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Woodford Patient....
Tony Peterson
Posted: 12 November 2017 11:06:49(UTC)

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The reasons people use to select (or deselect) investments are very subjective. As in any good debate opposing sides can often seem equally convincing. Yet both cannot be right.

But, thank our lucky stars that people do reason differently. If we all used exactly the same reasons there would be no market to trade in. There would either be no sellers, or no buyers.

I let numbers do the walking for me, not raking around with loads of research. After all, if the monkey with the pin could beat directors (as well as fund managers and financial journalists) as the FT discovered some years back, there's not a great deal of useful information that the small investor can exhume.

So I buy 'em when they're down, and prune 'em when they're up. Works for me.

And I look up through the velux and see skies of blue....red roses too.....
4 users thanked Tony Peterson for this post.
Sara G on 12/11/2017(UTC), Shetland on 12/11/2017(UTC), J Thomas on 12/11/2017(UTC), Mickey on 13/11/2017(UTC)
J Thomas
Posted: 12 November 2017 12:54:54(UTC)

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I hold both AstraZeneca and GSK, mainly for the dividends. Of the two I prefer AZN as I believe the lower debt and higher value pharma drugs make it a more attractive company.
In the longer term the future may well be a merger of the two; the cost savings would be enormous between two basically identical companies.
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Tony Peterson on 12/11/2017(UTC)
Hank Elvis Dobbs (texan)
Posted: 12 November 2017 13:06:08(UTC)

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[quote=Tony Peterson;53181]The reasons people use to select (or deselect) investments are very subjective. As in any good debate opposing sides can often seem equally convincing. Yet both cannot be right.

But, thank our lucky stars that people do reason differently. If we all used exactly the same reasons there would be no market to trade in. There would either be no sellers, or no buyers.

I let numbers do the walking for me, not raking around with loads of research. After all, if the monkey with the pin could beat directors (as well as fund managers and financial journalists) as the FT discovered some years back, there's not a great deal of useful information that the small investor can exhume.

So I buy 'em when they're down, and prune 'em when they're up. Works for me.

And I look up through the velux and see skies of blue....red roses too.....[/quote

..Sounds like them roses need a prune now 'T' !!
1 user thanked Hank Elvis Dobbs (texan) for this post.
Tony Peterson on 12/11/2017(UTC)
Tony Peterson
Posted: 12 November 2017 14:11:32(UTC)

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Elvis

If they come to power, it will be our portfolio getting a pruning without any recourse to secateurs.
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Hank Elvis Dobbs (texan) on 12/11/2017(UTC)
BOB 2
Posted: 12 November 2017 15:35:17(UTC)

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TONY or anybody's thoughts welcome
your old Favorite has come up again GLAXOSMITHKLINE GSK
i like to know your thoughts on where you think there going
price at moment around 1317.5 Fri down 29.5 one month down 13.12%

re report RUPERT HARGREVES
part states I believe management should act before being pushed. a 50% cut would reduce the dividend to 40p a share .
EPS of 110p easily covers the 80p per share dividend payout , however on a cash basis, the payout looks vulnerable . indeed , for the first nine months of the year , the company produced just over £4 bn in cash from operations and spent £1.5 bn on capex, giving a free cash flow of
£2.5 bn before dividends for the period amounted to £3 bn leaving a gap of £500m
more
http://www.fool.co.uk/in...-6-dividend-yield-safe/

so TONY .P are they a bargain at this price or should we wait thanks bob
Tony Peterson
Posted: 12 November 2017 15:47:40(UTC)

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BOB 2

Sorry to disappoint you, but I have no idea what is likely to happen to GSK's sp in the near future.

It might go up (and if it goes over 1650 I will start slicing profits yet again).

It might go down (and any price below 1310 will see me buy more).

I was selling judiciously pared slices in June at over £17. I have been buying those parings back in the last few weeks.

I have no idea whether the dividend will be cut, maintained, or increased.

I do not know the future. But I enjoy managing our holding.

What a wonderful world.
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BOB 2 on 12/11/2017(UTC)
Mr Helpful
Posted: 12 November 2017 18:54:58(UTC)

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Hardly an original thought, but in this 'bull market of everything', the only stocks seemingly offering value today, are those where the underpinnings of that value are in doubt.
All the good stuff is fully valued.

So for those buying or holding distressed stocks it will (as always) be something of a lottery.
Some will pay off, some won't.
But to decide to sell existing holdings at distressed levels as TP has hinted makes little sense. If it was OK yesterday at 400p, why is it not OK today at 200p? Values may now be uncertain, but it is the same company/business.

