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Reflections on Woodford

Closed-end funds and OEICs
widowandorphan3
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Reflections on Woodford

#232655

Postby widowandorphan3 » June 29th, 2019, 12:57 am

Dear everyone,

I have been a lurker here for a while, but was on 'the other place' - it's only been a few years...!

Apologies I meant to post this at the height of the WEIF fiasco but had problems registering, but now I have I thought I'd share my thoughts on this.

A lot of commentary re NW is, correctly:

"past performance is no guide to future returns"

This is indeed the case. But sadly the future is unknowable, so we have to use the past as a guide, whether we like it or not.

Us wise fools may think we don't, but we do. Look outside the investment world: those of us who hire people partly do it because Joe Soap used to work for respected Acme PLC, and by all accounts didn't do badly there, and Acme doesn't employ fools for long.

But on a number of occasions let's face it, they turn out to be duds, for one reason or another. And I think we all know people who sail from one Acme to another Acme for years being thoroughly mediocre or worse, but often survive and sometimes prosper: they know the right people, they tell the bosses what they want to hear, they choose and then invent and dress up dubious statistics that suit their story, and get rewarded for it.

And as with people, so with shares and investments which are all ultimately controlled by fallible people, including of course ourselves.

I invested with WEIF at the start, 5 years ago. Did I buy the hype? Maybe, a bit. He seemed sensible, and had made some brave and successful calls in the past. Plus it was a period when I was moving more dosh to funds having lost various shirts in individual shares over the years.

It seemed a safe fund, loaded with reliable, large dividend Tobacco & ULVR type etc. stocks and many other companies I had heard of and knew what they did. And it was transparent about what it held - in fact much more easily transparent than most OEICs.

The first couple of years it did decently - it outpaced the FTSE100, but I noticed they weren't doing as well as another major investment I had with Fundsmith, so I sold about half in summer 2016 after Brexit vote, and greatly reduced my DDs going into WEIF.

Then in early 2017 I did a review and realised that though WEIF was by no means terrible, it wasn't a patch on Smith. And then the Provident news started coming in fast and bad, along with the arrival of all sorts of strange companies that I'd never heard of, and I concluded it was time to go, and exited entirely at 137p or so in early July 2017, and gave it to Smith instead.

I am saying this not because I claim to be a sage - but what I am saying is that everyone - if they can - should keep a close eye on their investments, and if decision-making seems to have gone awry, then it's time to get out. I was lucky as it turned out, but it was informed luck, I like to think.

Now I know in theory what happened to WEIF could happen to Smith, but in reality he's invested in vast, listed global companies, where even at £22bn redemptions are likely to be manageable this side of some horrendous catastrophe (e.g. collapse of one of the largest holdings, nuclear war etc.) And yes, you might say just buy an index, but Smith has delivered 21% pa for 5 years (and Lindsell Train Global a tad more as it happens, which I also have a bit of), and no mainstream index has done that, as far as I'm aware, and I'm happy for him to have his 1% on that basis.

And I can briefly describe virtually every company Smith holds (and indeed spent many years working for one of them) and can reasonably argue they have a future, one way or another - rather than some of the dubious outfits WEIF has been getting involved with recently. And some of them even pass the Buffett 'an idiot can run this' test.

But ultimately I dumped WEIF because at the end of the day, the yes past performance of Smith was better than Woodford's. And I avoided losing a ton of money.

Regarding ETFs - I really don't like them. I know it's occasionally fashionable to say this, but I worry greatly about counter-party risk when the chips are down, and as we know from 2008 big scale and with WEIF small scale, the chips do come down occasionally. Indeed, part of the reason I don't like ETFs is that I lost loads on IUKD, so long flavour of the month in the 2003-7 period, until it very much wasn't. And as for synthetic ETFs...

But we learn, and the expensive lessons are the most valuable as you paid the most for them.

Regarding ITs - I would LOVE to find an IT equivalent to Smith or Lindsell, as I would save a fortune on HL fees. But I don't think there is one, really. Maybe there's a reason for that, I don't know. (Please holler if there is one!)

Regarding HL: I like them as a company and have some of my investments with them. I like their website and their app, and I like when you call them you get to speak to a well-educated sounding lad/lady in Bristol on the second ring - none of this idiot press 1, press 2, or having to deal with language and distance-delay issues etc.

