How many shares in a HYP?

[PinkDalek]

Micro Focus

But apart from that, there some further confusion about whether the yield is 3.3% or 4.1% or 6% depending which site you check!

The 4%ish calculations reflect the last two dividends only - both 58.33¢ (in sterling terms).

The 6%ish calculations reflect the last two dividends, together with the first interim of 34.60¢ (in sterling terms).

Third and final dividend per share of 58.33c for the 18 month accounting period (total dividend per share of 151.26 cents).
from https://www.londonstockexchange.com/exc ... 68789.html but best to read the entirety as relevant.

I haven't seen the 3%ish. That may be based on a forecast following the SUSE disposal and the wording in the prelims regarding future dividends:

We continue to target a Net Debt to Adjusted EBITDA multiple of 2.7 times and maintain a dividend policy that is twice covered by adjusted earnings.

I'm guessing idpickering's It seems I might've missed the boat maybe? may well be referring to the change in share price etc since they were mentioned in the parallel Topic [stopping here, as he's now written along the lines I was thinking].

[PinkDalek]

OK they're maybe offering 6% yield currently, ...

I really don't believe they are. Please see my earlier posts. That 6% is based on 18 months worth of dividends.

[Arborbridge]

OK they're maybe offering 6% yield currently, ...

I really don't believe they are. Please see my earlier posts. That 6% is based on 18 months worth of dividends.

The 3% - actually 3.3% - is here: http://www.investorease.com/company.php ... &epic=mcro

I believe it is "historic" - investorease usually are.

Arb.

[idpickering]

OK they're maybe offering 6% yield currently, ...

I really don't believe they are. Please see my earlier posts. That 6% is based on 18 months worth of dividends.

Thank you very much. Incidently, dividenddata have this regarding them; https://www.dividenddata.co.uk/dividend ... ?epic=MCRO In short 4.74%. I have three weeks to Pickering about this. Holding 31 shares, an odd number, plays havoc with my OCD and severe PTSD! We'll see nearer my next top up time mid next month. The bottom line is, you don't have to have a finger in every pie.

Ian.

[PinkDalek]

Micro Focus

OK they're maybe offering 6% yield currently, ...

I really don't believe they are. Please see my earlier posts. That 6% is based on 18 months worth of dividends.

The 3% - actually 3.3% - is here: http://www.investorease.com/company.php ... &epic=mcro

I believe it is "historic" - investorease usually are.

Seemingly based on an Annualised Dividend but I can't see the calculations.

In any event, I've updated the main Micro Focus Topic here viewtopic.php?p=218192#p218192 reflecting the Results of today's General Meeting.

Anyone with further interest, might be best to continue over there (given this topic's original Subject header).

[Gengulphus]

... I have three weeks to Pickering about this. ...

Out of curiosity, is the verb really "to Pickering" or just "to Picker", and if the former, should I say e.g. "I have been Pickeringing about whether to buy this share for some months, and still am" when I'm talking about an ongoing activity? ;-)

And yes, I do realise that maybe I should ask on another board, but it seems unlikely that the only person capable of answering authoritatively would see the question there! ;-)

Gengulphus

[idpickering]

... I have three weeks to Pickering about this. ...

Out of curiosity, is the verb really "to Pickering" or just "to Picker", and if the former, should I say e.g. "I have been Pickeringing about whether to buy this share for some months, and still am" when I'm talking about an ongoing activity? ;-)

And yes, I do realise that maybe I should ask on another board, but it seems unlikely that the only person capable of answering authoritatively would see the question there! ;-)

Gengulphus

Hi Gengulphus, the term Pickering came about a couple of years ago, as a humorous dig at my monthly fickleness in choosing my next pick.

Ian.

[Gengulphus]

It follows from my previous comment that the original poster was asking slightly the wrong question. It should be "How many sectors?", not "How many shares?", and my answer is a minimum of 15 as I said.

This is a much clearer way to define the crucial diversification requirement of the strategy, especially for newcomers asking this sort of question. Some sectors may comprise more than one share but the defining diversification characteristic should be sectors, not shares, as the initial part of the design.

I presume, partly from possibly fallible or outdated memory of what you've previously said, that you would also apply that 'sectors rather than shares' principle to weightings being equal? So for instance, if someone has 20 sectors, with five of them containing two selected companies each and the other fifteen just one selected company each, then equal weightings for you would mean 100%/20 = 5% into each sector (so 2.5% into each of the ten sector-sharing shares and 5% into each of the fifteen other companies), not 100%/25 = 4% into each company?

