HYP1 is 17 - comments not permitted on HYP Practical

[vrdiver]

I'm a bit confused with this fuss over ITs being included or excluded.

PYAD himself, for example, included Land Securities in HYP 4 (1).

According to the FT (2) LAND is:

a real estate investment trust

.

(my emphasis)

Sooooo..... why the fuss? If an IT has a suitable yield and meets all the same criteria as a "normal" company, then (in my mind at least) it's a HYP candidate. For purists who say REITS are a special case, please elaborate.

VRD


(1) http://www.fool.co.uk/investing-basics/ ... portfolio/
(2) https://markets.ft.com/data/equities/te ... s=LAND:LSE

[moorfield]

Sooooo..... why the fuss? If an IT has a suitable yield and meets all the same criteria as a "normal" company, then (in my mind at least) it's a HYP candidate. For purists who say REITS are a special case, please elaborate.

The obvious difference I can think of is that a private investor can buy, hold and accumulate income from the same shares that an IT (such as CTY) does, but not the same properties etc. that a REIT does.

[Wizard]

Sooooo..... why the fuss? If an IT has a suitable yield and meets all the same criteria as a "normal" company, then (in my mind at least) it's a HYP candidate. For purists who say REITS are a special case, please elaborate.

The obvious difference I can think of is that a private investor can buy, hold and accumulate income from the same shares that an IT (such as CTY) does, but not the same properties etc. that a REIT does.

OK, so why is HICL not permittted? That is a number of infrastructure investments that I do not believe anyone on here would be able to invest in directly.

As onslow rightly said

Mods - where is the policy statement referenced a few weeks ago which was going to make things clear?

Terry.

[moorfield]

OK, so why is HICL not permittted? That is a number of infrastructure investments that I do not believe anyone on here wpuld be able to invest in directly.

It is permitted here on High Yield Share Strategies - General, Terry.

But seriously, who knows, both are good questions above.

[Raptor]

Sooooo..... why the fuss? If an IT has a suitable yield and meets all the same criteria as a "normal" company, then (in my mind at least) it's a HYP candidate. For purists who say REITS are a special case, please elaborate.

The obvious difference I can think of is that a private investor can buy, hold and accumulate income from the same shares that an IT (such as CTY) does, but not the same properties etc. that a REIT does.

OK, so why is HICL not permittted? That is a number of infrastructure investments that I do not believe anyone on here would be able to invest in directly.

As onslow rightly said

Mods - where is the policy statement referenced a few weeks ago which was going to make things clear?

Terry.

REIT's are different to IT's. I believe that they originated in the US this is from the US Sec. This is different from an Investment Trust

Raptor.

[Lootman]

REIT's are different to IT's. I believe that they originated in the US this is from the US Sec. This is different from an Investment Trust

REIT's are somewhat different from normal IT's. They are structured a certain way so as to gain tax advantages. Essentially the deal is that if a REIT distributes all its profits as dividends, then it escapes corporation tax - something that normal IT's pay. It is for this reason that REIT dividends are taxed in a different way and at a higher tax rate.

UK REIT's are modelled on US REIT's although there are differences in some of the rules, just as with other types of securities. The other difference is that US REITs can cover more than just property. Various US lumber companies are structured as REITs, for instance. There are also similar vehicles called Royalty Trusts and MLP's, which typically provide a high running yield. BP's Prudhoe Bay output in Alaska is structured as one, for instance, and yields 14%.

I think the danger here is the slippery slope issue. If you allow REIT's then perhaps you have to allow MLP's, Royalty Trusts and various other high-yielding hybrid and derivative securities. That said, I think it would be fairly odd if some property companies were allowed but not others, due to such an arbitrary distinction.

[Breelander]

I'm a bit confused with this fuss over ITs being included or excluded.
PYAD himself, for example, included Land Securities in HYP 4 (1).
According to the FT (2) LAND is:

a real estate investment trust

.
(my emphasis)

Sooooo..... why the fuss? ... For purists who say REITS are a special case, please elaborate.

