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Arrogant Bastard Fund Manager Neil "Nomates" Woodford offers up the least convincing apology since Nixon

By Tom Winnifrith | Sunday 10 September 2017


An evil PR spinner has had words with underperforming fund manager Neil "Nomates" Woodford, aka the most arrogant bastard in the City. Until now the line was "I am right the market is wrong, its business as normal." Now Nomates has recorded a video in which he says that he is sorry for the underperformance of his funds. Perhaps it is the fact that he has seen folks yank a net £350 million out of his £10 billion CF Woodford Equity Income fund in recent weeks that has caused the contrition. If redemptions continue on that scale, Woodford will be forced into some hurried share sales which will only compound his woes. The trouble it that Woodford patently does not feel sorry.

Woodford has stated: "I'm very disappointed with the short-term performance and indeed, have been criticised for it.” What you find it odd that folks might criticise you oh great one? After debacles such as Provident Financial (PFG)? How dare the bastards suggest that the great Woodford is anything other than a frigging genius. Bastards I say. Bastards.

But Woodford is not changing ihis approach because, as we all know, Nomates is right and the market is wrong:
“What's the right valuation for the businesses that I'm investing in and indeed, the ones I'm not investing in? Where is the market making an error? Where has the market got the wrong end of the stick? Has it distorted reality? And it often does. It did it before. It's done it on numerous occasions in my career. And it is certainly doing it now in my view. That is a painful place to be.”

Woodford argued that if you take a broader look at the portfolio and stock market, it suggests his underperformance is more a product of “the rather odd characteristics of this bull run” He said the rally was a result of a “very narrowly led market” where eight stocks have accounted for more than half of the growth in the FTSE All Share index.

Hmmmm. I would not argue that valuations of many FTSE 100 and indeed FTSE 350 stocks are crackers but to say that his underperformance of the last year or so is because he is not buying these dizzy super eight is not entirely fair. For over the past year Woodford has not only underperformed a rising market, his fund has actually delivered a negative return (1.9%) Okay c 40% of that loss is explained by the 0.75% annual management charge (meaning that even as investors have lost cash, the Woodford Group has trousered £75 million from managing this fund) but the plain and simple fact is Woodford has backed stocks which, on balance, have in value.

This is not just a story of missing out on racy and unsustainable shooting stars. This is partly a matter of Woodford making a number of big stock specific calls which were bad ones. Why cannot he admit to that?

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