Gengulphus

[pyad]

I presume, partly from possibly fallible or outdated memory of what you've previously said, that you would also apply that 'sectors rather than shares' principle to weightings being equal? So for instance, if someone has 20 sectors, with five of them containing two selected companies each and the other fifteen just one selected company each, then equal weightings for you would mean 100%/20 = 5% into each sector (so 2.5% into each of the ten sector-sharing shares and 5% into each of the fifteen other companies), not 100%/25 = 4% into each company?

Gengulphus

Yes exactly, I meant that it's the sectors that must be equally weighted at cost, not the shares. Similarly for a new sector added to an existing HYP, the amount to invest in it is the then sector average value and if that new sector has more than one share then the new money is divided equally between those shares.

[Lootman]

I presume, partly from possibly fallible or outdated memory of what you've previously said, that you would also apply that 'sectors rather than shares' principle to weightings being equal? So for instance, if someone has 20 sectors, with five of them containing two selected companies each and the other fifteen just one selected company each, then equal weightings for you would mean 100%/20 = 5% into each sector (so 2.5% into each of the ten sector-sharing shares and 5% into each of the fifteen other companies), not 100%/25 = 4% into each company?

Yes.

If you later bought a second share for a given sector, then you'd sell half of the first share in that sector?

[IanTHughes]

I presume, partly from possibly fallible or outdated memory of what you've previously said, that you would also apply that 'sectors rather than shares' principle to weightings being equal? So for instance, if someone has 20 sectors, with five of them containing two selected companies each and the other fifteen just one selected company each, then equal weightings for you would mean 100%/20 = 5% into each sector (so 2.5% into each of the ten sector-sharing shares and 5% into each of the fifteen other companies), not 100%/25 = 4% into each company?

Yes.

If you later bought a second share for a given sector, then you'd sell half of the first share in that sector?

Can you please explain the logic behind that statement? I only ask because it is in my opinion completely ludicrous, but I am sure someone as knowledgeable as yourself would surely not have made it without your usual serious thought.


Ian

[Lootman]

Yes.

If you later bought a second share for a given sector, then you'd sell half of the first share in that sector?

Can you please explain the logic behind that statement? I only ask because it is in my opinion completely ludicrous, but I am sure someone as knowledgeable as yourself would surely not have made it without your usual serious thought.

.
You are correct. It was a serious thought.

Pyad claimed, in response to a question by Gengulphus, that the important thing about equal-weighting is that (in his opinion) it should be sectors that are equally weighted and not shares. So for example if it was a 20-sector portfolio, with each position being 5%, then if you chose 2 shares for a sector then each holding would be 2.5% and not 5%.

So far, so good. But that assumes the entire portfolio is bought in one go on day one. What if instead there is a second phase to the construction of the portfolio? And suppose that energy is already at 5% but you want to add BP to your Shell holding. Then the question that arises is this: Do you buy a 5% weight in BP as well, meaning that your sectors are no longer equal-weighted? Or do you make sure you have a half position in both shares, by selling some Shell, in order to maintain the equal weighting of the sectors?

Of course another factor is whether this is new money or not. If it isn't then you'd have to sell anyway to add a new holding. If not, then the above dilemma applies.

Whilst another factor is how long between the two phases. If it is years after then his equal-weighting idea is probably shot to hell anyway. But it might not be that long after the initial purchases. Or his subsequent purchases might be an attempt to equalise the sector weightings if he really believe that that is important.

[IanTHughes]

If you later bought a second share for a given sector, then you'd sell half of the first share in that sector?

Can you please explain the logic behind that statement? I only ask because it is in my opinion completely ludicrous, but I am sure someone as knowledgeable as yourself would surely not have made it without your usual serious thought.

.
You are correct. It was a serious thought.

Pyad claimed, in response to a question by Gengulphus, that the important thing about equal-weighting is that (in his opinion) it should be sectors that are equally weighted and not shares. So for example if it was a 20-sector portfolio, with each position being 5%, then if you chose 2 shares for a sector then each holding would be 2.5% and not 5%.

So far, so good. But that assumes the entire portfolio is bought in one go on day one. What if instead there is a second phase to the construction of the portfolio? And suppose that energy is already at 5% but you want to add BP to your Shell holding. Then the question that arises is this: Do you buy a 5% weight in BP as well, meaning that your sectors are no longer equal-weighted? Or do you make sure you have a half position in both shares, by selling some Shell, in order to maintain the equal weighting of the sectors?

Of course another factor is whether this is new money or not. If it isn't then you'd have to sell anyway to add a new holding. If not, then the above dilemma applies.

