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  • FIRST POST
    • ZingPowZing
    • By ZingPowZing 21st Oct 19, 8:38 PM
    • 254Posts
    • 91Thanks
    ZingPowZing
    Panorama 21/10/19
    • #1
    • 21st Oct 19, 8:38 PM
    Panorama 21/10/19 21st Oct 19 at 8:38 PM
    Any thoughts/experiences?

    Apparently HargreavesLansdown have 300,000 tied up in Woodford funds.
Page 2
    • bostonerimus
    • By bostonerimus 21st Oct 19, 11:31 PM
    • 3,425 Posts
    • 2,731 Thanks
    bostonerimus
    Are you qualified to offer advice?
    Originally posted by Thrugelmir
    Not qualified, but definitely certified or maybe certifiable.
    Misanthrope in search of similar for mutual loathing
    • bd10
    • By bd10 21st Oct 19, 11:37 PM
    • 142 Posts
    • 74 Thanks
    bd10
    You assume all those invested in his fund were smart enough to have realised. You are wrong. A lot are not smart enough to put it bluntly. Whilst it is easy to find the companies that woodford invested in, it is not so easy to determine that they were a load of rubbish. The Link reports do not help as well as it just validates the valuations that are clearly too high.


    So probably the best option investors have is to get out when they see some underperformance but most dont think like that, many would prefer to hope for the best rather then lock in a loss. Others may be convinced by their IFAs to hold tight. And the rest would not even monitor that closely.


    What woodford did was not just picking bad stocks. He made a complete U turn in strategy and made highly dangerous bets that went completely against his main objective. Not to mention the fact that Woodford was a bit too cosy with the same companies he invested in as well as the influence he had with valuers. I have seen this in person myself. When someone wants to sell something hard to value, they cosy up with valuers to convince them to value it at a higher price then it is actually worth. It happens a lot in the finance industry (particularly if it is related to real estate). I have seen it so many times that i think genuinely there should be investigations done. Similar to the subprime crisis when rating agencies got it so wrong.


    But regulators are always asleep, not interested or turn a blind eye.
    Originally posted by itwasntme001
    I agree with you on many points. Cutting losers is the toughest part for any retail investor. Hope dies last. I did not at one of his funds actually, this was not the fund that got closed but another one and the combination of home builders and finance companies and others heavily exposed to the current brexit turmoil had me run the other way. Too toxic.
    It's absolutely impossible to value illiquid not publicly traded stocks for almost everyone. I am not expecting that.

    As for the FCA, also agree. They were totally asleep and failed the public. If I look across the pond how strict the CFTC/SEC is, oh boy, they are pulling up trading firms left right and centre now. Although they were also deep asleep and did not act on Madoff.

    There were failings on all sides. (I simply found Panorama's conclusion a bit too one-sided).
    • bostonerimus
    • By bostonerimus 21st Oct 19, 11:44 PM
    • 3,425 Posts
    • 2,731 Thanks
    bostonerimus
    I agree with you on many points. Cutting losers is the toughest part for any retail investor.
    Originally posted by bd10
    My portfolio is broadly the same as it was a quarter of a century ago. In 2008 I sold a lot of bonds and bought a lot of equities as I rebalanced through the financial crisis. I well remember selling bonds to buy a US equity index with the Dow Jones having fallen from 13k to around 7k.
    It wasn't a tough choice at all, I just followed my rebalancing rules.
    Misanthrope in search of similar for mutual loathing
    • itwasntme001
    • By itwasntme001 21st Oct 19, 11:48 PM
    • 442 Posts
    • 191 Thanks
    itwasntme001
    My portfolio is broadly the same as it was a quarter of a century ago. In 2008 I sold a lot of bonds and bought a lot of equities as I rebalanced through the financial crisis. I well remember selling bonds to buy a US equity index with the Dow Jones having fallen from 13k to around 7k.
    It wasn't a tough choice at all, I just followed my rebalancing rules.
    Originally posted by bostonerimus

    You are lucky to have had the opportunity to ride the market with bond yields falling and then hopping onto the equities train at low levels during the crisis.


