Woodford Concerns

bowlhead99

AnotherJoe wrote: »

The trouble with the duds* are, its like looking at someones self styled collection of gold nuggets, and finding that the first chunk you pick up, quite a sizable one, going on for 10%, is iron pyrites. What are the odds the rest are also, and in fact theres little or no gold there?

* not your ordinary "failed company" duds but stonking scams in the Enron and Theranos class.

IMHO there are some interesting businesses which aren't obvious duds, even if some are very pre-revenue or even pre-product .

Yes I know you have a bee in your bonnet about Industrial Heat for example, but that doesn't mean the emperor is wearing no clothes.

Malthusian

seacaitch wrote: »

They were relatively plentiful in the 'noughties' as first base rates and consumer credit demand rose, and then eventually as the wholesale funding market began drying up and the lenders had to up their rates, eg. a few examples: 5% from Egg in '02; 5.5% Cahoot in '04; 5.8% Nottingham BS '05; 5.3% MBNA in '06; Icesave(!) 5.7% in '07; B'ham Midshires 6.76%, Northern Rock(!) 6.9%, Icesave(!) 7% in '08; lots in the 6-7% range '09 some of which could be locked in to late 2010.

And the exclamation marks tell a story. Before 2007 even FSCS-protected deposits were in theory capital-at-risk products if you held more than £2,000. Up to £35,000 you risked a 10% haircut and above £35,000 you were risking 100% of the excess.

And IceSave depositors were - again in theory - taking the additional risk of relying on the Icelandic compensation scheme in return for a higher interest rate.

Naturally that's not how it turned out in reality. As with Equitable Life, as with defined benefit pensions, and maybe as with London Capital & Finance (watch this space), if enough people choose to believe that something is risk-free then the Government has to spend everyone else's money to make it so.

When Northern Rock and Icesave depositors were bailed out, and the compensation limits went up to 100% of £85,000, making bank deposits effectively risk-free for everyone who wasn't extremely rich and extremely lazy, the quid pro quo was increased capital adequacy requirements, which added to the downward pressure on bank interest rates. (Funding for Lending etc is of course also a big factor.)

bowlhead99

JohnRo wrote: »

As a small scale holder myself I hope you're right but I'm looking at averaging down to limit the damage rather than a glorious future.

How does 'averaging down' limit your damage? On the holding you have, the damage has already been done (albeit unrealised), as what you have can no longer be sold for what you paid.

If you think the value is more than the bid price so there's no point selling right now, that's fine, just wait and ride it out, with your existing holding

The only reason to 'average down' by buying more at current prices would be if you think it has a more glorious future than other opportunities - i.e. you believe you will make (e.g.) 10%, 20%, 30% on a new £1000 invested here more quickly or reliably than if you invested that £1000 somewhere else.

Averaging down generally implies you have more confidence than the market because you think this opportunity should receive your new capital instead of one of the thousands of other opportunities receiving your new capital instead.

If you don't actually have that confidence then perhaps you are just looking to massage your personal performance table by being able to say you're only 10% down on £10000 investment rather than being 20% down on a £5000 investment. Such window dressing to 'limit the damage' by having your loss percentage show as lower, is poor quality investing and a rookie mistake - and you don't seem to be a complete rookie from your other threads ...

JohnRo

Ok point taken. Poor choice of words as usual.

To increase the chance of seeing a positive investment return in [STRIKE]the[/STRIKE] my future.

OldMusicGuy

cogito wrote: »

Woodford is still insisting that he will be proved right eventually.

To slightly misquote John Maynard Keynes, we're all dead eventually.

Reaper

An interesting snippet about "Link Asset Services". As an Authorised Corporate Director (ACD) they were meant to represent investors. However being appointed by the fund and paid by them it is perhaps unsurprising they failed to ruffle any feathers. And it turns out they have similar past failures.

https://www.standard.co.uk/business/jim-armitage-link-went-missing-on-its-job-to-watch-over-woodford-equity-income-fund-s-behaviour-a4162286.html

PS In case anyone isn't familiar with the mentioned "Guernsey trick" it was to get some unlisted stocks to list themselves on the obscure Guernsey exchange so they no longer counted towards the maximum 10% allowed limit on unlisted stocks.

Johnnyboy11

MaxiRobriguez wrote: »

Sounds like a job for Johnnyboy to find them and present them here for discussion.

redux is the one for that job...

redux wrote: »

Straight away I can think of 4 or 5 other less fashionable investment trusts on such discounts that I'd consider before this one, up 30 to 70% in 3 or 5 years, and no doubt there are more to be found.

arnoldy

ColdIron wrote: »

Hargreaves Lansdown has dropped the Woodford Income Focus fund from its £562 million HL Multi-Manager High Income fund, as withdrawals from Neil Woodford's smaller fund hit £116 million in six days.

https://citywire.co.uk/investment-trust-insider/news/hargreaves-leads-stampede-from-woodford-income-focus/a1239569

Yes shameful. Hargreaves have sold out of a fund they relentlessly pushed on the poverty 50 list to small investors - further compounding losses for the direct small investor.


But I'm not surprised. The game plan now is to expunge Woodford from the HL Corporate memory. Soon he will be the "Fund Manager Whose Name Cannot be Mentioned" in HL Head Office.



Any documents appertaining to the Fund-Manager-Whose-Name-Cannot-be-Mentioned will be kept in the restricted section of the HL archives.


But HL rehabilitation into civilised Society will be a long and difficult process, after this latest demonstration of their behaviours -almost simultaneously selling to clients and getting out before themselves before their direct clients.

dividendhero

ColdIron wrote: »

Hargreaves Lansdown has dropped the Woodford Income Focus fund from its £562 million HL Multi-Manager High Income fund, as withdrawals from Neil Woodford's smaller fund hit £116 million in six days.

https://citywire.co.uk/investment-trust-insider/news/hargreaves-leads-stampede-from-woodford-income-focus/a1239569

HL seems to have had moved from "Back Woodford" to "Sack Woodford". Me thinks the HL MM funds were starting to see redemptions and this will serve as a firebreak to stem this.

As for Woodford Income Focus, it looks like a dead man walking - only a question of time before it's gated

EdGasketTheSecond

Article in Shares magazine today re. Patient Capital. Here's a quote:
"Kieran Drake, a research
analyst at Winterflood, estimates
that 74% of Patient Capital’s
portfolio by value at the end of
April was also held in the Equity
Income fund.
He believes that as Woodford
restructures the Equity Income
fund portfolio and exits all the
illiquid holdings, valuations in
the Patient Capital portfolio
could fall and hurt its net asset
value (NAV)."