Woodford Patient Capital Share Discussion Threads

[1tcm1] 18/9/2018 08:32

LOL trollwatch!

[trollwatch] 18/9/2018 08:27

Don't worry about your errors, jonwig, everybody knows you are not a literary man. It's only the discerning here who would have noticed your sly and subtle nod to Lord Byron, now dead alas. For it was he who wrote the famous lines:
"The Asserion came down like the wolf on the fold, And his cohorts were gleaming in purple and gold." Well done you!

Of course I have not read your post because unfortunately I have you filtered for irrelevance. But here's a few words of advice. Platitudes do not equal certitudes, no matter what their provenance.

[brianarthur1939] 18/9/2018 01:11

"jonwig 17 Sep '18 - 17:34 - 4449 of 4454

@ researchanalystman - again, your posts #4435, #4437 are superficially convincing, but don't stand up to scrutiny.

1) The WPCT concept is not in itself faulty, but the execution is. Most important here is the 20% gearing limit which leads to forced sales as GAV decreases. And he needs to sell good stuff in extremis. I don't know what Northern Trust is thinking about its debt facility.

2) You cite Wellcome, and its Syncona IT is an example of how to do it: use specialist expertise to pick stocks and then give specialist support. Woodford trusts "people" to do it for him.

3) Amazon ... "no earnings" (I paraphrase). Here they are:



That's the cash flow page. Look at the recycling for growth. Go to the income statement tab. There are the post-tax earnings. Sky-high valuation, but no earnings??

Please, when you make asserions, check that they bear scrutiny."




@jonwig - your post 4449, again, superficial but not convincing.

The usual shareprophets platitudes, but incoherently presented. Could do better. But then, maybe not. For instance check what you aver about Woodford in 2)

I do like your asserions, however, even though they do not bear scrutiny. So does your friend chucko1, but I don't think he understands.

[researchanalystman] 17/9/2018 20:11

In no way suggesting that wpct has an equivalentBut,Remember genetech... after its first five years it had just Annual Revenues of $9.0 Million . After only having $3.4 Million after four yearsIt takes a while for momentum to grow -as they say" patience"can sometimes be very well rewarded( for those who don't know it was a phenomenal success )

[researchanalystman] 17/9/2018 19:43

"Most important here is the 20% gearing limit which leads to forced sales as GAV decreases. "Or conversely as successful companiesGrow and get more fund raising from other investors such asGovernment of singapore then leverage becomes less/ securitybecomes more secure as unmet demand for shares from otherswho wanted a slice but couldn't get it.Think of someone building a new house, gets part paymentsas they complete certain stages... the value in the house may grow ,may fall if not completed but if people (investors) comealong and say what your building is great - i'd like a slice of itand are reputable and put their money where their mouths are,your risk is reduced(they are adding money which you don,t need to.) the initial loan is more secure...you have an "out" if needed as there is a demand to buy your stake if you want to sell BUT if you don't need it you say i,m going to stay with my great choice i made..With some of wpct companies that appears to be the path taken.. So we will see but time is needed to see. And that is the big advantage of a closed fund.Northern are not mugs..20% gearing is modest.Remember springer just put £100 mln into purple bricks which makes it more secure than it was..

[chucko1] 17/9/2018 17:50

On Amazon, quite simply, it may not have had earnings, but it had a growing mountain of revenue. Even as far back as 1996.

In this specific case, it was valued highly on the basis that it could always stop investing and turn on the “Net Income Avail. To Common” tap. Recently, it’s done both.

[ltcm1] 17/9/2018 17:45

RAM - good point.

Chucko1 - that would be a most facinating study!

I really think Woodford needs to man up and do a broadcast on ALM soon. He was so positive about them, isn't it time he explained what is going on there and gave us his thoughts??? The publishing of the delayed results later this month is surely the right time to update.

[jonwig] 17/9/2018 17:34

@ researchanalystman - again, your posts #4435, #4437 are superficially convincing, but don't stand up to scrutiny.

1) The WPCT concept is not in itself faulty, but the execution is. Most important here is the 20% gearing limit which leads to forced sales as GAV decreases. And he needs to sell good stuff in extremis. I don't know what Northern Trust is thinking about its debt facility.

