"Building the Pot"

[Alaric]

stockmarket investment meant buying more shares in LloydsTSB.

The price reduced to about 10% of where it had been before the disaster of being talked into the merger with HBOS.

What would have happened if they said "no"? HBOS presumably would have collapsed or been taken into public ownership, but what of Lloyds?

[tjh290633]

stockmarket investment meant buying more shares in LloydsTSB.

The price reduced to about 10% of where it had been before the disaster of being talked into the merger with HBOS.

What would have happened if they said "no"? HBOS presumably would have collapsed or been taken into public ownership, but what of Lloyds?

I think that was covered in some detail in the recent civil case. The court transcript is no doubt in the public domain.

TJH

[IanTHughes]

We don't need hindsight to understand the investment risks that he was exposing himself to by putting so much capital into a single company.

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

dead right .

including screening stocks on high yield and little else.

That would be too risky for me, I use the HYP Strategy


Ian

[JuanDB]

Easy to look back on those posts with the power of hindsight. We can only hope the result was not catastrophically life affecting.

We don't need hindsight to understand the investment risks that he was exposing himself to by putting so much capital into a single company.

Of course everyone hopes that things worked out in the end, but if by raising the story of a known investor who ignored the clear damage-limitation that diversification gives us, it helps to raise awareness in anyone at all who might be thinking of taking a similar path, then I think it's only right to do so.

New investors come to this site all the time, and I think more experienced investors have a duty to warn people away from these types of approaches.

Cheers,

Itsallaguess

I fully agree with that Itsallaguess.

To be clear, I wasn't commenting on those commenting on the posts using hindsight, although reading back my comment I see why it could have been read that way. My comment was more just to sympathise with the OP of those posted threads.

[pyad]

My comment was more just to sympathise with the OP of those posted threads.

If you are referring to JimSusan the man was a damn fool. Speaking from memory but I'm sure there were posters on his thread at TMF pointing out the sheer unbridled stupidity of sticking everything into one share for a long term strategy intended to provide for his future so there's no hindsight involved. But he always defended it, believing that Lloyds was akin to some sort of divine corporate entity possessed of infallibility and so could never go wrong.

For a long term investment plan like HYPs, intended to provide an income either immediately or in future, diversification is absolutely critical to lower risks. Anyone who thinks otherwise is either too dumb to understand, has a misplaced belief resembling religious fanaticism in some undeserving company, or stupendously over rates their non existent investment and stock picking skills to the point of idiocy.

[EssDeeAitch]

My comment was more just to sympathise with the OP of those posted threads.

If you are referring to JimSusan the man was a damn fool. Speaking from memory but I'm sure there were posters on his thread at TMF pointing out the sheer unbridled stupidity of sticking everything into one share for a long term strategy intended to provide for his future so there's no hindsight involved. But he always defended it, believing that Lloyds was akin to some sort of divine corporate entity possessed of infallibility and so could never go wrong.

For a long term investment plan like HYPs, intended to provide an income either immediately or in future, diversification is absolutely critical to lower risks. Anyone who thinks otherwise is either too dumb to understand, has a misplaced belief resembling religious fanaticism in some undeserving company, or stupendously over rates their non existent investment and stock picking skills to the point of idiocy.

Don't beat about the bush, tell us what you really think

[OLTB]

I think they're "Building the Pot" in Canada today.

Cheers, OLTB.

[JuanDB]

My comment was more just to sympathise with the OP of those posted threads.

If you are referring to JimSusan the man was a damn fool. Speaking from memory but I'm sure there were posters on his thread at TMF pointing out the sheer unbridled stupidity of sticking everything into one share for a long term strategy intended to provide for his future so there's no hindsight involved. But he always defended it, believing that Lloyds was akin to some sort of divine corporate entity possessed of infallibility and so could never go wrong.

For a long term investment plan like HYPs, intended to provide an income either immediately or in future, diversification is absolutely critical to lower risks. Anyone who thinks otherwise is either too dumb to understand, has a misplaced belief resembling religious fanaticism in some undeserving company, or stupendously over rates their non existent investment and stock picking skills to the point of idiocy.

Don't beat about the bush, tell us what you really think

Personally I’d like to be able to express sympathy for another human being, without needing to kick them in the vegetables for mistakes a decade ago. I suspect the OP has had plenty of time to regret their position at the time.

[SalvorHardin]

Personally I’d like to be able to express sympathy for another human being, without needing to kick them in the vegetables for mistakes a decade ago. I suspect the OP has had plenty of time to regret their position at the time.

It emerged later that JimSusan had many other assets.

I know of a far worse case. Not as high profile on TMF, an occasional poster and cheerleader. Someone who was convinced that Royal Bank of Scotland was the only share you needed. According to someone I met at a fool social who knew them offline, they lost about £450K as a result when the proverbial hit the fan and ended up being declared bankrupt. A good lesson for others.

It is a very instructive story. I can afford to fall in love with a share; I have done so with two holdings (both to be fair have superb moats) but my other 37 holdings are more than enough for me to live on in retirement as my sole source of income. Most people cannot, particularly those starting off investing.

It is a however a great exercise to try and come up with the one non-investment trust share that you'd buy if you were forced to invest everything in it and then walk away for ten years. It sorts the wheat from the chaff and then some. I'm still waiting to find it, I do own some decent candidates

[jackdaww]

If you are referring to JimSusan the man was a damn fool. Speaking from memory but I'm sure there were posters on his thread at TMF pointing out the sheer unbridled stupidity of sticking everything into one share for a long term strategy intended to provide for his future so there's no hindsight involved. But he always defended it, believing that Lloyds was akin to some sort of divine corporate entity possessed of infallibility and so could never go wrong.

