Woodford Patient Capital Share Discussion Threads

[the oxford whale] 22/8/2017 10:01

If you don't think his repeated bad performance across a number of shares (too many to list) in his other funds has no affect on his investments in this fund then you are sticking your heads in the sand. Alarm bells should be ringing for any sane investor imo.

[solonic] 22/8/2017 09:43

It seems that the WPCT trolls are out in strength here. I thought this was a decently moderated thread.

[pugugly] 22/8/2017 09:36

brianarthur1939 - Agreed but the recent problems across all his investment vehicles (imo)have cast doubt on his continued ability to "walk on water" Specific to Patient Capital - amongst others - apart from today (Sphere) are Allied Minds,RM2, plus of course the US biotech company (name cannot recall for the moment_ where management appear to have given W 2 fingers.

[brianarthur1939] 22/8/2017 09:30

But this is a WPCT thread.

[pugugly] 22/8/2017 09:26

TAM - DYR - Woodford holds but in another vehicle - TOW is (imo) correct in principle re W but not in specific detail


Major shareholders


Holder % Voting rights As at
Invesco Ltd. 20.17% 27 Jul 2017
Woodford Investment Management (UK) 19.90% 27 Jul 2017
BlackRock Inc 6.44% 27 Jul 2017
Marathon Asset Management LLP (UK) 4.69% 27 Jul 2017
M&G Investment Management Ltd. (UK) 4.53% 27 Jul 2017

Also is view of recent news could it be that investors in Ptient Capital will demand/require a very significant discount to published NAV as valuations of unlisted companies is by often "by guess and by god" !!

[the air marshall] 22/8/2017 09:17

The Oxford Whale.



Oh dear, another rather unintelligent wannabe trying to troll WPCT.

Slight problem, WPCT doesn't own any Provident Financial!!

[p1nkfish] 22/8/2017 09:17

Sphere being taken private.

[the oxford whale] 22/8/2017 09:01

Provident financial taking a 50% drop today, another woodford success story.

[timnet] 21/8/2017 22:54

Patience wearing a bit thin here.... I know you're not currently earning anything from this IT, Mr Woodford, but methinks you need put yourself and your organisation in a position to and also reward some of your longer term backers here. And just as a matter of interest what has Purple Bricks got to do with Biotechnology? A bit more guidance from you as to where you're going with this would help. Maybe a bit more focus on this and less on new issues.

Just how many years does "patient" require from us?

[harveydee] 09/8/2017 21:20

Oh dear, TBPH is the latest WPCT disaster, down 20% today and almost half its recent share price

[harveydee] 09/8/2017 21:19

Oh dear, TBPH is the latest WPCT disaster, down 20% today and almost half its recent share price

[p1nkfish] 09/8/2017 18:00

I do think he'll know how to navigate this better than people on this pbb.
If in doubt, get out.

[jonwig] 09/8/2017 16:43

pink - because his revenue account shows income of under £0.4m and interest of £2m. [Annualising from H1.] These are cash payments to be made.

Early-stage investments can suffer in wider market downturns through inability to access new capital. WPCT may be unable to provide it (debt ceiling) and others may be unwilling. His holdings will also be valued on market criteria and overdraft called.

OK, we're not at that point, but it's GFC plus 10 today (on the BBC's timetable), so vigilance is timely!

Having said that, you both have good arguments. My position here is small and won't hurt - nor make me a billion.

[p1nkfish] 09/8/2017 15:58

Its not meant to be a market timing vehicle.
PIs can have the luxury of that by buying in or selling out of the Trust.
Use your perogative but why expect a Patient Capital Trust to apply market timing?

[topvest] 09/8/2017 14:57

In my view, the clever game is to have net cash of up to 25% at this point in the cycle (I'm at 17% and possibly too low + lacking cleverness!) and then take on up to 15% net debt on a major downturn (not that I would do this, but I'd like to be fully invested). Not the other way around!
Many of the investments in their portfolio are illiquid. How would they sell 30% of PURP if the wheels fell off, as an example? They would be a distressed seller very quickly.

