Woodford Patient Capital Share Discussion Threads

[andy] 08/8/2019 11:48

cc2014,


I think the rush to the exit will be undignified, everyone will want to get out before the next man.


I guess Kent CC will be a the head of the queue.

[cc2014] 08/8/2019 11:42

I think.... he probably has gone and bought LLOY Specto and RBS too. And on first sight that's what his investors would see as the sort of of investment he should be making.

But right now I don't think he should be buying anything as in December he's going to need a billion of liquidity in WEIF. Buy LLOY now, pay 0.5% stamp duty plus commission and then sell again in 4 months time. The costs are going to take most of the profit in that time period. OK, Lloy might go up but it might go down too. Say lloy return is 6% which over 4 months is 2% less the trading costs gives not very much.

Much better to stick the money in some from of short term bond or frankly hold it as cash because he's going to need the liquidity before the fund opens not a week after else he'll just be a forced seller again. I hope someone has explained this to him. I note WEIF cash at the end of June was 0.13% but it's not clear to me whether they have paid off all of the loan and reduced the gearing to zero.


I suspect the plan is to fill the portfolio with a broad range of FTSE100 stocks by December and tell the market the fund is now doing what it's investment management remit says it should in the belief redemptions then won't follow. They will though. It won't matter what it looks like, the damage to his reputation is already done. All those IFA's will be telling their punters to get out asap.

[ltcm1] 08/8/2019 11:40

It was rumoured he signed a 'lock in' at PURP, perhaps that was the case with others, I don't know.

Woody told us he travelled the length and breadth of the investment universe. And the best our money managing Captain Kirk found out there was Kier and PFG.

[andy] 08/8/2019 11:28

Tim,


A bit old, and probably even worse fgures now:




Apologies if this has been posted before.

[spectoacc] 08/8/2019 11:13

Good post @CC2014. Though you won't want to hear it, I suspect he's put WEIF cash into your LLOY :) Awaiting Top 10 list.

The "winners" point is a good one - he briefly looked to have big success with eg PURP, ALM etc, but can't bring himself to sell because he's "right".

The spiral of redemptions has amplified his poor stock selection and dreadful risk management.

My take on the tax bill is that of course he could have raised a million quid elsewhere - put a mortgage on the holiday home for eg - but the WPCT sale says everything you need to know about the NAV.

[tim 3] 08/8/2019 11:11

Great post cc.

Risk management is absolutely critical even more so with AIM.

Read a great book by Douglas the disciplined trader which explains it in great detail and also the importance of cutting losses early.

Also having a diverse portfolio without to much exposure to one sector.

All these things woody seems to have ignored and now his investors are paying the price.

Personally I dislike the AIM market having seen many lose their shirt on it and as you say the governance is less strict than the ftse 250.

[brummieloser] 08/8/2019 11:06

Hey, perhaps jonwig writes specto's posts? They say more or less the same thing. That would explain a lot, especially all that embarrassing stuff about BUR. Now THAT was funny as hell.

[brummieloser] 08/8/2019 11:02

Can we have more of jonwig's dog rex? Funniest thing ever on this thread. (Apart from specto's repetitive posts.)

obvs jonwig himself didn't write it. LOL

[cc2014] 08/8/2019 10:59

The thing is Woodford keeps making the same mistakes over and over again.

With WEIF he's said he was going to transition into mostly FTSE100 and a few FTSE350 stocks were the liquidity is.

Yet here we are again some two months later, his number 2 holding BUR on AIM. And with the greatest respect there's a reason the directors have left it on AIM. There's always a reason. I would suggest a lower governance threshold.

Maybe he did sell a few but it can't have been that many as it hasn't triggered an RNS release and the drop in NAV today supports if he did sell any he didn't sell much at all.

It's the most basic rule of running a portfolio not to be over-invested in one stock especially if it doesn't meet your investment remit. And the thing is there was liquidity here, he had the chance to sell. Maybe not the whole lot but he could have shifted some each month and gradually reduced and got them away at market prices and not had to offer a 10% discount for a lump.

The guy just doesn't understand risk management.


I've been making a living from the stock market for years. I've made some bad investments. Quite a few. I continue to make them I've also had to deal with being punished when the market has gone irrational. But what's kept me in the game is risk management by trying not to be overweight on indidivual stocks nor too many in the same sector. Also, trying to avoid adding to my losing trades unless I am absolutely sure and even then following some stake sizing rules.

