Woodford Concerns

Brian65

The fact Woodford won't reduce his £100,000 a day fees whilst its closed suggests to me he doesn't expect to re-open it soon?

gadgetmind

Why reopen it at all? It can just sit there funding his fees for decades.

bowlhead99

Brian65 wrote: »

The fact Woodford won't reduce his £100,000 a day fees whilst its closed suggests to me he doesn't expect to re-open it soon?

Well, not that he is earning £100k a day in fees from WEIF, that's just a number rounded up by several tens of thousands to more easily fit into a sound bite ..

He won't be opening it earlier than whenever there's a practical solution to deal with the liquidity issues. So, no time soon, as there are plenty of assets needing to be sold down, and some will be tricky to sell.

But in the meantime, his company is managing the fund and contractually still gets paid for managing it. His fees cost the investors something like 0.05% a month. A twentieth of a percent per month is not really going to damage investors' wealth.

What would probably damage the investors' wealth rather more would be if everyone at Woodford stopped working on making orderly disposals and keeping a sense of structure in the fund and just downed tools because they had no income.

Brian65

bowlhead99 wrote: »

Well, not that he is earning £100k a day in fees from WEIF, that's just a number rounded up by several tens of thousands to more easily fit into a sound bite ..

I thought it was per working day Mon-Fri
Point is that once the fund is wound up his career is over.
So he has a vested interest in spinning the job out

Brian65

gadgetmind wrote: »

Why reopen it at all? It can just sit there funding his fees for decades.

Indeed. And he can keep the assets at their claimed valuations, rather than the prices people will pay for them.

Brian65

bowlhead99 wrote: »

What would probably damage the investors' wealth rather more would be if everyone at Woodford stopped working on making orderly disposals and keeping a sense of structure in the fund and just downed tools because they had no income.

I suppose in that situation the assets would be sold to the highest bidder?
In which case we would find out what they are worth instead of trusting Woodford to get more?

Aretnap

Brian65 wrote: »

I suppose in that situation the assets would be sold to the highest bidder?
In which case we would find out what they are worth instead of trusting Woodford to get more?

A bankruptcy sale, or something close to it, is not the best way to establish the true value of assets, still less extract that true value.

bowlhead99

Brian65 wrote: »

I suppose in that situation the assets would be sold to the highest bidder?
In which case we would find out what they are worth instead of trusting Woodford to get more?

You don't find out what they are worth by taking the shares to a car boot sale and saying "everything must go, who wants them??!"

If your parents are moving house and need to clear the loft because they're downsizing next week, they might take everything to a garage sale and they might put the boxed mint condition 1970s star wars toys in a big bag at two for a pound. And some collector might come along and convince your mum that he is the only guy in the neighborhood who would be interested in 40 year old plastic toys so he'll do her a favour and take them away, if she makes it three for a pound. Fine, what the heck, your mum no longer has the space, and is not really motivated to get top dollar, so she does the deal.

Whereas if you have time on your hands you can strategically seek out all the sci fi nerds in the country (or other countries), and explain how these pieces will really enhance their collections, and you are not selling them because you don't like them but just because you need to sell them to make space, but you don't necessarily have the time pressure to sell because you can move them into a storage facility for a while. So you can take your time and find the highest bidder in the world who wants them.

When you embark upon that process, some people will offer you a lowball price for a quick sale hoping to flip them on to a better bidder later. But if time is on your side (rather than being to sell in the next week or month) you can find that better bidder yourself and get a much higher sale price.

Herbalus

IanManc wrote: »

Alex Brummer had penned a highly readable defenestration of Mr Woodford in the Daily Mail today:

https://www.thisismoney.co.uk/debate/article-7165405/ALEX-BRUMMER-Like-Neil-Woodford-investors-feel-utterly-betrayed.html

Enjoy!

The elephant in the room for this article is how somebody who starts off with a list of how many years they've been involved in finance doesn't appear to have done any diligence on where he's invested. I don't know if that's an unfair comment, but when the author lists off a number of examples when there were concerns about Woodford funds dating back several years, I do wonder.

The author also seems to think this Woodford issue threatens the integrity of advice, which given that the majority of investors were DIY, seems troubling that he doesn't know what advice is.

Plus, it seems nothing to do with Equitable Life whatsoever. A very odd article.

cogito

Herbalus wrote: »

The elephant in the room for this article is how somebody who starts off with a list of how many years they've been involved in finance doesn't appear to have done any diligence on where he's invested. I don't know if that's an unfair comment, but when the author lists off a number of examples when there were concerns about Woodford funds dating back several years, I do wonder.

Quite right. Bummer embarrasses himself with this article.

Incidentally, with reference to Dampier, it was revealed earlier this week that he was still investing his own money in Woodford funds as recently as last month. I always regarded him as a numpty and he has provided further evidence to back up my view of him.