Woodford Concerns

Midas

jaybeetoo wrote: »

“FundExpert’s head of research Sam Lees, however, says that Hargreaves Lansdown shoulders some “blame”. He says: “They over-promoted the fund and kept recommending it when there was no objectively good reason to do so. Now the reason it is removed from their Wealth 50 is because ‘the fund can’t be traded’ - is that it?”

https://www.moneyobserver.com/news/woodford-gets-boot-hargreaves-lansdown-wealth-50

It's incredible that they were still pushing this line as recently as January https://www.hl.co.uk/news/articles/waiting-with-woodford

Seabee42

If someone has earnt you a lot of money it is perhaps understandable to cut them some slack. I am sure the uncertainty over brexit has affected many things but that uncertainty has been going on for many years now and is perhaps the new normal so he has had time to adapt.


He would have had a reason to invest in each company just maybe the scrutiny of peers wasn't there in his own business.

Midas

Woodford isn't being helped by the fact that the three biggest holdings in WEIF (Barrett Developments, Burford Capital and Taylor Wimpey, which between them account for nearly a fifth of the fund) are all down about 10% in the last three months. Whether that is because of a disposals by Woodford or other factors I have no idea. His next biggest holding is of course Provident Financial, of which the less said the better.

EdGasketTheSecond

Maybe he should relaunch this one as 'The Very Patient Fund' as investors will have no other option to get their money out.

Malthusian

MK62 wrote: »

To be fair, Woodford Equity Income hasn't actually collapsed (at least not yet anyway).....it's been suspended for 28 days, after which the situation will be reviewed.

Nah, stick a fork in it. It's going to be wound up, and significant losses should be expected from selling off the unlisted stuff at its true value (whatever the market will pay for it). I am so confident of this prediction I will bet a fiver on it.

The word "collapsed" shouldn't be taken to mean total losses - that would obviously be absurd, and even Madoff's scheme didn't result in total losses (investors have so far recovered just over 50%). I would not normally use the word "collapse" for a situation like this unprompted, but I was responding to an inaccurate but forgivable comparison between the Madoff scheme and Woodford's fund, so I humoured the existence of the parallel.

A windup can only be avoided if either

a) investors decide to stick with Woodford en masse and do not submit withdrawal requests as soon as the fund reopens (unlikely)

b) Woodford can get a good price for his illiquid holdings in the next month (unlikely or he'd have already done it to bring the fund back under 10% illiquid holdings without cheating)

or c) he sells off even larger amounts of listed holdings and breaks the restriction on illiquid holdings even more blatantly (unlikely with the FCA hovering).

Fair enough, it's not good, but at this point investors shouldn't panic - for those in Woodford Equity Income there is nothing you can do in any case at the moment.

Agreed.

I'm trying not to sound too gleefully pessimistic. Even if the 18% of unlisted shares reported by Citywire turn out to be entirely worthless, which is extremely unlikely, that would still be only an 18% loss compared to the reported fund price before it was suspended. The sell-off may reduce the prices of the listed shares held by Woodford as well. But again that should only result in a relatively small loss compared to the price at which the fund was suspended.

It will still be a bitter pill for the investors to swallow. They thought that by sticking with Woodford they'd make money when he was proved to be a genius, and a winding up takes the option of sticking with him off the table. If my fiver is right and that's what happens.

JohnRo

Reaper wrote: »

His Patient Capital is another interesting one. I sold out a while back but being closed-end the share price reacts very much to sentiment. It is down 12% today at the time of writing presumably due to his name being associated with it, even though nothing has changed. If it falls further for reasons of sentiment rather than performance I might be tempted to get back in.

Likewise, I hold a small stake bought at launch and will be looking to make a (relatively) hefty top up if it sinks to a tempting valuation and wider discount.

Robie

I am glad I got out few days ago. I can't see going back in any time soon.

bowlhead99

aroominyork wrote: »

Your wish... 15-20% down this morning. Anything else I can do for you?

That's fine for now, thanks

I am a buyer at 66.5p which seems OK against yesterday's closing NAV of 89.07p. Of course, a large chunk of the NAV is unlisted or thinly traded and therefore not daily revalued, and values will need to be written down if there are significant disposals of the same assets in the bigger fund, and actual losses will be created if WCPT sells down its holding as part of Woodford exiting something at a firesale price to a strategic buyer. And WPCT remains too big IMHO for its initial objective, and if Woorford's entire shop fails another manager may not want to take over the PCT with its current economics (i.e. management fee-free).

Still, price contagion can be fine for a patient investor buying when there's blood on the streets.

westernpromise

I read somewhere that if 1,000 completely inexpert people play the stock market, they'd have something like an equal chance - 33% - of either making money, or losing money, or breaking even each year. If those who break even or win keep playing, there will eventually be one player left in the game who has never lost money in 17 straight years.

That guy is then at acute risk of being mistaken for a financial genius, by himself as well probably. But should you invest with him, he's no more likely to make you money than any of the other 999.

I am sure there's more to Neil Woodford's record than that, but maybe not that much more.

The point about the controls over him at Invesco is an interesting one. Presumably if he couldn't persuade his managers there that a given trade was a good idea, it didn't happen. Once on his own, that restraint disappears, for good or bad.

AnotherJoe

elona wrote: »

This may be a daft question but is the taint likely to affect the perception of Invesco? I do know he is no longer anything to do with them.

Please take this in a kind way, yep its a daft question