Neil Woodford makes a comeback

aroominyork

MaxiRobriguez said:

Prism said:

MaxiRobriguez said:

Personally I think he should be in jail, not starting up another fund.

It's one thing "underperforming", it's another thing entirely roping in investors who believed they were investing in a large cap equity income fund, only for the fund to go bankrupt because the manager invested in frontier companies on the sly because it was more entertaining to do so and gave a sense of masculinity and bravado when (if!) it comes off.

If similar things (take investment, lie about what you're doing) happened in another industry and the sums were much less, then no doubt those people would end up in jail.

A bit dramatic. This was the most transparent fund I have even seen which was to some degree part of its downfall. The entire holding list was kept up to date monthly for anyone to see and look into. There was little suggestion that this was purely a large cap fund as it was invested in plenty of FTSE 250 stocks in addition to the small caps which it shouldn't have been invested in. This liquidity issue was reported on time and time again for anyone that cared to look.

Anyone that invested in this fund and claims that they didn't know what it was invested in has only themselves to blame. Stick to index funds maybe.

Not everyone is as smart as people on this forum. Many retail "investors" were roped into his fund but didn't have the capability to assess the underlying portfolio holdings.

Exactly. It is not sufficent to bark "caveat emptor". He marketed himself and his fund in a way which could easily mislead people who are not fiancially savvy, as people on this site highlighted many times even before things went wrong. He mislead people, and it's simply not creible to say he wasn't aware he was misleading them.

Moe_The_Bartender

MaxiRobriguez said:

Prism said:

MaxiRobriguez said:

Personally I think he should be in jail, not starting up another fund.

It's one thing "underperforming", it's another thing entirely roping in investors who believed they were investing in a large cap equity income fund, only for the fund to go bankrupt because the manager invested in frontier companies on the sly because it was more entertaining to do so and gave a sense of masculinity and bravado when (if!) it comes off.

If similar things (take investment, lie about what you're doing) happened in another industry and the sums were much less, then no doubt those people would end up in jail.

A bit dramatic. This was the most transparent fund I have even seen which was to some degree part of its downfall. The entire holding list was kept up to date monthly for anyone to see and look into. There was little suggestion that this was purely a large cap fund as it was invested in plenty of FTSE 250 stocks in addition to the small caps which it shouldn't have been invested in. This liquidity issue was reported on time and time again for anyone that cared to look.

Anyone that invested in this fund and claims that they didn't know what it was invested in has only themselves to blame. Stick to index funds maybe.

Not everyone is as smart as people on this forum. Many retail "investors" were roped into his fund but didn't have the capability to assess the underlying portfolio holdings.

He could have frozen the management payments whilst the funds was in complete disarray but he chose to kept extracting that wealth from a failed fund.

The guy is a crook. There should have been regulatory lessons learned from this episode.

If you don’t know or don’t understand what you’re buying, you should stick to a savings account. You should always look under the bonnet and if you don’t and it goes wrong, you only need to look in the mirror if you want to know who to blame.

aroominyork

Moe_The_Bartender said:

MaxiRobriguez said:

Prism said:

MaxiRobriguez said:

Personally I think he should be in jail, not starting up another fund.

It's one thing "underperforming", it's another thing entirely roping in investors who believed they were investing in a large cap equity income fund, only for the fund to go bankrupt because the manager invested in frontier companies on the sly because it was more entertaining to do so and gave a sense of masculinity and bravado when (if!) it comes off.

If similar things (take investment, lie about what you're doing) happened in another industry and the sums were much less, then no doubt those people would end up in jail.

A bit dramatic. This was the most transparent fund I have even seen which was to some degree part of its downfall. The entire holding list was kept up to date monthly for anyone to see and look into. There was little suggestion that this was purely a large cap fund as it was invested in plenty of FTSE 250 stocks in addition to the small caps which it shouldn't have been invested in. This liquidity issue was reported on time and time again for anyone that cared to look.

Anyone that invested in this fund and claims that they didn't know what it was invested in has only themselves to blame. Stick to index funds maybe.

Not everyone is as smart as people on this forum. Many retail "investors" were roped into his fund but didn't have the capability to assess the underlying portfolio holdings.

He could have frozen the management payments whilst the funds was in complete disarray but he chose to kept extracting that wealth from a failed fund.

The guy is a crook. There should have been regulatory lessons learned from this episode.

If you don’t know or don’t understand what you’re buying, you should stick to a savings account. You should always look under the bonnet and if you don’t and it goes wrong, you only need to look in the mirror if you want to know who to blame.

"Should...". Easy to say. But many people do not realise how complex investing in - otherwise hoards of people wouldn't get sucked into mini bonds thinking they are safe and giving them 8% pa. One of the roles of financial regulatory authorities is to protect people from misunderstandings they might reasonably make.

[Deleted User]

Moe_The_Bartender said:

MaxiRobriguez said:

Prism said:

MaxiRobriguez said:

Personally I think he should be in jail, not starting up another fund.

It's one thing "underperforming", it's another thing entirely roping in investors who believed they were investing in a large cap equity income fund, only for the fund to go bankrupt because the manager invested in frontier companies on the sly because it was more entertaining to do so and gave a sense of masculinity and bravado when (if!) it comes off.

If similar things (take investment, lie about what you're doing) happened in another industry and the sums were much less, then no doubt those people would end up in jail.

A bit dramatic. This was the most transparent fund I have even seen which was to some degree part of its downfall. The entire holding list was kept up to date monthly for anyone to see and look into. There was little suggestion that this was purely a large cap fund as it was invested in plenty of FTSE 250 stocks in addition to the small caps which it shouldn't have been invested in. This liquidity issue was reported on time and time again for anyone that cared to look.

