Big Week for Vod

[MDW1954]

As we all know, or should know, this is not the place to discuss moderation. But last night's events have been extensively questioned and debated already, so I'm going to return to this thread one more time.

Stripped to its essentials, Walrus' post said something like: "On the basis of newspaper speculation, I feel I would be better off selling my HYP, and replacing it with a basket of income-centric investment trusts".

Clearly, this isn't the board for that. HYP Strategies is the place. Everyone knows -- or should know -- that.

Plus... newspaper speculation hardly counts as hard news. Walrus clearly felt that it was "news" worth discussing, though. In which case, the Company News board is the place to post it, and discuss it.

Why not here? Because this is HYP Practical, where we talk about managing HYPs. And very few of us actually manage our HYPs -- in other words, take actual actions, as Walrus was proposing -- on the basis of "news" that hasn't happened.

Note, I am not saying that any dividend cut won't happen. I am simply saying that idle speculation is not what this board should be about. If it does happen, then fair game: let's talk about what to do. But wasting time on it beforehand seems pointless. Although, for those who do want to speculate about it, the Company News board will happily host such speculation.

Finally, as has already been pointed out, Walrus asked for his account to be deactivated.

MDW1954

[Arborbridge]

As we all know, or should know, this is not the place to discuss moderation. But last night's events have been extensively questioned and debated already, so I'm going to return to this thread one more time.

Stripped to its essentials, Walrus' post said something like: "On the basis of newspaper speculation, I feel I would be better off selling my HYP, and replacing it with a basket of income-centric investment trusts".

Clearly, this isn't the board for that. HYP Strategies is the place. Everyone knows -- or should know -- that.

Plus... newspaper speculation hardly counts as hard news. Walrus clearly felt that it was "news" worth discussing, though. In which case, the Company News board is the place to post it, and discuss it.

Why not here? Because this is HYP Practical, where we talk about managing HYPs. And very few of us actually manage our HYPs -- in other words, take actual actions, as Walrus was proposing -- on the basis of "news" that hasn't happened.

Note, I am not saying that any dividend cut won't happen. I am simply saying that idle speculation is not what this board should be about. If it does happen, then fair game: let's talk about what to do. But wasting time on it beforehand seems pointless. Although, for those who do want to speculate about it, the Company News board will happily host such speculation.

Finally, as has already been pointed out, Walrus asked for his account to be deactivated.

MDW1954

Thank you for your explanation.

It's all a bit of a value judgement about what is or is not OK to discuss, isn't it?
As regards the passing of Walrus himself, I would say that there a difference between the rules, and the spirit of the rules. That is, it seems acceptable to me at least, that if a long standing member of our board decides to hang up his boots and invest in something other than HYP, it is perfectly sensible to let him say so and to give a parting explanation. "Last words", so to say. It's a question of pure human interest, not a question of "rules".

I won't post again on the subject as it would become even further OT. The trouble is, I wouldn't know where else to post anyhow, and my attempts to post similar things elsewhere have also been ruled OT. This is just part of the general problem of closing down debates for reasons which no one quite understands, which will no doubt sort itself out given time as mods share their reasoning.

Arb.

[CryptoPlankton]

Note, I am not saying that any dividend cut won't happen. I am simply saying that idle speculation is not what this board should be about. If it does happen, then fair game: let's talk about what to do. But wasting time on it beforehand seems pointless. Although, for those who do want to speculate about it, the Company News board will happily host such speculation.

Finally, as has already been pointed out, Walrus asked for his account to be deactivated.

MDW1954

As a point of order: The last three threads on specific companies (BT, CNA and IMB) have all included conjecture about dividends that could very easily be misinterpreted as speculation. Perhaps, if speculation about dividends isn't permitted, there could be some clarification about exactly what "speculation" is in this context? For instance, would theorising or supposition be acceptable? I think some elucidation would go some way to help avoid further frustration and desertions.

Of course, that is only speculation...

[tjh290633]

In the case of BT.A the board have announced that they intend to maintain the dividend at the current level for next year. In the case of IMB they have stated their intention to increase the dividend by 10% again next year.