Real estate Invesment Trusts (my bold) are a special case. The REIT tax status was introduce in legislation starting on Jan. 1st 2007. Actually, when Pyad chose LAND it was probably a normal company just like any other, making its money by building/buying properties and renting them out. REIT status hasn't changed its business model, only the tax it pays. Another similar REIT is British Land (BLND).

We are a leading UK commercial property company...

http://www.britishland.com/about-us

...and up to January 2007 BLND and LAND were normal quoted companies just like any other HYP holding.

The benefits of REITs are immediate in terms of their boost to investors in the quoted property sector and those companies joining the regime. Until today, quoted property companies have had to operate at a considerable disadvantage to other property investment vehicles.

http://www.britishland.com/news-and-vie ... 01-01-2007

[Wizard]

The obvious difference I can think of is that a private investor can buy, hold and accumulate income from the same shares that an IT (such as CTY) does, but not the same properties etc. that a REIT does.

OK, so why is HICL not permittted? That is a number of infrastructure investments that I do not believe anyone on here would be able to invest in directly.

As onslow rightly said

Mods - where is the policy statement referenced a few weeks ago which was going to make things clear?

Terry.

REIT's are different to IT's. I believe that they originated in the US this is from the US Sec. This is different from an Investment Trust

Raptor.

From the link you provided on Investment Trusts:

Investment trusts can hold a variety of assets (listed equities, government/corporate bonds, real estate, private companies,...) listed/incorporated/domiciled in any region. 

My bold.
The entry then goes on to categorise different types of Investment Trust and talks about REITs, so I am not sure what point you were trying to make by providing the link as it seems to support the point that REITs are Investment Trusts.

Terry.

[Wizard]

Real estate Invesment Trusts (my bold) are a special case. The REIT tax status was introduce in legislation starting on Jan. 1st 2007. Actually, when Pyad chose LAND it was probably a normal company just like any other, making its money by building/buying properties and renting them out. REIT status hasn't changed its business model, only the tax it pays. Another similar REIT is British Land (BLND).

This seems the closest to a distinction I can understand. So would it be fair to say that the hurdle for an IT to be permitted for discussion on the Practical board has nothing to do with what it owns and whether an individual investor can directly acquire those holdings, rather it is that the Investment Trust is actively managing / operating those assets rather than being just a passive financial investor?

Terry

[tjh290633]

REITs have been explained above. They are merely a way in which property companies have been changed in recent years. They do not invest in other companies like normal Investment Trusts do.

Having looked at HICL with Wizard, above somewhere, it is obvious that they do not invest in other companies but provide finance for projects, which are then run or managed by other companies. Again, it is not like normal Investment Trusts.

TJH

[Arborbridge]

...
That would be a shame if you do, for your would deny yourself exposure to a much better supported board than this one.

Utter nonsense!

Wizard said that he would stop posting on the HYP board.

Moderator Message:
text removed. Personal attaqck. Raptor.

Precisely: I meant his ideas and comments would get better expousre on the HYP Practical board.

I might write nonsense occasionally, but rarely utter nonsense

[Arborbridge]

I'm a bit confused with this fuss over ITs being included or excluded.

PYAD himself, for example, included Land Securities in HYP 4 (1).

According to the FT (2) LAND is:

a real estate investment trust

.

(my emphasis)

Sooooo..... why the fuss? If an IT has a suitable yield and meets all the same criteria as a "normal" company, then (in my mind at least) it's a HYP candidate. For purists who say REITS are a special case, please elaborate.

VRD


(1) http://www.fool.co.uk/investing-basics/ ... portfolio/
(2) https://markets.ft.com/data/equities/te ... s=LAND:LSE

Just a small point: HYP4 originted before REITs were invented, At the time, LAND was not a REIT. However, as others have pointed out, the change to being a REIT is a bit academic and they are not the same animal as the usual IT.