I repeat Woodford just doesn't understand risk management and that's his major problem. Nothing wrong with being a contrarian but even then you have to keep a spread of shares in a spread of sectors. He just doesn't understand. I have some MARS that I think if I sell I'll get a better return if I stick the money on LLOY. But I can't as I've got enough LLOY/RBS etc. already. So, I won't because it will keep me in the game. If for example he had stuck just 10% of the portfolio on oil/commodities he'd have got a better return.

Same problem with WPCT. He's overcommitted to a small number of stocks and now doesn't have enough liquidity to manage things.

Woodford seems reluctant to cash in his winners too. (or top slice them if you prefer). There's a whole load of psychology going on in his head which just isn't right for his chosen career.


Oh and while I'm posting I just wanted to comment about his tax bill. FFS what I'm heaaring here is that a man who is worth £50m has so little cash he needs to sell assets to pay his tax. Instead of putting the tax in a six month deposit account to save for when the bill is due he's gone and spent it and presumably was going to use earnings nearer the time (on which more tax is due) to pay the bill. Is this the sort of guy you would trust with your investments? Which is the same problem as WPCT. He got £1b from the market and went and spent the whole lot as fast as he could. Any sane person could have worked out it was going to take some considerable time to deploy that effectively but not Neil.

The guy is just flawed.

Oh and finally neither he nor any of his team seem to understand a balance sheet with any skill.

[tim 3] 08/8/2019 10:50

Cheers guys.

[jonwig] 08/8/2019 10:28

tim - Woody paid 100p as part of the IPO placing. But when he went solo, and bought in the market it would be around 300p.

[andy] 08/8/2019 10:10

Tim3,

Note the words "first investment", so an injital price, not an average.

-------


It means Woodford’s stake, worth £212m on Tuesday, is now worth just £92m.


Burford’s shares are still up 300% since Woodford’s first investment in June 2014.

[spectoacc] 08/8/2019 10:06

Dunno, but had been his biggest gainer/contributor to performance.

Looking at Noon 7th Aug figs:

WEIF highest share cloass the Z accumulators at 88.75p. That's in excess of 5yrs of "performance", including compounding income.

IFF highest 74.37p.

Once again, WEIF is supported by the IMO "highly dubious" unlisteds valuations. That turkey has yet to come home to roost, and won't be pretty when it does. [Roost or roast?]

A lot less data on the WIM site these days. Hardly a surprise. Maybe the person who used to do it was in the redundancies.

(IFF, unsupported by setting own valuations for unlisteds, but also unburdoned by much of the smallcap cr*p, shows just how bad Woodford's reverse midas touch really is).

Woodford - the man who can't outperform cash. Cash under the bed, let alone on deposit.

[tim 3] 08/8/2019 09:56

How much did Woody pay for BUR?

[ltcm1] 08/8/2019 09:15

Well done jonwig. I don't think the Woodford Elite know what CGT is :).

[spectoacc] 08/8/2019 08:13

Missed most of the fun on BUR yesterday, but wow - £3.80 intraday?

Have often said, Woody's "Once in 30 year UK valuation opportunity" didn't seem to fit with BUR - a USD co. Or, for that matter, the unlisteds, which is when the fireworks will really begin.

WEIF holders can't even sell.

[jonwig] 08/8/2019 07:20

@ RCT - he held it since 2009 at 100p, then bought in when he went solo in 2014/15. It's one of the few stocks he hasn't lost money on; until last year, BUR was an 18-bagger ... for me too.

BUR may have fallen off a cliff this week, but I've still landed myself with a hefty CGT bill.

[rcturner2] 08/8/2019 07:07

You have to ask how a supposed equity income fund has a dodgy AIM stock as its 2nd biggest holding. Madness.

[jonwig] 08/8/2019 06:59

Carson Block said he'd been researching Burford for some time, but the fact that it was a "Woodford Stock" clinched it. Perfect timing, too. (BBC R4.)

[spob] 08/8/2019 03:47

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[jonwig] 08/8/2019 03:38

diku - I use Firefox with an ad blocker. ADVFN would drive me nuts without it.