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.
This post, and any others timed before 12 noon on May 17th that follow it, were originally part of the "Bad week for Vod" thread, and have been moved to tidy things up, and facilitate further discussion. -- MDW1954