Whilst another factor is how long between the two phases. If it is years after then his equal-weighting idea is probably shot to hell anyway. But it might not be that long after the initial purchases. Or his subsequent purchases might be an attempt to equalise the sector weightings if he really believe that that is important.

My goodness, I do thank you for your time and so obvious expertise, how many hours you must have spent, at least 3 minutes, and all for others to benefit! Remarkable!

Thank you, thank you, your confirmation of the HYP Strategy is so important to people such as myself


Ian

[Lootman]

Can you please explain the logic behind that statement? I only ask because it is in my opinion completely ludicrous, but I am sure someone as knowledgeable as yourself would surely not have made it without your usual serious thought.

.
You are correct. It was a serious thought.

Pyad claimed, in response to a question by Gengulphus, that the important thing about equal-weighting is that (in his opinion) it should be sectors that are equally weighted and not shares. So for example if it was a 20-sector portfolio, with each position being 5%, then if you chose 2 shares for a sector then each holding would be 2.5% and not 5%.

So far, so good. But that assumes the entire portfolio is bought in one go on day one. What if instead there is a second phase to the construction of the portfolio? And suppose that energy is already at 5% but you want to add BP to your Shell holding. Then the question that arises is this: Do you buy a 5% weight in BP as well, meaning that your sectors are no longer equal-weighted? Or do you make sure you have a half position in both shares, by selling some Shell, in order to maintain the equal weighting of the sectors?

Of course another factor is whether this is new money or not. If it isn't then you'd have to sell anyway to add a new holding. If not, then the above dilemma applies.

Whilst another factor is how long between the two phases. If it is years after then his equal-weighting idea is probably shot to hell anyway. But it might not be that long after the initial purchases. Or his subsequent purchases might be an attempt to equalise the sector weightings if he really believe that that is important.

My goodness, I do thank you for your time and so obvious expertise, how many hours you must have spent, at least 3 minutes, and all for others to benefit! Remarkable!

Thank you, thank you, your confirmation of the HYP Strategy is so important to people such as myself

Since I know you have far too much integrity and honour to ever be sarcastic or cynical, I accept your compliments. You are very welcome, of course.

[IanTHughes]

.
You are correct. It was a serious thought.

Pyad claimed, in response to a question by Gengulphus, that the important thing about equal-weighting is that (in his opinion) it should be sectors that are equally weighted and not shares. So for example if it was a 20-sector portfolio, with each position being 5%, then if you chose 2 shares for a sector then each holding would be 2.5% and not 5%.

So far, so good. But that assumes the entire portfolio is bought in one go on day one. What if instead there is a second phase to the construction of the portfolio? And suppose that energy is already at 5% but you want to add BP to your Shell holding. Then the question that arises is this: Do you buy a 5% weight in BP as well, meaning that your sectors are no longer equal-weighted? Or do you make sure you have a half position in both shares, by selling some Shell, in order to maintain the equal weighting of the sectors?

Of course another factor is whether this is new money or not. If it isn't then you'd have to sell anyway to add a new holding. If not, then the above dilemma applies.

Whilst another factor is how long between the two phases. If it is years after then his equal-weighting idea is probably shot to hell anyway. But it might not be that long after the initial purchases. Or his subsequent purchases might be an attempt to equalise the sector weightings if he really believe that that is important.

My goodness, I do thank you for your time and so obvious expertise, how many hours you must have spent, at least 3 minutes, and all for others to benefit! Remarkable!

Thank you, thank you, your confirmation of the HYP Strategy is so important to people such as myself

Since I know you have far too much integrity and honour to ever be sarcastic or cynical, I accept your compliments. You are very welcome, of course.

Oh dear I am blushing but you are of course welcome as well

Mind you, your original statement:

If you later bought a second share for a given sector, then you'd sell half of the first share in that sector?

Is still complete nonsense!

But I think I speak for every contributor to this board when I say that, your contribution is so enjoyed!


Ian

[csearle]

Mind you, your original statement:

If you later bought a second share for a given sector, then you'd sell half of the first share in that sector?

Is still complete nonsense!

But I think I speak for every contributor to this board when I say that, your contribution is so enjoyed!

I don't think you need to take that quite so literally Ian. If you take a "share" to mean a "share holding" then it all makes sense in that the doubling up would not over expose the investor to that particular sector.

Chris

[IanTHughes]

Mind you, your original statement:

If you later bought a second share for a given sector, then you'd sell half of the first share in that sector?

