first top up of 2020

[Arborbridge]

I haven't made any HYP topup since October, so perhaps I'd better get around to it!

Here's the latest data I am pickering over in preparation for the topup on the 10th.



IMPs seem stuck at the top, but since nearly 5% of my income depends on them, they are disqualified. HSBC is the front runner which rather surprised me since last time I looked it was BT - thus do the places bobble around.
I'm fairly stacked up with Financials (around 25%) but not with banks specifically, so I think HSBC is likely to receive some cash. If there's any left over, I would have to decide between another financial - SLA - or BT.
Four of the top six places go to financials, so it is difficult to avoid them unless I veto them.

Any discussion is welcome, but it looks like I will go HSBC with BT in reserve.

Arb.

[IanTHughes]

I haven't made any HYP topup since October, so perhaps I'd better get around to it!

Here's the latest data I am pickering over in preparation for the topup on the 10th.



IMPs seem stuck at the top, but since nearly 5% of my income depends on them, they are disqualified.

Why?

Seriously, why have a top-up calculation spreadsheet if you then disregard its results? There may well be good reason to disqualify Imperial Brands (IMB) but claiming that receiving 4,72% of your income is akin to receiving 5,00% is a bit weak is it not? In my view it smacks of disqualifying IMB for other reasons which you should be honest about. At least to yourself!


Ian

[tjh290633]

It is funny, the way that companies change places. I have a lot of disqualified shares by my own standards. Recently several have ranked equally, which means that you can choose between them.

Currently Kingfisher is my most eligible share, and at one time it was equally ranked with two others. Now it is some way ahead of its competitors.

The criterion for disqualication is that topping up by 20% would increase share of either dividend income or portfolio cost above 5%. IMB is also disqualified by me.

TJH

[tjh290633]

Just looking at my top-up table, which looks like this:

Top-up          Income                     Cost                
Rank     EPIC   Rank     EPIC   % Income   Rank   Epic   % Cost
     1   IMB*        1   TW.       5.92%      1   MARS    4.67%
     2   BT.A*       2   IMB       5.02%      2   AV.     4.55%
     3   KGF         3   BT.A      4.71%      3   BT.A    4.50%
     4   LLOY*       4   AV.       4.62%      4   MKS     4.31%
     5   MKS*        5   RIO       4.46%      5   LLOY    4.23%
     6   TW.*        6   MARS      4.25%      6   WMH     4.05%
     7   SMDS        7   BP.       4.01%      7   GSK     3.99%
     8   RDSB        8   LGEN      3.93%      8   S32     3.99%
     9   BHP         9   RDSB      3.82%      9   SSE     3.94%
    10   VOD        10   BATS      3.65%     10   BHP     3.78%
    11   AV.*       11   BHP       3.61%     11   LGEN    3.67%
    12   BATS       12   SSE       3.59%     12   PSON    3.64%

I have marked the disqualified shares *, but reference my previous comments, KGF, LLOY and MKS all rank equally in the calculations and appear in alphabetical order.

The value weights of the lowest 10 holdings are:

26   LLOY*
27   BA. 
28   IMB*
29   IMI 
30   MKS* 
31   KGF 
32   SMDS
33   RB. 
34   PSON
35   TSCO

Three of those feature in the disqualified list, and the lowest three all have sub 3% yields.

Nice to see the cricket result with some fine catches at the end.

TJH

[Arborbridge]

I haven't made any HYP topup since October, so perhaps I'd better get around to it!

Here's the latest data I am pickering over in preparation for the topup on the 10th.



IMPs seem stuck at the top, but since nearly 5% of my income depends on them, they are disqualified.

Why?

Seriously, why have a top-up calculation spreadsheet if you then disregard its results? There may well be good reason to disqualify Imperial Brands (IMB) but claiming that receiving 4,72% of your income is akin to receiving 5,00% is a bit weak is it not? In my view it smacks of disqualifying IMB for other reasons which you should be honest about. At least to yourself!