Anyone that invested in this fund and claims that they didn't know what it was invested in has only themselves to blame. Stick to index funds maybe.

Not everyone is as smart as people on this forum. Many retail "investors" were roped into his fund but didn't have the capability to assess the underlying portfolio holdings.

He could have frozen the management payments whilst the funds was in complete disarray but he chose to kept extracting that wealth from a failed fund.

The guy is a crook. There should have been regulatory lessons learned from this episode.

If you don’t know or don’t understand what you’re buying, you should stick to a savings account. You should always look under the bonnet and if you don’t and it goes wrong, you only need to look in the mirror if you want to know who to blame.

Linbus system, power train unit, ECU...most people can't make head nor tail of what is under the bonnet of their car.
Are you really saying if something goes wrong, it's the owner's fault? 

Prism

ZingPowZing said:

Moe_The_Bartender said:

MaxiRobriguez said:

Prism said:

MaxiRobriguez said:

Personally I think he should be in jail, not starting up another fund.

It's one thing "underperforming", it's another thing entirely roping in investors who believed they were investing in a large cap equity income fund, only for the fund to go bankrupt because the manager invested in frontier companies on the sly because it was more entertaining to do so and gave a sense of masculinity and bravado when (if!) it comes off.

If similar things (take investment, lie about what you're doing) happened in another industry and the sums were much less, then no doubt those people would end up in jail.

A bit dramatic. This was the most transparent fund I have even seen which was to some degree part of its downfall. The entire holding list was kept up to date monthly for anyone to see and look into. There was little suggestion that this was purely a large cap fund as it was invested in plenty of FTSE 250 stocks in addition to the small caps which it shouldn't have been invested in. This liquidity issue was reported on time and time again for anyone that cared to look.

Anyone that invested in this fund and claims that they didn't know what it was invested in has only themselves to blame. Stick to index funds maybe.

Not everyone is as smart as people on this forum. Many retail "investors" were roped into his fund but didn't have the capability to assess the underlying portfolio holdings.

He could have frozen the management payments whilst the funds was in complete disarray but he chose to kept extracting that wealth from a failed fund.

The guy is a crook. There should have been regulatory lessons learned from this episode.

If you don’t know or don’t understand what you’re buying, you should stick to a savings account. You should always look under the bonnet and if you don’t and it goes wrong, you only need to look in the mirror if you want to know who to blame.

Linbus system, power train unit, ECU...most people can't make head nor tail of what is under the bonnet of their car.
Are you really saying if something goes wrong, it's the owner's fault? 

I don't think anyone is saying that that it wasn't his fault for investing in illiquid small companies in the main fund. It was a bad decision, he got caught out by it, the fund was taken off him and the problem was fixed. Some people lost a bit of money - always a risk with investing - due to a few years of underperformance. However he didn't break the law and therefore its unlikely that he can be barred from opening up this new fund but it seems unlikely many will want to buy in.

Much like your car example, a poor quality car from a previously decent manufacturer would be recalled and fixed but you would likely lose value on the car over time and the same manufacturer would likely try and release a new model at a later point. You don't have to buy it and in fact if the first model was seriously bad I bet very few people would. 

[Deleted User]

Arguably, but Moe The Bartender is saying something else, he says it is the buyer's responsibility to look under the bonnet, check the electronics and, if it goes wrong, blame herself. If investors were held to that level of expertise, there would be no need for a list of recommendations on the Hargreaves Lansdown website, by which most private investors in Woodford were netted.

Hargreaves Lansdown has a lot to answer for for their part in the Woodford funds fiasco.

talexuser

There were several years of under performance before it closed and plenty of time to jump out. I sold when it was ~10% down from peak, ftse was rising during this time, other income funds were not similarly falling, stories started about money being pulled out, and analysts were openly giving sell opinions, so made 30% in three years. If you are told that funds may fall and that historic performance does not mean future performance etc, surely that is some degree of caveat emptor. The biggest reputation fail should be HL putting it in their own funds and "wealth whatever the number was at that time" up to the last minute it actually failed, but it hasn't appeared to harm them at all, and like failed politicians, Woodford keeps his head down for a time and just comes back as if nothing untoward has happened. Life is good at the top.

Thrugelmir

MaxiRobriguez said:

Personally I think he should be in jail, not starting up another fund.

Appears Woodford is being employed to manage the same investments the fund once held. Perhaps shows how little is actually known. Typical media story these days to create a lot hot air and stamping of feet. 

Croeso69

MaxiRobriguez said:

Personally I think he should be in jail, not starting up another fund.

Clink Fund Solutions?

[Deleted User]

Exactly the same strategy as before.

"When Woodford left Invesco and started his own firm he simply bought the same companies again, taking roughly 20% stakes in many of the same illiquid companies. He bought 30% in these companies at Invesco and 20% of these companies at his own firm. No wonder these stocks went up and no wonder his performance looked so good. Woodford managed £32bn at Invesco and £16bn at his own firm. The sheer weight of money going into the same stocks drove up their prices.

We all now know what happened when the money stopped flowing in and flowed out; the process reversed. When Woodford started selling his stakes, the hype went out of valuations and having Woodford on a shareholder register became Kryptonite to the stock price, compounding the underperformance of the fund."

The Telegraph interview (his first for years) would have been the choice of Woodford himself, and the names of the stocks he dropped into the conversation didn't happen by accident.  There were tears, reportedly. Whether Woodford once more intends to circumvent regulations by listing holdings on the Guernsey Stock Exchange wasn't broached in the interview afaik.