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Pearson 1st Quarter Trading Update

Practical discussions about equity High-Yield Portfolios (HYP) for income
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ZipserSir
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Re: Pearson 1st Quarter Trading Update

#138543

Postby ZipserSir » May 12th, 2018, 3:07 pm

Think I will sell a part of my holding on Monday. The dividend outlook is relatively unpromising and I hope there will be better possibilities elsewhere. Still have a sizable holding in a different account and it would be nice to see the current price bull run continue to the point where I can get my original investment back.

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Re: Pearson 1st Quarter Trading Update

#138554

Postby UncleEbenezer » May 12th, 2018, 3:49 pm

You folks whose investing style is to buy high and sell low help provide a real opportunity for others. Thank you.

ZipserSir
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Re: Pearson 1st Quarter Trading Update

#138560

Postby ZipserSir » May 12th, 2018, 4:04 pm

UncleEbenezer wrote:You folks whose investing style is to buy high and sell low help provide a real opportunity for others. Thank you.


Actually, I bought low and am selling high, so you can't thank me, I'm afraid :roll:

kempiejon
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Re: Pearson 1st Quarter Trading Update

#138579

Postby kempiejon » May 12th, 2018, 5:11 pm

ZipserSir wrote:have a sizable holding in a different account and it would be nice to see the current price bull run continue to the point where I can get my original investment back.

So not quite high enough yet?
As an aside I managed to recoup the capital loss on my Petrofac HYP shares by buying some for recovery. I was lucky to make that choice towards the bottom and topping up throughout some of the first flush of recovery. Those additional tranches of PFC were not bought with HYP principals and I have a plan to exit but the yield does make the new holding not unattractive from an income perspective, I am more likely to sell on when I can find another attractive trade to redirect the cash to.
I like the Pearson digital reinvention recovery story but for income it's been a dog, still perhaps from here the dividend trajectory is upwards.

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Re: Pearson 1st Quarter Trading Update

#138609

Postby ZipserSir » May 12th, 2018, 7:43 pm

kempiejon wrote:
ZipserSir wrote:have a sizable holding in a different account and it would be nice to see the current price bull run continue to the point where I can get my original investment back.

So not quite high enough yet?


I bought at two different times - win some / lose some :roll:

kempiejon wrote:As an aside I managed to recoup the capital loss on my Petrofac HYP shares by buying some for recovery. I was lucky to make that choice towards the bottom and topping up throughout some of the first flush of recovery. Those additional tranches of PFC were not bought with HYP principals and I have a plan to exit but the yield does make the new holding not unattractive from an income perspective, I am more likely to sell on when I can find another attractive trade to redirect the cash to.


Ditto Petrofac :cry:

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Re: Pearson 1st Quarter Trading Update

#139033

Postby SDN123 » May 14th, 2018, 5:59 pm

Arborbridge wrote:Pearson share price is almost begging me to take some action. I see the forward yield is now down to my 2% limit, but with 2.5% pencilled in for next year: i.e. dividend increasing which is, after all, what we are looking for. It is now the lowest forward yielder I have - even lower than Tesco, and the latter's dividend is likely to increase faster next year.

As a result, I will today set a stop loss at a price which I have yet to determine. It will be pretty tight, though, so is likely to trigger if the price does not continue increasing.

Decision made.

Also: topping up NG tomorrow.


Arb.


I have been looking for an exit point from Pearson for a while (low yield; the company no longer in the businesses that I valued when I originally bought it; the company no longer run by the same people was when I originally bought it.)

I hadn’t researched or used stop losses before, and so Arb’s post directed to a very useful new technique for me.

I probably set the stop “too tight” but have just sold out at 905p and a bit - which suits me fine.

Now to find somewhere to put the new cash (SLA and the big pharas are the favourites right now according to HYPTUS.)

Thanks Arb,

SDN123

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Re: Pearson 1st Quarter Trading Update

#139393

Postby Arborbridge » May 16th, 2018, 4:22 pm

SDN123 wrote:
Arborbridge wrote:Pearson share price is almost begging me to take some action. I see the forward yield is now down to my 2% limit, but with 2.5% pencilled in for next year: i.e. dividend increasing which is, after all, what we are looking for. It is now the lowest forward yielder I have - even lower than Tesco, and the latter's dividend is likely to increase faster next year.

As a result, I will today set a stop loss at a price which I have yet to determine. It will be pretty tight, though, so is likely to trigger if the price does not continue increasing.