From my POV, just to re-itereate, whatever the rules of this board or of HYP, I prefer to keep my ITs separate from my other HYP shares. I can see no reason to mix them, and good reasons NOT to.

[Wizard]

Having looked at HICL with Wizard, above somewhere, it is obvious that they do not invest in other companies but provide finance for projects, which are then run or managed by other companies. Again, it is not like normal Investment Trusts.

Hence why I do not understand why discussion of HICL was stamped on in a recent thread on Practical (viewtopic.php?f=15&t=8335&p=95464&hilit=Hicl#p95464). Even after it was established in our discussion that HICL was not a typical IT there was nothing to say HICL could be discussed.

Terry.

[Wizard]

From my POV, just to re-itereate, whatever the rules of this board or of HYP, I prefer to keep my ITs separate from my other HYP shares. I can see no reason to mix them, and good reasons NOT to.

My bold.

Surely by saying the emboldened part above it means you think that the ITs are HYP shares, but you keep them separate from you other HYP shares.

Terry.

[Lootman]

Just a small point: HYP4 originted before REITs were invented, At the time, LAND was not a REIT. However, as others have pointed out, the change to being a REIT is a bit academic and they are not the same animal as the usual IT.

From my POV, just to re-itereate, whatever the rules of this board or of HYP, I prefer to keep my ITs separate from my other HYP shares. I can see no reason to mix them, and good reasons NOT to.

On a related matter, in the US the property sector was considered, for the longest time, a separate sector from those used for ordinary shares (or common stocks, as they would say).

So US shares were divided into ten groups (staples, discretionary, healthcare, energy, tech, utilities, industrials, transports, finance, materials) whilst property was out on its own, excluded from the Dow Jones Index, the S&P 500 and so on. So it's not unusual to consider property to be a different animal, and its own special category and asset class.

That said, it was recently given its own sector so now there are eleven high level sectors, not ten. Even so, historically property was deemed segregated, which is my roundabout way of saying that I believe the practice of allowing REITs but not ITs would appear to have some rational basis.

[CryptoPlankton]

I can't quite understand why the people who want to discuss "HYP" (as in the specific method stemming from PYAD's initial articles, and what HYP Practical was set up for) aren't just allowed to get on with it. It does seem that a few individuals dislike it so much they feel they have a duty to discredit it, but posting over there criticising the strategy or disputing its (admitedly ill-defined) rules is, by some definitions, borderline trolling. I suppose its merits may be discussed here, but what does it matter whether IT's are allowed in a HYP or not? If someone manages an income portfolio in a way that doesn't seem to comply with the requirements of HYP then they can post about it here - that's what this board is for. This thread has shown that there's potential for plenty of traffic and it's hardly onerous to keep an eye on both boards, so it shouldn't detract from the overall exchange of ideas.

I don't have a HYP as such, but I feel I can contribute to that board when subjects overlap with my interests. If I decide to post my portfolio though, it will be here as it is a high yielding portfolio (there is a difference) consisting of both company shares and IT's. I really don't see the problem.

Having said that, I do think a little more clarity in the board names would help...

[Lootman]

I can't quite understand why the people who want to discuss "HYP" (as in the specific method stemming from PYAD's initial articles, and what HYP Practical was set up for) aren't just allowed to get on with it.

If we are allowed such meta-discussion here then I'd define the issue this way. Once upon a time Pyad (or Bland, to use his real name) had a certain following and credibility on TMF, based on the fact that he used to be one of their paid freelance writers, and because TMF-UK has always emphasised dividends (in a way that the parent TMF-US never did).

So for a while he had some kind of de facto guru status, and the fact that I always thought the Emporer has no clothes on did not detract from that.

But then a few things happened. First 2007-2009, that collapsed the sacrosanct pillar of HYP - that dividends are stable, increasing and reliable. At some point Bland got fired from TMF or quit. And finally a newer crew of correspondents showed up who had better ideas, deeper ideas and a more demonstrable and verifiable pedigree and heritage, like TJH and Luniversal.

