Frying pan to the fire again

[Arborbridge]

I made a start a while back at looking at all my unforced sells following some discussion with Dod and others. Whether or not selling and buying something else is worth while, is broadly 50:50 (five years after the event) in my case. I'm not great at tinkering.

The last move in that way was when I (unecessarily, and uncharacteristically) sold MKS. Marks has been under the kosh for a while and seems (people say) to be a serial disappointer. Retail, "bad", and Marks unable to make any real headway in this world of disrupters according to the chit chat, eventually undermined my thinking to the point when I gave up and sold.

Looking around for something in a different sector which was a reliable dividend payer and solid business, I noticed that WPP was yielding more than it had for a long while - so I bought it. That was shortly before Martin Sorrell resigned

It's too soon to judge the eventual outcome, of course, but at this moment, my tinker has proved something of a disaster. Since I sold, Marks price has come back about 8% and WPP has sunk 10%. Oh well.... in five years, I'll know whether it was the right step or not.

Do not tinker lightly!


Arb.

[idpickering]

I made a start a while back at looking at all my unforced sells following some discussion with Dod and others. Whether or not selling and buying something else is worth while, is broadly 50:50 (five years after the event) in my case. I'm not great at tinkering.

The last move in that way was when I (unecessarily, and uncharacteristically) sold MKS. Marks has been under the kosh for a while and seems (people say) to be a serial disappointer. Retail, "bad", and Marks unable to make any real headway in this world of disrupters according to the chit chat, eventually undermined my thinking to the point when I gave up and sold.

Looking around for something in a different sector which was a reliable dividend payer and solid business, I noticed that WPP was yielding more than it had for a long while - so I bought it. That was shortly before Martin Sorrell resigned

It's too soon to judge the eventual outcome, of course, but at this moment, my tinker has proved something of a disaster. Since I sold, Marks price has come back about 8% and WPP has sunk 10%. Oh well.... in five years, I'll know whether it was the right step or not.

Do not tinker lightly!


Arb.

Wise words once again Arb. I try not to tinker if I can, and have a history of averaging my buying price of my holdings by buying on the dips.

Ian.

[YeeWo]

Looking around for something in a different sector which was a reliable dividend payer and solid business, I noticed that WPP was yielding more than it had for a long while - so I bought it. That was shortly before Martin Sorrell resigned

I bit the bullet and sold the last of my WPP stock on 27July @ £11.80. Principle reasons: -
- The Tech. Giants and online generally is removing WPP from the loop in ways I never foresaw.
- The replacement for Sir Martin will have every incentive on earth to Kitchen Sink the results in his/her 1st year.
Proceeds churned into Vodafone which while not without difficulties has a huge dividend and seems a more central player in the online infrastructure which will be powering the future. Like you i'll know if I'm correct in 5+ years........

[Breelander]

...Whether or not selling and buying something else is worth while, is broadly 50:50 (five years after the event) in my case...

And that's probably the best an experienced investor like yourself should expect. An inexperienced one is more likely to systematically guess wrong - hence HYP's 'hold forever' guidance.

There are few who claim to have exceptional stock picking skills. Those very few (if any) who genuinely do shouldn't be HYPing in the first place. The many who are mistaken in their confidence eventually find frequent trading is bad for their wealth.

Retail, "bad", and Marks unable to make any real headway in this world of disrupters according to the chit chat, eventually undermined my thinking to the point when I gave up and sold..

This is the sort of noise we are encouraged to ignore.

[Arborbridge]

This is the sort of noise we are encouraged to ignore.

Quite, but on this occasion it did "get" to me. But bear in mind I have several other retail shares, and that influenced me too.
However, I do have to admit to feeling slightly annoyed with myself at selling Marks with which I've had a love/hate relationship for a long while. Whilst there are plenty of people who moan about Marks as a store, I must admit to rather liking it. But that hardly makes it a sound investment as my shopping habits seem to be distinctly contrarian: i.e, I almost never shop online and prefer "shopping".