I have never paid much attention to the Wealth 50 malarky; I am aware of how it works, and while it has some real winners on there (like Lindsell) it also has some funds that I would never buy, and the whole HL discount thang whiffs a little.

And I would never ever buy their multi-manager funds since 1. They don't seem to perform that well 2. You get murdered on multiple fees over time 3. You end up at quite a distance from what we're doing here: supplying capital to allow Joe Soap to work every day at Acme PLC, and then taking a minute sliver of Joe's profitable output to fund one's retirement, your kid's first flat, etc. Perhaps there is a place for them for Widows & orphans because of diversification, but my suspicion is that indexes are better for this.

And HL's newish in house HL Select etc. funds don't seem to have done great shakes in the most part thus far, and they don't even seem that cheap when you include the platform fee.

HL is a very profitable company - indeed as Smith himself has observed, for a distributor to earn a gross margin of 60% or whatnot is extraordinary (with very high ROIC to boot), when distributors in most other sectors are lucky to get 2%. I even owned some HL at various times, but I'm out for now as this affair won't help their business or reputation, though I think they'll be fine long term.

I don't think they can get done for mis-selling; WEIF was but one of 50 in their silly list, and I paradoxically *almost* admire them for not dumping WEIF when they should have done, though doubtless their directors now wish they'd done so now. After all, the late Tony Dye at UBS I recall got sacked from UBS about 2 days before the dotcoms he derided all started blowing up in 2000. And some of the WEIF stuff might well come good, in the fullness of time, though the liquidity problem was a slow moving train wreck in the past year or 2, in hindsight.

In conclusion, as someone has observed, the WEIF saga is not greedy investors coming unstuck. This is investors not paying close enough attention to their investments, which is extremely important. Not every day or week, but at least once a month or quarter. And if you're in drawdown with presumably time on your hands, you should do it more frequently. And it's literally 10,000 times easier do it now than in the olden days when you had to buy a copy of the FT and arm yourself with a magnifying glass.

I do feel sorry for people who are unable to manage their investments with confidence, perhaps due to age &/or infirmity, especially if they were told that WEIF was a 'buy and forget' fund, which doubtless may have happened.

And if you don't want to manage - or can't - you really should just buy VLS80/100 or .INX or whatever and as Bogel famously said, just buy the haystack instead, and investment advisors should say so.

WaO

AsleepInYorkshire
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Re: Reflections on Woodford

#232668

Postby AsleepInYorkshire » June 29th, 2019, 7:40 am

widowandorphan3 wrote:And I think we all know people who sail from one Acme to another Acme for years being thoroughly mediocre or worse, but often survive and sometimes prosper: they know the right people, they tell the bosses what they want to hear, they choose and then invent and dress up dubious statistics that suit their story, and get rewarded for it.

Great musings and a timely reminder to all of us that we do need to stick to the fundamentals (pun intended) and ensure we keep our self disciplines in place. After all it is our money.

I don't want to diversify from your post but if I may I 'd like to touch on this little part. Mainly because over the last year I have been working with someone who I am struggling to respect professionally. I often feel quite disingenuous about myself and my conclusions about him. He's a self promoter. And he's had years to hone his chosen discipline. It took me some time to see behind the facade and spot the real personality. I've read that these kind of personalities represent a substantial proportion. We all self promote. I'm guilty of that. But these people take it to a much higher level. The difference between my self promoting habits and there's is they will not show any restraint and their behaviour has a huge negative impact upon the rest of the team they work with.

And therein, perhaps lies a warning. We can never know the real agenda of those who seek to sell us a product. Often we assume. We don't look under the carpet.

'Self-promoters' do nothing but still get ahead at work
https://www.bbc.co.uk/news/education-46608818
You might have seen their strategically self-regarding emails or watched their self-inflating egos in work meetings.

Woodford continued to take fund fees after the fund was suspended. No sign of remorse towards his customers. Such behaviour seems aligned with his needs and not those of his customers.

We can all sit around "the table" in a meeting and agree together on a strategy to progress. However, the number of people agreeing to a strategy doesn't make it anymore viable. Agreement is a herd behaviour. We do it because it reassures us. We don't want to disagree and be "the odd person out". Better to agree and sign off a bad strategy than disagree and cause self inflicted ostracisation.

Woodford is a timely reminder that we should have simple disciplines in place and make those checks which protect us.

