Woodford Patient Capital Share Discussion Threads

[ltcm1] 12/2/2018 13:32

Minerve I too share your concerns about financial displine in the era of 300yr low interest rates. Also I wonder how true NW's chief argument for the fund is - that he got in a rock bottom prices because he was the only game in town. Another way of looking at it is he pumped a huge amount of cash into one sector and by doing so forced his own entry level prices up. Instead of being the only game in town he found himself being the investor in every town!

I don't know how you can control capital injections with Biotech, I think that is the reason why most won't people touch it. NW will argue there is safety in numbers with these projects but what if the transformational discoveries are bunched toward the back end? Are people really going to accept the fund could fall two thirds before that happy moment?

[andy] 12/2/2018 13:25

kpo115,

The weakness there is everything is subjective, and bulls now always label bears "trolls" simply because they don't agree with their opinion.


That IS NOT trolling!


In fact if you look at most ADVFN threads on "hot" stocks at least, the "trolls" are often the frustrated bulls posting about off topic discussions rather than the company the thread is about, simply because there is no news to discuss!


Anyone asking them a question is labelled a "troll", and if that's what you think the government is meaning, then I think you are mistaken.


ADVFN will cease to exist if that is brought in.

[minerve] 12/2/2018 12:41

I decided to take a quick U-turn here and exited WPCT. It may turn out a success, it may not. I have read quite a bit over the weekend and the Seeking Alpha write-up, coupled with Woodford's recent track record and state of the market has made me decide to err on the side of caution.

The article I posted earlier is another biotech not delivering. The list is starting to get endless.

I have a concern that QE and the cheap cost of money has created an 'opportunity of capital' where perhaps the 'opportunity of business' doesn't match. Perhaps too much capital is chasing less and less really good start-ups which is why we are having failures and significant devaluations.

When I founded a company, capital was more expensive, and less freely available, so the company ran excellent stewardship over its finances and the board oversaw direct budgetary control for the whole company. We spent a lot of time in boardroom meetings but capital wasn't wasted. When the company later raised significant capital, 'we' were a larger company, but through the expansion budgets were naturally passed over to their respective departments, and awash with capital, financial management was too relaxed and too complacent. Fortunately, I had left the company before the significant capital raise so I don't have any blame to shoulder. In less than two years the money was gone.

So, these biotechs which are raising significant amounts of capital, in a world awash with capital, create an environment where failure is more likely to occur. It increases nascent valuations which lower future returns and increases the risk of significant devaluation when operational failures occur. Also, early significant capital injections doesn't seem to me to nurture strict financial displine and actually may increase the chance of further cash calls.

How do we improve the chances of success? I think Woodford and other investors should piecemeal capital injections further. So less capital per tranche with more frequent targets. I guess this is difficult when some investors are prepared to throw them the whole bank. But, if that is the case, Woodford should pull back from investing because at the moment it looks like these start-ups get too much free run and we only find out failure when too much capital has been spent and it is too late.

Good luck to current holders.

[rackers1] 12/2/2018 12:40

or maybe its not ......

[ltcm1] 12/2/2018 12:21

If anyone wants to put the case for buying into this fund I am more than happy to hear it.

Maybe WPCT is a fantastic investment?

[minerve] 12/2/2018 11:35

Well, I think trolling is a very difficult thing to police and if it is being policed and monitored by the same people who get involved in current witch-hunts and politically correct/equality nonsense - good luck with that! LOL

[kpo115] 12/2/2018 11:32

hpcg, I agree with you. For example:

"In Internet slang, a troll (/troʊl, trɒl/) is a person who sows discord on the Internet by starting quarrels or upsetting people, by posting inflammatory,[1] extraneous, or off-topic messages in an online community (such as a newsgroup, forum, chat room, or blog)"

That's it! You have a description of topvest and others in a nutshell.

None, and I mean none, of their arguments have any relevance to WPCT.

[solonic] 12/2/2018 11:20

"ltcm112 Feb '18 - 10:59 - 1851 of 1851
0 0 1
kpo115 how can opinions on here possibly affect WPCT, which is a fully invested closed fund???"


If you think that, why don't you ask topvest why he bothers to make his meaningless and ineffective posts?

[ltcm1] 12/2/2018 10:59

kpo115 how can opinions on here possibly affect WPCT, which is a fully invested closed fund???

I would hate to see WPCT fail but what is openly accepted by all parties is quite a lot of physical cash has already been lost. That is not to say it can't be made up in the future. But this is where we are.

[minerve] 12/2/2018 10:31

Shield Therapeutics shows nothing is iron clad in biopharma

Aim-quoted business has flunked trials of its flagship anaemia treatment

[kpo115] 12/2/2018 10:20

Hey Topvest, cynicalbear and other assorted troll bunnykins, haven't you heard the news? The government is considering banning trolls on social media. That means your nefarious activities could be significantly curtailed. What will you do then? Drop off your perches one by one for lack of oxygen?

You may, indeed, have to find for the first time a serious relevant argument to bash WPCT with!

[ltcm1] 12/2/2018 10:14

Thinking about Woodford the company, what are the implications???

With WPCT is the hurdle now 130 before he can earn? I do not know how the fee structure works re the other two funds but it strikes me that the charges were on the low side for the customer.

