The Lemon Fool

https://www.vodafone.com/content/index/ ... dends.html

VOD have advised on their website that the Interim Dividend due to be paid on Friday 1 Feb will be at the €:£ rate of 0.87299, giving a ‘notional’ 4.2253p per share. In practice, they usually apply the €:£ rate against the total € divi payable, possibly giving rise to an apparent ‘discrepancy’ of a few pence.

Thanks. Despite having just sold my shares I would seem to be in line for the dividend. Good. Least they can do.

Dod

Thank you for posting this information. It seems the dividend is all that VOD can offer nowadays. A disappointing share, but it's dividends we're about here, right?

Ian.

idpickering wrote:
A disappointing share, but it's dividends we're about here, right?

It is, but what does that really mean?

Where outlier yields start to appear, people seem to forget about the fact that we're also looking for sustainable dividends that have the potential to grow with inflation.

Outlier-yields often seem to get discussed here in a manner that tends to forget the 'sustainable' and 'potential to grow' bit....

Whilst I never agreed with Luni's over-complicated methodology for his 'Zones' theory, I completely agreed with his idea that a 'Danger Zone' exists with regards to yields, and whilst it's clear that there will be sustainable recoveries in some of the shares inhabiting such outlier-yield-areas, we really should continue to ask ourselves if it's really worth the risk - and that single question can cover a number of sub-questions, regarding existing holdings or potential top-ups....

If I look back at the major disasters in my HYP over the years, very often they've occurred shortly after a period where they spent some time as yield-outliers themselves.....

So yes, it's 'all about the dividends' - but only so far as if they can keep on being delivered at the level we might expect them to be....

Cheers,

Itsallaguess (owns Vodafone and both major tobacco's - but in very small percentage, legacy-holdings of my income-portfolio..)

Itsallaguess wrote:If I look back at the major disasters in my HYP over the years, very often they've occurred shortly after a period where they spent some time as yield-outliers themselves.....

Unless you compare it with shares that became outliers for a period, but didn't then become major disasters, then it doesn't really tell you anything.

I've had holdings drop 90% with historic yields (before new div announcements) reflecting that, and yet they managed to recover. Likewise I've had seemingly good companies, bought because I thought they were safe, go south relatively quickly.

I'm surprised that quite such a strong, almost religious aversion is being had particularly on this board to shares with, we'll ... a high yield (looks up at the board name)... just because they have, errm, a high yield.

True, go in with your eyes open, but to sell just because the yield is now higher, is simply to sell because the price has dropped. If you always sold your shares when the price drops, I'm not sure how that fits with making money... buy high, sell low?

Someone actively managing and analysing the companies they invest in might decide to sell when the price drops because they've independently studied the accounts and agree things have changed...

But Doris?

onthemove wrote:
I'm surprised that quite such a strong, almost religious aversion is being had particularly on this board to shares with, we'll ... a high yield (looks up at the board name)... just because they have, errm, a high yield.

Well I'm not sure that categorising a view that suggests caution with ultra-high-yields as 'religious aversion' is really going to help anyone if we're trying to discuss these types of situations....

onthemove wrote:
True, go in with your eyes open, but to sell just because the yield is now higher, is simply to sell because the price has dropped. If you always sold your shares when the price drops, I'm not sure how that fits with making money... buy high, sell low?

Did you miss the bit where I said that I held both Vodafone and both tobacco's in my income portfolio?

Cheers,

Itsallaguess

Itsallaguess wrote:
Did you miss the bit where I said that I held both Vodafone and both tobacco's in my income portfolio?

Cheers,

Itsallaguess

As do I, plus Galliford Try, Persimmon, Aviva, BHP.............
starting to feel a bit nervous. That's 7 stocks at over 8%, before we start considering yield laggards like Marstons at a mere 7.1%

I am hoping this is all down to Brexit collywobbles feeding very negative market sentiment, but steeling myself for major pain to come.

"No-look 2019" anyone?

Itsallaguess wrote:Well I'm not sure that categorising a view that suggests caution with ultra-high-yields as 'religious aversion' is really going to help anyone if we're trying to discuss these types of situations....