2) You cite Wellcome, and its Syncona IT is an example of how to do it: use specialist expertise to pick stocks and then give specialist support. Woodford trusts "people" to do it for him.

3) Amazon ... "no earnings" (I paraphrase). Here they are:



That's the cash flow page. Look at the recycling for growth. Go to the income statement tab. There are the post-tax earnings. Sky-high valuation, but no earnings??

Please, when you make asserions, check that they bear scrutiny.

[researchanalystman] 17/9/2018 17:32

Itm "who is going to pay"china's growth has been 6 percent per annum for many many years.Its Middle class has boomed Middle class growing in indiaThe US spending , is say 15% of gdp on health 400 mln peopleIf or when the other 6 bln in the world or just a small percentage of them start catching up with the united states and modern diagnostics tentacles grow, the demand will be no problem..Get the right product in health and it always will sell.Individual drugs tailored for individual's specific issues if resulting in less side effects and that would be a mega wow!Always Remember the uk is but a tiny less than one percent of a world of 7 bln people. Global gdp rises 3 percent plus year after year after year

[chucko1] 17/9/2018 17:13

Woodford did have a number of these Biopharma stocks when at Invesco and then in the Income Fund. So it’s not just the past 3.5 years of history, but far longer a period. Were the statistics better or worse during the former period? Anyone have any data on this? (or even specific examples). Overall, the funds were great, but I am not aware of any performance attribution.

The genuine concern is that he is more a hobbyist, or somewhat attached, regarding these “Patient Capital” things, putting him at some disadvantage.

[ltcm1] 17/9/2018 16:15

RAM - a spirited and well argued defence above and I thank you for it.

OK I accept the EPS was a bit of kite flying on my behalf, which you rightfully demolished.

You use the example of Amazon (!) however the story of Woodford's non Bio's has been cash burn not growth. If you go below the top six holdings there isn't much to get exited about.

WPCT is effectively concertinered into a half dozen biotech's and as Woodford admitted in this clip about British Bio - "the history isn't great".



The interview is very interesting because Woodford acknowledges the falling GDP's present a difficulty in who is going to pay for all this medicine. A good example might be Proton Partners.

If this biotech was such a great investment why have all the big pharma's got out of it??? Perhaps they concluded it was too risky.

The opportunity may be good but what knowledge of the sector does Woodford really have beyond drinking Port on 13th Century refectory tables at Oxford colleges??? What exactly is his qualification for making all these picks???

WPCT is riding just a few big horses when the strike rate in the sector is historically low in the UK.

In Woodford we trust???

[chucko1] 17/9/2018 15:56

Trollwatch, as you are filtered, you will have to invite Harijan (who I inadvertently left off the filter list) to respond! The door remains ajar for a short while.

[chucko1] 17/9/2018 15:50

Researchman, much of what you say is correct. But my point is that 3.5 years has seen WWH and Polar funds up 30 to 40%. Are they really comparable? Ask initial investors in WPCT which, don’t forget, is a listed stock available to any investor in any size, just like the two just mentioned. They are also up 400% ish the past 10 years (which, by chance, is an IRR of 17.5%). It was not sold as a VCT with the relevant tax breaks.

That said, WWH did halve in value in 2002, but then that was at the time that everything in that space did.

[chucko1] 17/9/2018 15:34

Harijan, do respond and let’s see what you have to say, rather than merely (and 100% inaccurately) critiquing the poster, rather than the post.

Are you a coward?

[researchanalystman] 17/9/2018 15:21

ChuckoThe issue of "underperformance" you say for WPCTWhat benchmark can one use... true it said a return of 10%before taking fees but i'm not sure what a vc type trustof medical long lead time developing companies can be realistically benchmarked against. Discounts of 10-15% are (were ) the norm for trustsSo from 100 to current 92p net asset value with potential forundervalued success because havent been revalued. ( think historic and property type valuations) in my mind doesnt particulary say that fund managers exist for the door..In fact didnt we see the reverse with one starting to accumulate.Please remember again this is WPCT not all woodford

