Anyone topping up Imperial Brands?

[Dod101]

Keep calm and carry on. Apart from anything else if you ditch tobacco, support services and utilities there is not much choice left is there?

Dod

You left out Retail, Dod.

You are right Bouleversee. My list was done without too much thought, but rather to make the point. If we followed that through we would be left with not much more than one or two banks, some insurers, and a few property companies, which is not a very balanced HYP. As it is you will know that I have a long term aversion to Suppport services (in all their guises), and Retailers, in particular supermarkets. I have reduced my exposure to Utilities.

What this does is points me in the direction either of overseas shares or international ITs. I am beginning to think that the days of the traditional (for want of a better expression) HYP may be numbered.

Dod

[idpickering]

I am beginning to think that the days of the traditional (for want of a better expression) HYP may be numbered.

Dod

An interesting point Dod. I'm of a mind that sectors/shares come and go into and out of fashion. I am relaxed about the long term, as have no control of that firstly. I think they'll likely always be options in share selections, as we carry out our screening, just some different ones that's all.

Ian.

[Arborbridge]

If we followed that through we would be left with not much more than one or two banks, some insurers, and a few property companies, which is not a very balanced HYP. As it is you will know that I have a long term aversion to Suppport services (in all their guises), and Retailers, in particular supermarkets. I have reduced my exposure to Utilities.

What this does is points me in the direction either of overseas shares or international ITs. I am beginning to think that the days of the traditional (for want of a better expression) HYP may be numbered.

Dod

Going overseas to run away from the problem doesn't help, for the same problem again arises.
If you think this is the end of sector diversification (and HYP), it also puts the screws on all the ITs we commonly mention.
The whole point of buying sectors is that we know some will do very badly at times, and others better - however, all sectors are likely to suffer in a general bear market. If there's a paradigm shift in what P/E the market prefers, it will affect every company, every sector. Diversification only helps with the normal ebb and flow, not bear markets.

Needless to say, I think you are being too gloomy - a gloom possibly brought on by a few bad weeks and months in the market. For someone with your experience, Dod, I'm surprised. Surely, we've seen it all before? and there's nothing new going on here. You and I have lived through many market reverses and changes: it's all part of the game. Looking back, people talk about the "crash" or "correction" of various years, and quite honestly they are all just dents in the progress, but not knockout blows. Some seem quite insignificant now, though at the time some people alleged the sky was falling in.

Arb.

[Dod101]

Needless to say, I think you are being too gloomy - a gloom possibly brought on by a few bad weeks and months in the market.

Maybe I am being too gloomy but if so it is not brought on by the current market volatility. I can take that in my stride.

It is a fact that one mainstay of any HYP, utilities,seem to be under threat more than I can recall. I do not like retailers, nor support services and even tobacco has fallen away, although not so far does there seem to be any threat to dividends (but Mr Market usually knows more than I do). I ignore the scribblings of commentators.

My comment to keep calm and carry on surely does not suggest that I am being other than pragmatic. As you know an international IT, any IT,gives instant diversification so I think there is a decent case to look at them. Iwill not dwell on the case for IT as it is off topic but I am sure you get the drift.

Maybe we are all being too pessimistic about the political threat- can you really imagine Jeremy Corbyn as PM?- but I am afraid that if it did come to pass it would be a disaster for our economy, and not just the utilities.

Dod

[Arborbridge]

....can you really imagine Jeremy Corbyn as PM?

Also, he'll be in his 70's when the next (scheduled!) general election comes around and nearly 80 when his 5 year term finishes.

Too old.

Yes to the first part. But what has age to do with it? 70 is the new 50, and in any case - just look at the elder statesmen who have been elected around the world, and in the past, too.
I think the political threat is real, so much so, I'm even wondering if and when to dump some utes. The hottest must be CNA which in my case might have halved already (haven't bothered to check). I see I have just under 10% in utes, so significant if that gets written off, and more significantly the income therefrom.

However, I (and Dod) are old enough to remember previous panics over what will happen if Labour gets elected. Yes, I remember moderately well off people swearing they would sell up and go abroad, for there is no hope! It all came to nothing in the end - everything changes, but nothing changes. I do not think a Corbyn election would by "disaster" for the economy as Dod reckons, though labour would unfortunately reap the blame for an even bigger electoral mistake - the big "B" word. And that was a Tory misjudgement. Allowing people to make an emotional judgement about a matter of such huge financial import was hardly smart.
We need to be aware of the difficulties, but income investing will survive pretty much intact - even if it goes through a sticky patch.

The only alternative is to cut and run, putting all that HYP money into and annuity

[MDW1954]

Moderator Message:
Chaps, can we avoid an overtly political debate, please? There are better places for that. -- MDW1954

[Arborbridge]

Moderator Message:
Chaps, can we avoid an overtly political debate, please? There are better places for that. -- MDW1954

OK. Close to the wind, I'll admit

[Bouleversee]

Well, I carried on and bed and ISAd my IMB shares today at £26,42 and £26.425 respectively and I'll try to keep calm if the continue to go down after going x-d on the l8th.. OK so far but early days. At least the div. will now go into the ISA (I hope). If you all top up before then, that should boost the s.p.