AiY

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Re: Reflections on Woodford

#232677

Postby Dod101 » June 29th, 2019, 8:59 am

Both very good posts and timely reminders for us all. One of the things to avoid in investing is to go with the crowd. If we end up agreeing with the crowd fine but make up your own mind. I was never in to Woodford and he has shown his true colours recently. Apart from continuing to charge fees for his closed fund, listing small unlisted companies in the Channel Islands where there appears to be very little liquidity may just be meeting the letter of the regulations but certainly not the spirit or providing any more liquidity and Woodford of course must have known that. He is simply not to be trusted.

We can have all the rules and regulations in the world but if people want to they can always get round them. Culture culture culture. That is what is needed and of course some ability/experience to be able to spot it.

Dod

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Re: Reflections on Woodford

#232707

Postby shawsdale » June 29th, 2019, 11:17 am

Thank you for those thoughtful posts.
I also initially bought the HL and Woodford hype for WEIF but sold out at a slight profit from the income units some time ago for a slightly different reason - the dividend started off rather low and then did not increase as I'd hoped for from an equity income fund. As [mostly] an income-seeker, dividend growth has become a significant factor in my ongoing monitoring of investments, as well as the close scrutiny of underlying holdings for funds/trusts, and accounts for individual equities.

There is one aspect of the original post I hope we don't overlook: the plea for an investment trust version of Fundsmith/Lindsell Train (if only...!)
In the larger-cap global space I presume the OP has explored the likes of Scottish Mortgage, Monks. I've also noted the recent improvement in Martin Currie Global. I don't hold any of these.

I do hold the smaller-cap version of Fundsmith, Smithson, which has got off to a strong start, and might be worth investigating. Smithson's fund managers were recently interviewed (duration 24 minutes) on the Brewin Dolphin podcast:

https://www.brewin.co.uk/individuals/insights/regular-reflections/is-smithson-the-right-move/

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Re: Reflections on Woodford

#232749

Postby Backache » June 29th, 2019, 2:24 pm

I have not been caught in the Woodford debacle. A coup,e of points that you raise though.
One is that my understanding is that for most ETF's there is little or no counterparty risk it is mainly the synthetic ones where the problem may arise,, though I don't use ETF's very much.
The second is that you can avoid all HL's charges for Fundsmith be investing directly with the manager , it may not be as convenient but if you are concerned about small likelihood risks in the event of a major breakdown you would be diversifying where your investments are held.

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Re: Reflections on Woodford

#232752

Postby Alaric » June 29th, 2019, 2:54 pm

Backache wrote:The second is that you can avoid all HL's charges for Fundsmith be investing directly with the managerd.


Or any Broker/platform that doesn't levy custody/administration fees as a percent of value.

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Re: Reflections on Woodford

#232754

Postby 88V8 » June 29th, 2019, 3:01 pm

Woodford handed himself an impossible task.

At Invesco, he had a portfolio built up over many years, and a trusted team who knew the account and how to manage it.
Setting up his new funds, he had to find a home for billions in a very short space of time. And deliver an outperformance that would justify his doubtless generous package.
Impossible.

So, he resorted to somewhat desperate measures.
I suspect the same could happen to any 'star' fund manager swept away by their own hype.

As regards keeping a close eye on one's investments, agree, but most people buy Funds so they don't have to.

V8

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Re: Reflections on Woodford

#232761

Postby widowandorphan3 » June 29th, 2019, 3:19 pm

Thanks for the kind and interesting comments -

'Self-promoters' do nothing but still get ahead at work
You might have seen their strategically self-regarding emails or watched their self-inflating egos in work meetings.


Indeed. I'm not terribly good at self-promotion, which may have held me back, I don't know. But I do know thoroughly mediocre people who are good at it and have been promoted far above their abilities. I suspect twas always thus, and for ever will be; and may be getting worse for various reasons e.g. HR box ticking.

Woodford continued to take fund fees after the fund was suspended. No sign of remorse towards his customers. Such behaviour seems aligned with his needs and not those of his customers.


I have a slightly contrarian view on this front. 'He' is a business as well as an individual, with salaries to pay. If I still held WEIF I think I would prefer them to concentrate on righting the ship, selling down assets etc. rather than brushing up their CVs.