    With bond yields at record lows and stocks at record highs, what can one expect in terms of growth in bonds and equities and how can one rebalance going forward? Seems like the easy money has been made already.
    • bostonerimus
    • By bostonerimus 22nd Oct 19, 12:34 AM
    • 3,425 Posts
    • 2,731 Thanks
    bostonerimus
    With bond yields at record lows and stocks at record highs, what can one expect in terms of growth in bonds and equities and how can one rebalance going forward? Seems like the easy money has been made already.
    Originally posted by itwasntme001
    Hmm, maybe just own VLS60 and see what happens in 30 years.
    My portfolio is becoming more equity heavy as I've stopped rebalancing, but I'll leave it alone and see what happens in the next 30 years.
    Misanthrope in search of similar for mutual loathing
    • Brian65
    • By Brian65 22nd Oct 19, 7:23 AM
    • 207 Posts
    • 106 Thanks
    Brian65
    Just had a look. To be included on the published list. Fund managers are required to provide discounted fees on the funds to HL clients. No direct remuneration , but a clear incentive to buy the fund via HL for retail investors. Cosy relationship.
    Originally posted by Thrugelmir
    Indeed. So the most profitable punters are sucked into HL instead of platforms which charge lower platform and trading fees.
    • Brian65
    • By Brian65 22nd Oct 19, 7:25 AM
    • 207 Posts
    • 106 Thanks
    Brian65
    Toothless as the owner of dentures sitting in a glass by the bedside.
    Originally posted by ZingPowZing
    If you mean the FCA I would agree.
    But I thought that, this time, the BBC went about as far as it could without risking legal action.
    • Brian65
    • By Brian65 22nd Oct 19, 7:33 AM
    • 207 Posts
    • 106 Thanks
    Brian65
    valuations that are clearly too high.
    Originally posted by itwasntme001
    That may be clear now but it wasn't then, and I think that is the root of the problem
    • msallen
    • By msallen 22nd Oct 19, 7:37 AM
    • 1,096 Posts
    • 1,369 Thanks
    msallen
    Or the lady who bought the fund for a few grand based on recommendation by a friend. That's just naive with an element of greed. Did she check what the holdings were or what the strategy is? I bet not.
    Originally posted by bd10
    Indeed. Although it was not explicitly stated it was implied that all her investments were in the one fund. The Beeb would have fulfilled its public service criteria better by just spending half an hour telling people not to put all their eggs in one basket, regardless of who the basket maker was or how well made they think the basket is.
    Hall of fame
    • Brian65
    • By Brian65 22nd Oct 19, 7:45 AM
    • 207 Posts
    • 106 Thanks
    Brian65
    They were totally asleep and failed the public. If I look across the pond how strict the CFTC/SEC is, oh boy, they are pulling up trading firms left right and centre now. Although they were also deep asleep and did not act on Madoff.
    Originally posted by bd10
    They seemed to have missed the other fund manager on the Panorama programme too, so I don't know if they are more efficient over there. Certainly prison sentences are longer in the USA for all types of crime. More inequality inevitably leads to more crime, and more prisoners. Hence Britain having the most in Europe, but not as many as the USA where inequality is greater.
    • Brian65
    • By Brian65 22nd Oct 19, 7:54 AM
    • 207 Posts
    • 106 Thanks
    Brian65
    I would say anything with direct property (not liquid REITs), hy corporate bonds, some small/mid cap funds, some ig bond funds, anything else too exotic, should probably get sold asap.
    Originally posted by itwasntme001
    Every other investment looks expensive to me too, as prices have been inflated by years of QE. But how else might you preserve the value of cash
    • OldMusicGuy
    • By OldMusicGuy 22nd Oct 19, 8:56 AM
    • 1,104 Posts
    • 2,281 Thanks
    OldMusicGuy
    It's good to see both of these scandals get prime time TV but it was disappointing for me on two counts. First, it created the impression that the entire industry consists of these fund managers who are supposed to know everything when in fact we all know that is not the case. It didn't highlight the alternative way of passive investing (which IMO is much better for less experienced investors). All it did was to scare the "ordinary Joe" away from investing.

    Second, it didn't highlight the role of HL. HL are the reason so many small investors got sucked in IMO - the lady featured in the programme was clearly an HL user. She did say that she backed up the friend's recommendation with "research" and was shown on the HL platform. That would have bombarded her with pro-Woodford messages.

    But surely the Hargreaves Lansdown proposition is that they do make those checks on behalf of the unsophisticated/uninterested/better things to do investor.
    Originally posted by ZingPowZing
    They don't, and the small print makes it clear they don't. However, their relentless positive view of Woodford did encourage people to invest with Woodford. It was one of the factors that influenced me to put a large sum into the Income Focus fund but I pulled the money out with a small loss once his investing direction became apparent to me. The Daily Fail guy should have been able to see the risks Woodford was taking but the small investor with limited could not be expected to.
    Last edited by OldMusicGuy; 22-10-2019 at 9:01 AM.
    • roddydogs
    • By roddydogs 22nd Oct 19, 9:14 AM
    • 6,458 Posts
    • 2,793 Thanks
    roddydogs
    Been said many times investments are not risk free, if you don't want risk go elsewhere.
    • Malthusian
    • By Malthusian 22nd Oct 19, 9:25 AM
    • 6,965 Posts
    • 11,246 Thanks
    Malthusian
    Could the H&L "Wealth List" be construed as financial advice and hence could H&L be sued for bad advice?
    Originally posted by bostonerimus
    No. Advice is a personalised recommendation. A list of 50 funds is not a recommendation.

    Bear in mind that nine months ago I would have told you that London Capital & Finance didn't give anyone financial advice, but until the FCA decides to rip up the rulebook again, as it stands that is what regulated advice means.

