Woodford Concerns

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.

itwasntme001

bowlhead99 wrote: »

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).

Picking bad things full stop, not just at wrong times. And buying illiquid rubbish for a OEIC fund without doing proper risk management. And trying to entice valuers to put a larger value then deserved.


Hoping??!! LOL. Hope is a very dangerous word when it comes to investing

Thrugelmir

itwasntme001 wrote: »

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.

How does a Company that is losing money reinvest back into the business?

The concept behind Amazon was an online marker place. Given the rudimentary nature of the internet at the time. Was ahead of the game. AI is the new frontier.

itwasntme001

Thrugelmir wrote: »

How does a Company that is losing money reinvest back into the business?

The concept behind Amazon was an online marker place. Given the rudimentary nature of the internet at the time. Was ahead of the game. AI is the new frontier.

A company can raise capital by share or debt issuance. Also can still show balance sheet losses even though they have been funding investment.

The concept of buying things online was not new when Amazon launched. Amazon just executed it a lot better. It entered into a business area that was already proven to be viable.

Using AI by Benevolent to create drugs has not been proven to be viable at all thus far. It has never really been done with success. I think the closest has been IBM Watson Health but this failed and the drug got recalled.

[Deleted User]

It would be interesting to focus on the role of Hargreaves Lansdown in the Woodford Fund fiasco.

A quarter of a million HL customers are invested in Woodford funds. How did that happen?

My suspicion is that HL traded favour on their platform for exposure to Woodford's funds.

The pay-off for HL was that, as long as a Woodford fund was rolled from one of their favoured funds to another (according to the risk profile of the fund) HL accrued brokerage fees on both sides without
lifting a finger.

Pay-off for Woodward was that their diaspora of investors were largely unaware of HL's artificial protection against proper scrutiny of the performance of their fund.

But I'm happy to be corrected by someone at HL or outside who knows better..

Thrugelmir

ZingPowZing wrote: »

My suspicion is that HL traded favour on their platform for exposure to Woodford's funds.

To be included in the 50. The fund manager must agree to a discounted fee rate. From the investors perception seems like a no lose situation.

The disclosure that Jupiter Fund Managers managed to quietly liquidate a £1 billion position in 2017 says a lot.