I'm sure many of them are doing that, but at least they know the business isn't going down for now. And yes, I know NW and his partner have made a small fortune since going it alone, but in the first two years at least they appeared to earn it, and generally I am supportive of entrepreneurs getting rewarded. I accept it's an unpopular view, and one that I can say with no skin in the game, thank God.

Smith and co have earned a small fortune since setting up FS. On the basis of the 1% annual fee coming to c£220m pa, with 28 staff = a cool £7.9m per employee - no wonder someone at a recent AGM gently suggested the fund should invest in itself (a bit like the Lindsell IT, and we've seen what's happened there...). Sadly Terry and co aren't selling, but I suppose we should be grateful cf Woodford that FS doesn't invest in unquoted businesses.

I don't however begrudge them a penny, and I don't think any right-thinking investor would. The alpha they've attained has made material differences to their investors lives which those people ordinarily wouldn't have.

There is one aspect of the original post I hope we don't overlook: the plea for an investment trust version of Fundsmith/Lindsell Train (if only...!) - In the larger-cap global space I presume the OP has explored the likes of Scottish Mortgage, Monks. I've also noted the recent improvement in Martin Currie Global. I don't hold any of these.


Thank you. Yes SMITs is interesting, but despite its amazing long term performance the tiresome reality is that in the past year it's returned precisely +0%, while Smith has done 14.3% and Lindsell 17.5%. It appears to be somewhat 'racier' in its holdings, and has much more major girations in the past year than those funds.

Re Monks, yes amazing long term performance (27% pa over 5 years), but only 10% in past year, but I will look at it more closely.

Martin - don't know that one, will take a look.

I do hold the smaller-cap version of Fundsmith, Smithson, which has got off to a strong start, and might be worth investigating. Smithson's fund managers were recently interviewed (duration 24 minutes) on the Brewin Dolphin podcast


Yes I bought this at start and have been building a larger position - 23% in 9 months is a very impressive performance. But with its focus on somewhat smaller companies, it's (in theory) rather riskier, and I wouldn't feel as comfortable having as large a holding in it than in Fundsmith itself. But as time goes on and it continues to do well, I can see it attaining a growing premium on assets, which is worth considering too.

There is a major gap in the market for a FS/LT-like IT, and hopefully it will get filled one day by someone good.

One is that my understanding is that for most ETF's there is little or no counterparty risk it is mainly the synthetic ones where the problem may arise, though I don't use ETF's very much.


I suspect that not all ETFs are created equally on this front, and I really don't want to find out the hard way.

The second is that you can avoid all HL's charges for Fundsmith be investing directly with the manager , it may not be as convenient but if you are concerned about small likelihood risks in the event of a major breakdown you would be diversifying where your investments are held.


Good point. It has been argued that this aspect is a key reason HL never recommended FS; you can't go direct with Lindsell, for example.

I guess HL feared their investors would build up big FS holdings, then wake up one morning (like I did last year) and realise they could slash annual charges by 31% by going direct. I have gone the direct route for most of my Smith, but the ISA transfer was a time consuming and bureaucratic mess, which left me out of the market for a month and cost me money; it's much harder than say changing energy or mobile provider. Maybe I was unlucky.

I hope the FSA's recent look at the market involves them enforcing timely and low hassle transfers as it would make the market much more competitive. But I suspect the 'Audis' of the platform world like HL wouldn't like such changes one little bit - certainly a gap in the market for a 'Volkswagen/Skoda' - i.e. a platform that offers almost as much as HL re service/website/app, but at much lower cost.

But yes, I have to have a platform because you can't have LT and indeed many other funds any other way other than through a platform, and as stated HL do a good job, albeit a pricey one.

WaO

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Re: Reflections on Woodford

#232851

Postby TahiPanasDua » June 30th, 2019, 8:00 am

Experience in the workplace can prepare us to both detect and (shamefully?) practise the art of hype. Hopefully, this carries through to help assess potential investments.

I worked on a major infrastructure project under a man who was by far the best talker in my entire career.

He was rightly admired by all for his delivery in meetings. He appeared to have no real competitors. His meeting asides and adlibs, in particular, were extremely adept.

However, it became apparent to close departmental staff that he never actually adlibbed. Everything was scripted. He appeared to devote extraordinary amounts of time to rehearsing everything he could possibly say down to the smallest detail. He was an accomplished thespian and I learned a lot from him. His day to day dealings with his own staff were decidedly pedestrian.