    The FCA are getting it in the neck for doing nothing but if they'd done something, i.e. put the fund into administration as soon as it breached the 10% unlisted share limit and did not redress the breach within 90 days (looking through the attempt to cheat by listing the shares on the side of a cowshed in Guernsey), they would have got pelters on the basis of "if they'd left it alone everything would have been fine". And no-one would have given them any credit.
    • eskbanker
    • By eskbanker 22nd Oct 19, 10:50 AM
    • 11,665 Posts
    • 14,462 Thanks
    eskbanker
    Indeed. Although it was not explicitly stated it was implied that all her investments were in the one fund. The Beeb would have fulfilled its public service criteria better by just spending half an hour telling people not to put all their eggs in one basket, regardless of who the basket maker was or how well made they think the basket is.
    Originally posted by msallen
    Seems to me that they largely abandoned the 'inform' and 'educate' aspects and chose to focus on 'entertain' instead, especially with the tired doorstep ambush trope....

    As you say, the apparently reckless actions of the woman following her friend and claiming to have conducted some cursory due diligence weren't challenged at all and she was mostly soft-soaped with heavily-loaded questions like 'what do you think of the protection you had' and 'how long can you keep losing £300/day for'!
    • itwasntme001
    • By itwasntme001 22nd Oct 19, 10:57 AM
    • 442 Posts
    • 191 Thanks
    itwasntme001
    I watched this last night. Afterwards i watched another programme about petty crime and investigators/police catching these low level criminals (usually stealing money in the £10s of pounds). These people were presumably from poor ethnic minority backgrounds.


    The contrast is very eye-opening. On one hand you have a fund manager raking in fees at the expense of many middle class families but getting away with it (arguably woodford trying to influence valuers and potential conflict of interest in the dodgy companies he invested in could be seen as some sort of crime). On the other hand you have people trying to save a few quid given their poor background and grtting caught red-handed and being fined multiples of the theft and in some cases criminal punishment.


    Both cases are not acceptable but very interesting to see the contrast between low level crime and high level financial "crime".
    • Thrugelmir
    • By Thrugelmir 22nd Oct 19, 11:04 AM
    • 65,406 Posts
    • 57,546 Thanks
    Thrugelmir
    Hmm, maybe just own VLS60 and see what happens in 30 years.
    Originally posted by bostonerimus
    May have worked in the past. What is the 40% invested into at the current time?
    ““there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.””
    ― Niall Ferguson
    • itwasntme001
    • By itwasntme001 22nd Oct 19, 11:08 AM
    • 442 Posts
    • 191 Thanks
    itwasntme001
    Hmm, maybe just own VLS60 and see what happens in 30 years.
    My portfolio is becoming more equity heavy as I've stopped rebalancing, but I'll leave it alone and see what happens in the next 30 years.
    Originally posted by bostonerimus

    Why would you want to own any bonds at current yields over a 30 year time horizon?


    Your strategy at this point in time seems a bit gung-ho tbh. Record low yields and a stock market that is at its highs with projections for forward returns forecast to be very low. Just does not feel right to be invested like this at this stage.
    • Brian65
    • By Brian65 22nd Oct 19, 11:12 AM
    • 207 Posts
    • 106 Thanks
    Brian65
    I watched this last night. Afterwards i watched another programme about petty crime and investigators/police catching these low level criminals (usually stealing money in the £10s of pounds). These people were presumably from poor ethnic minority backgrounds.


    The contrast is very eye-opening. On one hand you have a fund manager raking in fees at the expense of many middle class families but getting away with it (arguably woodford trying to influence valuers and potential conflict of interest in the dodgy companies he invested in could be seen as some sort of crime). On the other hand you have people trying to save a few quid given their poor background and grtting caught red-handed and being fined multiples of the theft and in some cases criminal punishment.


    Both cases are not acceptable but very interesting to see the contrast between low level crime and high level financial "crime".
    Originally posted by itwasntme001
    Yes I saw that. The coppers looking for the moped snatch and grab gangs remarked they are all from deprived backgrounds 'nobody with a comfortable life would take the risks for the rewards they do'
    I don't condone theft, but it left me with little sympathy for those who walk down the street flaunting a £10k watch.
    Mine cost £1.50 posted from China, does everything I need, and anybody who tries to mug me for it can have it
    Last edited by Brian65; 22-10-2019 at 11:15 AM.
    • itwasntme001
    • By itwasntme001 22nd Oct 19, 11:18 AM
    • 442 Posts
    • 191 Thanks
    itwasntme001
    Yes I saw that. The coppers looking for the moped snatch and grab gangs remarked they are all from deprived backgrounds 'nobody with a comfortable life would take the risks for the rewards they do'
    I don't condone theft, but it left me with little sympathy for those who walk down the street flaunting a £10k watch.
    Mine cost £1.50 posted from China, does everything I need, and anybody who tries to mug me for it can have it
    Originally posted by Brian65

    Yes, whilst some people look down on petty thieves, it helps to see from their perspective and position that the risk-reward is worth it. I would do the same.


    I am cheap so i think petty thieves would never even consider stealing from me.
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