Ian

In what way have I disregarded its results? I've used the table and you can see that applying my normal limits (limits not disimilar to yours) IMB would breach limit on income from one share. I am not disregarding but applying the - admittedly rather soft - rules I usually work to. I didn't say "4.72% is akin to" 5.00% but an economic topup would put it well over 5%. That's how the rules work!

Now, the next bit will confirm your worst fears - I feel entitled to top up any of my shares, but especially any within the top 12. Normally I would select the highest ranking share which is not invalidated, but do we always do that? No - sometimes we veto a share - an example of a share people have vetoed is Centrica or BT - and I do not intend to be the only person here who can't veto a share because you think I shouldn't

Arb.

[Arborbridge]

Seriously, why have a top-up calculation spreadsheet if you then disregard its results? There may well be good reason to disqualify Imperial Brands (IMB) but claiming that receiving 4,72% of your income is akin to receiving 5,00% is a bit weak is it not? In my view it smacks of disqualifying IMB for other reasons which you should be honest about. At least to yourself!


Ian

Reading the thread again, I now realise that you may have forgotten that my criteria are more or less the same as Terry's, so that when I wrote : IMPs seem stuck at the top, but since nearly 5% of my income depends on them, they are disqualified. I made the assumption that you would know my method depends on 5% being roughly my top income contribution. Whilst that is not inviolable, I wouldn't normally top up if it the results was greater than 5%.

I can see how you misundertood my remark.


Arb.

[IanTHughes]

I haven't made any HYP topup since October, so perhaps I'd better get around to it!

Here's the latest data I am pickering over in preparation for the topup on the 10th.


IMPs seem stuck at the top, but since nearly 5% of my income depends on them, they are disqualified.

Why?

Seriously, why have a top-up calculation spreadsheet if you then disregard its results? There may well be good reason to disqualify Imperial Brands (IMB) but claiming that receiving 4,72% of your income is akin to receiving 5,00% is a bit weak is it not? In my view it smacks of disqualifying IMB for other reasons which you should be honest about. At least to yourself!

In what way have I disregarded its results? I've used the table and you can see that applying my normal limits (limits not disimilar to yours) IMB would breach limit on income from one share.

With respect, you did not say that IMB would breach any limit, rather you stated, rather categorically I thought:

.... but since nearly 5% of my income depends on them, they are disqualified.

To my mind there is nothing about that statement that indicates that you are thinking of the income dependence post top-up!

Now, the next bit will confirm your worst fears - I feel entitled to top up any of my shares, but especially any within the top 12. Normally I would select the highest ranking share which is not invalidated, but do we always do that? No - sometimes we veto a share - an example of a share people have vetoed is Centrica or BT - and I do not intend to be the only person here who can't veto a share because you think I shouldn't

I am not fearful of anything, after all it is not my portfolio.

However that only begs the question as to why you do not build any veto that you may use, as well as the post top-up income calculation, into your Top-Up calculation. That is what I do.


Ian

[Arborbridge]

With respect, you did not say that IMB would breach any limit, rather you stated, rather categorically I thought:

.... but since nearly 5% of my income depends on them, they are disqualified.

To my mind there is nothing about that statement that indicates that you are thinking of the income dependence post top-up!


Ian

I've already explained what happened: I thought (reasonably or otherwise) that you knew I had such limits. Yes I was categoric. It is close enough to my limit for me to disqualify it from further capital this time, and prefer a different share. I did not make it clear that it would breach the limit, but it doesn't take much imagination to realise that any topup would do so. I'm sorry not to have made it clear in the first place but thought - incorrectly as it turns out - it was implicit.
I haven't disregarded my table or my normal method - it's just that you didn't realise that.

Nuff said, I think. If you want to nit pick, carry on but you will be by yourself

Arb.

[Arborbridge]

To veridy my topup decision:-

Yesterday I bought more HSBC and BT. HSBC came up to median weight, but the residual cash left BT short of median. The table this morning looks like this (first 12 shares of HYP only) :-



Those dreaded financials take four of the top places! In principle most of this group of twelve are in with a shout of a topup when it next occurs, though on capital or income weight, IMB and PSN are less likely.

Arb.