Woodford Concerns

talexuser

Thrugelmir wrote: »

Yet everybody says investing is for the longer term, i.e. over 10 years. While scrunitising short term performance tables. You cannot have it both ways.

The question might be what are the chances of bottom quartile performance over 5 years outperforming an equivalent fund (ie same sort of sector, not apples and oranges) that has done well over those years at the end of 10 or more years?

I dropped High Income a couple of years ago when it flatlined while Evenload on my watch list grew. Since then HI has lost around 10%, while Evenload had gained around 45%. Looking at the top ten holdings I can't see how that will reverse dramatically in the next 5 years or crash, but at the end of the day it's all a punt.

Thrugelmir

talexuser wrote: »

The question might be what are the chances of bottom quartile performance over 5 years outperforming an equivalent fund (ie same sort of sector, not apples and oranges) that has done well over those years at the end of 10 or more years?

Buying unfashionable stocks (i.e. value investing) has been out of vogue in recent years. A consequence of an extended bull market. Different strategies are required for different market conditions. Investors tend to become complacent when markets are benign.

talexuser

Entirely agree, we have a constant stream of articles saying value has turned the corner

However I'm still not sure if the value of HI will come good. I think QE and recent Brexit shambles has upset the calculations of some good long term managers who have not moved their perceptions with the new circumstances.

Moe_The_Bartender

Value investing is a concept that harks back to the days when information about companies was less available to the general public than it is now. I'm surprised that many investment managers still stand by it.

Look at M&G Recovery (still on the HL Wealth 50 despite years of fourth quartile performance and failure to achieve its benchmark). It used to be a great fund but Tom Dobell seems to have lost it completely and stubbornly sticks to an outdated strategy. And it's not the only one.

Shares are 'cheap' for a reason and the reason isn't that they are out of fashion.

redux

AnotherJoe wrote: »

p.s. In 6 months there will be an interview with NW where he says if only investors had faith he would not have lost them so much money as the new management.

That's about as much use as saying Nigel Farage would have been a good Prime Minister, if only he'd won some of those 8 failed attempts to become an MP.

Thrugelmir

What's the modern theory that you've adopted if value is an outdated concept of investing?

talexuser

AnotherJoe wrote: »

In 6 months there will be an interview with NW where he says if only investors had faith he would not have lost them so much money as the new management.

Well if he continued those portfolios in a virtual sense, then he would have some actual facts and graphs to prove his case, compared to the wind up payouts. Still it couldn't have happened with the withdrawals, but he could say it was all Kent Councils' fault. :rotfl:

Thrugelmir

talexuser wrote: »

but he could say it was all Kent Councils' fault. :rotfl:

Jupiter quietly pulled a billion out without causing a ripple. Rather like Northern Rock when the lions roar, the stampede for the exits starts. Makes you wonder how investors will react when something hits the global markets hard.

HardCoreProgrammer

Moe_The_Bartender wrote: »

Look at M&G Recovery (still on the HL Wealth 50 despite years of fourth quartile performance and failure to achieve its benchmark). It used to be a great fund but Tom Dobell seems to have lost it completely and stubbornly sticks to an outdated strategy. And it's not the only one.

Apologies for the rudeness, nut if anyone still thinks the Wealth 50 list is a guide to good funds, they seriously need their heads examining.

The list is full of mediocre funds and is more than than a marketing list of funds which have bent over backwards and offered "discounts" to HL.

As to Link Fund Solutions and PJT Park Hill, they don't care if investors lose their shirt. They are just selling off everything, hence no reputation to guard, no incentive to make investors stay with the fund, and no prospect of repeat business. They will do it in such a way that maximises their fees and trying to get the beat value for the assets will come way down their priorities.

AnotherJoe

HardCoreProgrammer wrote: »

As to Link Fund Solutions and PJT Park Hill, they don't care if investors lose their shirt. They are just selling off everything, hence no reputation to guard, no incentive to make investors stay with the fund, and no prospect of repeat business. They will do it in such a way that maximises their fees and trying to get the beat value for the assets will come way down their priorities.

I think LFS definitely have a reputation to protect and that's why they are gradually writing down IH rather than writing it off on one go, because if they suddenly wrote it off maybe there would be awkward questions about why they uprated it 3.5x only a year ago after previously rating it at the £32M price NW paid, rather than the £0 it was clearly worth. The second (agreeing to NW's valuation) looks like cowardice, the 3.5x looks like corruption or utter unbelievable stupidity. Not sure which is the better of the two attributes to pick.