Arb HYP adjustment

[Arborbridge]

But what's the point of having your method (other than giving you something to fill your time), if you are not going to select abrdn ? Then there's nothing to discuss, surely ?

To shorlist for more detailed checking re dividend history, cover, debt, sectorial diversification etc surley?
I usually eliminate the top few each time I look at my HYPTUSS

Precisement. Yet Arb wrote:

A good candidate, but not near the top according to Terry's method, so hardly a stand out in that sense.

There is no share in that shortlist with a higher f'cast yield and cover than IMB, ergo: stand out

Depends which spectacles you are using.

But seriously, there isn't much between Aviva and IMB in those respects you mention, and which one tops up becomes a matter of personal choice. Sooner or later, either or both will be in the ascendent.

[BullDog]

May/June potential: Here's my top dozen shares in my HYPTUSS by topup ranking:-



Of these, abdrn and PSN are definite potentials as there is cash in that particular account, and I cannot see any reason to exclude them. PSN is close to its ceiling as it provides 4.2% of my income. The forecast yield is showing as 11% - does anyone have a useful comment about this? Is it real?

Sainsburys creeps up, and ought to be enjoying a topup - except that Avivia, just below it has a higher income. There are some excellent candidates lower down, all of which are valid choices and only RIO is completely excluded as it already provides nearly 6% of income. CSN and LLOY are also near their ceilings so would probably not make the cut.
All things being equal, I will probably go with the top choice/choices - though UKW is quite tempting even though the yield is not so great.

Arb.

I have been looking at DS Smith again lately, the shares have pulled back quite a bit from recent highs. I sold at over 400p. Your yield looks high? I make the yield nearer 4%. At a 5.3% yield, I would be buying DS Smith. Thanks.

The current yield is 4.3%, but the 5.3% is the forecast yield. Certainly a good company, and I was surprised it didn't do so well in the pandemic.

Indeed, I sold out during the latter stages of the pandemic for a decent profit. I held them as a play on booming Internet shopping. They didn't do as well as I had hoped though. Just bought back into DS Smith and topped up LGEN. Doubled the yield compared to Shell and still have half my Shell stock. Good luck with the ArbHYP top up.

[Arborbridge]

Adjustment today: small topups of ABDN and PSN. Rather than a larger topup in one or the other, I split it half each.

The resulting table now has Sainsbury at the top, with Aviva second. ABDN and PSN are in third and fourth places but are unlikely to get anymore cash since there isn't any in that account.

The financial services sector now account for 13% of my HYP, so I will be watching that weighting which does include abdrn. THe other members are the excellent SDRC, Man Group, and IG Group.

I was intending to trade some other stuff today as HSDL had a free trading offer to celebrate its first 25 years.
How ironic that we arranged to meet my sister in law for lunch, which spanned the whole free trading period.

Arb,

[monabri]

Adjustment today: small topups of ABDN and PSN. Rather than a larger topup in one or the other, I split it half each.

The resulting table now has Sainsbury at the top, with Aviva second. ABDN and PSN are in third and fourth places but are unlikely to get anymore cash since there isn't any in that account.

The financial services sector now account for 13% of my HYP, so I will be watching that weighting which does include abdrn. THe other members are the excellent SDRC, Man Group, and IG Group.

I was intending to trade some other stuff today as HSDL had a free trading offer to celebrate its first 25 years.
How ironic that we arranged to meet my sister in law for lunch, which spanned the whole free trading period.

Arb,

Surely you have a mobile phone? you could have sat at the table trading over lunch just nodding occasionally!

[Arborbridge]

Adjustment today: small topups of ABDN and PSN. Rather than a larger topup in one or the other, I split it half each.

The resulting table now has Sainsbury at the top, with Aviva second. ABDN and PSN are in third and fourth places but are unlikely to get anymore cash since there isn't any in that account.

The financial services sector now account for 13% of my HYP, so I will be watching that weighting which does include abdrn. THe other members are the excellent SDRC, Man Group, and IG Group.

I was intending to trade some other stuff today as HSDL had a free trading offer to celebrate its first 25 years.
How ironic that we arranged to meet my sister in law for lunch, which spanned the whole free trading period.

Arb,

Surely you have a mobile phone? you could have sat at the table trading over lunch just nodding occasionally!

That would have gone down well!

[tjh290633]

But what's the point of having your method (other than giving you something to fill your time), if you are not going to select abrdn ? Then there's nothing to discuss, surely ?

Then there's nothing to discuss, surely ? Hypers - nothing to discuss?