Hmm, the book I used a long while ago when starting out investing provided, amongst many other aspects, some review of academic attempts to look at whether some things could be used as signs of value, etc. They concluded that generally there isn't any proven/provable way of beating the odds, except for perhaps a slight benefit in buying shares with a Yield of 7% and PE of 7 (combined).

I mention this, because at times, I get the impression that 7% yield can sometimes now be considered 'in the danger zone' by unintentional consensus on this board.

I'll admit that since the 2008 financial crisis, with generally low interest rates and low inflation, that might have in the short/medium term 'adjusted' the environment such that in these times that might have 'adjusted' the 7:7 level, so that perhaps in these times, maybe a lower yield might be equivalent.

But I don't really see any acknowledgement or recognition when people talk of 'ultra high yields' or 'danger zones' that they either consider these fluid or deriving from the current macro economic environment.

Itsallaguess wrote:Did you miss the bit where I said that I held both Vodafone and both tobacco's in my income portfolio?

Apologies -

It's the problem of clicking reply to a particular post, but then broadening the reply out to bring in not just other aspects from this thread, but also aspects that I've been seeing for a while across other threads on this board, aspects which seem to be becoming more and more assumed / accepted to be part of the HYP strategy.

I mean, (speaking generally again) I don't recall the original HYP from TMF days having danger zones, or considering yields in the 7% to 8% as specifically reasons (on their own) to avoid a share. Yet I'm more and more getting the feeling that anything at or over even just 6% nowadays on here can almost be discounted on that basis alone, in perhaps the way that 12% to 15% might have been in the TMF days.

Apologies again though - I wasn't trying to single you out or anything - it was just unfortunate that I clicked on a particular comment to reply to in one of your posts that segwayed into the more broad point.

The broad point being that my feeling is that the growing nervousness at, or avoidance of, shares with yields in the 6% to 8% range, doesn't really seem to tally with what I remember of the original HYP strategy that I thought was the basis for this board(?)

TUK020 wrote:I am hoping this is all down to Brexit collywobbles feeding very negative market sentiment, but steeling myself for major pain to come.
"No-look 2019" anyone?

To (mis) quote Donald Rumsfeld ... isn't it the unknown unknowns that matter?

All the things that are making you steel yourself for major pain to come, are all known knowns or known unknowns.

And the market at its current level knows them both as well as you do.

Strip out the known unknowns and known knowns, and you have a market just like at any other time, with just the same unknown unknowns.

In other words without the already known issues (which are already priced in), there's no more reason to steel for major pain now from here, than at any other time.

(Caveat - that doesn't mean it couldn't still go either way just no particular reason why the coming year should be any more of a don't look than any other )

onthemove wrote:To (mis) quote Donald Rumsfeld ...

"Stuff happens"

Yield worries are just a bout of nerves - UK market does seem cheap at the moment - I tell myself to sit on my hands and stay fully invested.

onthemove wrote:

Itsallaguess wrote:
Well I'm not sure that categorising a view that suggests caution with ultra-high-yields as 'religious aversion' is really going to help anyone if we're trying to discuss these types of situations....

Hmm, the book I used a long while ago when starting out investing provided, amongst many other aspects, some review of academic attempts to look at whether some things could be used as signs of value, etc. They concluded that generally there isn't any proven/provable way of beating the odds, except for perhaps a slight benefit in buying shares with a Yield of 7% and PE of 7 (combined).

I mention this, because at times, I get the impression that 7% yield can sometimes now be considered 'in the danger zone' by unintentional consensus on this board.

Well trying to maintain that people might be 'getting too nervous about 7% yields' is perhaps missing the point a little, when the yields for the types of HYP shares people recently are getting nervous about are much higher than that -

Forecast Yields (Digital Look) -

Vodafone (https://tinyurl.com/ybghz4va) = 9.4% (34% higher than a 7% yield...)

British American Tobacco (https://tinyurl.com/ya9m8mue)= 8.8% (25.7% higher than a 7% yield...)