I can see it must cost a fortune running public funds what with all the hurdles and the physical size of the thing. The whole shebang must seem a total ballache when you are well out of the money. It must be a very lonely place, hence the rather unkind share price 'nomates' moniker.

I do feel sorry for NW. But he is hardly helping himself by giving the impression he has gone to ground, even if that isn't the case.

[cynicalbear2016] 11/2/2018 19:44

Yhanks Topvest

[topvest] 11/2/2018 18:55

If you want a really good laugh, have a read of ShareProphets today and a comic interview on a great investment by Neil Woodford in internet string. Absolutely fantastic. Unfortunately, it’s spot on!

[chinahere] 11/2/2018 18:32

Applaud perhaps - but is WPCT the work of a benefactor, or is it the work of an investor seeking financial returns?

I fear it's too much of the former but perhaps I'm wrong.

[ltcm1] 11/2/2018 18:07

Andy that sounds a good question for awkward corner!

Must say he comes across very well on the youtube vids, I could see him doing well in politics. I suppose he could be looking at a peerage if the fund stays alive and some important advances take place in his companies. You can only applaud the investment he has made into UK biotechs.

[andy] 11/2/2018 15:44

escapetome,

Do you seriously think he would answer the pone to a humble pi asking about some of his investments? And even of he did, do you think he would have the time to assuage his fears?


He is said to be very arrogant, although I have never met him so only going on hearsay.

[escapetohome] 11/2/2018 11:07

As Woodford likes to keep touch directly with the companies he invests in avidly, perhaps likewise investors should pick up the phone and talk to Woodford.

Then surely the questions would be answered and hopefully riposted.

[ltcm1] 11/2/2018 10:52

I am still struggling with this one!

Looking at the quoted stocks, the only one I can find with genuine liquidity is Idex, a 1.64 weight. If you look at the top 10, 60% weight, you can't say for certain there is genuine liquidily in Purplebricks or Prothena on account of Woodford owning large stakes in both. So where is the liquidity in the quoted stocks???

To me it seems this fund is exchanging cash losses for paper profits. I am surprised the discount to NAV isn't more like 20%. Perhaps Woodfords hitherto good name means he is still getting a premium that is not justified??? To me Woodford seems to be getting the benefit of an awful lot of doubt in his portfolio.

[jonwig] 10/2/2018 15:08

@ ltcm1 - if many of his investee cos need money then it's volatile ... very! A bit like having a portfolio consisting of just one company which needs it.

My point might be that a diversified portfolio won't be like that model. I'd hope his portfolio is diversified enough to avoid that risk. But then ... where does he find the money?

On the question of the second fundraising, there's no doubt his broker told him not to bother. It's at that point, I think, that I got the impression of Woodford Hubris. Invariably follows Nemesis.

[chinahere] 10/2/2018 12:21

Raising capital for WPCT from here would be very costly and would significantly dilute current holders.

To add to the woes, if that £150 million loan gets called then an implosion must be likely.

[ltcm1] 10/2/2018 11:46

I am certain many know this but in this launch interview Woodford says the WPCT plan is to raise more capital through the issue of 'C' Shares on the back of the fund prospering.



You may not be surprised to hear he doesn't discuss the position the fund is in now with regard to raising capital!

jonwig I get what you are saying but if NW has a ton of unquoted companies he can't fund won't that rachet up the volatility of the fund? A point Andy is making above.

Oxford Whale - in the interview he cites his long relationship with Allied Minds as an example of how he has gained experience in this field. I think you are onto something though!

It seems weird to me he passed on Iqe - what was that all about? Could have got in sub 20p!

Someone else asked about egaming on his website and they said they had not considered it, WPCT does seem oddly concentrated in certain sectors. We have a rich history in gaming yet where is the investment from Woodford???

[topvest] 10/2/2018 11:27

Interesting note on Share Prophets today. The overdraft is secured and the documents are on public display at Companies House. They are a little difficult to follow, but the lender can appoint a receiver if an Enforcement Event occurs (when in default). Unfortunately, the covenants appear to be in the Facilities Agreement which is not on public record. One thing for sure, is that the auditors will not let them get away with last year's viability statement this year.

[andy] 10/2/2018 10:58

itcm1,

"However, there is this business of a 150m overdraft repayable on demand as the fund is 20% geared. I would be grateful if one of the knowledgeable posters here could enlighten me on this point. I can only assume the great man has a plan to deal with this!"

-------

Ok, if you owe the bank £1 and can't pay it's your problem, owe them £150 million, and it's THEIR problem! as the saying goes.


If they call the loan in he would be a distressed seller, and the hedge funds would take him to the cleaners in that position, so my guess is that if pushed, he would point that out to his creditors.


Although he seems to be pushing his limits he has been swapping some stock between his funds apparently, putting some PURP into the INCOME Fund for example! On that basis he may have more breathing room than we think, and the unlisted stuff is into going down in value because it's hard to determine.


The real problem would come if he cannot pump more funds into the cash hungry unlisted companies, IMO, as without him they may struggle to raise the required funds.


It could get interesting, but I guess there are a few short term actions that can alleviate immediate problems.