My next HYP "unpick"

[Arborbridge]

I've done my usual trick of setting a stop loss and leaving it to the market whether I sell or not - if the price does indeed continue to rise fine - if not it will sell at just under the recent lows, and I will be shot of it.
Stop loss set for a month and I will review then.

Sorry but respectfully this a cop out. Either you are convinced to sell VOD or not? If you prefer to delegate this decision to Mr Market you might be better delegating it to an IT manager?

Last time I checked stop losses were not an appropriate way to manage an HYP, has this changed?

Well, stop losses are rarely mentioned (except by me) but that's no reason not to us them. On and off, I've used them since 2000. To characterise the use of such a tool as a "cop out" is unreasonable, in my view: they can be eninetly useful. It's a way of hedging one's bets and wholly sensible - if the SP carries on rising I get the benefit, if it falls through the floor, I'm protected.
In any case some HYPers use a variant of the stop loss without realising it - they just aren't "automatic". It's what we do when we decide to buy or sell if certain barriers are crossed, particularly on grounds of yield or capital size, being a proxy for price.

If you are trying to make me feel guilty about using a fringe idea to manage my HYP, I'm sorry to say you haven't succeeded

Arb.

[kempiejon]

The trouble I'd see with selling - I'm not - is that with VOD's 10% yield one would likely see a reduction in income.
The dividend that VOD delivers is only about 1.5% of my HYP income. I have bought into the LTBH but for those that do sell, doing so that reduces income seen contra to me. Perhaps there's a similar yield for the money freed up by ditching VOD?
I don't think VODs dividend will be cut next year unless I've missed a comment.

[kempiejon]

Well, stop losses are rarely mentioned (except by me) but that's no reason not to us them.

Oh me too.
Edit, oops sorry I mean limit orders. Part of my tidying unsheltered into sheltered in the run up to year end as a way to capture a good exit price without needing to watch the markets. Not part of the HYP strategy but a handy way for me to try and maximise with potential year end sells.

[Arborbridge]

The trouble I'd see with selling - I'm not - is that with VOD's 10% yield one would likely see a reduction in income.
The dividend that VOD delivers is only about 1.5% of my HYP income. I have bought into the LTBH but for those that do sell, doing so that reduces income seen contra to me. Perhaps there's a similar yield for the money freed up by ditching VOD?
I don't think VODs dividend will be cut next year unless I've missed a comment.

There would be an immediate drop, and yes, it's all about income. The problem is, no one knows until after the event, but there are circumstances when a high yield in a company with a falling share price and static yield is less of an advantage than the opposite.
The opposite argument, is that I've endured the pain and might as well hang on for recovery, both of income increases and capital. You could say, I've been doing that for several years already. Unfortunately, it's a story we keep hearing about VOD which is turning into a serial disappointment. These types of events keep arising in my HYP and each time I think I may have gotten rid of the dead and risky - so it seems, until the next one. Each time, people tell me it was "obvious" that such and such a share was bound to fail and I should have seen it coming.

As I get older, I'm gradually rotating out into ITs, but at a snail's pace, in order to cut down on these decisions. If it occasionally costs me some income, so be it.

Arb.

[kempiejon]

There would be an immediate drop, and yes, it's all about income. The problem is, no one knows until after the event, but there are circumstances when a high yield in a company with a falling share price and static yield is less of an advantage than the opposite.

As I get older, I'm gradually rotating out into ITs, but at a snail's pace, in order to cut down on these decisions. If it occasionally costs me some income, so be it.

Quite so, as we've heard before it's what let's you sleep at night, if, as they say, VOD is going to reduce your income if you hold on you'd be better off out. An unknown you can remove by ditching the share. With 30 odd shares of differing weights and yields any one pick will only make small dent if swapping 10% yield for 5%, probably lost in the noise and variation in the basket of dividends.

[Itsallaguess]

VOD has been in a very slight upward trend, then hit the previous bottom and bounced off.

I've done my usual trick of setting a stop loss and leaving it to the market whether I sell or not - if the price does indeed continue to rise fine - if not it will sell at just under the recent lows, and I will be shot of it.

Stop loss set for a month and I will review then.

Out of interest Arb, and with VOD having dropped another 6% since your post above, and around 10% in the last month, did your stop-loss sale get triggered on it?




Source - https://www.google.com/finance/quote/VOD:LON?window=1M

Cheers,

Itsallaguess

[Arborbridge]

VOD has been in a very slight upward trend, then hit the previous bottom and bounced off.

I've done my usual trick of setting a stop loss and leaving it to the market whether I sell or not - if the price does indeed continue to rise fine - if not it will sell at just under the recent lows, and I will be shot of it.

Stop loss set for a month and I will review then.