These are facts, not speculation. Journalists are always commenting on what might or might not happen. VOD is another case in question.

Wait for the results. Unless you have inside information, you are no better than the "teenage scribblers". If you do have such information you should say nothing.

Do not speculate.

TJH

[OLTB]

As a builder, I ‘think’ I don’t mind if VOD cuts it’s dividend as if the people running the company think it is financially sensible to do so and makes for a more financially secure business in the long term then I have to trust their judgement. Well, I don’t have to, but I will choose to. Hopefully a progressive dividend policy will restart at some future point (assuming they announce a cut tomorrow!!)

I understand that for those drawing on dividends to assist in their retirement spending, the sentiment may be different.

Cheers, OLTB.

[Julian]

I don't want to fan any flames and am not commenting on moderation, I will absolutely stay out of that, but I will say that I personally found this thread alerting me to newspaper speculation about the VOD dividend useful and it did enable me to take immediate action but probably not any sort of action that would first spring to most people's minds.

The action I took was to look at the total income from my VOD shares in actual annual payments received and do a little bit of what-if thinking about how my income would end up in the face of, for instance, a 25% or 50% reduction in the dividend. I do not intend to trade away any of my VOD shares so I am not taking any "hard" action but this thread has at least enabled me to take the "soft" action of somewhat bracing myself were these rumours ever to turn into reality. Essentially the action I took was some mental preparation and personally I find that helpful in managing the ups and downs of being an HYP investor. For me managing my personal psychology is an important part of managing my HYP.

In retrospect I would not have invested any of the Verizon deal returns back into VOD but at least my quite common (for me) compromise approach helped in that I split the difference and invested half of it back which at least will soften the blow somewhat were this rumour to turn into reality.

I also took the opportunity to look at my latest percentage figures. My HYP is sort of split into 2, the tax-sheltered part which is currently entirely re-invested safety margin and the un-tax-sheltered part which I think of as my "core" HYP because that is the bit from which I draw my income. VOD is 5.47% of my core HYP income at the moment but I was rather amazed (and extremely pleasantly surprised) to find that it comprises a mere 0.45% of my combined ISA and SIPP safety margin income.

Even though my main safety margin is in my ISA and my SIPP I do also have a very small safety margin in my core HYP but unfortunately after the recent changes to dividend taxation requiring me to accrue substantially more for annual income tax liabilities that is now wafer-thin. If something nasty were to happen to the VOD dividend then it would almost certainly tip me over the edge and require me to start drawing some income from my ISA for the first time since I started living off my HYP in 2009 (assuming I wasn't willing to cut my monthly draw which I wouldn't be). That would be sad but at least I would have had some forewarning that it just might happen and would I suspect make the necessary adjustments and move on more quickly than if I hadn't seen this thread.

- Julian

[Arborbridge]

In the case of BT.A the board have announced that they intend to maintain the dividend at the current level for next year. In the case of IMB they have stated their intention to increase the dividend by 10% again next year.

These are facts, not speculation. Journalists are always commenting on what might or might not happen. VOD is another case in question.

Wait for the results. Unless you have inside information, you are no better than the "teenage scribblers". If you do have such information you should say nothing.

Do not speculate.

TJH

I know you firmly believe that one should use company statements or historic yield information and not forecast dividends. Many of us believe that in general, forecasts are worth having - even if you count them as speculation - because we would rather not fly entirely blind lookign in the rear view mirror.

Most forecasts are not in any case pure speculation, but based on some semblance of information gathering - company interviews, and statements. I reckon an analyst's intelligent assessment is better than mine, and so it has proved to be over the years I've been doing this - notwithstanding the occasional system failure or howler!

Arb.

[Alaric]

If something nasty were to happen to the VOD dividend then it would almost certainly tip me over the edge and require me to start drawing some income from my ISA for the first time since I started living off my HYP in 2009 (assuming I wasn't willing to cut my monthly draw which I wouldn't be).

