Never Sell Shell

[Dod101]

As a good HYPer that is my usual practice but seeing where it sits today at over £27, higher than in the 'good old days' when it used to hover around £24/25 with I think a higher oil price than today I have topped it. Not in the top up sense but taken about 10% of my holding out. Sold for the first time in a long while. I will sit on the cash and might even by in again if the price comes back. Meanwhile of course the price is continuing upwards.

Fine by me.

Dod

Moderator Message:
Edited to correct error, at poster's request.

[idpickering]

As a good HYPer that is my usual practice but seeing where it sits today at over £27, higher than in the 'good old days' when it used to hover around £24/45 with I think a higher oil price than today I have topped it. Not in the top up sense but taken about 10% of my holding out. Sold for the first time in a long while. I will sit on the cash and might even by in again if the price comes back. Meanwhile of course the price is continuing upwards.

Fine by me.

Dod

I do try to be of the 'never sell Shell' ilk myself Dod, I do support your right to top slice any holding should you so desire, but I'm always wary of the charges such jumping out, and back in entail. I've held Shell continuously since my first purchase on 20 Jul 2005, and admit to being tinkerer with their shares in my early HYP days, until I realised I wasn't very good at 'trading' so went back to the HYP buy and hold mantra. My last purchase was on 21 Jan 2016, during the downturn. The bottom line for me though, is that there'd have to be a very good reason for me to sell my RDSB holdings. Where else can you get such a great yield from a huge beast such as Shell? There are others of course, but they pale next to Shell for me.

Ian.

[monabri]

Only time will tell if this "bet" pays off. However, the bet is 10% of your holding....so you would appear to only have partially convinced yourself that RDSB is "towards its top end" . A lot will depend on which way oil prices go and I wouldn't even contemplate guessing that.

Why 10% though, what was the reasoning behind this figure or did 10% simply translate to a convenient/ round sum of money?

Didn't you do something similar with HSBA?

[pendas]

I sold out late March @ £22.30 to buy back within this year's ISA. The price has been on the rise ever since and the sale proceeds are gathering dust.

[Dod101]

Only time will tell if this "bet" pays off. However, the bet is 10% of your holding....so you would appear to only have partially convinced yourself that RDSB is "towards its top end" . A lot will depend on which way oil prices go and I wouldn't even contemplate guessing that.

Why 10% though, what was the reasoning behind this figure or did 10% simply translate to a convenient/ round sum of money?

Didn't you do something similar with HSBA?

Yes I did this with HSBA. Sold at £7 and bought back in when it fell back to £6.40 or thereabouts. The reasoning for Shell was really just to bring it back to a more comfortable holding but I do think the price is 'toppy'. I will be happy whether it continues upwards (when I might sell more) or if it falls back but I get a bit frustrated when I stick by the HYP mantra and watch a price rise and then fall back and I have not harvested anything from that. I know all about LTBH, but I like to think I am a bit beyond Doris which is what the HYP strategy outlined by pyad was about.

I think currently that Shell is subject to a bout of irrational exuberance.

Dod

[IanTHughes]

“Never say Never”

Many HYPers would sell Royal Dutch Shell (RDSB), or any other holding, but only for a good reason. At today’s close of 2,739.00p RDSB is currently yielding just north of 5%, definitely HYP territory. Back in November last year the company announced it’s scrapping of a Scrip Dividend alternative to cash because it no longer need to save the cash!

http://www.cityam.com/276555/shell-rest ... rket-makes

It further announced a significant improvement in its cash projections by raising its cash flow outlook by 2020 by $5 Billion to $30 Billion.

Of course this is predicated on an oil price of $60 per barrel but surely the foregoing represents a stonking good HYP candidate?

What kind of news would have persuaded you to hold on?

If your portfolio were considerably overweight in RDSB or the Oil sector generally, then I might understand, but surely you would sell more than 10% in those circumstances.

Did you sell simply because you wanted to realise some profit that you saw sitting there?

Another question if I may.

If you had no holding of RDSB at the present time, and no recent disposal of a holding, would RDSB be a purchase possibility for your HYP at a yield of 5%+?

If the answer in “No”, why not?

If the answer is “Yes”, why sell?

Well each to their own I suppose, my strategy is HYP


Ian

[tjh290633]

Another question if I may.

If you had no holding of RDSB at the present time, and no recent disposal of a holding, would RDSB be a purchase possibility for your HYP at a yield of 5%+?

If the answer in “No”, why not?

If the answer is “Yes”, why sell?

Well each to their own I suppose, my strategy is HYP


Ian

Yes, it would.

However I have held RDSB since 2006, first bought at 1820p. Added in 2007 at 1691p, then trimmed back when overweight in 2008 at 1900p. Topped up in 2010 at 1726p, then trimmed back in 2011 at 2363p.

Since then have topped up on four occasions. In 2013 at 2307p and again at 2152p, then in 2015 at 1834p and finally in 2017 at 2137p.

It currently stands at 137% of the median holding value, yields just over 5% but contributes 4.3% of my dividend income, so further topping up is ruled out. It needs to rise 10% relative to the median to qualify for trimming back when over 150% of the median.

