Woodford anyone?
Discussion
was8v said:
CaptainSensib1e said:
Far more culpable in my view are the FCA and Link. The FCA should have held him to account for breaching his limits on holding unquoted stocks, and Link should have provided far better governance, and had clearly made a lot of questionable decisions since the fund suspended which has resulted in a significant reduction in value returned to unit holders.
I'd written it off as a bad investment until I read things like this and looked into it.Its surely verging on fraud to breach limits on unquoted stocks and have HL recommended the fund when they knew it was going south. Link governance had a big role! Or lack of. And the fees for selling the fund off - obscene and unreasonable.
Theres three lawsuits gunning for them, no win no fee so they must have something to get their teeth into.
Probably can only expect some tiny compo from the unfair selling off fees or something. But better than nowt.
At a guess Link, the FCA and HL probably thought it was a short term situation and would be remedied by Woodford selling off those illiquid assets over time, but they were clearly wrong.
In the end the problem was essentially the fund management equivalent of a bank run, assets being pulled out faster than redemptions could be met, which was why trading in the fund was ultimately suspended.
Simpo Two said:
Phooey said:
CaptainSensib1e said:
This whole saga also demonstrates the challenges of letting investors make their own decisions without any advice. Few really understand how to create a balanced portfolio and end up taking far more risk then they realise by not diversifying sufficiently. But that's a discussion for another day.
I see your point but it also proves that taking advice (like I did) doesn't offer any guarantee of avoiding these types of funds. The only saving grace for me was it was just 5-6% of my pot invested in WF - diversification?. But it was still 5% too much. And shameful if you were charging your clients a commission for investing and managing in these types of 'risky' investments. The first disconnect for me was the tech crash of 2000. I had an IFA. I thought 'But you're supposed to be looking after my money...' I know now that he was only looking after his percentage and only interested in getting to get more business on his books to get more percentages. If you're selling toothpaste in MLM, fine, but you're not...
anonymous said:
[redacted]
Is it about seeing a bubble coming or is it about thinking "hold on a moment he's spent 20 years buying companies like Lloyds and now he's buying cold fusion startups " in an equity income fund?If people woke up tomorrow and saw Taylor Wimpey and easyJet were in the top 10 of Fundsmith I think you'd hear about it is probably the simplest parallel I can think of.
MikeKite said:
Out of the 1000s of funds out there, why was Woodford so popular? Get to the bottom of that and you can may answer a lot of questions.
Quite simply because between 1988 and 2017 he was one of the best performing managers investing in the UK, and he made a lot of people a lot of money over this period. People started to believe he was infallible, which he clearly wasn't.Edited by MikeKite on Sunday 6th December 08:08
CaptainSensib1e said:
MikeKite said:
Out of the 1000s of funds out there, why was Woodford so popular? Get to the bottom of that and you can may answer a lot of questions.
Quite simply because between 1988 and 2017 he was one of the best performing managers investing in the UK, and he made a lot of people a lot of money over this period. People started to believe he was infallible, which he clearly wasn't.Edited by MikeKite on Sunday 6th December 08:08
Maybe better education would stop people trying to pick winners and give better overall outcomes......
b
hstewie said:
hstewie said: Is it about seeing a bubble coming or is it about thinking "hold on a moment he's spent 20 years buying companies like Lloyds and now he's buying cold fusion startups " in an equity income fund?
If people woke up tomorrow and saw Taylor Wimpey and easyJet were in the top 10 of Fundsmith I think you'd hear about it is probably the simplest parallel I can think of.
If people woke up tomorrow and saw Taylor Wimpey and easyJet were in the top 10 of Fundsmith I think you'd hear about it is probably the simplest parallel I can think of.
I am just a simpleton but stock trading does need to be complicated.
If you research a company well and think it will succeed in their business but it. If you don’t research it well you are leaving a lot to chance, effectively uneducated guess. Even with research there is a chance you get it wrong so diversify a little.
If you don’t want to research buy an global index fund and sit on it, regular payments will see you weather the dips in the market and some percentage of government bonds will be like the keel of a boat...
As for the dot.com bubble that was obvious.... how can a stock in a company raise multiple times the actual profits of the business without rebalancing itself? Seems logical to me. Let’s not forget that shares are like owing part of businesses so ultimately will be tied to how that business performs in real life. The problem is that the adjustment forge share price vs business profit is not real time.