Rarely rely heavily on Technical Analysis, but where fundamentals are in doubt, TA can assist the investor to buy on the way up rather than on the way down. Won't be optimal, may miss the lowest price, and some may well baulk at 'chartism'.
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North Star on 13/11/2017(UTC)
King Lodos
Posted: 12 November 2017 22:24:42(UTC)

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That was the conclusion I came to.

A lot of great companies are sitting on PEs around 30-50 .. At some point that means 2-3% long-term returns (which only get lower as they're bid up further).

How we get there is anyone's guess .. A crash would be great, as there'd be a chance to pick up cheap stocks again .. The fear is we don't get one (and if bond yields stay down, people might be buying 5% dips forever .. Terrible for long-term returns).


If you buy stocks on PEs of 12, you're looking at 8% returns .. But the invisible bit is how much risk we're willing to tolerate for 8% .. The Quality investing style of Fundsmith and Lindsell Train is basically a bet on the cheap being more overvalued than the expensive – i.e. there being too many gamblers in the market.

As far as I can tell, there's no way to work out which perspective is right – or if the quants and ETFs exploiting these styles have flattened them out or spun them into reverse.

What I like about momentum is the feedback .. Poor performance over 3 months always gives you a decision: did you make mistakes you can learn from, or do you move your portfolio over to Vanguard funds? .. Michael Platt cuts a traders positions in half on a 3% loss, and out the market on another 3% .. You can't really do that with Value, because 7 years of underperformance is par for course
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Mr Helpful on 13/11/2017(UTC), North Star on 13/11/2017(UTC)
colin overton
Posted: 18 November 2017 10:33:07(UTC)

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Well another terrible week for Woodford investments has come and gone. WPCT suffered from Prothena weakness and lost 6% in a week, even 95p now looks along way off. NW's Equity Income fund is now down over 1year against the FTSE 100, 250 and All Share, by up to 15% (according to HL's charts).
Now banks are on the menu, I believe. I own shares in a couple and Woodford's support worries me. Didn't Woodford offer supportive words to GKN a while ago, and we know what happened to them last week.
Certainly NW needs a change in direction, fortune or sentiment, both soon and profound. How is this to be achieved?

King Lodos
Posted: 19 November 2017 00:41:02(UTC)

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If the underlying businesses you're investing in are good (or at least represent better value than what everyone else is crowding into – speaking as someone who's still buying Tencent on a PE ratio of 62), then price falls are an opportunity to secure higher future returns.

I've got opposing views on where Woodford's investing: I think equity income may be a risk bubble (which is a term I may have just invented) .. i.e. High yields generally keep you out of stocks on eye-watering valuations, yet if risk isn't being adequately discounted in the valuations of stocks like GSK – with everyone chasing yield – then I'd say that's a bubble of sorts.

On the other hand, any long-term investing strategy that didn't regularly underperform would've been arbitraged away by the market decades ago .. It's probably the one reason Value investing holds up, despite being known about for so long .. Woodford was exactly here in the 90s – with the media hounding him for years of significant underperformance – and came out of the 90s looking like a genius .. I don't think it's any different today – I think years of stimulus and positive feedback loops has made us all a bit oblivious to valuations again .. Eventually something comes along and presses reset on the markets, and as Buffett says: you get to see who's been swimming naked, etc
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North Star on 20/11/2017(UTC), Tim D on 20/11/2017(UTC)
colin overton
Posted: 20 November 2017 09:03:33(UTC)

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Great King, I hope you're right about Old Neil. I had a similar thought about the past. That's why I hung on to some of Woodford's "traditional" UTs. By nature I'm an optimist and am happy (theoretically) to take the rough after the smooth. For once I timed my selling well and partially sold W's mutuals 1-2weeks ago, advising a friend to get out as well, he did. Sold Shell at 2500p using HL's excellent "cheeky early morning" forward sell-limit facility, should have sold more! Thought about "pruning" my RTZ holding and lost ~5% by being greedy. Now hoping for an Xmas China boom to get RTZ to ~4000p

Back to the subject. I should have sold all my WPCT at 95p ten days ago using the afore mentioned "trick", but only pruned. My criticism of Woodford is not just on his lousy small cos stock picking in benign times but technical. For WPCT to be depend on one share, Prothena Corp PLC, for its medium term success, defies the logic for mutuals. As does WPCT's over emphasis on Tech and Bio/Pharma in particular.
I guess the moral of the tale is don't "give" ANYONE £850 million to spend on small cos and expect him to invest slowly and wisely, the temptations are just too great.
Unlike his "big cos stuff", I don't see WPCT benefiting from a down-turn, it'll be the next up-turn before we see 100p or even 95p on this one! Anyone buying on weakness then?