Decision made.

Also: topping up NG tomorrow.


Arb.


I have been looking for an exit point from Pearson for a while (low yield; the company no longer in the businesses that I valued when I originally bought it; the company no longer run by the same people was when I originally bought it.)

I hadn’t researched or used stop losses before, and so Arb’s post directed to a very useful new technique for me.

I probably set the stop “too tight” but have just sold out at 905p and a bit - which suits me fine.

Now to find somewhere to put the new cash (SLA and the big pharas are the favourites right now according to HYPTUS.)

Thanks Arb,

SDN123


Well, here's a funny thing. I didn't actually set the stop loss as something else distracted me. I then went away for a few days, and completely forgot the whole Pearson discussion and what I had intended to do. Didn't cross my mind until just now when I thought to look at Lemon Fool.

Maybe I should do something about it - soon- but this episode also reminds me why HYP appealed to me when I retired: i.e. a technique which enabled one to go away for long trips and forget about investment, leaving it to take care of itself. Perhaps I should stop reading LMF for six months altogether and forget about all the discussion, ebb and flow and company news. Just let HYP do the job it was designed for - I am quite sure it would survive!

Arb.

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Re: Pearson 1st Quarter Trading Update

#139421

Postby SDN123 » May 16th, 2018, 5:50 pm

Arborbridge wrote:

Maybe I should do something about it - soon- but this episode also reminds me why HYP appealed to me when I retired: i.e. a technique which enabled one to go away for long trips and forget about investment, leaving it to take care of itself. Perhaps I should stop reading LMF for six months altogether and forget about all the discussion, ebb and flow and company news. Just let HYP do the job it was designed for - I am quite sure it would survive!

Arb.


Well if you, and others before you, disappeared I wouldn’t have found HYP - so thanks for staying this long!

There is a funny contradiction on this board between those who say “I do this because I could leave it alone for six months” and those who say “I don’t want more shares as there would be too much administration”.

I suspect the difference are due to:

- how actively you chose to monitor shares in order to top-up / tinker / make new investments; and

- how many of your shares are tax sheltered (little or no “compulsory” paperwork) and how many are exposed to tax (legal reporting requirements plus tax management tactics).

SDN

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Re: Pearson 1st Quarter Trading Update

#139426

Postby Arborbridge » May 16th, 2018, 6:11 pm

SDN123 wrote:
There is a funny contradiction on this board between those who say “I do this because I could leave it alone for six months” and those who say “I don’t want more shares as there would be too much administration”.

I suspect the difference are due to:

- how actively you chose to monitor shares in order to top-up / tinker / make new investments; and

- how many of your shares are tax sheltered (little or no “compulsory” paperwork) and how many are exposed to tax (legal reporting requirements plus tax management tactics).

SDN


And that contradiction is abundantly evident in at least one person - i.e. me! However, it's possible to use the HYPTUSS and record one's dividends etc without all the fussing about the details of whether this or that company should be avoided.

At the heart of this is the "to sell or not to sell" debate - because if it's all much of a muchness and "trading" makes little difference, then one might as well go to sleep on it - save for as much record keeping as one wishes to do. That's the point on which I was reflecting, rather than record keeping. In my view, record keeping is almost a voluntary activity if everything is inside a tax shelter. All one needs to know is that there is sufficient income arriving in a timely manner!

In my case, the record keeping was for two purposes: to see if HYP would provide the income necessary in retirement, and to compare with whatever else I might do with the capital. Of course, that's a never ending story, but I'm happy to continue with it for the foreseeable future.

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Re: Pearson 1st Quarter Trading Update

#144722

Postby ZipserSir » June 9th, 2018, 3:37 pm

Sorry for resurrecting this one, but since the price has continued to climb, I have nearly got my shirt back - and though they might have kept it longer than I would like, at several times I did not expect to get it back at all.

Sentiment among the wise is running against PSON. Does anyone here think there is any reason to hold on?

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Re: Pearson 1st Quarter Trading Update

#144783

Postby Arborbridge » June 10th, 2018, 7:07 am

ZipserSir wrote:Sorry for resurrecting this one, but since the price has continued to climb, I have nearly got my shirt back - and though they might have kept it longer than I would like, at several times I did not expect to get it back at all.

Sentiment among the wise is running against PSON. Does anyone here think there is any reason to hold on?