I follow my own rules for topping up, which combines inverse weight and yield to arrive at a ranking. RDSB is a lowly 30/37 in the top up rankings.

TJH

[Hypster]

I might be topping up RDSB with my June investment. It’s currently in fourth place in the rankings but things do change at the top. I’ll decide nearer the time.

[Dod101]

Just to sum up. I do not use any mechanical method for any of my moves, trimming, buying ab initio or anything else. Instinct and common sense.

To answer IanTHughes

Were I a new HYPer I would certainly look to buy Shell at the present time, with what I think is a sustainable dividend and yielding more than 5%, why not? The price might fall back but never mind over an investment lifetime it will be fine.

I have though held it continuously since 1995 and have neither bought more nor sold any. CGT would have become an issue. For the last couple of years though it has been safely tucked away in an ISA (paid some CGT on that) and so I can now trade freely. Just as a matter of interest my original buying price has increased by 9 times in the 23 years. I have taken account of the consolidation in 2005 when Shell Transport dropped out of the picture.Not nearly as good as some shares I have held but including dividends must be a very good return.

I have no concern about some trading and if it does not work out (that is if that the price runs away upwards) I will be perfectly happy because I still hold a large slug, and I will find something else. The world is a big place.

Dod

[jackdaww]

ive tinkered with the idea of top slicing at this price - but i havnt.

[OLTB]

Having just read a great book - The Art of Execution by Lee Freeman-Shor - I would have no hesitation in trimming a winner once it exceeded a personal set multiple of my portfolio. Note that it would be a trimming exercise, and not fully cashing in.

Cheers, OLTB.

[bluedonkey]

Gosh, this would be near the bottom of my list of potential sellers.

[csearle]

Shell is middling in my HYP, in terms of top-up ranking, asset-weight, and income contribution weight. So steady as she goes for me. C.

[absolutezero]

Having just read a great book - The Art of Execution by Lee Freeman-Shor - I would have no hesitation in trimming a winner once it exceeded a personal set multiple of my portfolio. Note that it would be a trimming exercise, and not fully cashing in.

Cheers, OLTB.

Another reader!
This is the book that convinced me 'Strategic Ignorance' was a mistake after the Carillion saga.
I let winners run but losers get some kind of action.

[richfool]

There are some "macro" views of O & G's and their future on the thread link below, which whilst inappropriate for a HYP Practical board thread may be of interest to some of the posters on this thread:

viewtopic.php?f=55&t=11664

[Dod101]

This is the book that convinced me 'Strategic Ignorance' was a mistake after the Carillion saga.
I let winners run but losers get some kind of action.

I might even get hold of that book. absolutezero did not have to buy the book or wait for Carillion to discover that SI is a (strategic) mistake, I have been saying that for most of the time I have been posting here and on TMF.

SI is intellectual laziness apart from being highly dangerous.

Dod

[monabri]

SI is intellectual laziness apart from being highly dangerous.

Dod

I agree wholeheartedly. I would be surprised if many " regulars" on the HYP board disagree ( if " SI rules ok", why pay so much attention to the board and other Lemons comments?).

[OLTB]

This is the book that convinced me 'Strategic Ignorance' was a mistake after the Carillion saga.
I let winners run but losers get some kind of action.

I might even get hold of that book. absolutezero did not have to buy the book or wait for Carillion to discover that SI is a (strategic) mistake, I have been saying that for most of the time I have been posting here and on TMF.

SI is intellectual laziness apart from being highly dangerous.

Dod

I still count myself as a new investor and the book has been very interesting indeed - it doesn't tell you how to screen/what stocks to look for, it isn't technical and Dod, you may be doing what the book recommends anyway! It tells you what actions to take in order to give yourself the best chances for success. This is both when stocks are on the way down and on the way up.

Sorry for going OT, but I think it's useful in the general OP of trimming a winner such as Shell.

Cheers, OLTB.

[tjh290633]

This is the book that convinced me 'Strategic Ignorance' was a mistake after the Carillion saga.
I let winners run but losers get some kind of action.

I might even get hold of that book. absolutezero did not have to buy the book or wait for Carillion to discover that SI is a (strategic) mistake, I have been saying that for most of the time I have been posting here and on TMF.

SI is intellectual laziness apart from being highly dangerous.

Dod

Just remember that the S stands for Strategic. SI does not mean put your head in the sand when it all goes pear shaped.

It just means taking no notice of journalistic hype or posts like those emanating from TMF. Reading company reports and RNS posts is not SI.

TJH

[IanTHughes]

SI is intellectual laziness apart from being highly dangerous.

On the contrary, Strategic Ignorance (SI) is simply a refusal to take notice of long-term forecasts and opinions, which in any case are often contradictory and mostly based on guesswork or acceptance of assumptions. Following SI frees ones intellectual investigation to focus more keenly on those things one can analyze – annual results and the like.

Maybe your definition of SI is different or perhaps you can make successful long-term forecasts. I cannot.


Ian