Woodford Concerns

Reaper

At times I think I should get back in as
1) Woodford Patient Capital Trust says it is thinking about replacing Woodford which might restore confidence
2) Some investors think it has fallen too far and are looking to make money on a recovery or if the trust is wound up.

But then I hear Woodford has sold 60% of his own holdings in the fund (though he claims it is just to pay tax bills etc)

Now I hear another Woodford pick may well turn out to be dodgy and I wonder just how much research he did on the rest of his portfolio. Once free of the restraints imposed in his previous funds he seems to have gone overboard leaping at every high risk opportunity that he could get his hands on without checking them out properly. Let's hope he didn't invest in LCF

I think I am going to stay clear. It doesn't feel like all the bad news is over yet.

MaxiRobriguez

Reaper wrote: »

At times I think I should get back in as
1) Woodford Patient Capital Trust says it is thinking about replacing Woodford which might restore confidence
2) Some investors think it has fallen too far and are looking to make money on a recovery or if the trust is wound up.

But then I hear Woodford has sold 60% of his own holdings in the fund (though he claims it is just to pay tax bills etc)

Now I hear another Woodford pick may well turn out to be dodgy and I wonder just how much research he did on the rest of his portfolio. Once free of the restraints imposed in his previous funds he seems to have gone overboard leaping at every high risk opportunity that he could get his hands on without checking them out properly. Let's hope he didn't invest in LCF

I think I am going to stay clear. It doesn't feel like all the bad news is over yet.

Replacing the manager doesn't warrant consideration in my mind. You still have a toxic brand and a portfolio which still constitutes a load of crap that will weigh on anyone managing the fund Woodford or otherwise.

Reaper

MaxiRobriguez wrote: »

Replacing the manager doesn't warrant consideration in my mind. You still have a toxic brand and a portfolio which still constitutes a load of crap that will weigh on anyone managing the fund Woodford or otherwise.

That depends what you think of Woodford. If you think the fund price may be driven down below the true NAV by a loss of confidence in him then replacing him and have somebody start to reverse his policies would help.

If you think he has neutral or positive effect on the share price then replacing him is not a good idea.

Personally I think he needs to go, even if the funds are named after him.

Moe_The_Bartender

Midas wrote: »

Burford Capital (which from memory was the second or third largest holding in WEIF before the suspension) is being shorted by Muddy Waters and down c. 25% this morning :eek:

Burford is down over 50% today as of now. It accounted for 6% of Woody's fund at the end of June so will now be around half that or less.

If the Muddy Waters report is accurate, this yet again raises the question about Woodford’s stock picking. Same goes for his chum Barnett at Invesco who must surely be overdue for the bullet. To think that I used to have a six figure sum invested with them at one point and got out before the stench became overwhelming.

Malthusian

I can't really see the point of replacing Woodford and getting a new manager to - what, sell all his unlisted crap and buy large-cap equities with the handful of coppers that is left, turning WPCT into just another UK or global investment trust with an image problem and a hideous performance graph? You may as well wind the fund up.

Equally I can't see the point of sacking Woodford and getting a new manager to keep the fund as it is. It's still the same crap, only you have eliminated the rationale behind the fund, which is: Woodford's genius stockpicking + patience = moon. If you believe that WPCT's investments will eventually come good it makes no sense to sack the man who bought them.

And what are you going to pay a new fund manager with given WPCT's "fee free" structure?

It's double or quits at this point.

Midas

The full Muddy Waters report on BUR is available here: http://d.muddywatersresearch.com/content/uploads/2019/08/MW_BUR_08072019.pdf

Astonishing reading. For example, this quote:

' BUR’s governance strictures are laughter-inducing. The CFO is the wife of the founder / CEO. Under the best of circumstances, this should alarm investors; however, with a company that consistently books non-cash accounting profits, it is unforgivable. In a situation so ripe for abuse, the very least the company could do is to have an independent CFO. (The CEO has sold a total of £59.4 million of stock.) BUR has cycled through four prior CFOs or senior finance managers (none of whom stayed for long). The table below shows the turnover at CFO and senior finance functions. These facts beg the question “Is Elizabeth O’Connell the only CFO who can be relied upon to approve the accounts?” '

Reaper

It will be interesting to see how Burfield respond. It looks pretty damming. Invesco don't come out of it well either.

Scarpacci

Also of note, Hargreaves Lansdown has Burford in all three of its "Select" funds.

Moe_The_Bartender

And what's going on with Sabina Estates whose website is inaccessible except for the home page and whose accounts show next to nothing but the big cheese seems to be a long time buddy of Woodford?

https://www.sabinaibiza.com/

poppy10_2

Sabina is a cash shell. Claims to be a property company but doesn't seem to actually build any properties, or do anything really other than raise millions in capital, and distribute hundreds of thousands in salaries and fees to the directors.

Even worse is Safe Harbour, started up a few years ago with a vague business plan to "buy a B2B platform." Has raised tens of millions in capital, mostly from Woodford and Barnett, but still hasn't purchased anything years later so still isn't actually doing anything. In the interim the directors have withdrawn millions in salaries and "advisory fees". It's a publicly listed company on AIM but there have been virtually no transactions in its shares, other than one curious buy order last year that was just enough to raise the share price by 10% (from 120p to 132p), exactly the amount needed to trigger a performance bonus for the directors.

Anything Woodford touches seems to be dodgy.