Woodford Concerns

Reed_Richards

Is it really genuinely possible to short a stock that is unlisted or infrequently traded? Don't you have to find someone who owns the stock (not Woodford) who is prepared to loan it to you so you can sell it faster than Woodford can so you can buy it back from Woodford at less than you sold it for?

Linton

Reed_Richards wrote: »

Is it really genuinely possible to short a stock that is unlisted or infrequently traded? Don't you have to find someone who owns the stock (not Woodford) who is prepared to loan it to you so you can sell it faster than Woodford can so you can buy it back from Woodford at less than you sold it for?

Plus shorting only works if you know something, or believe you know something, that the rest of the world doesnt. So you would need to find a buyer of your borrowed unlisted/illiquid shares who doesnt know that Woodford is just down the street knocking on doors with a wheelbarrow full of them.

Malthusian

AnotherJoe wrote: »

I suspect there are plenty of holders who'd prefer to get out at that discount now rather than be in limbo for an indeterminate period.

Not many. During the 2016 commercial property panic, Aberdeen offered to let investors out of their open-ended fund early at a 17% penalty, and most of them withdrew their withdrawal requests. (Despite this being lower than some closed-ended funds were subject to.)

Investors in funds which have closed to withdrawals due to a crisis are like cats miaowing to be let out during a rainstorm. As soon as you open the door they change their mind.

Very few people have a gambling debt to the mob that makes paying an avoidable 17% penalty worth it.

There is no ignorance going on - the difference between an open-ended and closed-ended fund is in the public domain. Aggrieved investors can do a WASPI if they like ("well nobody told me") but it doesn't change anything.

No doubt they would like to be offered the fund's last published unit price to get out tomorrow but that isn't going to happen. If you worked out what you could get for WEI's assets this very day and then offered investors their percentage, most of them would decide they'd rather wait for the orderly wind-up.

(Note: the penalty that would be necessary to allow WEI investors to cash out early is completely distinct from the eventual write-down of the assets, as the latter isn't avoidable.)

Scarpacci

Malthusian wrote: »

Woodford commitment to transparency 'making a bad situation worse'

Short version: Woodford publishing his fund's entire holdings (presumably more frequently than almost all other funds do via Morningstar) is biting his investors on the bum because fund managers are looking at what he holds and then shorting it, knowing he's a forced seller.

This might ring more true if he didn't have so many > 5% stakes in companies that he would be forced to declare anyway, and declare again after any 1% trading movements.

If you exclude the unlisted companies, which nobody can short anyway, and those large stakes in smaller companies which he'd have to declare anyway, you're left with the bigger caps and the question whether any anti-Woodford movement could really shift the price. Was the price of AstraZeneca, back when he held it, really going to move on people trying to outmaneuver Woodford?

talexuser

Today's Questor in the Telegraph, reinforces his hold on HL shares.

Whether this is PR puff or not HL claims Woodford no longer appears in the top 30 enquiries to HLs help desk. So "loyalty" inertia maybe outweighs anger over the consistent Woodford recommend?

If true it's disappointing for the concept of competition - if I was trapped in the gate I would be looking hard at those intermediaries who put Woodford on their sell lists a year ago, and not pay HL any more fees on my total portfolio.

Drp8713

talexuser wrote: »

Today's Questor in the Telegraph, reinforces his hold on HL shares.

Whether this is PR puff or not HL claims Woodford no longer appears in the top 30 enquiries to HLs help desk. So "loyalty" inertia maybe outweighs anger over the consistent Woodford recommend?

If true it's disappointing for the concept of competition - if I was trapped in the gate I would be looking hard at those intermediaries who put Woodford on their sell lists a year ago, and not pay HL any more fees on my total portfolio.

But how many people would really be that bady affected?

You would have to do all of the following:

Used the Wealth 50 to build your portfolio
Ignored all of the main investment sectors except UK Equity Income (otherwise you would have sub 10% in WEI and any losses would be 2-3% of portfolio max)
Not have reviewed your holding's performance (if you didnt notice years of underperformance would you notice the removal from the Wealth 50?)
Not have wanted to sell before the block (but suddenly do now)
Not hold more than £10k (or not care about overpaying fees or you would use close ended funds with HL)
Be a DIY investor who doesnt take personal responsibility for their investment choices.

Not doing just one of those things means you wouldnt be in this situation/upset...

Thrugelmir

talexuser wrote: »

Today's Questor in the Telegraph, reinforces his hold on HL shares.

Whether this is PR puff or not HL claims Woodford no longer appears in the top 30 enquiries to HLs help desk. So "loyalty" inertia maybe outweighs anger over the consistent Woodford recommend?

If true it's disappointing for the concept of competition - if I was trapped in the gate I would be looking hard at those intermediaries who put Woodford on their sell lists a year ago, and not pay HL any more fees on my total portfolio.

With £90bn or so under management. HL are still an industry force to be reckoned with.

coyrls

Drp8713 wrote: »

But how many people would really be that bady affected?

You would have to do all of the following:

Used the Wealth 50 to build your portfolio
Ignored all of the main investment sectors except UK Equity Income (otherwise you would have sub 10% in WEI and any losses would be 2-3% of portfolio max)
Not have reviewed your holding's performance (if you didnt notice years of underperformance would you notice the removal from the Wealth 50?)
Not have wanted to sell before the block (but suddenly do now)
Not hold more than £10k (or not care about overpaying fees or you would use close ended funds with HL)
Be a DIY investor who doesnt take personal responsibility for their investment choices.

Not doing just one of those things means you wouldnt be in this situation/upset...

According to The Lang Cat:

[FONT=&quot]......although with 76% of HL customers having no exposure to #thatfund, and over 50% of those that do holding less than £4k, I for one am not sure the impact to HL will be that profound.[/FONT]

Drp8713

coyrls wrote: »

According to The Lang Cat:

Quite. Mountain and mole hill.

Given the recent market increase, anybody sensibly diversified will be making a profit even if WEI ends up taking a 20 or 30% hit.

talexuser

Support staff redundancies announced at Woodford Capital. I suppose that was inevitable, carrying on after this looks unlikely unless some uber-contrarians stick with him in a much smaller fund looking for upsides from a shorting over correction.