I'm still not sure if I did the right thing.

[TUK020]

Don't call this decision just yet. In a year's time maybe.

My key learning for Carillion is to keep half an eye on the shorts position:
https://shorttracker.co.uk/companies/?sort=2&d=desc

MKS on the front page - quite a few people betting a lot of money that it is going to head south. That's a conviction position!
You might yet heave a big sigh of relief.

[Arborbridge]

Don't call this decision just yet. In a year's time maybe.

My key learning for Carillion is to keep half an eye on the shorts position:
https://shorttracker.co.uk/companies/?sort=2&d=desc

MKS on the front page - quite a few people betting a lot of money that it is going to head south. That's a conviction position!
You might yet heave a big sigh of relief.

Thanks for the encouraging words. Although the shorting is interesting, I'm never sure how critical it really is. For example, Greene King was over 10% this year, but has now settled back, and was up to 15% in 2015. These fears come and go, and HYP tends to throw up those shares which are out of favour.

I wouldn't call this decision either - not for a few years anyhow.

[Itsallaguess]

Whether or not selling and buying something else is worth while, is broadly 50:50 (five years after the event) in my case.

I'm not great at tinkering.

Bit of a philosophical question though Arb - let's pretend that you more or less 'knew' that such trades were only ever going to be 'performance-neutral', but such trades *still* potentially meant moving from a company that you simply weren't 'happy with', to one which didn't cause you any abnormal angst in owning, would you see an 'emotional' benefit to still carrying out that 'performance-neutral' tinker?

I personally don't think that *every* 'investment-benefit' must always be measured in pounds and pence......

Cheers,

Itsallaguess

[Arborbridge]

Whether or not selling and buying something else is worth while, is broadly 50:50 (five years after the event) in my case.

I'm not great at tinkering.

Bit of a philosophical question though Arb - let's pretend that you more or less 'knew' that such trades were only ever going to be 'performance-neutral', but such trades *still* potentially meant moving from a company that you simply weren't 'happy with', to one which didn't cause you any abnormal angst in owning, would you see an 'emotional' benefit to still carrying out that 'performance-neutral' tinker?

I personally don't think that *every* 'investment-benefit' must always be measured in pounds and pence......

Cheers,

Itsallaguess

Yes, I know you've expounded that before, and it is a perfectly valid point. In general, I don't suffer long term anxiety about shares, but I am prone to being moody in the short term - which is a thoroughly bad attitude for a HYPer!
However, it's possible that the short term and sudden event is actually brought on by a long period of simmering thought.

Many of these sells are not accompanied by a sense of relief, but the reverse - a sense of regret.
Arb.

[Blagdon]

A few years back I did quite a detailed analysis of my tinkering performance (including costs)... there was almost nothing in it... loads of time, effort and energy for basically no difference in performance.

[MDW1954]

Arb,

I think you're aware that I write about this sort of thing. Not from any position of particular expertise, but from the perspective of a longterm private investor who has been deemed at have an ability to communicate this sort of stuff. Translation: I'm just as likely to get it wrong as you are.

How I think about a "sell", and how I have tended to communicate it in writing, is to think of a "sell" in terms of a buy. In other words, what offers a more compelling opportunity?

For any HYPer with a reasonably mature HYP, and no unfulfilled sectors, the answer is often uncomfortable. Or at least, is so to me. And it often translates into doubling-up on something where I'm less certain about the upside than I am on downside of the share I'm contemplating selling.

Note, this is how I evaluate individual shares. Sectors, trackers, and country-specific ETFs are something else. But that would be off-topic. But for HYP, that's my answer.

To translate again: Pyad, and Doris, have a point.

MDW1954

[Breelander]

A few years back I did quite a detailed analysis of my tinkering performance...

This one? I remember it well, Rec'd it at the time and then, when TMF was closing, made sure it was archived for posterity...