King Lodos
Posted: 20 November 2017 09:40:50(UTC)

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I'd sold Woodford Equity Income, WPCT and EDIN by about mid-2015 .. So whatever my opinion, I don't like to gamble on how things might turn out .. You can get decent results so easily with a World Index tracker, why wait for performance to turnaround in something you have to pay a fee for?

But the art of Value investing (as a stock picker or fund investor) is to focus on fundamentals and see losses as the time of maximum opportunity .. People are going to keep buying and selling Woodford (and a hundred others like him) at the wrong times .. Data shows people consistently pile into Value funds after all good performance, and hold on just long enough to catch all the downside.

I'd still compare WCPT much more to Venture Capital .. Your typical Small or Micro-Cap fund has major brands and businesses than have been around decades; WPCT's in businesses that aren't even close to being businesses yet .. The reason I'm not tempted is because I have no idea how good Woodford's team are in that space yet – and plenty of Venture funds do horribly.
colin overton
Posted: 20 November 2017 22:44:37(UTC)

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Certainly in recent benign times global funds have done rather well. If waters get more choppy it will be interesting to see whether the somewhat lazy proposition of buying global companies will succeed. Unless one is a convinced believer in passive investments, which companies to pick to go into mutuals will be important. I can recall a time when global unit trusts were rotten.
King Lodos
Posted: 21 November 2017 01:29:32(UTC)

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It was only a few years ago I recall global funds being very out of fashion and rarely beating their benchmarks.

I think the track record's still pretty bad over a market cycle, because no one's really bringing new information to the table .. What Smith and Train do is invest in some of the most researched companies in the world – they're exploiting more of a behavioural phenomenon (that people gamble too much on lower quality companies).

Giles Hargreaves is in much more of a niche, so his team can actually add information, and engage in 'price discovery', so it makes a lot of sense that funds like Marlborough Special Situations should have very good long-term track records .. I'd say jury's still out on global funds – I don't think they're adding real alpha – and trusts get easy upside in bull markets simply from leverage
Bill Fowler
Posted: 21 November 2017 08:16:40(UTC)

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The decline of the share has been surprisingly controlled over the past week or so but what the new bottom will be is anyone's guess. I think I am going to take this one off the list of shares I am interested in, just get bad vibes on it.
Hank Elvis Dobbs (texan)
Posted: 21 November 2017 08:33:59(UTC)

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Funny that Bill....it's just appeared on the sqweeky bum chart (having difficulty uploading)...Lodo..?
colin overton
Posted: 24 November 2017 10:47:28(UTC)

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WPCT down just over 5% on the week (I discount a late Friday rally).
Old Neil went into print to defend Prothena, although didn't actually deny Kerrisdale's points from what I read. Prothena down ~18% on the week (in $s). I guess this share is fast becoming less important to WPCT (and other Woodford mutuals) as the share price goes down and down, although this decrease is responsible for 3% of the overall 5% decrease in WPCT this week.
Quo Vadis? Whatever the rights and wrongs of the previous quoted data, I believe WPCT is now a large millstone round Old Neil's neck, 84p is a poor price over 30months for a 100p investment, when benchmarks are +60 to 80% over the same time period.
How will he escape? Well he could, over time, use better (i.e. more successful) stock picking and turn the fund around. This might not be as easy as it would have been starting 30months ago, are the Bears coming out of the forest? Or might Woodford close the fund and amalgamated it with another of his vehicles? This would gain 9p per share for us investors and remove this embarrassment from Woodford Plc? It's a thought. I wonder when we'll see a share price of 100p or even 95p again for WPCT, 10 days ago now seems a long time in this trust's "life"?
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Tim D on 24/11/2017(UTC)
Micawber
Posted: 24 November 2017 17:01:19(UTC)

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WPCT features in today's "cheap and dear" Investment Trustwatch as one of the "cheap" ones, but the web comment register/sign in bug is back again so we can't comment on Investment Trust Insider web pages.

I would comment that a discount of -9.6% is by no means "cheap" for a highly risky venture capital trust of this type, even if it had been doing well, which it conspicuously has not. It should be on a discount nearer -20% IMO.
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Tim D on 24/11/2017(UTC)
colin overton
Posted: 24 November 2017 17:20:51(UTC)

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I made a comment that we need to see some growth from Woodford's Patient Capital trust before anybody's likely to put any more money in it. Don't know if it was published? I rather like the idea of Old Neil giving up on this trust and selling out, giving us back another 9p above the share price to defrayal losses. It would also get Old Neil out of a difficult corner. I have a feeling that this trust is going to see very bad times before things improve.
Micawber
Posted: 24 November 2017 18:19:08(UTC)

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It seems one has to sign out of Citywire Money in order to sign into IT Insider to comment, and sign out of that before signing in again to Citywire Money to comment here! Gah!
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