He would rehearse presentations in front of his next level managers which is undoubtedly good. However, we learned never to comment as he would get angry. Furthermore, in some one on one encounters he often appeared not to be actually speaking to you so much as rehearsing for a bigger stage.

He was not disinterested in the technical aspects of the project but it was definitely secondary. Of necessity,he worked extremely hard to achieve success in both aspects.

With the passage of time I have come to suspect that he was a narcissist. I believe they are frequently successful in the workplace.

I am sure my experience was not unique. It has left me with an admittedly unhealthy distrust of the spoken and written word. I am a natural sceptic when it comes to the Woodfords of this world.

Phew! got that off my chest!!!!

TP2.

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Re: Reflections on Woodford

#232853

Postby Dod101 » June 30th, 2019, 8:21 am

Very interesting TahiPanasDua, I guess we have all encountered a variation on the type you describe. Whether they are successful or not often depends on the environment they are working in and of course the scepticism or otherwise of their colleagues and /or business associates. In my experience they often do well for a time and then fall by the wayside because they actually believe their own hype and are eventually found out, unless of course they can combine the hype with a very good technical grasp of their position. Then they probably will go places.

Woodford did not seem to be lacking in self confidence nor the ability to present himself but does not seem to have been able to see the entire range of possible outcomes. He obviously believed his own hype. Like you I never bought in to this.

Whatever we might think of say Terry Smith as an individual, he seems to be straight.

Dod

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Re: Reflections on Woodford

#232861

Postby AsleepInYorkshire » June 30th, 2019, 9:39 am

TahiPanasDua wrote:Experience in the workplace can prepare us to both detect and (shamefully?) practise the art of hype. Hopefully, this carries through to help assess potential investments.

I worked on a major infrastructure project under a man who was by far the best talker in my entire career.

He was rightly admired by all for his delivery in meetings. He appeared to have no real competitors. His meeting asides and adlibs, in particular, were extremely adept.

However, it became apparent to close departmental staff that he never actually adlibbed. Everything was scripted. He appeared to devote extraordinary amounts of time to rehearsing everything he could possibly say down to the smallest detail. He was an accomplished thespian and I learned a lot from him. His day to day dealings with his own staff were decidedly pedestrian.

He would rehearse presentations in front of his next level managers which is undoubtedly good. However, we learned never to comment as he would get angry. Furthermore, in some one on one encounters he often appeared not to be actually speaking to you so much as rehearsing for a bigger stage.

He was not disinterested in the technical aspects of the project but it was definitely secondary. Of necessity,he worked extremely hard to achieve success in both aspects.

With the passage of time I have come to suspect that he was a narcissist. I believe they are frequently successful in the workplace.

I am sure my experience was not unique. It has left me with an admittedly unhealthy distrust of the spoken and written word. I am a natural sceptic when it comes to the Woodfords of this world.

Phew! got that off my chest!!!!

TP2.

I concur. We need to have an arms length view of any individual who is investing on our behalf. Often we don't. We become "comfortable". Instead of looking at regular intervals and checking specific information we "get on with the rest of our life". But when we hand over responsibility of stock purchases to another person are we throwing the baby out with the bathwater? How often do we read the warning "past performance is not necessarily a good way to project future returns". But I'm as guilty as the next of looking at a companies past to try and bring some comfort to my "picking process".

We all know that Warren Buffett has had to deal with plenty of bad news in his time. Contrary to popular belief he does dump bad stock quite quickly. Tesco for example. He understands the risks he's taking and minimises the potential downside from the outset. He simply doesn't throw the dice until he is certain that he is buying value at the right price.

Woodford's approach, with the benefit of hindsight, seems more scattergun. He appears to have been more interested in managing the perception of his investors than paying attention to the funds management itself. And that's where he's come unstuck. He's not been able to exit poor picks which have impacted negatively on the funds returns.

I'm not entirely sure what he has been doing investing in higher risk vehicles. It simply smacks of either desperation or even worse a narcissistic mindsett of invincibility. Albeit the decisions were poor, as was Warren Buffetts Tesco investment, the mindsett surrounding entry and exit appears to have been part of the ultimate downfall. We can all pick bad stocks. It comes with the territory. A good strategy executed timely will both manage and mitigate these occasions. Woodford has compounded his own errors. He simply did not stop digging and his ladder just got ever more shorter. He hasn't been completely honest with his investors, with-holding vital information and exceeding legal parameters on more than one occassion.