Imperial Brands (https://tinyurl.com/y9gdfont) = 8.5% (21.4% higher than a 7% yield...)

onthemove wrote:

Itsallaguess wrote:
Did you miss the bit where I said that I held both Vodafone and both tobacco's in my income portfolio?

Apologies - It's the problem of clicking reply to a particular post, but then broadening the reply out to bring in not just other aspects from this thread, but also aspects that I've been seeing for a while across other threads on this board, aspects which seem to be becoming more and more assumed / accepted to be part of the HYP strategy.

No problem, and thanks for the explanation.

At the end of the day, whilst you might feel quite right to try to dampen down what you might personally consider to be 'over-enthusiastic-caution', I'd much prefer that to happen, as part of discussions where some people are urging caution, than for us to perhaps have a situation where people may be wanting to urge caution, but might feel put off by the thought of adverse reactions if they were to do so...

Echo-chambers are really, really dangerous things when it comes to personal investment, after all.....

Cheers,

Itsallaguess

onthemove wrote:
...I mean, (speaking generally again) I don't recall the original HYP from TMF days having danger zones, or considering yields in the 7% to 8% as specifically reasons (on their own) to avoid a share. Yet I'm more and more getting the feeling that anything at or over even just 6% nowadays on here can almost be discounted on that basis alone, in perhaps the way that 12% to 15% might have been in the TMF days.

...The broad point being that my feeling is that the growing nervousness at, or avoidance of, shares with yields in the 6% to 8% range, doesn't really seem to tally with what I remember of the original HYP strategy that I thought was the basis for this board(?)

A few people worried about the VOD yield does not constitute any kind of consensus other than amongst those very few people. It's one of the problems of this medium that a small number of people can give the impression that they are representative and that in consequence their views have weight. A very small number of regular posters here, tinkerers and worriers, air their views and because stuff is always happening to their shares, the sectors or the general economy, or even is just forecast by some Carneyite knob to happen, they always have something to say.

This is the kind of thing you'll see from them:

Share A has too high a yield, I'm worried

Share B has too low a yield, I'm worried.

Brexit, I'm worried.

My cat has shat on the living room rug, will this cause BHP to cut its dividend?

You get the idea. None of this matters worth a damn.

pyad wrote:

onthemove wrote:
...I mean, (speaking generally again) I don't recall the original HYP from TMF days having danger zones, or considering yields in the 7% to 8% as specifically reasons (on their own) to avoid a share. Yet I'm more and more getting the feeling that anything at or over even just 6% nowadays on here can almost be discounted on that basis alone, in perhaps the way that 12% to 15% might have been in the TMF days.

...The broad point being that my feeling is that the growing nervousness at, or avoidance of, shares with yields in the 6% to 8% range, doesn't really seem to tally with what I remember of the original HYP strategy that I thought was the basis for this board(?)

A few people worried about the VOD yield does not constitute any kind of consensus other than amongst those very few people. It's one of the problems of this medium that a small number of people can give the impression that they are representative and that in consequence their views have weight. A very small number of regular posters here, tinkerers and worriers, air their views and because stuff is always happening to their shares, the sectors or the general economy, or even is just forecast by some Carneyite knob to happen, they always have something to say.

This is the kind of thing you'll see from them:

Share A has too high a yield, I'm worried

Share B has too low a yield, I'm worried.

Brexit, I'm worried.

My cat has shat on the living room rug, will this cause BHP to cut its dividend?

You get the idea. None of this matters worth a damn.

Do promise that you'll never change pyad....

Cheers,

Itsallaguess

pyad wrote:

onthemove wrote:
...I mean, (speaking generally again) I don't recall the original HYP from TMF days having danger zones, or considering yields in the 7% to 8% as specifically reasons (on their own) to avoid a share. Yet I'm more and more getting the feeling that anything at or over even just 6% nowadays on here can almost be discounted on that basis alone, in perhaps the way that 12% to 15% might have been in the TMF days.

...The broad point being that my feeling is that the growing nervousness at, or avoidance of, shares with yields in the 6% to 8% range, doesn't really seem to tally with what I remember of the original HYP strategy that I thought was the basis for this board(?)

