Woodford Concerns

JohnRo

I look at what's happened to the bloke and can't help thinking about the Maynard Keynes quote..

'The market can stay irrational longer than you can stay solvent'

AnotherJoe

itwasntme001

JohnRo wrote: »

I look at what's happened to the bloke and can't help thinking about the Maynard Keynes quote..

'The market can stay irrational longer than you can stay solvent'

But you do not know the market is being irrational. Looking at some of the companies he has invested in, the market price looks rational to me. Market in liquid securities generally is never wrong/irrational.

itwasntme001

EdGasketTheSecond wrote: »

Keir announced today that they are no longer paying a dividend. So Woodford's 16% holding won't be much use in an Income fund. Also Kier value very low over the last two trading days; almost halved, so another blow for Woodford.

It should be obvious to everyone that Woodford is finished and that is a good thing. It is a pity he was allowed to manage money to start with. At least the results show clearly he is completely incompetent.

JohnRo

itwasntme001 wrote: »

But you do not know the market is being irrational. Looking at some of the companies he has invested in, the market price looks rational to me. Market in liquid securities generally is never wrong/irrational.

The quote is not directly about the market or current value being rational, it's about belief in an outcome and market timing.

He may well be proved right to have chosen what he holds now at some future point in time but it doesn't look like his MO is going to get him there.

Thrugelmir

itwasntme001 wrote: »

Market in liquid securities generally is never wrong/irrational.

Passive investing is driven by herd instinct though.

fun4everyone

There must be some value in there and some of the companies must have a chance of going ballistic but..

1) The NAV is a total scam, IH for one is valued at $4bn? Other companies have ludicrous valuations as well, it seems to be based on the price NW paid for them.

2) I don't trust the portfolio either. He threw money at everything and anything without doing any proper research. Stuff like Northwest Bio and Industrial Heat shows that. If investors money is being treated like that (without proper respect) then I don't want to be putting my hard earned in there.

3)WEIF is in all likely hood going to be a forced seller both of WPCT itself and also of some of the stocks in WPCT as there is a lot of cross contamination (WEIF holds some of the same stuff). This could be the cause of the falls now of course.

4)NW is on the hook for more funding to Proton Partners and others that he signed up to long ago. There is a £150m bank overdraft (IIRC) which is due to be repayed in January. Can't really say whats going to happen there but bankers are not stupid with their own money. There must be a chance they just call it in so they get paid before it goes tits up?

The question is what is a fair price. The positive to WPCT imo is that it gives retail investors a chance to get access to stuff they normally would not be able to access. I like that, but the research done on WPCT companies has been utter garbage so far. I would be tempted at a discount to a fair price but I don't know what it is. It's a chunk lower than it is now though in my opinion.

itwasntme001

JohnRo wrote: »

The quote is not directly about the market or current value being rational, it's about belief in an outcome and market timing.

He may well be proved right to have chosen what he holds now at some future point in time but it doesn't look like his MO is going to get him there.

As a fund manager for a fund (especially a open ended fund), he should have understood this and realized his stocks could potentially fall as much as they did. It should be clear by now some of his picks were doomed from the start so for him its nothing to do with the Keynes quote. Its more about just simply being a very bad fund manager.

dividendhero

itwasntme001 wrote: »

It should be obvious to everyone that Woodford is finished and that is a good thing. It is a pity he was allowed to manage money to start with. At least the results show clearly he is completely incompetent.

To be fair to Woodford, he was pretty good at Invesco - but he was part of a time and subject to proper oversight. Once he struck out on his own he went rogue - can't see any of the funds recovering, he might as well come clean to investors and tell him they'll get some cash for Xmas

AnotherJoe

itwasntme001 wrote: »

But you do not know the market is being irrational. Looking at some of the companies he has invested in, the market price looks rational to me. Market in liquid securities generally is never wrong/irrational.

Looks irrational to me, since its probably around 2x where it should be on my back of a fag packet reckoning, (which is probably more space than he used to work out what to pay in the first place)


In any case, when you say the market is "never wrong" thats obviously wholly incorrect.

Unless by "generally never wrong" that's another way of saying "its sometimes very wrong"