You wouldn't take the alternative approach that leaving wealth inside a tax shelter was preferable? If so then you would supplement your income by disposing of holdings in the taxed account. That's subject to not having to sell so much as to incur Capital Gains Tax.

[Julian]

If something nasty were to happen to the VOD dividend then it would almost certainly tip me over the edge and require me to start drawing some income from my ISA for the first time since I started living off my HYP in 2009 (assuming I wasn't willing to cut my monthly draw which I wouldn't be).

You wouldn't take the alternative approach that leaving wealth inside a tax shelter was preferable? If so then you would supplement your income by disposing of holdings in the taxed account. That's subject to not having to sell so much as to incur Capital Gains Tax.

Thank you Alaric - an extremely valid point.

I have this goal/rule stuck in my mind that my "core" HYP dividend income should at least meet my annual draw with the rest (tax-sheltered) stuff as safety margin. As you say though, from a tax perspective the most tax-efficient response to a significant (probably greater than 20% for me) cut in VOD dividend or any other issue wiping out the safety margin in my "core" accounts would indeed be to sell off some capital in the HYP to compensate. Doing that would require me to think differently and accept not only my core divi income dropping below my annual draw due to any VOD (or other) cut but in fact then dropping further below due to selling off some income-generating assets to make up the difference. (Clearly that is only one side of the equation and looking at the whole picture the beneficial counterbalance is that it causes my potentially income-tax-free (if/when I draw it) income stream to increase more than it otherwise would.)

Your input seems to me to be a demonstration of the point I made in my last post about this thread being useful to me in helping the process of managing my own psychology since it gives me time to internalise the need to adjust my mindset re sell-offs in the core and divi income dropping below annual draw arising from the extremely valuable input that you just gave me.

- Julian

[CryptoPlankton]

In the case of BT.A the board have announced that they intend to maintain the dividend at the current level for next year. In the case of IMB they have stated their intention to increase the dividend by 10% again next year.

These are facts, not speculation. Journalists are always commenting on what might or might not happen. VOD is another case in question.

Wait for the results. Unless you have inside information, you are no better than the "teenage scribblers". If you do have such information you should say nothing.

Do not speculate.

TJH

I do not speculate and I am not disputing those facts. The point I was trying to make (as lightheartedly as I could) was that there was clearly speculation about future dividends within all of those threads. In the case of BT, it took remarkably similar form to the "offending" VOD post in that it referenced a newspaper article doing just that. So, given such posts have gone unquestioned previously, the frustration was understandable - and avoidable...

That is all.

[Alaric]

I have this goal/rule stuck in my mind that my "core" HYP dividend income should at least meet my annual draw with the rest (tax-sheltered) stuff as safety margin.

If you do an annual "bed & ISA" or equivalent to utilise the £ 20,000 ISA allowance, the non-sheltered side of your dividend income is liable to be running down anyway.

[MDW1954]

So, given such posts have gone unquestioned previously, the frustration was understandable - and avoidable...

CryptoPlankton,

I really don't want to perpetuate this discussion.

But in reference to your statement above, I certainly can't recall previous posts that baldly stated an intention to sell an entire HYP and switch to income ITs if a rumoured dividend cut happened.

Your mileage may vary, as they say. But I can't recall that.

I'm not a fan of threads that just recycle speculation, but I accept that some element of it is probably unavoidable. This particular example, however, was too egregious to ignore.

That said, the post wasn't deleted, and wasn't moved. All that happened was a plea for more facts, and less rumour. If posters are frustrated with that, especially to the point of leaving, then so be it.

I very much hope that this will be my last post on this thread.

MDW1954

[monabri]

One positive - VOD's share buyback programme is proceeding with shares repurchased at a significantly lower share price compared with that a year ago.

[Itsallaguess]

I do not intend to trade away any of my VOD shares so I am not taking any "hard" action but this thread has at least enabled me to take the "soft" action of somewhat bracing myself were these rumours ever to turn into reality. Essentially the action I took was some mental preparation and personally I find that helpful in managing the ups and downs of being an HYP investor.