A few people worried about the VOD yield does not constitute any kind of consensus other than amongst those very few people. It's one of the problems of this medium that a small number of people can give the impression that they are representative and that in consequence their views have weight. A very small number of regular posters here, tinkerers and worriers, air their views and because stuff is always happening to their shares, the sectors or the general economy, or even is just forecast by some Carneyite knob to happen, they always have something to say.

This is the kind of thing you'll see from them:

Share A has too high a yield, I'm worried

Share B has too low a yield, I'm worried.

Brexit, I'm worried.

My cat has shat on the living room rug, will this cause BHP to cut its dividend?

You get the idea. None of this matters worth a damn.

Ha ha ha ha ha!!! I think Doris made a similar remark.

Cheers, OLTB.

for IAAG and OLTB

PYAD

Please continue dropping by Stephen. Your input is great.

Ian.

Isn't the basis for discussion about Vodafone wrong. I'm not bothered by their yield I'm bothered by their dividend cover, currently listed as 0.7 on multiple sites.



Darren

Being in a 'danger zone' was not as I understand it a reason in itself for selling a share but it is a reason to take a look and see if there is anything else that might be a problem, ie an underlying issue. As xbigman has just said, dividend cover or the lack of it is a problem with Vodafone. The yield is now excessive by any standard and the Balance Sheet is stretched.

In any case, the 'Danger Zone' changes with the average yield of the FTSE100 which I think is now a bit over 5%. My danger zone is around 50% over the FTSE average yield, so that today I am looking at shares yielding over around 7.75%. Vodafone's yield is shouting problem and that, coupled with the state of its finances, led me to sell. I applied the same consideration to SSE and sold last year.

I have looked and thought hard about the two tobacco shares (I hold both) but I can see no reason to be too concerned about the sustainability of their dividends, or even an increase in them, so I will continue to hold. Just as shares tend to overshoot upwards caused by momentum buying so the same thing can happen downwards and I think that is what has happened with the tobaccos. Everyone has gone off tobacco shares.

Dod

onthemove wrote:I mean, (speaking generally again) I don't recall the original HYP from TMF days having danger zones, or considering yields in the 7% to 8% as specifically reasons (on their own) to avoid a share. Yet I'm more and more getting the feeling that anything at or over even just 6% nowadays on here can almost be discounted on that basis alone, in perhaps the way that 12% to 15% might have been in the TMF days.

Apologies again though - I wasn't trying to single you out or anything - it was just unfortunate that I clicked on a particular comment to reply to in one of your posts that segwayed into the more broad point.

The broad point being that my feeling is that the growing nervousness at, or avoidance of, shares with yields in the 6% to 8% range, doesn't really seem to tally with what I remember of the original HYP strategy that I thought was the basis for this board(?)

I wonder if some of this is the long shadow of Luni - plus a dash of disaster from one or two shares of our own? Many of us here would have digested his extensive posts on TMF and some of his very stongly held beliefs have rubbed off.

If I remember rightly, he would try to keep the yield within about 1.5x FTSE, which gives us just over 7% now. That suggests a "normal" ceiling of 7-7.25% and anything more being "adventurous". That's assuming historic dividends on the FTSE do hold up in the coming year, naturally, which they are forecast to do.

Personally, I'm tempted by the yields on offer but since the size of my pension pot means I can "get by" without being that greedy, I'm also content to look at middling yields. However, I have to say that the use of the HYPTUSS has its own compelling logic which drives one towards the top end.

We must take into account the current context - Brexit. I reckon this has thrown up a once in a decade opportunity that we should generally utilise. THis also, BTW would obliged us to look at unusual chances thrown up in those middle yielders and ITs too.

Arb.

PS you will have spotted all the above is suffused with a kind of "will I won't I" ambivalence towards very high yields

This thread is rapidly veering off-topic, but if anyone has the data, it would be interesting to compare the distribution of shares among Luni's "zones", say 5 years ago and now. I realise that Vodafone now is a different creature from what it was 5 years ago, but the movement of shares between zones could be instructive.

TJH