I'm a bit out of the news loop here. If the price has continued to rise, that sounds good, and what is the evidence about "the wise"? One of the "wise" - Nick Train - I assume is still holding on, if that's significant - but when did we follow the Wise? If the price is rising (within limits), isn't that an argument for holding on unless you have something better to do with the capital?

The problem for me with PSON, not only the low yield, but the fact the company isn't what I thought it was when I bought it. I can't make up my mind if that fact is a good thing or a bad one! After all, companies do, and have to, evolve as time goes on - all the great ones do it. The question is, whether the evolution will bring success or failure and I suppose, the change from what I bought in itself is hardly important. That's probably just my own lack of vision that change was needed, overdue.

I've held off making the sell decision myself for a long while - and rather glad I did up until now. As I mentioned previously, my usual technique in this situation is to set a stop-loss and let the market make the decision for me. I still haven't set one for PSON due to other distractions like holidays, not to mention inertia.

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Re: Pearson 1st Quarter Trading Update

#144784

Postby TUK020 » June 10th, 2018, 7:40 am

Short interest on Pearson is 6.9% of stock:
https://shorttracker.co.uk/companies/?sort=2&d=desc

One of my conclusions from the Carillion saga is that one of the few early warning signals available is the shorttracker (other than the yield being too high).
I have set an arbitrary limit of 5%. This means that I have bailed out of Pearson, Sainsburys (unfortunately before the recent spike), and Wood Group.
I also bailed out of Tesco, but the short level on this has now subsided.
I am keeping a beady eye on Marstons, at just over 3%, which is now the highest in my portfolio.

There is no evidence or analysis to back up the 5% limit - a figure plucked out of the air.

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Re: Pearson 1st Quarter Trading Update

#144788

Postby Arborbridge » June 10th, 2018, 9:41 am

TUK020 wrote:Short interest on Pearson is 6.9% of stock:
https://shorttracker.co.uk/companies/?sort=2&d=desc

One of my conclusions from the Carillion saga is that one of the few early warning signals available is the shorttracker (other than the yield being too high).
I have set an arbitrary limit of 5%. This means that I have bailed out of Pearson, Sainsburys (unfortunately before the recent spike), and Wood Group.
I also bailed out of Tesco, but the short level on this has now subsided.
I am keeping a beady eye on Marstons, at just over 3%, which is now the highest in my portfolio.

There is no evidence or analysis to back up the 5% limit - a figure plucked out of the air.


I'd say 5% is far too low a limit, unless you have other reasons for bailing out. I think you might find quite a few HYP companies have been over that limit and recovered with no harm being done, so you would be selling out unecessarily.

Arb.

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Re: Pearson 1st Quarter Trading Update

#144796

Postby ZipserSir » June 10th, 2018, 11:04 am

Arborbridge wrote:I'm a bit out of the news loop here. If the price has continued to rise, that sounds good, and what is the evidence about "the wise"? One of the "wise" - Nick Train - I assume is still holding on, if that's significant - but when did we follow the Wise?


Sorry, the evidence of the 'wise' appears to be sell - see here https://www.fool.co.uk/company/?_action ... r=LSE-pson.

I'm not inclined to hang on - I think there might be better investments out there - but Fools are often contrarian and I'm always interested in a different point of view.

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Re: Pearson 1st Quarter Trading Update

#144801

Postby Arborbridge » June 10th, 2018, 11:56 am

ZipserSir wrote:
Arborbridge wrote:I'm a bit out of the news loop here. If the price has continued to rise, that sounds good, and what is the evidence about "the wise"? One of the "wise" - Nick Train - I assume is still holding on, if that's significant - but when did we follow the Wise?


Sorry, the evidence of the 'wise' appears to be sell - see here https://www.fool.co.uk/company/?_action ... r=LSE-pson.

I'm not inclined to hang on - I think there might be better investments out there - but Fools are often contrarian and I'm always interested in a different point of view.


There's a difference between what brokers are recommending and what managers are actually doing. It would be interesting to know about the latter.
I've always taken our oft used expression "The Wise" to mean managers rather than brokers or scribblers of one sort of another, though I see that's too narrow a view from your ideas of who they are. The HYPers contention is (I thought) that he can beat "The Wise" at the investment game and does not need to follow them.