[jonwig] 09/8/2017 10:33

Papy - that's a fair point, selling investments. In a downturn that's what ITs do, to reach net cash for the next upturn. Any IT which doesn't will have even worse performance. Actually quite a number of respected ITs have net cash or alternative assets. (PNL, RCP, RICA, LTI, ... FGT is 2.5% geared.)

In this case, it's harder because so much of the portfolio is illiquid, and income won't generate cash to pay it down quickly enough.

20% or so is pretty high, but he's on record as being positive on the UK economy and his portfolio (eg. post #1073). So that's at least consistent.

[papy02] 09/8/2017 10:18

Jonwig
How would they reduce gearing in a severe downturn, other than selling investments at severely marked down prices. (Then missing any recovery)? Unless they have that crystal ball I've been searching for.

That said, the gearing is 17%, and is capped at 20%, so it's not like there was 100% + gearing.

I suspect it's correct that WPCT would be hit disproportionately in a downturn, but my rationale is a bit thin:
- the gearing, but this is capped at 20%
- some assets priced for perfection (eg Purplebricks but that's 11% ish of total)
- if inflation / interest rate shock that hits dcf valuations of jam tomorrow stocks as have to discount future earnings at higher rates (only higher *real* rates matter?)
Any additions or comments to that anyone?

[mazarin] 08/8/2017 15:53

'The best is yet to come" according to Neil Woodford as he remains confident of annual growth hitting 10+ % and claiming it's a real prospect for WPCT: for details, see:

[jonwig] 08/8/2017 06:58

topvest - whilst I go along with a lot of that, I would hope the gearing would be eliminated in the event of a severe market downturn: it's more than doubled over the past half year and the terms (bank overdraft) don't prevent immediate repayment.

[topvest] 08/8/2017 06:50

Amazons net margin percentage is wafer thin and always has been. That's fine given its business model, but it's on a P/E ratio of about 200 and profitability doesn't look like it's going to take off.
Anyway, the point is that we are near the end of a bull market where some valuations are looking stretched. WPCT should have done really well with its gearing magnifying returns. It hasn't. That doesn't bode well for a bear market whenever that happens where this will be down by up to 50% from the high and gearing magnifying the downside as the debt is too high for a speculative non-income bearing trust.

[p1nkfish] 06/8/2017 22:27

I wouldn't compare it to Amazon.

[dr biotech] 06/8/2017 18:20

Amazon made about $3bn over the last year and has 8 quarters of profits. That's substantial in my eyes.

There are always going to be losers here, if there wasn't he wouldn't be investing early enough

[p1nkfish] 06/8/2017 16:55

One of the points of patient capital is that it tends to looks through cycles.
In this case it looks through cycles and invests largely in nascent companies.

I don't see a reason to complain as it's not as if it's not transparent and open about what it does.

If it doesn't meet an investors objectives then look elsewhere, the trust is unlikely to change, wind up more likely perhaps.

One problem might be associating Woodfords name with it given his past approach but why play the man and expect the trust to be in the mold of his previous endeavours?

Give it 10 years total from launch then decide.

[topvest] 06/8/2017 16:41

Agreed, that value and growth is a continuum and it's difficult to always post directly in one box or the other. All I suppose I'm saying is that this vehicle is so far along the growth continuum that price doesn't matter at all. Its somewhat akin to The Scottish Mortgage Investment Trust. That is a long long way removed from Neil Woodfords original value style. It is almost speculative. In a bear market both these trusts will be amongst the worse performing trusts. I would never invest in Amazon at its current crazy multiple. It does change the world and is a great company, but it's margins are wafer thin and it's unlikely to ever pay a dividend or make a substantial profit. On top of that it is bid proof, as the value of the company exceeds the GDP of most countries. The price of the Amazon share is exactly that and in no way linked to value in my view...just a speculative bubble. The PURP valuation is almost as crazy and assumes it will be the global winner which is unlikely given its based in Shirley (rather than Silicon Valley) and has virtually no barriers to entry. It's speculative in my book. I believe Neil Woodford only put 5 per cent of his portfolio into such stocks originally. This is a massive shift and the level of debt leaves the vehicle very exposed in a bear market. Then again, he should be commended for truly investing for the long term which isn't really happening in the U.K. He's gone out on a limb with this trust and it will either break his reputation or create an investor genius that the UK has yet to see. I go for the former, but the latter is always a possibility.