Woodford Fund being suspended: Black Swan?

trendie

Legendary member
6,113 981

I don't buy stocks, but do trade FX and indices.
Much as I have rules and indicators, I acknowledge, it's essentially discretionary.

One of the high-flying funds, Woodford, has suspended its operation.
One investor, a council has asked to withdraw money. (£250M)
This may, or may not, be connected to Woodfords heavy investment in one company, Keir, recently posting a profits warning.

Unless you have a truly automated system, are we all likely to be hit by something like the above? (a combination of two or more unusual events that gouge your account, that may, or may not, rock your confidence.)
 
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malaguti

Senior member
2,329 445
I'd say there is the element of "I want it now" mentality creeping into this area also
the fund apparently only started in 2014/15 with 18% increase in his first year..and flat since then, whereas the market has obviously gone up. funds are in it for the long term, however like i say in an age where consumer demand requires immediate satisfaction using fundamentals as your basis is not going to win over many fans
 

Signalcalc

Senior member
3,027 633
I joined this fund at launch and managed to get out around break-even in the middle of last year, I didn't realise that the small print contained a freeze clause, there must be alot of pain for investors that had plans for the money they were about to withdraw. Not sure it will result in a black swan, it could though given there is lots of other bad news around at the moment, however the markets are pretty resilient nowadays, they won't want a run on investments across the board.

Edit: FTSE is rising this morning, so not a black swan to me.
 

barjon

Legendary member
10,236 1,539
I’ve been in it since the start. Taken half out already, not so much due to the flat recent performance but more about him playing ducks and drakes with his very high risk (independently valued since unquoted) stuff.
 
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Silverston

Junior member
22 3
It seems some if these investors probably shouldn't have been in this fund in the first place if they didn't understand the potential risk/returns profile, after all isn't it called Patient Capital? since he has to sell all the illiquid assets now that's going to cap any decent upside going forward, assuming the fund survives this.
 

4xis2ez

Well-known member
310 39

I don't buy stocks, but do trade FX and indices.
Much as I have rules and indicators, I acknowledge, it's essentially discretionary.

One of the high-flying funds, Woodford, has suspended its operation.
One investor, a council has asked to withdraw money. (£250M)
This may, or may not, be connected to Woodfords heavy investment in one company, Keir, recently posting a profits warning.

Unless you have a truly automated system, are we all likely to be hit by something like the above? (a combination of two or more unusual events that gouge your account, that may, or may not, rock your confidence.)
I trade Nadex spreads. Your maximum loss is how much you paid to trade the spread. If you paid $150 for one contract, that is the most you can lose regardless of market movement.