The Lemon Fool

Looks like this could be an interesting meeting this week. I read in the Times the dividend is to be cut. We have our money man CEO Nick Read adamant it's not.
We have a NZ sale on the horizon, a liberty deal, and expensive 5G auctions on going in Germany.

In a backdrop of negativity price has been fairly static these last 6 months,

Is this a dividend cut backed up with a well received plan leading to a share price rally, or an ill conceived short sighted decision to retain a 3.5 billion dividend.

Feels like this could be the week that my HYP is consigned to the knackers yard and I move to solely investing in ITs for income. Interesting times......

Walrus wrote:In a backdrop of negativity price has been fairly static these last 6 months,

Vodafone Corporate Bonds stand about 20% above par, so there don't seem doubts about the underlying soundness of the Company's earnings. The share price has dropped to make the dividend yield around 9%. But that's the question, do they intend to maintain the dividend and can they afford to do so?

MDW1954 wrote:

Moderator Message:
At present this is all just speculation, and Walrus' comments about consigning his or her HYP to the knacker's yard are off-topic. If anyone has any hard information, then post it. But please don't post idle speculation. -- MDW1954

Seriously? Is this for real? It was front page of the Sunday Times today. Seriously I give up.

Walrus wrote:

MDW1954 wrote:

Moderator Message:
At present this is all just speculation, and Walrus' comments about consigning his or her HYP to the knacker's yard are off-topic. If anyone has any hard information, then post it. But please don't post idle speculation. -- MDW1954

Seriously? Is this for real? It was front page of the Sunday Times today. Seriously I give up.

Just delete my account please I'm done with this.

Walrus wrote:Seriously? Is this for real? It was front page of the Sunday Times today. Seriously I give up.

What we might be able to salvage from this thread is a discussion of VOD's yield - it has been running at or above twice that of FTSE100 yield for the last year. Now I have been panned routinely here for suggesting such a simple criteria as that disqualifies buying (or topping up) very high yielders without sweating the accounts; but I know this - that has stopped me from chasing VOD's yield for the last year and I feel quite relaxed about a dividend cut that may or may not be coming this week.

Walrus wrote:

Walrus wrote:

MDW1954 wrote:

Moderator Message:
At present this is all just speculation, and Walrus' comments about consigning his or her HYP to the knacker's yard are off-topic. If anyone has any hard information, then post it. But please don't post idle speculation. -- MDW1954

Seriously? Is this for real? It was front page of the Sunday Times today. Seriously I give up.

Just delete my account please I'm done with this.

Walrus,

I'm going to respond to this, even though I probably shouldn't. I'm a journalist of 30 years standing. A decent chunk of what I do is financial journalism, too.

I've been published in the Sunday Times' business news section. As far as I'm concerned, any dividend cut is speculation until we see the RNS.

If you want to manage your HYP on the basis of rumour and speculation, fine.

Meanwhile, I've forwarded your account for deletion.

MDW1954

moorfield wrote:

Walrus wrote:Seriously? Is this for real? It was front page of the Sunday Times today. Seriously I give up.

What we might be able to salvage from this thread is a discussion of VOD's yield - it has been running at or above twice that of FTSE100 yield for the last year now. Now I have been panned routinely here for suggesting such a simple criteria as that disqualifies buying (or topping up) very high yielders without sweating the accounts; but I know this - that has stopped me from chasing VOD's yield for the last year and I am quite relaxed about a dividend cut that may or may not be coming this week.

If you're suggesting that chasing yield is not without risk, then many of us here would agree with that. A proper discussion of that notion belongs elsewhere, though.

My own view is that VOD's yield has indeed been very high, not least due to a lack of visibility about future earnings. My own (tiny) holding in VOD has *not* been increased, precisely because of that -- irrespective of the high yield.

I don't really understand why the company has been so opaque.

MDW1954

MDW1954 wrote:

Walrus wrote:

Walrus wrote:
Seriously? Is this for real? It was front page of the Sunday Times today. Seriously I give up.

Just delete my account please I'm done with this.

Walrus,

I'm going to respond to this, even though I probably shouldn't. I'm a journalist of 30 years standing. A decent chunk of what I do is financial journalism, too.

I've been published in the Sunday Times' business news section. As far as I'm concerned, any dividend cut is speculation until we see the RNS.

If you want to manage your HYP on the basis of rumour and speculation, fine.

Meanwhile, I've forwarded your account for deletion.

MDW1954

Thanks, I appreciate your efficiency in eliminating me.