For me managing my personal psychology is an important part of managing my HYP.

It's a very important investment aspect for me too, and I try very hard to align my income-approach to my personal investment-temperament.

One key aspect of that is limiting the percentage of portfolio-income that comes from any single-company holding, and actively managing that position if severe imbalances occur.

That way, I know that I don't need to fret too much about day-to-day company-news items at all, as such concerns have been actively considered as part of my portfolio-management, and have been minimised to a level that I'm really quite comfortable with.

It's also one of the key reasons that I don't tend to chase ultra-high-yields in recent years either. When I used to do that, I quickly found that such holdings would become a constant 'niggle' in the background noise of my life, with me worrying far too much if such yields would be maintained or not. I've found that since my general target-yield has dropped somewhat, those 'background niggles' disappeared almost overnight and have never returned..

There's lots we can do to align our income-portfolios with our investment-temperament, but I think the first thing to look at is just where the areas are that currently display some type of 'clash' between our actions and our temperaments. This was certainly a key enabler in allowing me to become a much more relaxed HYP owner, as once I'd identified those areas that I wasn't at all comfortable with, I was then quickly able to find long-term solutions to them...

Cheers,

Itsallaguess

[monabri]

I note that there has been no significant share buys by any of the directors (*) - I like to see the CEO and (in particular) the CFO buying.

The "worry" for me is that we have two new directors in post - Read (CEO) and Valle (CFO) and they have both only been in post for about half a year. They might decide to "rebaseline" having had time to review the business.

So, one might contend that there have been no significant buys because the new directors are still "sussing things out" but you'd like to think they would have been sufficiently confident when taking the job on that all was reasonably ok (...or not!)


Edit: More news here - hot off the press - Sale of Vod New Zealand.
viewtopic.php?p=221351#p221351




Info taken from SimplyWallStreet

https://simplywall.st/stocks/gb/telecom ... oup-shares

(*) I'm not classing Mr Nish's 20,000 shares as significant.

[IanTHughes]

I note that there has been no significant share buys by any of the directors (*) - I like to see the CEO and (in particular) the CFO buying.

Hardly surprising in view of the fact that Directors and Persons Discharging Managerial Responsibilities (PDMR's) are forbidden from buying or selling shares in their company for a period of up to 60 days leading up to results being published. It is known as the "Close Period".


Ian

[TheMotorcycleBoy]

I'm not a HYP guy, but this looked like being upbeat re. VOD
https://www.ii.co.uk/analysis-commentar ... e-ii508228
apologies if this is the wrong thread for this post - thought it might interest people here.

Matt

[Dod101]

And of course that was the classic 'chasing yield' strategy. I am sorry that your investment went wrong, but it was on the cards.

Rule 1. Do not rely on management reassurance.

Rule 2. See what your eyes (and the market) are telling you.

No one (except for pyad) said that investing was easy.

Dod

[IanTHughes]

No one (except for pyad) said that investing was easy.

Now, I have read a lot of articles written by Stephen Bland - aka pyad - but I cannot for the life of me remember him saying that "Investing is easy". Could I trouble you to provide a link to the post/article/blog that backs up your otherwise slanderous claim?

I thank you in advance for your cooperation


Ian

Moderator Message:
This is getting tedious. I've no idea whether Pyad ever ever said "investing is easy" or not, but the whole 'Doris' construct essentially says exactly the same thing. What could be easier than inheriting a bunch of shares, doing nothing, and just banking the dividends? His whole approach is predicated upon a low-maintenance approach to investing, based around simple rules. Please also look up the difference between 'slanderous' and 'libelous'. -- MDW1954

[IanTHughes]

If excessively high yield were useful as an indicator, should we not be using it as a "sell and replace" signal?

Are you perhaps recommending: buy at "optimal" yield, wait for yield to rise/price to fall, sell, rinse and repeat?

I think I shall stick to HYP

I'm not suggesting anything of the sort.

Sorry, I should have said "Sell and Replace" rather than "Sell, rinse and repeat"


Ian