Out of interest Arb, and with VOD having dropped another 6% since your post above, and around 10% in the last month, did your stop-loss sale get triggered on it?

Itsallaguess

No, but I expect it will today unless there's a general market rise.

When setting stop losses, it's always difficult to know which way to err - too tight and it triggers immediately and too loose and one has accept one will lose more. Looking at the chart at the time, it seemed that the bottom was around 70p, and a break through that level could be significant - so I set it at 69p.

Inevitably, if it goes to 69p and rallies from there I'll kick myself for being too tight to 70p, but accepting that is just part of the game.

Then the next question will be whether to stack most of it into SOI and MYI which are the only ITs in that broker account - or start a new position. But that's a story for another board.

Arb.

[Dod101]

Out of interest Arb, and with VOD having dropped another 6% since your post above, and around 10% in the last month, did your stop-loss sale get triggered on it?

Itsallaguess

No, but I expect it will today unless there's a general market rise.

When setting stop losses, it's always difficult to know which way to err - too tight and it triggers immediately and too loose and one has accept one will lose more. Looking at the chart at the time, it seemed that the bottom was around 70p, and a break through that level could be significant - so I set it at 69p.

Inevitably, if it goes to 69p and rallies from there I'll kick myself for being too tight to 70p, but accepting that is just part of the game.

Then the next question will be whether to stack most of it into SOI and MYI which are the only ITs in that broker account - or start a new position. But that's a story for another board.

Arb.

O dear Arb. That is no way to proceed. Make the decision. Vodafone has been a hopeless investment for years; sell at best and move on. For all the Pickering around we sometimes accuse Ian of, he can be decisive and that to me is much the better course than more or less finding someone else to make the decision for you.

Dod

[kempiejon]

STOP LOSSES! - bad HYPer.

[Arborbridge]

No, but I expect it will today unless there's a general market rise.

When setting stop losses, it's always difficult to know which way to err - too tight and it triggers immediately and too loose and one has accept one will lose more. Looking at the chart at the time, it seemed that the bottom was around 70p, and a break through that level could be significant - so I set it at 69p.

Inevitably, if it goes to 69p and rallies from there I'll kick myself for being too tight to 70p, but accepting that is just part of the game.

Then the next question will be whether to stack most of it into SOI and MYI which are the only ITs in that broker account - or start a new position. But that's a story for another board.

Arb.

O dear Arb. That is no way to proceed. Make the decision. Vodafone has been a hopeless investment for years; sell at best and move on. For all the Pickering around we sometimes accuse Ian of, he can be decisive and that to me is much the better course than more or less finding someone else to make the decision for you.

Dod

I did make the decision! The decision was to draw a line at the price I would want to protect, and sell if that line was breached. I've been setting stop losses for years and it is a perfectly normal way to proceed if you have been "brought up" in that style of investing. It is a way of safeguarding the downside while taking advantage of any emerging upside.

You have a different way of proceeding - fair enough. I used stop losses almost constantly before HYP and it made sure I did not suffer the sorts of disasters I have had with HYP, where the tendency is just to tolerate a large fall and put up with it. Which, of course, is what has happened with VOD prior to this. I'm not regretting that as it's all part of the HYP system, but in passing one would have to say that the "old me" in the days of looking at charts would have sold VOD a long, long time ago.

Arb

[Arborbridge]

STOP LOSSES! - bad HYPer.

Sorry if you think so. Think again! Essemtially it isn't much different to any other control people use within HYP - eg yield, or capital weight, or income weight. These are all just numbers we use to make decisions.

Having decided to put a stop loss on VOD I am in effect saying I will accept any upside, but want to limit any further losses - and I don't believe I should feel guilty about that.


Arb.

[kempiejon]

STOP LOSSES! - bad HYPer.

Sorry if you think so. Think again! Essemtially it isn't much different to any other control people use within HYP - eg yield, or capital weight, or income weight. These are all just numbers we use to make decisions.

Having decided to put a stop loss on VOD I am in effect saying I will accept any upside, but want to limit any further losses - and I don't believe I should feel guilty about that.


Arb.

Arb, please don't apologise to me, or feel guilty, you run your portfolio as you see fit. Selling is not part of my HYP strategy so I don't need to think about that.

[Dod101]

I am more likely to put a limit on a buy price. Once I decide to sell, I like to sell. Anyway good luck to you but I sold Vodafone a long time ago.

Dod

[Itsallaguess]

Inevitably, if it goes to 69p and rallies from there I'll kick myself for being too tight to 70p, but accepting that is just part of the game.

Google Finance is showing a brief dip to 68.75p earlier this morning -

https://www.google.com/finance/quote/VOD:LON

Did your 69p stop-loss do it's job?