MDW1954 wrote:If you're suggesting that chasing yield is not without risk, then many of us here would agree with that. A proper discussion of that notion belongs elsewhere, though.

What I'm suggesting is HYP selection/top-up guidelines could be evolved/improved by adopting a yield ceiling, as well as a floor - which is well known of course. You're right that discussion belongs elsewhere; VOD, and CNA, make pertinent case studies of the notion. But what do I know.

MDW1954 wrote:

Walrus wrote:

Walrus wrote:
Seriously? Is this for real? It was front page of the Sunday Times today. Seriously I give up.

Just delete my account please I'm done with this.

Walrus,

I'm going to respond to this, even though I probably shouldn't. I'm a journalist of 30 years standing. A decent chunk of what I do is financial journalism, too.

I've been published in the Sunday Times' business news section. As far as I'm concerned, any dividend cut is speculation until we see the RNS.

If you want to manage your HYP on the basis of rumour and speculation, fine.

Meanwhile, I've forwarded your account for deletion.

MDW1954

I've just heard back that Walrus' account has indeed been deactivated.

MDW1954

MDW1954 wrote:
I've just heard back that Walrus' account has indeed been deactivated.

MDW1954

FWIW I think that's a shame. He/she had a lot to offer this board.

Ian.

moorfield wrote:

MDW1954 wrote:If you're suggesting that chasing yield is not without risk, then many of us here would agree with that. A proper discussion of that notion belongs elsewhere, though.

What I'm suggesting is HYP selection/top-up guidelines could be evolved/improved by adopting a yield ceiling, as well as a floor - which is well known of course. You're right that discussion belongs elsewhere; VOD, and CNA, make pertinent case studies of the notion. But what do I know.

These are fair comments and those with longer memories will know of Luni's attempts (a long time ago now, it seems) to create "zones" or yield acceptability. Many people didn't accept the idea that there was a "hard border" - or rigid zone - but nevertheless the idea lingers on. Lingers on in the sense that Luni's warnings may set some of our antennae waving a bit when the yield become suspiciously high.
BTW, MDW, I'm not sure why "a proper discussion of this belongs elsewhere" - maybe you could explain that so we can all learn from it? It seems to me that this is exactly the place to discuss it as it part of managing one's HYP. Just another factor to bear in mind along with the dividend record etc.

It's an area where personal taste can have a big influence. Especially in a case like VOD where people have noted the consistently low eps cover which added to the high yield have been a puzzle for years. That the cash flow cover seems reasonable mitigates this, but it isn't surprising if HYPers have been drawing back from topping up or buying VOD.

It would be that VOD becomes another "interesting" test for HYP principles - but my belieif is that my HYP will still carry on doing what it has been doing for the past ten years - providing my with a significant part of my pension. That's even after all my blunders and self doubts along the way

Arb.

MDW1954 wrote:
As far as I'm concerned, any dividend cut is speculation until we see the RNS.

MDW1954

So we cant discuss any potential rising/lowering of dividends for particular companies until its been annouced in a RNS?

VOD has been discussed many times, on this board, given the low EPS coverage of its dividend. Yet we cant discuss a headline article in one of the weekends leading newspapers, days before VOD announces it results?

onslow wrote:

MDW1954 wrote:As far as I'm concerned, any dividend cut is speculation until we see the RNS.

So we cant discuss any potential rising/lowering of dividends for particular companies until its been annouced in a RNS?

That is odd because the TLF HYP-P guidelines specifically talk about the ability to discuss here future potential HY shares that are not currently HY (nor ever have been).

Surely that requires the ability to discuss why they may become HY in the future, i.e. some type of speculation or prediction.

Does that mean that we can discuss shares which may increase their payouts in the future but not those which may decrease them?

At this rate I fear others will follow Walrus’s lead and depart this board.

Ian.

And at the risk of poking a snake with a stick:

discussing or using, forecasts dividends is also speculation. Yet most of us do it.



Arb.

idpickering wrote:At this rate I fear others will follow Walrus’s lead and depart this board.

Ian.

We should start another thread in some other board - though heaven knows which - but I'll just say I regret losing Walrus. We need people with slightly different POVs to avoid the notorious group think. Any tendency to chase people like that away will surely make any board less enjoyable and, more to the point, less effective.

Let's hope this is just a "flounce" and that Walrus will return.

Arb.

What's the fuss? He asked to be deleted. He was deleted.

bluedonkey wrote:What's the fuss? He asked to be deleted. He was deleted.

Possibly tip of the iceberg, that's the problem.


Arb.