[researchanalystman] 17/9/2018 15:03

A thought for postersIn the U.S. the nasdaq and silicon valley has been successfuland people made rich because they took their expertise and world leading skill and harnessed it. It was technology and University expertise. Companies were formed ,got capitalsome failed but some prospered amazingly.Why, when in the UK we take our world class leaders BY FARin biotechand medicine and pre eminent universities in the field andfollow the same path do we not praise but castigate.Do we not say - this is what we are great at. This is where we will succeed but as yet ( until recently) we didn,t know which company or form.The only difference - both are mega billions markets of the future - for biotech and medicine the lead time is very much longer than tech to market . Patience not instant gratification.Think "wellcome" and because of its original medical successes it has now a trust which is has now grown £23bln Yes billion . Why berate investing in a world class country and universities at the forefront of cancer / dna/ - discovered of course in uk.And many other medical facetsAt last the uk's pioneering discoveries are being taken advantage of for monetary benefit unlike so many in the past which just stayed in Universities not developed and given away And there is a very good chance that seed corn of wpct will prosper as as a result . This is what the WPCT is all about .it may not succeed but its in the right place/ the right area.Someone somewhere will.If you are looking for low risk in a secure fund this is not for you.

[chucko1] 17/9/2018 14:59

If an investor was happy to receive a 10% annualised return over 10 years upon investment, fine. If there had been a meaningful chance of a negative return for the first 3.5 years, some of these investors might have been put off - difficult to say what proportion. But it was well advertised that the target investor required the quality of patience.

But put it another way: to achieve the target NAV return of 10%, the annualised return over the next 6.5 years needs to be about 17.35%. How many of the same investors have that continuing level of confidence? Probably fewer.

It is this that may help explain the large discount; diminishing faith in what is likely to be achieved here, notwithstanding the current NAV. That said, I am not yet convinced that this is certainly a dud, but I think that it is very likely to underachieve (certainly in relative terms).

Whatever was said about patience, most fund managers would agree that underperformance extending beyond three years is almost never tolerated by investors. This affects their position taking, and history bears this out, even in the case of the most successful fund managers.

[researchanalystman] 17/9/2018 14:19

Itm - oh please"The one word you will never hear from WPCT is this one - EPS. In case you are not aware it stands for Earnings Per Share. I've never heard Neil talk about earnings, p/e, profit, iDo please note This is WPCT - it is not repeat not an income fundWhen you have a successful embryonic company . Eps doesn'tCome into it.. revenue or borrowings or share raising are usedto Invest or expand the "successful" so its grows and developsIncome/ eps comes much later as you I'm sure you're well aware.So many examples in the U.S. classic amongst many is amazonYou also don't give up your share in a great company that you got in at the beginning by selling it too soon. ( remember you being taught let winners ride?)Do please remember this is forum for a closed fund and as such is protected from the risk of forced sales (once the successful initial leverage is paid off from investing addtional cash in the success stories. )True market pressure might result in a weaker net asset value or share price but the holdings can be kept for the recovery if needed in a massive bear market)

[the air marshall] 16/9/2018 15:15

Winnie if you had read the prospectus for WPCT you would have realised that your post is arrant nonsense repeated ad nauseam over previous months. I would guess that most real investors in WPCT, more savvy than you, realised that this was a long-term investment, PATIENT, as you are so often reminded.

To be honest at the moment EPS isn't a particularly interesting metric. Time will come, of course, when it will be. Watch this share shift when that happens.

[ltcm1] 16/9/2018 15:07

trollwatch all that may be true but value is between the buyer and seller, it isn't for any of us on the WPCT thread to pass judgement on whether Shareprophets subscribers get a good deal or not.

I don't think anyone bearish here needs TW to construct a shorting case, when Mr Woodford does a far better job himself with the various actions he has taken since launching WPCT, moves that have been reported in numerous sources like The Times and the FT.

My case against WPCT is purely based on investment principles. I believe this culture of "longer term" has spread like a cancer through WPCT companies. They all hear Neil saying "judge us in 10 years" and think 'cool, we don't have to bother about making a profit for a decade, we might aswell empire build as much as possible too!' I don't think anything has been chopped yet from the fund and there isn't a single company in there that actually turns a profit. Infact I doubt anything will do so for another two years at least.

The one word you will never hear from WPCT is this one - EPS. In case you are not aware it stands for Earnings Per Share. I've never heard Neil talk about earnings, p/e, profit, it's always making people better, curing cancer and transforming society.

Meanwhile he has constructed the huge time bomb that is WPCT and the clock is ticking...