Woodford Patient Capital Share Discussion Threads

[1oughton] 22/10/2019 17:19

Gapped tooth too?A sign of treachery in Shakespearean times.

[finkie] 22/10/2019 16:58

All holders are just plain unlucky here, running with the best thing since Buffett put your house on it said Hargreaves....etc just very unlucky. I hope everyone can recover, although some will have a slightly tighter retirement due to this which is really bad news. :-(

[volsung] 22/10/2019 15:57

We used to have a cat called Woody. It had 3 legs

[spectoacc] 22/10/2019 15:30

Not so much called in, as not renewed - January is the expiry. Possibly a new manager will get Northern Trust to roll it over - I doubt Woody could.

Bear in mind WEIF will be dumping holdings in most of WPCT's junk - that's not going to do NAV or debt coverage any favours at all.

If WPCT can avoid a firesale to repay the debt (and meet the commitments?), then there's more time for value to come through, assuming you believe that Woody has picked any eventual winners (and winners that will have to pull through without any more Woody cash).

There's scenarios where WPCT isn't worth zero.

[kev0856153] 22/10/2019 15:24

What will be the series of events here if the loan is called in?

How likely is the loan to be called in?

[spectoacc] 22/10/2019 14:30

@SMCN1968 - is there a punchline?

"Depends if he's on his horse or in his Porsche"

Or

"Shorter than he was, he couldn't stop averaging down".

[smcni1968] 22/10/2019 14:19

How tall is Woody?

[spectoacc] 22/10/2019 12:54

@RCT2 - I take your point, but - it's people buying silver that is pushing up the price of silver. Just that they're doing it one step removed via an ETF (no doubt to avoid the VAT charged on silver). And still a very long way from Woody.

@Jonwig - value of derivative contracts is a huge multiple of the market - but doesn't seem to matter, despite Buffett's old one about "financial weapons of mass destruction".

[rcturner2] 22/10/2019 12:42

I agree that this is not much of a problem with an ETF such as a FTSE 100 tracker, which is a very large underlying market. However, you have a very wide range of ETFs. Take ETF silver for example. This ETF is pure and simple buying silver as people buy the ETF. The ETF itself is forcing up the price of silver.

[jonwig] 22/10/2019 12:27

The IH results are published now. There is reduced loss, maybe because some activities have been discontinued. Asset impairments are low and cash is over $27m. The fantasy bit is the asset valuation.

The statement of going concern is the only interesting bit.

[jonwig] 22/10/2019 12:18

RCT - are you confusing two issues?

ETNs have counter-party risk as they are a bet between the holder and the issuer. There is no physical underpinning.

ETFs have (as Spec says) potential liquidity risk. However, this doesn't seem to have happened yet to any degree, as the ETF Sponsors rarely need to trade the underlying securities, almost all activity is between the Participating Dealers.

I read somewhere that there are more indices (and more ETFs) than there are shares, which sounds frightening, and there's speculation that lots of danger is lurking in that. Nobody seems to have modelled any scenarios, though.

Personally I don't use trackers at all, as I find them boring. A keen amateur chef is unlikely to buy ready meals.

[spectoacc] 22/10/2019 11:43

Nonsense @RCT2. ETFs track an index as decided by others - to take the simplest example, buying every stock in the FTSE100. They don't decide what goes in the FTSE100. The opposite to even the old Woodford, let alone the new one who punted on unicorns, unlisteds, & smallcaps.

Yes, there's potential issues when trackers "become" the market. Not there yet, but they're making up an increasing share in the US. That should in theory provide more opportunity for stock-pickers, but hasn't seemed to so far.

Note also there's liquidity rules for stocks within the index (in the UK at least), including free floats and weightings. Woody holds, to pick an example, 27.5% of MPH - that couldn't happen with a tracker.

[rcturner2] 22/10/2019 10:48

ETFs follow exactly the same model as Woodford. People pour money into them and they repeatedly buy the same things pumping up the price and making the returns look good. Which is pretty much a pyramid scheme. As soon as the music stops there will be a stampede for the exit and there wont be enough liquidity in the market to fulfill the sellers.

[skinny] 22/10/2019 09:06

It might as well be - toothless never the less.

[spectoacc] 22/10/2019 08:59

@RCT2 - also the stock-lending angle, so that even a physical ETF may have lent out stock to a counter-party that subsequently goes bust.

I don't think ETF/trackers etc are much of a worry for UK, but agree in US - taking an ever-larger slice of the market, everyone wants more as they go up, and becomes self-perpetuating. The reverse on the way down.

However - that affects everything, including your individually-held shares, and ITs.

I've always been anti open-ended too, but some now have reasonable charges. And let's not forget what can destroy ITs - debt, as WPCT holders may eventually discover.

[jonwig] 22/10/2019 08:55

RCT - ETFs are backed by physicals (shares or commodities). ETNs are the ones you mean.

Skinny - that's David Jason!

[rcturner2] 22/10/2019 08:43

ETFs though could just be the next scandal waiting to happen

You have counterparty risk and you could quite easily have the same problem as with open ended funds which is if everyone tries to sell at the same time you get liquidity problems and a death spiral

I personally would never touch an ETF just as I would never touch an open ended fund

[skinny] 22/10/2019 08:36

Panorama was too superficial in its coverage and gave too much cover to "Show me the money" Winniefroth.

As for the FCA :-

[spectoacc] 22/10/2019 06:59

@Boystown - "Worth 0p-20p, nearer the former than latter". However, two things could happen to make me think about buying:

1. Change of manager and kitchen-sinking of the valuation (apparently imminent, as it's been for many months)
2. OD successfully rolled over (due in Jan)

Absent either - arguably both - of those, and WPCT looks doomed IMO, as it has since before WEIF was gated. Full of losers that require more funding they're unlikely to get, and a Not Asset Value.

[diku] 22/10/2019 00:18

Nope...kaput...

[tartshagger] 22/10/2019 00:16

There are a lot of limit buy orders in the 27-28p area. There are also a lot of stop-loss sells at 25p. Until we know a true price-discovery nav (not likely with the new management and the nature of the holdings) only gambling addicts would try and catch a falling knife here.At some point the fog will clear, there will be a big up-day on high volume. If you must, take a punt before close of play then

[boystown] 21/10/2019 22:34

An impossible question, I know, as we're all groping around in the dark trying to pin the tail on the donkey re valuations, but at what point is this a speccy buy? Any kind of reasoned analysis anywhere?