Time will reveal the truth. But for now I have formed my own judgement of where this has gone wrong. Ultimately Woodford seems to be the only beneficiary. The only one who has made a mountain out of the saga. The only one who is still digging. I can't argue the moral rights and wrongs of this, although I continue to feel he has not entirely understood the sentiment and correctness of suspending fees whilst the fund is suspended. I agree he has to pay his staff and they, to, are stakeholders. Has he stopped taking his salary? Has he done anymore than offer an apology? He was prepared to take large sums for getting it right but seems unprepared to do the opposite when it unfolds. He took risks that he shouldn't have taken with funds which were entrusted to him.

Ultimatley and as the opening poster has said - we need to raise our game though. If we chose "comfort" and elect others to invest for us we need to protect ourselves. It's a little bit like cleaning out the fridge once a week. Five minutes work will allow us to throw out the cheese that's just turning mouldy. Better to throw out the cheese and buy new than allow it to spread mould to the other food.

AiY

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Re: Reflections on Woodford

#232874

Postby AsleepInYorkshire » June 30th, 2019, 11:03 am

I concur. We need to have an arms length view of any individual who is investing on our behalf. Often we don't. We become "comfortable". Instead of looking at regular intervals and checking specific information we "get on with the rest of our life". But when we hand over responsibility of stock purchases to another person are we throwing the baby out with the bathwater? How often do we read the warning "past performance is not necessarily a good way to project future returns". But I'm as guilty as the next of looking at a companies past to try and bring some comfort to my "picking process".

We all know that Warren Buffett has had to deal with plenty of bad news in his time. Contrary to popular belief he does dump bad stock quite quickly. Tesco for example. He understands the risks he's taking and minimises the potential downside from the outset. He simply doesn't throw the dice until he is certain that he is buying value at the right price.

Woodford's approach, with the benefit of hindsight, seems more scattergun. He appears to have been more interested in managing the perception of his investors than paying attention to the funds management itself. And that's where he's come unstuck. He's not been able to exit poor picks which have impacted negatively on the funds returns.

I'm not entirely sure what he has been doing investing in higher risk vehicles. It simply smacks of either desperation or even worse a narcissistic mindsett of invincibility. Albeit the decisions were poor, as was Warren Buffetts Tesco investment, the mindsett surrounding entry and exit appears to have been part of the ultimate downfall. We can all pick bad stocks. It comes with the territory. A good strategy executed timely will both manage and mitigate these occasions. Woodford has compounded his own errors. He simply did not stop digging and his ladder just got ever more shorter. He hasn't been completely honest with his investors, with-holding vital information and exceeding legal parameters on more than one occassion.

Time will reveal the truth. But for now I have formed my own judgement of where this has gone wrong. Ultimately Woodford seems to be the only beneficiary. The only one who has made a mountain out of the saga. The only one who is still digging. I can't argue the moral rights and wrongs of this, although I continue to feel he has not entirely understood the sentiment and correctness of suspending fees whilst the fund is suspended. I agree he has to pay his staff and they, to, are stakeholders. Has he stopped taking his salary? Has he done anymore than offer an apology? He was prepared to take large sums for getting it right but seems unprepared to do the opposite when it unfolds. He took risks that he shouldn't have taken with funds which were entrusted to him.

Ultimatley and as the opening poster has said - we need to raise our game though. If we chose "comfort" and elect others to invest for us we need to protect ourselves. It's a little bit like cleaning out the fridge once a week. Five minutes work will allow us to throw out the cheese that's just turning mouldy. Better to throw out the cheese and buy new than allow it to spread mould to the other food.

AiY

Interestig article which I've just read after my last post was entered. It seems to focus on much of what I've mentioned in my post.

https://www.theguardian.com/business/20 ... nt-bitcoin

AiY

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Re: Reflections on Woodford

#232882

Postby richfool » June 30th, 2019, 11:38 am

I came across this in my travels,- manoevering by the fund manager to avoid disclosing higher levels of unquoted companies:
Link admits errors in reporting Woodford's Guernsey stocks

Woodford listed his stakes in unquoted companies Benevolent AI, Industrial Heat, Ombu and Sabina Estates on Guernsey's International Stock Exchange over a 15-month period beginning at the end of 2017.

