Woodford Concerns

JSmith321

I know you shouldn't kick a man/fund when it's down but are there any buying opportunities here if a fire sale takes place?

Suffolk_lass

fun4everyone wrote: »

Wow it does continue to get worse as each day passes. If you are in WEIF then The Times is saying you won't getting anything back until Christmas...

https://www.thetimes.co.uk/article/investors-in-neil-woodford-fund-cut-off-from-cash-until-christmas-5nwwlrzt8

Whilst The Telegraph suggests Hargreaves Lansdown's multi manager funds may now have to be gated because of their heavy WEIF allocations..

https://www.telegraph.co.uk/investing/funds/woodford-suspension-could-cause-hargreaves-lansdown-halt-withdrawals/

The Times and the Sunday Times Money and Business and Money sections have been reporting in an alarmist way about Woodford for months - and especially the last 3 weeks. Are they the reason that some of the withdrawals suddenly accelerated, becoming the catalyst for the run? I am not suggesting they should not have done but they have made the same story stretch over a number of weeks. Did this become a self-fulfilling situation?

Brian65

JSmith321 wrote: »

I know you shouldn't kick a man/fund when it's down but are there any buying opportunities here if a fire sale takes place?

Comments in the FT say a fire sale is already taking place, although of course Woodford's spokesman denies it. They are saying prices are being driven down to very low levels because of the volumes up for sale, and perception of the Woodford brand has swung to the other extreme.
Problem is sorting the wheat from the chaff when its so difficult to value.

PS: why do you say kicking him when he is down?
As far as I can see its helping him out if you are bidding up the prices of what he is trying to sell.

Reaper

coyrls wrote: »

I don't think that WPCT would be included in the 10% limit because it is tradeable on a recognised exchange.

You are completely right. I was having a blonde moment!

Scarpacci

I couldn't help but think of Woodford as I was reading this today:

Reversion to the mean occurs because people persuasive enough to make something grow don’t have the kind of personalities that allow them to stop before pushing too far.

What kind of person makes their way to the top of a successful company, or a big country?

Someone who is determined, optimistic, doesn’t take “no” for an answer, and is relentlessly confident in their own abilities.

What kind of person is likely to go overboard, bite off more than they can chew, and discount risks that are blindingly obvious to others?

Someone who is determined, optimistic, doesn’t take “no” for an answer, and is relentlessly confident in their own abilities.

Reversion to the mean is one of the most common stories in history. It’s the main character in economies, markets, countries, companies, careers – everything.

Part of the reason it happens is because the same personality traits that push people to the top also increase the odds of pushing them over the edge.

https://www.collaborativefund.com/blog/five-lessons-from-history/

Brian65

Scarpacci wrote: »

I couldn't help but think of Woodford as I was reading this today:

https://www.collaborativefund.com/blog/five-lessons-from-history/

Warren Buffet does not appear like that to me.
He hasn't done so well of late, but that may be because his funds have got too big to find decent opportunities for.

talexuser

JSmith321 wrote: »

I know you shouldn't kick a man/fund when it's down

Why on earth not? That's what capitalism is all about, winners rise to the top and losers fall to be replaced by better winners.

JSmith321 wrote: »

but are there any buying opportunities here if a fire sale takes place?

Only if his unlisted stuff gets bought out cheap, you invest in that fund, and his choices turn out to have been good in the long run.

arnoldy

fun4everyone wrote: »

Wow it does continue to get worse as each day passes. If you are in WEIF then The Times is saying you won't getting anything back until Christmas...

https://www.thetimes.co.uk/article/investors-in-neil-woodford-fund-cut-off-from-cash-until-christmas-5nwwlrzt8

Whilst The Telegraph suggests Hargreaves Lansdown's multi manager funds may now have to be gated because of their heavy WEIF allocations..

https://www.telegraph.co.uk/investing/funds/woodford-suspension-could-cause-hargreaves-lansdown-halt-withdrawals/

Oh gawd. This gets worse.


Similar to the Telegraph I’m concerned about the contagion spreading to the Hargreaves Landsdown Multi Manager funds, some of them hold big % (and probably rising) of Woodford. In other words an illiquid untradeable asset that: 1) could be above the 10% limit and 2) has huge uncertainty around its value. In fact the very sorts of issues that led to the Woodford problem. And similar issues that led to HL ‘talking’ to Woodford in March now afflict them?


We already see pricing pressure on the Woodford funds with sort sellers breaking cover and the difficulty of liquidating such big positions in small companies. That’s before the difficulty of selling big positions in untraded early start-up companies eg Industrial Heat. We may have shocks coming there. I hope not as an investor but am not hopeful.


So experienced and professional investors may well seek certainty (all investors do) and sell the exposed HL MM fund(s).


This will be a self !!!!!!ing mechanism causing the proportion of Woodford funds in the HL MM funds to rise causing further – which would be a concern. That would cause further selling pressure.


It will be a difficult time; I think the key will be if there is selling pressure on the HL MM funds when the markets open on Monday.


If it all starts unravelling the FCA needs to step in to protect the interests of small investors in Woodford, WPCT, and HL MM. After all a big part of the problem with Woodford/Link/HL has been the rather lax regulation. I personally have lost money and ordinarily I would live and learn, but with the facts and issues coming out around Corporate behaviours and so forth I think Regulators, Corporations, and Individuals have some serious questions to answer.

coyrls

arnoldy wrote: »

So experienced and professional investors may well seek certainty (all investors do) and sell the exposed HL MM fund(s).

Can't see any experienced and professional investors holding any HL MM funds.

capital0ne

Luckily no self respecting IFA would ever have recommended any Woodford fund :T:T:T:T