[jackdaww]

I am beginning to think that the days of the traditional (for want of a better expression) HYP may be numbered.

Dod

================================

i think the writing has been on the wall for some time, i'm surprised (shouldnt be really) its lasted this long .

[Arborbridge]

I am beginning to think that the days of the traditional (for want of a better expression) HYP may be numbered.

Dod

================================

i think the writing has been on the wall for some time, i'm surprised (shouldnt be really) its lasted this long .

But then, you never did really believe in it

[vrdiver]

It's interesting that, as the market takes a bit of a breather (code for "prices have fallen") some raise doubts about whether HYP as a strategy is doomed, over, failed etc.

Until the dividends are counted, HYP success or otherwise is a moot point. Those still in the accumulation phase might like to consider how happy they'd be if the market was currently at 8000, rather than nearer to 7000. Perverse as it seems, most of us seem happier when our money can buy less dividends!

Those of us in the decumulation phase, drawing down dividends only, can ignore the various FTSE fluctuations and enjoy doing other stuff. Not having to sell capital to generate an income suddenly seems like a good strategy when capital values are all over the place.

(More sophisticated investors who do, will no doubt have their own protection buffers in place, so not be burnt by being a forced seller, but that's a level of complexity that HYP tries to avoid.)

I'm expecting the ride to get a bit wilder over the next few years (Brexit, Corbyn, unknown unknowns etc) but so long as the HYP companies can keep paying out, the capital really doesn't matter...

VRD


(and yes - you will find posts where I've said capital does matter - it's all about the context).

[idpickering]

It's interesting that, as the market takes a bit of a breather (code for "prices have fallen") some raise doubts about whether HYP as a strategy is doomed, over, failed etc.

I agree with the gist of your post VRD. Maybe this current dip is a good test of our HYP credentials, as HYPers, and our HYPs. Some here have surprised me, as I thought they were of more stern HYPer stuff. Just shows, we're only human after all.

Ian.

[Arborbridge]

It's interesting that, as the market takes a bit of a breather (code for "prices have fallen") some raise doubts about whether HYP as a strategy is doomed, over, failed etc........


I'm expecting the ride to get a bit wilder over the next few years (Brexit, Corbyn, unknown unknowns etc) but so long as the HYP companies can keep paying out, the capital really doesn't matter...

VRD

A good post VRD. I've been thinking too, that here we have the most minor of dips and people are already coming out with adverse comments: when the real fun begins (like a 50% fall from the top, which is always possible) they will be distraught.

Those of us who witnessed the 1970's (75% down wasn't it?), 1987,1991?, 2007 etc know how bad it can get, but also that it is survivable.

This is far from the end of HYP or LTBH investing.*

Arb

*that does not deny the possibility that those who are fleet of foot might find better ways of accumulating capital, but then I am after income, not a game of hide and seek.

[Quint]

....can you really imagine Jeremy Corbyn as PM?

Also, he'll be in his 70's when the next (scheduled!) general election comes around and nearly 80 when his 5 year term finishes.

Too old.

Mugabe?

[Dod101]

My comments about the future for a HYP have got nothing to do with the current dip and I do not think I ever said it had. It has everything to do with the number of shares that are currently not deemed suitable either as candidates for buying or holding long term and still providing sufficient diversification.

Whilst I agree with most of VRD's post that is my point. If I were an accumulator I might be more concerned about the current dip, because I would then be a long term accumulator of capital and frankly it is dividends that in these circumstances do not matter. They are then only a means to an end. I have never to any extent been in the position where I can ignore the income or at least turn it back into the investment, but for instance I am not sure that if I were I would be buying the tobaccos because they are a declining industry. Does the yield at least make up for the lack of capital growth? In fact you could say does that yield more than make up for the negative growth? Not at the moment. Which brings me neatly back on topic. Anyone buying Imperial Brands currently as an accumulator or builder of a HYP is placing a lot of faith in their future growth. Currently the market is not.

Dod

[Bouleversee]

Is it known whether IMB is getting into heat-not-burn cigarettes, sales of which are apparently soaring in Japan and no doubt will be elsewhere in the future?

[Dod101]

Is it known whether IMB is getting into heat-not-burn cigarettes, sales of which are apparently soaring in Japan and no doubt will be elsewhere in the future?

Is not your post of 13 February quoting some stockbroker not covering this very point? They are not in the heat not burn market (whatever that means) but earnings could be affected in 2019 by the need for substantial investment in this market?

Anyway tobaccos have certainly fallen out of favour as in an otherwise decent market BAT and I think Imps are both down again.

Dod

[Bouleversee]

Quite right. Dod. I had already forgotten about that It didn't mean a lot to me then but I have just been reading a long article in Sunday Times of Jan. 14 which I had had to put aside to read later which was all about this new type of cigarette and I noticed IMB wasn't mentioned in it. Seems they have some catching up to do. Me, too! The stack of newspapers gets bigger and bigger and eventually gets thrown out unread.

[Bouleversee]

So, Ian P., after all your pickering, did you top up today as planned or did you chicken out at the last moment?

[tjh290633]

Some of the proceeds of trimming back Segro this afternoon have gone into IMB, at 2641p. That rather more than doubles the prospective income from that bit of capital.

TJH