Is still complete nonsense!

But I think I speak for every contributor to this board when I say that, your contribution is so enjoyed!

I don't think you need to take that quite so literally Ian. If you take a "share" to mean a "share holding" then it all makes sense in that the doubling up would not over expose the investor to that particular sector.

Absolutely, but HYP very strongly advises diversification. It also advocates a "Long Term Buy and Hold" policy, i.e. "No Selling". Take the two together and if, as Lootman stated:

And suppose that energy is already at 5% but you want to add BP to your Shell holding.

Surely no energy share would qualify as a candidate for a top-up purchase in the first place?

I may be wrong but I am sure that a strong supporter of HYP such as Lootman will confirm that.

I should add that no one should be embarrassed by not fully understanding the HYP Strategy. It is fairly simple, that is true, but may still confuse investment amateurs.


Ian

Moderator Message:
I have corrected all the rude name-calling. Please try to remain civil. Thanks - Chris

[tjh290633]

Mind you, your original statement:



Is still complete nonsense!

But I think I speak for every contributor to this board when I say that, your contribution is so enjoyed!

I don't think you need to take that quite so literally Ian. If you take a "share" to mean a "share holding" then it all makes sense in that the doubling up would not over expose the investor to that particular sector.

Absolutely, but HYP very strongly advises diversification. It also advocates a "Long Term Buy and Hold" policy, i.e. "No Selling". Take the two together and if, as Lootman stated:

And suppose that energy is already at 5% but you want to add BP to your Shell holding.

Surely no energy share would qualify as a candidate for a top-up purchase in the first place?

I may be wrong but I am sure that a strong supporter of HYP such as Lootman will confirm that.

I should add that no one should be embarrassed by not fully understanding the HYP Strategy. It is fairly simple, that is true, but may still confuse investment amateurs.


Ian

Moderator Message:
I have corrected all the rude name-calling. Please try to remain civil. Thanks - Chris

If I may be permitted to intervene in this erudite and learned conversation, I always consider that there should be tolerance and flexibility in the weighting of holdings. Really the weighting concept only applies when a share is first bought. If you add a further share it is at the median weight at that time. It is straining at a gnat to suggest that weightings be adjusted if a further share is added which shares a category. For example, do we abide strictly by Pyad's rule in sectors like Support Services, for example? It is such a diverse sector that this would surely be nonsense.

I must go and sleep on this concept, which may lead me to many hours of fruitless portfoliom adjustment.

Or perhaps I may be flexible and do as I please.

TJH

[Arborbridge]

Maybe someone can put me right here: isn't this idea of "equal sector weighting" a new take on HYP?
As far as I know, all our previous constructions and maintenance thereof have been primarily based around the company capital weight - I don't remembered anything in the original guidelines about adhering to equal sectors, and discussions on HYP-P traditionally have only mentioned "maximum" size of sectors: e.g. 10% or 20%, rather than attempting equality of sectors.
Indeed, practitioners such as TJH (and myself) are on record as being fairly relaxed about sector size and I don't recall Pyad having put such a specific interpretation on sector weighting previously.

I'm not saying anything is "right" or "wrong", just suggesting that this emphasis could be new and therefore worth remarking upon.


Arb.

[idpickering]

Maybe someone can put me right here: isn't this idea of "equal sector weighting" a new take on HYP?
As far as I know, all our previous constructions and maintenance thereof have been primarily based around the company capital weight - I don't remembered anything in the original guidelines about adhering to equal sectors, and discussions on HYP-P traditionally have only mentioned "maximum" size of sectors: e.g. 10% or 20%, rather than attempting equality of sectors.
Indeed, practitioners such as TJH (and myself) are on record as being fairly relaxed about sector size and I don't recall Pyad having put such a specific interpretation on sector weighting previously.

I'm not saying anything is "right" or "wrong", just suggesting that this emphasis could be new and therefore worth remarking upon.


Arb.

I agree that for us here this new stance appears to be 'new' as I don't recall a mention of it on this board, but as Stephen said further up this thread;

For a long time now Ian I have been defining diversification in an HYP by the number of sectors rather than by the number of individual shares in order to avoid the confusion sometimes created when people refer to the number of shares without explaining whether or not they are all in different industries.

That, I think, makes it much clearer so I'd refer now to a minimum of 15 sectors rather than 15 shares, in order to cover multi-holding sectors. All the HYPs I've constructed for some years now have had more shares than sectors due to some of the latter having more than one holding.

I'm ok with that, although I'll be more relaxed about sticking to this new 'rule'.

Ian.