3 March 2021
Show hosts Dan Mikulskis and Mary Spencer bring on David Ricketts onto the show to discuss his book 'When The Fund Stops.'
1. Process of writing the book
- What drove David to want to write the book, why this, why now?
- How easy it is to get interviews with sources
- Driver for chapter names – is it just Neil that was a Zeppelin/Clapton fan?!
- Target / expected readership – written in a great “popular” style and not jargony
2. Market dynamics – why was Woodford successful for so long?
- Comparison to Buffett
- Managing money away from the City of London
- Avoiding tech in 2000 and banks in 2008 – for the right reasons?
- “Hands on” approach –> stewardship (Kay report)
- Transparency (potentially actually led to downfall though…)
- Communications – to individual investors
3. Market dynamics – what led to the downfall?
- Size of the fund
- Smaller / AIM / unlisted stocks
- Role of Woodford
- Role of retail investors / platforms / market commentators
- Role of administrators / regulators
- Run of big share price negative surprises
4. Lessons for investors / warning signs to look out for
- Key man risk
- Size matters
- Style drift (increasing focus on smaller companies)
- Launching new products
- Reliance on previous reputation over scrutiny
- Departures (and particularly compliance officers?!) / team dynamics / diversity
- “Cocktail of hubris and arrogance”
One thing to take away
- Highlight failures around oversight. Whether its Neil Woodford, or the FCA or the investment platforms that would champion Woodford right up until his business collapsed.
- It shines a light on all the different elements of the story, hoping to pass the pressure on to the regulators for answers.
Most underappreciated thing
- Rise of Neil Woodford but also his downfall.
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