Woodford Concerns

Sailtheworld

Brian65 wrote: »

FT report today says Woodford and his sidekick have taken close to £20 million in dividends last financal year. Taking it as dividends instead of pay reduces their tax, yet Woodford still claimed he had to secretly sell WPCT to pay his tax bill.
I hear even the human trafficers responsible for the Essex Lorry deaths have refunded their victims money.
Wonder if Woodford will show the same grace as them and refund some of his fees

Really? You're trying to draw a parallel between the murder of 39 people in the back of a container and a fund manager who made some poor stock picks?

I don't see why he should refund fees - his stock picks were in the public domain and nobody was forced to buy his fund.

His biggest crime is to remind people that they're unlikely to possess the skills to pick winning funds ahead of time. Obviously if any of his investors had such a skill they wouldn't have touched his fund with a bargepole. He'll have to be punished for something to prove he's a bad egg but I doubt it'll be murder.

Brian65

Moe_The_Bartender wrote: »

You mean they rang the newspapers to tell them? .

Don't be silly.
Apparently the news came from the victim's families.

Brian65

Sailtheworld wrote: »

Really? You're trying to draw a parallel between the murder of 39 people in the back of a container and a fund manager who made some poor stock picks?

No, I'm saying that even the trafficers accept the principle of refunding money when they have failed.
Oh and Woodford went far beyond bad stock picks. Which you would know if you read the thread before commenting on it.

Thrugelmir

itwasntme001 wrote: »

And just to prove my point in the above post, the valuation is in fact $1bn now and not $2bn (last year). It just goes to show that valuations for these types of companies have a very significant room for error given it just is so subjective.

Amazon currently trades on a PE of 72. Equally as subjective. If the Company doesn't deliver investors profit expectations.

itwasntme001

Thrugelmir wrote: »

Amazon currently trades on a PE of 72. Equally as subjective. If the Company doesn't deliver investors profit expectations.

All stocks when it comes to valuation has at least some degree of subjectivity hence we have such volatility in stock prices as market participants decide on a continual basis what the fair market prices should be as information is obtained. This does not mean the subjectivity in the fair price is the same for Amazon and Benevolent.

Amazon has proven to the market that it has a business model and that it is reinvesting it's cash flow into things that is expected to make even more money. The market decided to place a multiple of 72 on it as the market expects the company to growth revenues and at some point down the line increase its operating margins in order to boost its free cashflow, thereby growing into its multiple. Obviously there are risks with this, as there are with any stock, but the game here is to decide whether the risk-reward is at a level to justify an investment.

Benevolent has nothing that i can see in terms of business model, what exciting technology it has, whether it has a patent, what products it will sell, who it will sell it to, what revenues will likely be, what margins will likely be, nothing at all. Their website is just a marketing site with no information for investors. I believe investors like you and i can not invest directly in the company. However even if we could, i know for certain i would not invest at this stage as there just is no information on the company, not even basic information on what the business opportunity it is that they are in.

This makes the uncertainty around investing in Benevolent much higher then the uncertainty with Amazon. Orders of magnitude higher. Obviously this is just my subjective opinion. It is what it is.

Perhaps Woodford knows more then all of us do, and that is why there have been investors in WPCT. However given what has happened to Woodford and his fund, i think it is rationale to be highly skeptical of Benevolent as well as the rest of the companies in WPCT. Lets see what Schroders decides to do, i think it may be telling (although they may not be able to sell some of the underlying WPCT assets so we may never know).

Thrugelmir

itwasntme001 wrote: »

Benevolent has nothing that i can see in terms of business model, what exciting technology it has, whether it has a patent, what products it will sell, who it will sell it to, what revenues will likely be, what margins will likely be, nothing at all. Their website is just a marketing site with no information for investors.

Shareholders in the Company will have access to this information. Absolutely no requirement to put it in the public domain. Serves no purpose anyway.

Amazon has proven to the market that it has a business model and that it is reinvesting it's cash flow into things that is expected to make even more money.

Took Amazon 14 years to make a profit. Seems as the business model has worked. Despite scepticism from many investors. No doubt Woodford would have slated if he was an early stage investor in the business. Sometimes requires a little vision to see the longer term potential benefits of an investment.

itwasntme001

Thrugelmir wrote: »

Shareholders in the Company will have access to this information. Absolutely no requirement to put it in the public domain. Serves no purpose anyway.

Agree which then takes you to my other point in that his selection of investments for WEIF have proven to be terrible, so what makes you think his selection in WPCT won't be terrible, that too in many companies that are thus far not making profits and likely to need more investment capital (i.e. share dilution).


The discount to NAV does not mean much when NAV itself in all likelihood is wrong, coupled with the fact that Woodford tried to interfere with the valuation process at one time, did he try on this influence more then once?

itwasntme001

Thrugelmir wrote: »

Took Amazon 14 years to make a profit. Seems as the business model has worked. Despite scepticism from many investors. No doubt Woodford would have slated if he was an early stage investor in the business. Sometimes requires a little vision to see the longer term potential benefits of an investment.

Amazon sold books at first, sold something that was clear to see by everyone despite making any profit. There is difference between a business (amazon) that is growing its market share and investing back into its business and thus showing losses compared to a business (Benevolent) that says it is using AI to create fast and effective drug treatments whilst not actually having anything proven that says the technology is viable.


Again obviously Woodford knows a lot more then we all do, but since he seemed to have gone crazy with WEIF, why would he not have gone crazy with WPCT?

bowlhead99

Brian65 wrote: »

Oh and Woodford went far beyond bad stock picks. Which you would know if you read the thread before commenting on it.

It was basically bad stock picks combined with making a significant chunk of illiquid longer term plays - which were within limits when buying them but then exceeded reasonable limits following the significant fall in NAV - which in itself resulted from the poor investment performance and loads of redemptions.

I guess you could say it was 'far beyond' bad stock picks because the asset mix caused a structural problem, but ultimately the issue was picking the wrong things to buy at the wrong times (including buying illiquid assets within the portfolio while hoping the majority of fund's capital would be available for longer than it was).

itwasntme001

bowlhead99 wrote: »

It was basically bad stock picks combined with making a significant chunk of illiquid longer term plays - which were within limits when buying them but then exceeded reasonable limits following the significant fall in NAV - which in itself resulted from the poor investment performance and loads of redemptions.

Who sets those limits? Woodford's management team? Did they carry out stress tests? Particularly given WEIF was a OEIC fund?


Far beyond bad stock picks sounds about right.