I personally am happy with a lower but overall steady return than trying to beat the market and overall ending loosing or wasting too much money on fees. Like I said... simpleton.
If you research a company well and think it will succeed in their business but it. If you don’t research it well you are leaving a lot to chance, effectively uneducated guess. Even with research there is a chance you get it wrong so diversify a little.
If you don’t want to research buy an global index fund and sit on it, regular payments will see you weather the dips in the market and some percentage of government bonds will be like the keel of a boat...
As for the dot.com bubble that was obvious.... how can a stock in a company raise multiple times the actual profits of the business without rebalancing itself? Seems logical to me. Let’s not forget that shares are like owing part of businesses so ultimately will be tied to how that business performs in real life. The problem is that the adjustment forge share price vs business profit is not real time.
I personally am happy with a lower but overall steady return than trying to beat the market and overall ending loosing or wasting too much money on fees. Like I said... simpleton.
I am being naive but have returned between 7-10% overall over the last 6 years. Not amazing but good enough for me.
You are the one that’s naive. You think these people earn their money because they are worth it? Some (few) are, most put your money were they get better commission/management fees. Why did Woodford fail? Many reasons but if he was that good we wouldn’t have. Why many hedge fund managers fall into obscurity after a few golden years? Because it’s not about the pure skill it’s about how educated the guesswork is there is and there will always be a factor of uncertainty.
For my level the index linked funds work very well. I am not interested in beating the marked by taking risky chances, if you are or are wealthy and can afford to loose 5-6 figure sums that’s cool.
Perhaps if you are regularly investing 5-6 figures than one of those managers may offer you a little more but for most people there is no benefit. If your IFA makes you feel better and keeps changing funds or pushing in managed funds that have higher costs but don’t necessarily perform better than that’s fine too. Also when I say perform better I mean it in a stock market time frame which is the long term. I am not talking short term trading here.
Anyway, my small investments are working for me. I do have a job.
You are the one that’s naive. You think these people earn their money because they are worth it? Some (few) are, most put your money were they get better commission/management fees. Why did Woodford fail? Many reasons but if he was that good we wouldn’t have. Why many hedge fund managers fall into obscurity after a few golden years? Because it’s not about the pure skill it’s about how educated the guesswork is there is and there will always be a factor of uncertainty.
For my level the index linked funds work very well. I am not interested in beating the marked by taking risky chances, if you are or are wealthy and can afford to loose 5-6 figure sums that’s cool.
Perhaps if you are regularly investing 5-6 figures than one of those managers may offer you a little more but for most people there is no benefit. If your IFA makes you feel better and keeps changing funds or pushing in managed funds that have higher costs but don’t necessarily perform better than that’s fine too. Also when I say perform better I mean it in a stock market time frame which is the long term. I am not talking short term trading here.
Anyway, my small investments are working for me. I do have a job.
It certainly is... index funds will not beat the market but most likely will beat a managed fund in the long run.
Warren Buffett has said this himself and has instructions for his funds to be applied in this manner once he goes. He knows that no manager (including himself) can be consistent in the long term and for the majority indexed funds are good enough.
I expect to get a return in line with the global stock market gains. This should (not guaranteed) average around 10% a year. I’m in it for the long term 20 plus years. I am good with it.
It would be interesting to see what Chicken Dinner gets on his investments over the same period. Managed funds, etc only line the advisors pockets, the end result (in the long term) is probably worse than an indexed fund.
I am only interested in long term investing not short term so for short term other concepts will apply for sure and maybe a managed approach is better for those.
Warren Buffett has said this himself and has instructions for his funds to be applied in this manner once he goes. He knows that no manager (including himself) can be consistent in the long term and for the majority indexed funds are good enough.
I expect to get a return in line with the global stock market gains. This should (not guaranteed) average around 10% a year. I’m in it for the long term 20 plus years. I am good with it.
It would be interesting to see what Chicken Dinner gets on his investments over the same period. Managed funds, etc only line the advisors pockets, the end result (in the long term) is probably worse than an indexed fund.
I am only interested in long term investing not short term so for short term other concepts will apply for sure and maybe a managed approach is better for those.
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