Woodford Concerns

bowlhead99

AnotherJoe wrote: »

Rossi is the initial (twice convicted so far AIUI) fraudster. If IH havent worked out yet they've been had yet in a third fraud, then I see no merit to buying shares in a company run by gullible fools based on a fraud! . Whether its gullibility or they are deliberately extending the fraud doesnt matter.

Not sure they are in the situation where they 'haven't worked out they've been had yet'. Rossi is known for being difficult to work with and embellishing the facts when making bold claims. Without spending some time and money, you can't assess it. It got to the point where having tested it and got inadequate results, IH ended up in a legal battle with Rossi over the license, business, payments etc which is well documented because they both submitted court docs even though they didn't get a court judgement.

Rather than prolong the agony in a public court spat at great cost, they reached a settlement in which they surrendered the license and gave the tech back. From Rossi's perspective it was a a bit of a win because now he has his 'IP' back he can try to sell it again to someone else - if anyone will touch it - without it being entangled with the IH business. From IH's perspective it is also a bit of a win compared to how it could have ended up, as they are rid of him, didn't need to keep the tech which they had confirmed wasn't good enough to develop, and didn't need to pay him truckloads of cash to extricate themselves from the deal. Just take back your invention and leave us to work with other people without sharing the spoils with you.

So, almost a win win, after the wasted time and costs, compared to how it could have been (eg needing to keep spending Woodford or other people's money down this particular cul-de-sac).

Whom do you mean is 'deliberately extending the fraud' here? You mention you "see no merit to buying shares in a company run by gullible fools based on a fraud!", but you confirmed hundreds of posts ago that you are not buying the shares anyway because everything is a lie and you think Woodford is an idiot who never conducts due diligence into investments he makes, so it was already pretty clear you don't see merit in it

Brian65

cogito wrote: »

But despite all their concerns, HL continued to include WEIF in their Wealth 50. Elsewhere, they say that they recommend particular funds because presented with a huge choice of funds, clients can end up making no decision at all.

That’s all right then.

So what other funds are HL recommending in their 'Wealth 50' that they have concerns about?

fun4everyone

Some clarity around the complete scam that is the valuations of unquoted equities in weif/wpct

https://citywire.co.uk/funds-insider/news/link-feels-heat-over-valuation-of-woodfords-unquoted-stocks/a1242137

The value of Woodford's stake in Industrial Heat, a controversial business attempting to develop cold fusion technology that is viewed with deep scepticism by the scientific community, was hiked by 357% in one fell swoop in September last year. The company is the fifth biggest contributor to Woodford Equity Income's performance in the lifetime of the fund.

Benevolent AI, which is developing artificial intelligence to analyse scientific papers, has been revalued 600% higher since Woodford first invested

masonic

fun4everyone wrote: »

Some clarity around the complete scam that is the valuations of unquoted equities in weif/wpct

https://citywire.co.uk/funds-insider/news/link-feels-heat-over-valuation-of-woodfords-unquoted-stocks/a1242137

Didn't Woodford invest quite heavily in Prothena? That went from $6 to $75 before collapsing back to $10. That's traded on the NASDAQ. I have a work colleague who is into such shares. Believe me the market valuations of traded companies are massively inflated and deflated on little more than rumour - I can think of one example where the share price was decimated because someone threatened to challenge a patent, for example. It's the nature of the beast, and very entertaining for me to observe when it isn't my money at risk.

I wouldn't be surprised if the mere fact a company had Woodford's backing would lead to its valuation blowing up, and the mere fact a company now exists within a Woodford fund could lead to it crashing. So I'm not at all surprised that valuations of unquoted companies are all over the place.

bowlhead99

fun4everyone wrote: »

Some clarity around the complete scam that is the valuations of unquoted equities in weif/wpct

The link took me to a registration wall.

Before I sign up, is it really offering 'clarity around the complete scam that is the valuations' or is it just an observation that the value has been increased on two business because valuations of unquoted businesses may be subject to change when there is some sort of trigger event to reassess (eg change in actively levels, new funding round, etc)?

fun4everyone

masonic wrote: »

Didn't Woodford invest quite heavily in Prothena? That went from $6 to $75 before collapsing back to $10.

You know I think he was actually in them from the beginning. IE the company it span out of (Elan?) - he had them from Invesco.

Problem was he bought so much more later that they, a speculative non dividend paying drug company listed on NASDAQ, became a top 5 holding in a £10bn UK "equity income fund" - ridiculous. They were also the top weighting in WPCT at roughly 20%. A hedge fund published a long paper on why they were doomed to failure and their drug was going to do nothing. It made complete sense and was based in fact and logical reasoning. Prothena's chief science officer then resigned. WIM published a blog on how they were confident in everything to do with Prothena. The hedge fund were absolutely bang on the money and Prothena collapsed. WIM were complete mugs who did no research/ignored the facts.

cogito

Brian65 wrote: »

So what other funds are HL recommending in their 'Wealth 50' that they have concerns about?

None, AFAIK. Why?

masonic

fun4everyone wrote: »

Problem was he bought so much more later that they, a speculative non dividend paying drug company listed on NASDAQ, became a top 5 holding in a £10bn UK "equity income fund" - ridiculous. They were also the top weighting in WPCT at roughly 20%. A hedge fund published a long paper on why they were doomed to failure and their drug was going to do nothing. It made complete sense and was based in fact and logical reasoning. Prothena's chief science officer then resigned. WIM published a blog on how they were confident in everything to do with Prothena. The hedge fund were absolutely bang on the money and Prothena collapsed. WIM were complete mugs who did no research/ignored the facts.

Not a particularly surprising outcome, even without looking into the specific circumstances around this drug. About 70% of drugs fail during Phase II and a major cause of attrition is lack of efficacy (about 35%). That rate is mirrored within the autoimmune disease area. Just 1 in 10 drugs made it from Phase I to approval based on data from 2006-2015, and the odds of getting a drug through clinical development seem to be getting longer. That of course includes data from across the industry. Some companies will take much bigger risks in progressing compounds into the clinic than others.

So investing 20% of your fund in effectively a single clinical asset, seems very brave, to put it mildly.

AnotherJoe

StellaN wrote: »

I really feel at this stage we shouldn't make personal attacks on NW, I don't think the forum is the right place for that. As well as calling him a 'fool' you also made these quotes in other posts 'At least the results show clearly he is completely incompetent' and 'Its more about just simply being a very bad fund manager'.

Whatever our feelings in the current situation, NW has been a fund manager for a very long time and has made many people quite a lot of money (myself included). I don't hold any of his new funds mainly because of his change in investment style and, I do feel, for those people that are now trapped in the suspended WEI fund. However, I still feel this is not the place for personal attacks especially with such quotes 'he is is such a fool', 'a very bad fund manager' and 'he is completely incompetent'!

All three of those comments can actually be backed up with facts.

1. He bought into a company based on impossible technology from a twice convicted fraudster.
2. In the U.K. equity sector his fund is 91st out of 91 according to no less than HL, and in the area of listed funds he's had several major purchases lose the majority of the investment due to mismanagement which he failed to spot.
3. His company broke the liquidity rules multiple times, used dubious devices to evade the liquidity rules and got himself into a precarious position whereby he was extremely vulnerable to downturns causing a vicious spiral

dividendhero

masonic wrote: »

So investing 20% of your fund in effectively a single clinical asset, seems very brave, to put it mildly.

Doubly so when Woodford has no expertise in either venture capital or life science