Cheers,

Itsallaguess

[Itsallaguess]

O dear Arb. That is no way to proceed.

Make the decision. Vodafone has been a hopeless investment for years; sell at best and move on.

I did make the decision! The decision was to draw a line at the price I would want to protect, and sell if that line was breached. I've been setting stop losses for years and it is a perfectly normal way to proceed if you have been "brought up" in that style of investing. It is a way of safeguarding the downside while taking advantage of any emerging upside.

You have a different way of proceeding - fair enough. I used stop losses almost constantly before HYP and it made sure I did not suffer the sorts of disasters I have had with HYP, where the tendency is just to tolerate a large fall and put up with it. Which, of course, is what has happened with VOD prior to this. I'm not regretting that as it's all part of the HYP system, but in passing one would have to say that the "old me" in the days of looking at charts would have sold VOD a long, long time ago.

I've got to say that I'm with Arb on this one, in that I consider it to be far more important to have a clear view on our own personal methods and approaches to what's hoped to be a long investment-horizon, than it is to chase every last quid at the expense of never having that clear strategic approach.

Cheers,

Itsallaguess

[BullDog]

Inevitably, if it goes to 69p and rallies from there I'll kick myself for being too tight to 70p, but accepting that is just part of the game.

Google Finance is showing a brief dip to 68.75p earlier this morning -

https://www.google.com/finance/quote/VOD:LON

Did your 69p stop-loss do it's job?

Cheers,

Itsallaguess

That's the perennial problem with stop losses, getting stopped out and the price bounces back. I have used stop losses in the past but not generally. A trailing stop loss would be more useful but I don't think any retail platforms offer that.

[idpickering]

O dear Arb. That is no way to proceed. Make the decision. Vodafone has been a hopeless investment for years; sell at best and move on. For all the Pickering around we sometimes accuse Ian of, he can be decisive and that to me is much the better course than more or less finding someone else to make the decision for you.

Dod

Thanks for your kind comment Dod. As I've said before, I'm not an expert, and follow my gut instinct. That was the case yesterday when I dumped (an appropriate word methinks) my VOD holdings. And man I feel much better for having done so. Peace of mind is important in my honest opinion. I used the funds released to top up my other holdings. I've never done a 'stop-loss' in my life, but I'm happy to have got rid of VOD, which I've never been in positive territory with, apart from that expensively bought dividend. If it looks to good to be true etc. I expect a cut in the VOD dividend in the future too. I respect Arb's right to manage his HYP however he sees fit.

Ian.

[moorfield]

I did make the decision! The decision was to draw a line at the price I would want to protect, and sell if that line was breached. I've been setting stop losses for years and it is a perfectly normal way to proceed if you have been "brought up" in that style of investing. It is a way of safeguarding the downside while taking advantage of any emerging upside.

You have a different way of proceeding - fair enough. I used stop losses almost constantly before HYP and it made sure I did not suffer the sorts of disasters I have had with HYP, where the tendency is just to tolerate a large fall and put up with it. Which, of course, is what has happened with VOD prior to this. I'm not regretting that as it's all part of the HYP system, but in passing one would have to say that the "old me" in the days of looking at charts would have sold VOD a long, long time ago.

I've got to say that I'm with Arb on this one, in that I consider it to be far more important to have a clear view on our own personal methods and approaches to what's hoped to be a long investment-horizon, than it is to chase every last quid at the expense of never having that clear strategic approach.

Cheers,

Itsallaguess

That's all as maybe, but this isn't remotely the "HYP system" as Arb puts? Can't be long now until a big white box arrives to tell us...

Moderator Message:
...You have done a great job of reminding us. (Mind you if you're a tinkerer, how you effect your sale is I suppose a practical matter.) - Chris

[88V8]

Out of interest Arb, and with VOD having dropped another 6% since your post above, and around 10% in the last month...

No, but I expect it will today unless there's a general market rise....
Then the next question will be whether to stack most of it into SOI and MYI which are the only ITs in that broker account - or start a new position.

Ooooh naughty!!
You could go and start a guilt ladder

V8

[daveh]

Google Finance is showing a brief dip to 68.75p earlier this morning -

https://www.google.com/finance/quote/VOD:LON

Did your 69p stop-loss do it's job?

Cheers,

Itsallaguess

That's the perennial problem with stop losses, getting stopped out and the price bounces back. I have used stop losses in the past but not generally. A trailing stop loss would be more useful but I don't think any retail platforms offer that.

Its back up over 70p at the moment and the chart suggests it stayed above 69p at a minimum of 69.05p. I'm hanging on, but not topping up even though it sits at no 1 in my HYPTUSS. I'll reassess if and when it cuts its dividend as at the moment its still paying.