At which point Bland's star declined, further accelerated by the move to TLF where he has only sparsely contributed, and often gets lambasted.

So the real question is what to do now, as his legacy is deemed less relevant? The real need here to be addressed is investing for a sustainable and growing retirement income, and not speculating on and over-weighting a couple of historic winners. And in that context I am not sure that a busted flush from 17 years ago is what a critical mass here either want or need. That in turn informs the definitions of these two boards, which you appear to agree are sub-optimal. And, for that matter, whether we still need two - something I was never convinced about except for those who love extra complexity.

Moderator Message:
We are close to crossing the threshold. Attacking PYADs strategy is fair play but refrain from attacking the person. Raptor.

[CryptoPlankton]

I can't quite understand why the people who want to discuss "HYP" (as in the specific method stemming from PYAD's initial articles, and what HYP Practical was set up for) aren't just allowed to get on with it.

If we are allowed such meta-discussion here then I'd define the issue this way. Once upon a time Pyad (or Bland, to use his real name) had a certain following and credibility on TMF, based on the fact that he used to be one of their paid freelance writers, and because TMF-UK has always emphasised dividends (in a way that the parent TMF-US never did).

So for a while he had some kind of de facto guru status, and the fact that I always thought the Emporer has no clothes on did not detract from that.

But then a few things happened. First 2007-2009, that collapsed the sacrosanct pillar of HYP - that dividends are stable, increasing and reliable. At some point Bland got fired from TMF or quit. And finally a newer crew of correspondents showed up who had better ideas, deeper ideas and a more demonstrable and verifiable pedigree and heritage, like TJH and Luniversal.

At which point Bland's star declined, further accelerated by the move to TLF where he has only sparsely contributed, and often gets lambasted.

So the real question is what to do now, as his legacy is deemed less relevant? The real need here to be addressed is investing for a sustainable and growing retirement income, and not speculating on and over-weighting a couple of historic winners. And in that context I am not sure that a busted flush from 17 years ago is what a critical mass here either want or need. That in turn informs the definitions of these two boards, which you appear to agree are sub-optimal. And, for that matter, whether we still need two - something I was never convinced about except for those who love extra complexity.

So why don't you say what you really think about Stephen Bland?
(Not sure why I'm quoted in your post though?)

[Arborbridge]

From my POV, just to re-itereate, whatever the rules of this board or of HYP, I prefer to keep my ITs separate from my other HYP shares. I can see no reason to mix them, and good reasons NOT to.

My bold.

Surely by saying the emboldened part above it means you think that the ITs are HYP shares, but you keep them separate from you other HYP shares.

Terry.

Surely NOT! I don't believe ITs should be part of HYP, never have, but I can see how you drew your erroneous conclusion from the phrase "my other HYP shares". It should have "from my HYP shares": it was badly written but not (as you concluded) some sort of Freudian slip. ITs are still "shares" but shares in a fund, and that excludes them from my HYP, in my opinion. I wouldn't include them any more than I would my OEICS.

Review everything I've written previously.... In my view, ITs should not be included in HYP, but I believe some experts of HYP history here, say there is some wiggle room about this. I'm not sure about that but as I wrote above I'm just not interested in mixing shares with ITs.

I have a 39 share HYP and an 20 IT basket, and there's no way I'm going to amalgamate the two. Even if I had only one IT, I wouldn't do it.

Arb.

[richfool]

Surely NOT! I don't believe ITs should be part of HYP, never have, but I can see how you drew your erroneous conclusion from the phrase "my other HYP shares". It should have "from my HYP shares": it was badly written but not (as you concluded) some sort of Freudian slip.

Well that's a backward way of saying that Wizard drew the wrong conclusion, though in fact you worded things wrongly, ... which led him to the obvious conclusion. The key word being "other" HYP shares.