That enabled him to maintain a heavy weighting to unquoted companies in his fund far in excess of the 10% fund rules dictate. The FCA has estimated his exposure to unquoted companies reached double that this year.

The regulator was only alerted to these Guernsey listings when Citywire revealed the manager's ploy in March this year.


https://citywire.co.uk/funds-insider/ne ... ds-insider

Do read the comments at the end of the article.

widowandorphan3
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Re: Reflections on Woodford

#232998

Postby widowandorphan3 » June 30th, 2019, 10:03 pm

Thanks all.

Relevant to Woodford and indeed some of the unnamed examples from our own direct experience mentioned:

I am just reading Beevor's book on Arnhem. Eisenhower's COS said of Montgomery and Bradley "It is amazing how good commanders get ruined when they develop a public they have to act up to. They become prima donnas."

I think a very strange thing must happen to many when they start becoming famous. And though NW wasn't famous in the normal sense, he was very famous in his world. I fear he felt great expectations needed to be met, and that involved taking greater risks.

I know someone who found themselves briefly in the papers for a time, not for an especially good nor bad reason. They told me "it was weird finding myself written about... who is this person they're talking about? Me?" And she very much wanted no fame at all (she was a former SO of someone who was famous).

Lord knows what fame can do to many - I think clearly some go off the rails, and if this is combined with huge wealth, they rapidly find themselves with noone who ever says 'no' to them, and those who do don't last long.

One of the many reasons I utterly despise the whole "Joe Schmo, Chairman & CEO" thing still so common in US F500 businesses but mercifully now rare and indeed frowned upon in the UK. As has been pointed out before, it is hard to see WEIF happening under the Invesco banner; NW's bosses would have stopped him.

Twas ever thus - supposedly the Roman's had a slave whispering in Caesar's ear after the latest victory: "memento homo [Remember you are [only] a man."

Great advice for us all I think, and to be remembered especially when the going is good. Hubris has a nasty habit of being followed by nemesis.

WaO

Dod101
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Re: Reflections on Woodford

#233008

Postby Dod101 » June 30th, 2019, 10:54 pm

WaO

I like the Latin but you should have quoted it in full.

'Momento homo, quia pulveris est et in pulverem reverteris.' Remember man, you are dust and to dust you shall return.

In a sense just like the Scottish saying, 'We are all Jock Tamson's bairns'.

The thing though is that some seem to have an ability to keep their hands to the grindstone without it going to their heads and that is the secret. How to avoid getting carried away with an unjustified sense of our own importance. Woodford seemed to have lacked that and needed the back up of the Invesco team although he clearly did no appreciate that.

Dod

OhNoNotimAgain
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Re: Reflections on Woodford

#233084

Postby OhNoNotimAgain » July 1st, 2019, 10:00 am

The point is that the active management industry wants to sell alpha yet, ultimately, all investors will ever get, at best, is beta.

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Re: Reflections on Woodford

#233241

Postby richfool » July 1st, 2019, 7:56 pm

From today's Guardian:

Block on withdrawals from Neil Woodford fund extended
Investors will remain locked out of Neil Woodford’s flagship fund for at least another month after a block on withdrawals was extended.

https://uk.finance.yahoo.com/news/block ... 22017.html

and
https://www.bbc.co.uk/news/business-48790585

viewtopic.php?f=54&t=17991&p=233240#p233240

Mainwaring
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Re: Reflections on Woodford

#234339

Postby Mainwaring » July 5th, 2019, 11:30 pm

I am a little late to the thread and surprised no one seems to have mentioned Finsbury Growth & Income Trust. This is Lindsell Train in all its glory. My largest holding, it has done everything that Smith and SMT have done in the past few years although Nick Train has recently been warning that past performance can’t be relied upon. Do check it out widowandorphan3.

Dod101
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Re: Reflections on Woodford

#234357

Postby Dod101 » July 6th, 2019, 7:48 am

Mainwaring wrote:I am a little late to the thread and surprised no one seems to have mentioned Finsbury Growth & Income Trust. This is Lindsell Train in all its glory. My largest holding, it has done everything that Smith and SMT have done in the past few years although Nick Train has recently been warning that past performance can’t be relied upon. Do check it out widowandorphan3.


Why would anyone mention Finsbury Growth and Income? The thread is 'Reflections on Woodford'. I agree though about Finsbury and Nick Train's comments are quite typical of him and he is not a prima donna.

Dod


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