Woodford Patient Capital Share Discussion Threads

[chucko1] 25/10/2018 13:06

For all three years? You should have gotten out more. Or bought a fan heater.

Fine college, Lincoln, but not Balliol for PPE? 9 Prime ministers until now (after 755 years of existence), and I think a few of them were PPEists. But better than that, some really great, original (and controversial) thinkers.

And Boris ... (PM #10 ???)

[ltcm1] 25/10/2018 11:12

I was in an attic room on staircase eight. It was spacious and had 'the look' but instead of a roaring fire there was just a one bar elctric fire that threatened electrocution on an almost daily basis.

I used to sit there absolutely freezing and feeling sorry for myself would play 'Power Corruption and Lies' by New Order whilst plodding the revolution.

Guess I haven't changed that much.

[lewis121] 25/10/2018 10:09

Might it be that he is referring to Lincoln College Oxford?

[ltcm1] 25/10/2018 08:46

WPCT - In view of the declines in quoted stocks currently, is the 80/20 ratio of unquoted to quoted holding up sufficiently???

Or is Neil on one of his famous 'sourcing liquidity' exercises???!!!

[ltcm1] 25/10/2018 08:43

PPE at Lincoln matey.

But this isn't about me, it's about the economics.

If anyone wants to put the case for 2% UK growth I will only be too glad to hear it.

[chuckol] 24/10/2018 23:31

ltcm1, what qualifications, if any, do you have to make that 'analysis'? In my view, which I am easily as qualified as you to propagate, you are wrong, but I don't write thousands of posts relentlessly pushing it down people's throats.

Your track record on these threads is abysmal, is it not? And in the real world outside these threads also you have absolutely no record to speak of. You are simply NOT an expert. You might as well go into the nearest pub or golf club and ask for a random opinion.

I'd back woodford's analysis over yours a million times over. You are NEVER right! Sorry, mate.

Nice little rise today, LOL.

[saltraider] 24/10/2018 23:21

Give it a rest, Winnie. Why don't you?

It would be good for your health.

You don't look too good these days. I know it is mostly your relentless masturbation over that snap you took of 'sweet Pandora' but your obsession with Woodford clearly isn't helping either.

Take care of yourself, man!

[ltcm1] 24/10/2018 23:08

I see Woody's tweeting today about the 'bigger picture' so let's take a look.

Top of page we have:

"In the broader economic context, I don’t feel the need to form specific forecasts for things like inflation, GDP growth and unemployment.."

Then if you click on 'UK Economy' he says:

We expect the UK economy to grow by at least 2% this year – that isn’t a spectacular rate of growth but it is a considerably better outcome than the recession that some of the more pessimistic commentators are forecasting and what appears to be priced in to valuations. It will also compare very favourably with other major economies in Europe and North America, many of which are rapidly losing momentum amid increased political risks and tighter monetary policy.


Then under valuations he says:

"The bubble-like characteristics that have become increasingly evident in financial markets, add considerable risk to the investment backdrop. The elastic between the valuation of the popular stocks (such as the FAANGs* in the US, or in the UK, anything which offers investors exposure to Asian growth) and the unpopular stocks (the healthcare sector has been in a bear market for a long time now, for example, and in the UK, anything domestically-focused is completely out-of-favour) has reached breaking point, in my view.

We have already seen more than enough evidence to suggest that this valuation stretch is now on the cusp of reversing: tighter liquidity conditions, pressure on emerging markets, slowing growth in China, vanishing momentum in the eurozone economy, an increased likelihood that the failure of the US economy to accelerate despite the tax-cut boost, along with the continued resilience of the UK economy – all point to a stock market which cannot remain in denial of fundamentals for much longer.

Timing a market reversal, or pinpointing a specific event that will trigger it, is not possible but neither is it necessary. It is an inevitable consequence of the way that free financial markets work and have always worked – in the end however, fundamentals always reassert themselves and therefore, they are the only thing matters in the long run."


But the situation is that the UK fundamentals aren't that great because companies have been holding onto staff at fairly cheap rates and not investing in machinery. Like France and Germany both have 25% higher productivity. Then you have house prices at 10x earnings in some areas and high levels of personal borrowing together with very low savings.

I'm not meaning to do the UK down but as many economists predicted, the fall in the pound has not led to an export boom and the domestic economy is unable to take up the slack. It's difficult to see where Woodford's unbounded optimism for the UK comes from.

[ltcm1] 24/10/2018 10:29

Proton Partners - talk to me.

When do we get an update about take-up and revenues??? In the light of Spire's woes isn't it of concern that Proton might not be getting too much funding off the NHS???

Surely if this is the pathway to an IPO they want to build up psoitive newsflow.

[iq151] 23/10/2018 16:56

It is, in a minor way, illuminating to read the last 3 posts: 3(?)amateur small investors chuntering along discussing their antiquated and convoluted investment strategies.