It's interesting to note that although most of us would picker over the choice, TJH who came up with this scheme almost never does. He would topup the first valid choice in a mechanistic way. Only very occasionally has he swerved from that path.

Arb.

Don't forget that I have rules which disqualify certain holdings, if topping up would take them past certain maxima in share of income or portfolio cost.

Also, if two or more holdings have equal rankings, then I make a judgement as to which will be topped up. I have known 3 or 4 to be equal, and I might choose the one with the higher yield, or the one with the lower weighting, tom be topped up.

The other situation is where I have a rumpholding that I wish to bring up to median weight. This will arrive next Tuesday when I get the shares in Woodside Petroleum. They look like being 1/6th of the median weight, and probably qualify anyway, but I am contemplating disposing of Marstons to provide some of the necessary wherewithal.

TJH

[Dod101]

I admire TJH's method and discipline even although I could not possibly follow it. In any case, I do not have much free income to invest as I prefer to give it away, hopefully saving some IHT.

Dod

[funduffer]

The other situation is where I have a rumpholding that I wish to bring up to median weight. This will arrive next Tuesday when I get the shares in Woodside Petroleum. They look like being 1/6th of the median weight, and probably qualify anyway, but I am contemplating disposing of Marstons to provide some of the necessary wherewithal.

TJH

Yes, I am in the same position.

I have doggedly held onto Marstons (MARS) hoping it will rise phoenix-like from the covid ashes, but it can't seem to get off the ground! Another year with no dividends has just been announced, so my patience is running out, although the exit price would be miserable currently (just 58p).

I also gain some Woodside through my BHP holding, and I can see selling MARS to make Woodside a decent holding may be a way forward.

NB I wouldn't have bought abrdn, on the basis that it can't seem to increase it's dividend at all in inflationary times, even after it's large cut in 2020.

FD

[Arborbridge]

NB I wouldn't have bought abrdn, on the basis that it can't seem to increase it's dividend at all in inflationary times, even after it's large cut in 2020.

FD

An interesting comment in this context of when or whether one makes such judgements using this HYP method. I'm pretty sure I have rarely seen TJH make such a judgement.
I know he doesn't have abdn, but he does have AV. which is another share which comes in for a lot of flak and I'm pretty sure he's topped it up recently without worrying about "what might be".

Overall, it seems to me, TJH is much more sanguine about applying the system mechanically than most of us.

Arb.

[moorfield]

NB I wouldn't have bought abrdn, on the basis that it can't seem to increase it's dividend at all in inflationary times, even after it's large cut in 2020.

FD

An interesting comment in this context of when or whether one makes such judgements using this HYP method. I'm pretty sure I have rarely seen TJH make such a judgement.
I know he doesn't have abdn, but he does have AV. which is another share which comes in for a lot of flak and I'm pretty sure he's topped it up recently without worrying about "what might be".

Overall, it seems to me, TJH is much more sanguine about applying the system mechanically than most of us.

Arb.

That's why ABRDNs yield is 7.9%, more than twice the index. If it's dividend looked more attractive to buyers, it's yield would be less, presumably?

TJH has another important variable at play here, the firm 5% topup cap on income or cost, which is a risk control that affords some sanguinity over such decisions.

Were ABRDN bought now into a 5-share HYP "Lite" (*), for example, well that would be quite a different prospect.




(*) Whatever happened to HYP "Lites" ?

[Arborbridge]

NB I wouldn't have bought abrdn, on the basis that it can't seem to increase it's dividend at all in inflationary times, even after it's large cut in 2020.

FD

An interesting comment in this context of when or whether one makes such judgements using this HYP method. I'm pretty sure I have rarely seen TJH make such a judgement.
I know he doesn't have abdn, but he does have AV. which is another share which comes in for a lot of flak and I'm pretty sure he's topped it up recently without worrying about "what might be".

Overall, it seems to me, TJH is much more sanguine about applying the system mechanically than most of us.

Arb.

That's why ABRDNs yield is 7.9%, more than twice the index. If it's dividend looked more attractive to buyers, it's yield would be less, presumably?

TJH has another important variable at play here, the firm 5% topup cap on income or cost, which is a risk control that affords some sanguinity over such decisions.

Were ABRDN bought now into a 5-share HYP "Lite" (*), for example, well that would be quite a different prospect.




(*) Whatever happened to HYP "Lites" ?

For info: I operate the same risk control as TJH - 5% on income or cost, in addition to the current cap weight.

[Arborbridge]

Slightly surprised myself as I started to add to this thread - I haven't made any additions since May?