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Re: Pearson 1st Quarter Trading Update

#144805

Postby IanTHughes » June 10th, 2018, 12:22 pm

Arborbridge wrote:I've always taken our oft used expression "The Wise" to mean managers rather than brokers or scribblers of one sort of another, though I see that's too narrow a view from your ideas of who they are. The HYPers contention is (I thought) that he can beat "The Wise" at the investment game and does not need to follow them.

I agree with you about who "The Wise" are. To me they are those managers and other that pick the investments for Investment Funds and the like. Brokers simply follow a client's instructions.

I am not sure I agree with your second point though. As an HYPer I believe I can do as well as the Wise and by not incurring their fees, compounded over many years, I hope to come out ahead. Beat them? Sometimes I will, other times I will not, but the lack of charges will help me considerably

With regard to Pearson (PSON) I sold back in early April, just before the recent good news and near 20% increase in share price. Que sera sera! I console myself with the 30% increase in the value of the holding I bought into, Greene King PLC (GNK). I know it was a lucky break, buying two days before a very positive trading update was published :)


Ian

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Re: Pearson 1st Quarter Trading Update

#144810

Postby idpickering » June 10th, 2018, 12:53 pm

IanTHughes wrote:
Arborbridge wrote:I've always taken our oft used expression "The Wise" to mean managers rather than brokers or scribblers of one sort of another, though I see that's too narrow a view from your ideas of who they are. The HYPers contention is (I thought) that he can beat "The Wise" at the investment game and does not need to follow them.

I agree with you about who "The Wise" are. To me they are those managers and other that pick the investments for Investment Funds and the like. Brokers simply follow a client's instructions.

I am not sure I agree with your second point though. As an HYPer I believe I can do as well as the Wise and by not incurring their fees, compounded over many years, I hope to come out ahead. Beat them? Sometimes I will, other times I will not, but the lack of charges will help me considerably.

Ian


I agree about the above 'definition' of The wise (small w), and particularly with your second point above.

Ian.

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Re: Pearson 1st Quarter Trading Update

#144811

Postby Arborbridge » June 10th, 2018, 1:22 pm

IanTHughes wrote:I am not sure I agree with your second point though. As an HYPer I believe I can do as well as the Wise and by not incurring their fees, compounded over many years, I hope to come out ahead. Beat them? Sometimes I will, other times I will not, but the lack of charges will help me considerably


Ian


Well, unless one can do better, I imagine some people might say: "why bother?" One answer is, as we know, not many investment trusts or OEICS are built around our particular desire for a relatively high yield and rising income. Most need to compromise by throwing is a desire for capital growth which is seen by marketing departments as necessary to attract investors.

As regards "beating them": it seems likely that I do not, thus far - but hope springs eternal. All I can really say is that I'm not doing too badly.

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Re: Pearson 1st Quarter Trading Update

#144862

Postby Bouleversee » June 10th, 2018, 7:53 pm

IanTHughes -

Surely it depends on which "wise" you are comparing your own efforts with. I bought Scottish Mortgage IT on May 15, 2017 @ 390p as I want to simplify my affairs and hadn't been doing too well since I started following HYP. SMT's s.p. has gone up 35% since then; admittedly the yield is not massive but it increases and there are no additional charges so far as I know. Has your portfolio beaten/matched their record over the same period or a longer period? I haven't yet worked it out (complicated by shares inherited from my husband being added to my ISA at transfer value) but despite one or two having done better, I think I can safely say that, with losses such as CLLN, IRV, Cobham, De la Rue, etc. etc.. the total value of my portfolios is nothing like so good and it requires no effort from me. On Friday, I bought Monks IT which I hope will do equally well or certainly as well as anything I might choose. With all the uncertainty of Brexit hanging over us and the fact that the world is changing (e.g. today's news about genetic modification to cure sickle cell anaemia and MRI scanners which will kill cancer cells (https://www.telegraph.co.uk/news/2018/0 ... dbreaking/) - no big pharma involvement there so far as I am aware - I want some global investments and wide diversification including new types of business without the bother of having a large number of individual holdings and having to make all the decisions myself, as is my present situation, so the intention is to switch when the time seems right in many cases.

Having said that, I bought Woodford's Patient Capital Trust a year or so ago and am losing on that so even those considered very wise can be fallible or their miracles take a little longer.

Mods - feel free to move this to a more appropriate board. Am no good at computer stuff.

As regards Pearson, my husband used to hold but they had to be sold for the children's legacy. My gut feeling is that they are not out of the woods yet and may never be but you will soon know which way the wind blows.


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