On second thoughts, amusing is a better word! I wonder how much they will lose this year? I read somewhere that 70% of such investors lose money every year.

[porsche1945] 23/10/2018 13:40

A load of the Woodford holdings crashing today, really badly, this will be down to 70's again by next week.

[ltcm1] 23/10/2018 12:29

Yes I see about mean reversion. Clearly much of the bad news is in the price now. However it could yet get a lot worse. Who knows???

It should be noted Woodford's previous fund didn't mean revert, it doesn't have to be the case.

I am trying not to be opinionated about NW's macro calls, my intention is to compare them to the actual economic numbers coming out. As he based all his buys on 2% UK growth it is not surprising the fund is not running so well on 1.3% growth.

I know anyone can get a macro call wrong but doesn't there come a time when the strategy has to flex to the new environment? But perhaps growth will return to 2% or more and Woodford will have his day. But with investment falling and productivity problematical, it isn't so easy to see how that is going to happen in the next few months at least.

[chucko1] 23/10/2018 11:34

ltcm1, the whole point of the statistics (in numerous commentary pieces) was to show people that chasing last year’s winners was not a route to riches. The converse being true also.

I am not so sure that analysing NW’s macro calls and forming an opinion on them is actually a whole heap better than the stats - one could argue that the doubts on these investments is already reflected in the price (which is why the entire mean reversion thing has substance - not that I am strongly advocating it).

It in the case of EIF, where I agree is that what he is investing in (in EIF at least) may not be exactly as he originally intended. I do find that somewhat troubling.

[brianarthur1939] 23/10/2018 11:15

Thanks for that great advice winnie. Can I take it that you are, for once, correct this time? You've predicted all that a thousand times already and your guess has never been fufilled. What's different this time?

I suppose every dog has his day, even a lying old dog like yourself.


Winnie the Woof. LOL

[ltcm1] 23/10/2018 10:18

I would ignore him brian.

My reasons for thinking WPCT is a poor investment are simply based on the lack of earnings, the dodgy practice of self valuations following funding rounds plus the low chance of success for these super ambitious companies.

Woodford has also stopped doing 'awkward corner', a retrograde step.

[ltcm1] 23/10/2018 09:10

Down a penny.

Plenty have taken my advice this morning it seems!!!

[ltcm1] 23/10/2018 09:08

Thanks chucko1.

Does seem a dangerous practice to me viewing funds through the prism of statistics. I remember Nicolas Taleb writing about the guys at his firm who traded by mean reversion, they would make good money for years then suddenly the desk would be empty and they had suffered a monster blow up wiping all their profits and more out!

Isn't it better to judge the EIF on Woodford's macro calls of 2% UK growth and increasing real wages??? He has also said we will grow faster than Europe and be seen as a cheap investment, even more so when China has a slowdown (his prediction).

[ltcm1] 23/10/2018 08:56

Interesting points as ever Minerve.

Housebuilding - the banks are tightening up their lending and surveyors are starting to put lower valations on than the market price. In the past house prices have never done well after a big currency downwards movement. FTB house in the north seem a lot more affordable but the cost of building these is going to go up a fair bit IMO what with increased labour and matierals prices. Also the cheap land bought nearly a decade ago is starting to get worked out.

I really don't get why Woodford didn't see housebuilders as a buy in 2015 yet did in 2017 when the future prospects were less rosy.

Shopping - as well as online there is this problem of the big minimum wage hike coming up, I don't know NRR admittedly.

Personal loans - if the economy is growing at a slow rate this group will feel it more than any other. Many in this group are seeing costs rise higher than wages. An energy or food price shock will hit this group very hard. just looks a bad time in the cycle to me...

[minerve] 23/10/2018 00:02

"I can't really see how the Brexit inertia can benefit the businesses Woodford has invested in be it housebuilders, shopping centres, personal loans."

Do first-time buyers really consider issues like Brexit when buying a house? I don't think so. More mature buyers do, and that is why you are seeing some stress in house builders that sell the more expensive property - the Brexit situation plays more of a role in the decision through buyers' experience and by not being so naive. Also, most sales at the higher prices are chain related. If second-hand home values are depressed - and the delta to new homes is wide - it creates expectation/valuation stresses on the sale chain. Doesn't happen with 'true' first time buyers and low ASPs - no chain. At the low end, builders are still growing ASPs and volume!

Shopping centres: New River Retail are slightly niche in the sites they develop and the clients they have. Their market is centred around convenience/leisure which has different prospects to regular retail malls like Intu owns, for example.

Personal loans: Woodford is investing in companies that provide loans to sub-prime and other low quality borrowers - including guarantor loans. These will thrive during moderate economic stress and certainly will grow in correlation with a gig economy.

I question some of the stuff Woodford has done but those three just referred to make complete sense to me.

[saltraider] 22/10/2018 23:55

Only tears of laughter, chucko1 ... not otherwise moist.