Well, not totally true - there have been changes with Woodside and Haleon coming in due to corporate actions, and I have to admit to buying more Woodside but not posting here. Still, May until September must be about the longest buying drought ever for me.

In the past two days, I have trimmed Man Group which had grown to 2.1x median capital weight and has stayed there for a while. Most of the capital released went into purchasing more Woodside Group (lying fourth in the topup table) - which is now under water, unfortunately. Woodside yield is a bit guesstimatey, I think.

After these adjustments the highest 12 top-up candidates of my 39 share HYP are as follows:-



I have cash available in one account for a topup on the 10th October, so thoughts are forming on what to do next. Interesting to see that old dog, Sainsbury, has reared its head again and now is in third place after PSN and ABDN - all three are likely to be vetoed. PSN is out anyway as its contribution to income is getting too high.

Reviewing the table, the one which seems best poised is BLND, though it's nice to see DS Smith in the list - but at median weight, I can't really say investing in it would follow the guidelines of the topup ranking.

As an aside, there's always the possibility of investing some more in that HYP-like vehicle, MRCH instead, at a yield of 5.6%. Indeed, with the sweet shop open once more, there are endless possibilities for making and losing money.

Arbn.

[idpickering]

Thanks for the update Arb. I must admit that I’m considering topping up my Vodafone holdings soon. Tritax Big Box and Tesco are in my sights too.

Ian.

[BullDog]

Interesting update. Not until number 11 on that list is there anything I would buy. SMDS which really is on sale presently and unlike just about all of the others on the list is a pretty decent quality business. In my humble opinion of course.

[Arborbridge]

Interesting update. Not until number 11 on that list is there anything I would buy. SMDS which really is on sale presently and unlike just about all of the others on the list is a pretty decent quality business. In my humble opinion of course.

Yes, it is a quality business and I am surprised it suffered so much during Covid. I'm tempted, but there again, it's a median sized holding at present, so I don't really need to buy more. Too many good choices floating about at present.

I'll think further on that as I have been looking to topup DS Smith for a while.

[BullDog]

Interesting update. Not until number 11 on that list is there anything I would buy. SMDS which really is on sale presently and unlike just about all of the others on the list is a pretty decent quality business. In my humble opinion of course.

Yes, it is a quality business and I am surprised it suffered so much during Covid. I'm tempted, but there again, it's a median sized holding at present, so I don't really need to buy more. Too many good choices floating about at present.

I'll think further on that as I have been looking to topup DS Smith for a while.

Virtually unprecedented yield presently. But along with all the others on that list, they're a previous dividend cutter. Personally, I forgive them for the covid era cut because they're a quality firm at a bargain price. I don't think that about any of the others.

[kempiejon]

Arb, Bulldog, This useful little exchange has pointed me at SMDS's historically high yield. A share I've held nearly as long as I've had my HYP, I started buying in 2006 and in 2009 they halved the dividend, that took 4 years to restore to pre cut levels, since then the dividend multiplied to 3 times the 2006 level, but was retarded by Covid. At 6% with a pretty clear upward trend in income I think I'll ponder them over the weekend, usually I'd veto any cutters but I think Covid allows me to flex that.

[BullDog]

Arb, Bulldog, This useful little exchange has pointed me at SMDS's historically high yield. A share I've held nearly as long as I've had my HYP, I started buying in 2006 and in 2009 they halved the dividend, that took 4 years to restore to pre cut levels, since then the dividend multiplied to 3 times the 2006 level, but was retarded by Covid. At 6% with a pretty clear upward trend in income I think I'll ponder them over the weekend, usually I'd veto any cutters but I think Covid allows me to flex that.

Exactly my thinking. Happy to have got you pondering over a purchase.

[Arborbridge]

Arb, Bulldog, This useful little exchange has pointed me at SMDS's historically high yield. A share I've held nearly as long as I've had my HYP, I started buying in 2006 and in 2009 they halved the dividend, that took 4 years to restore to pre cut levels, since then the dividend multiplied to 3 times the 2006 level, but was retarded by Covid. At 6% with a pretty clear upward trend in income I think I'll ponder them over the weekend, usually I'd veto any cutters but I think Covid allows me to flex that.

Here's a chart of the history:-


It is odd - in olden times, the dividend just plodded upwards, then became super charged until the covid collapse. Not always what we want, but when mixed in with others, acceptable. Probably not one to go too far over median on, but I wouldn't reject it: but then, it is a cutter and the dividend isn't up to pre cut yet. Luni would give it five years!

Arb

[monabri]

Margins are quite thin....it wouldn't need much to wipe them out (raw materials, energy costs, labour, transport).