Whilst I disagree with PYAD’s extreme of NEVER tinker, I increasingly agree with the gist of his challenge that most of us tend to tinker too much and to the detriment of our portfolio performance.

https://web.archive.org/web/20161111173 ... sort=whole

PS: it's also memorable as the thread on which Arb asked me to post a review of my HYP - so you can blame him for my interminable Christmas monologues....

[idpickering]

A few years back I did quite a detailed analysis of my tinkering performance (including costs)... there was almost nothing in it... loads of time, effort and energy for basically no difference in performance.

Well said Blagdon. There's a lesson in your comment for us all here I think. Less is more, and all that, Have a rec.

Ian.

[Itsallaguess]

A few years back I did quite a detailed analysis of my tinkering performance (including costs)... there was almost nothing in it... loads of time, effort and energy for basically no difference in performance.

Well said Blagdon. There's a lesson in your comment for us all here I think. Less is more, and all that,

Didn't you have quite a tinkering-spree a while back though Ian, or am I mis-remembering?

I recall at the time it was really quite a flurry?

Cheers,

Itsallaguess

[idpickering]

Didn't you have quite a tinkering-spree a while back though Ian, or am I mis-remembering?

I recall at the time it was really quite a flurry?

Cheers,

Itsallaguess

Yep, guilty as charged. Not something I'm proud of as I try to be a good HYPer.

Ian.

[Itsallaguess]

Didn't you have quite a tinkering-spree a while back though Ian, or am I mis-remembering?

I recall at the time it was really quite a flurry?

Yep, guilty as charged. Not something I'm proud of as I try to be a good HYPer.

No, it's not so much that Ian, I was just wondering if you were in a position to carry out some similar qualitative studies as are being discussed here, given that I seem to remember that you carried out a number of sales around the same time?

Cheers,

Itsallaguess

[idpickering]

No, it's not so much that Ian, I was just wondering if you were in a position to carry out some similar qualitative studies as are being discussed here, given that I seem to remember that you carried out a number of sales around the same time?

Cheers,

Itsallaguess

Sorry, I get you now. To be honest, probably not.

Ian.

[tjh290633]

At some time in the past I looked at how my reinvestment of the proceeds of tinkering had fared. The criterion by which I judged them was how the dividend income post tinkering compared with the income tinkered away.

I had one adverse result, when I trimmed IMT (as it was then) and put the proceeds into BT.A and ICI. Both promptly cut their dividends. The rest worked fine.

One of my abiding principles was that reinvestment should always be into a share with a higher yield than that being sold. That way you got the ratcheting effect on income.

TJH

[tjh290633]

I had one adverse result, when I trimmed IMT (as it was then) and put the proceeds into BT.A and ICI. Both promptly cut their dividends. The rest worked fine.

TJH

I've now had a chance to dig out the relevant details. It all happened when I trimmed IMT back by 20% and put the proceeds into equal values of BT.A and ICI. IMT's dividend which would be foregone was 12p for the half year (34.5p for the previous year), while ICI's previous year's was 25.75p and BT.A's was 8.7p, having had a rights issue and cut their dividend from 21.9p.

Then, ICI cut theirs to 12.75p (and continued to reduce it further) and BT.A to 2p, before a gradual increase. The consequence in dividends per share was:

Divs    2002    2003    2004    2005    2006    2007    Totals                    
IMT    12.00   35.00   45.00   51.50   58.00   64.50   -460.18              
BT.A    2.00    6.50    8.50   10.40   11.90   15.10    200.19              
ICI     3.00    7.25    6.90    7.65    8.10    9.70    127.80              
   .                                                    327.99  Total            
   .                                                   -132.19 Difference             
   .                                                      -71%              
   .                                                      -29%   Less Income

So what could have been 47.65p replacing 34.5p given up turned out to be reduced income.

TJH

[CryptoPlankton]

One of my abiding principles was that reinvestment should always be into a share with a higher yield than that being sold. That way you got the ratcheting effect on income.

TJH

I really think you should write a book about your methods - perhaps you could go under the pseudonym of Terry Ratchet...