For a long term investment plan like HYPs, intended to provide an income either immediately or in future, diversification is absolutely critical to lower risks. Anyone who thinks otherwise is either too dumb to understand, has a misplaced belief resembling religious fanaticism in some undeserving company, or stupendously over rates their non existent investment and stock picking skills to the point of idiocy.

Don't beat about the bush, tell us what you really think

Personally I’d like to be able to express sympathy for another human being, without needing to kick them in the vegetables for mistakes a decade ago. I suspect the OP has had plenty of time to regret their position at the time.

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

quite agree.

a very uncharitable rant indeed.

[vrdiver]

a very uncharitable rant indeed.

I was thinking about this...

At first, I agreed with your statement, but then I thought, the poster in question was very popular on TMF; they showed intelligence, wit and a sense of humour, which garnered them a level of respect that could have encouraged others to follow their lead. Unfortunately, as SH pointed out, this wasn't the whole story:

It emerged later that JimSusan had many other assets.

What was an acceptable risk to JimSusan was not quite the same thing as "put everything in Lloyds", yet that was the overriding message being cast.

Pyad's post, whilst gritty, makes a fair comment on the strategy as presented. It's better to point out the flaws than to offer false comfort (e.g. "what rotten luck, never saw that coming..." type of flannel) especially when we still have posters arguing in favour of very concentrated portfolios, which may be fine for them, but are crazy levels of risk for general investors who haven't done the research or who don't understand what could happen and happen without much warning.

Earlier in this thread we have a post about how CBA has been a wonderful investment and how it's been a great plan to just reinvest the dividends in more CBA. I have no doubt it's worked for that poster but, in isolation, it would be an idiotic strategy for me or anyone else to follow. Pretty much the same issue and points that pyad is making about the Lloyds strategy.

If I had posted that investing in XTZ was a great strategy, and all I was going to do from here on was buy more XTZ, and how XTZ was an established, profitable company that just threw off cash and was the only one for me, I'd expect to be called out on it. If not to save me, then to at least make others pause for thought...

VRD

[pyad]

Personally I’d like to be able to express sympathy for another human being, without needing to kick them in the vegetables for mistakes a decade ago. I suspect the OP has had plenty of time to regret their position at the time.

Nonsense, I don't think you were there and don't realise what was going on (apologies if you were). I was and so were several others on this thread.

That chap went on for literally years in a nauseating sort of homespun wisdom style about Lloyds and how it deserved all his equity investment cash (though as mentioned above, he later admitted that in fact he had others and so was actually misleading people, making him even more suspect). He was broadcasting this wonderful strategy to people such that the naive could easily have fallen for it, with repeated and prolix messages offering the clear implication that he was right and therefore critics were wrong.

The whole thing may even have been a wind-up, who knows, but whatever, he was totally wrong and was told as much, there was no "mistake".

He therefore does not deserve any sympathy whatsoever, if he is to be discussed at all then condemnation is the only reaction deserved.

[Pastcaring]

I always found it all so easy.No silly names or acronyms,I' ve got no idea what a " Doris " is and no interest at all in finding out.

I buy companies,not something that has to fit into a box with a few silly acronyms printed on it.

People tend to think I have strange ideas,I always thought that paying off a loan of A$6K was far easier than trying to save up A$300K by putting in a little bit every month .

So easy it is surprising that most people do not do it and it is so easy because Pastcaring has taken a high risk route which so far has paid off.

It is now easy for him to extrapolate that into a formula for success for all. I wish him well for the future and just a smidgen of luck. He may need it.

Dod

Do you realise how utterly stupid that is.I wonder why most people didn' t start a company called Wall Mart ,Tesco,Wells Fargo etc etc.

The sheer insanity of the human race,if this company went bust that must prove that all companies are going bust.Everybody else didn't do this that or the other so they must be right .How could the crowd possibly be wrong.

Meanwhile the facts still prove ,they all got it wrong.I expect the next dividend to be paid end of March next year.I will use the one day short strategy and the sky will not fall down.

After say 26 years of increasing dividends they will still cry,the facts are wrong.I am well aware they can go bust.

At present they have not,there is no indication they will go bust,a very well run company.The risk in the future will be exactly the same as the past,there is a chance they can go bust Should they go bust then time will prove that the crowd were right.

Should they not go bust then time will prove that the crowd were wrong.The longer it goes on that they are wrong the more determined they will be to refuse to admit that they are wrong.

After say 26 years they produce 7 figures for me and a six figure annual income.When do you think the crowd will say,I wonder if we all got that wrong.

Shall we do a piss take on an annual basis.I'll report the figures on an annual basis and enjoy the amusement of ,this that or the other company went bust.Everybody else isn' t doing that etc etc

It does not make the slightest bit of difference what this that or the other company did.What this that or the other person said or did.

That company (CBA. ASX) is around one third of my wealth derived from shares,and one third of income derived from shares

How many decades do you think it will be before it dawns on the masses that facts are facts and delusions of reality are delusions of reality.

[Dod101]

Pastcaring. My statement is not stupid and I object to the use of the term. I have never said you were stupid or that your plan will come to grief some day. People like you do succeed but not many of us have the risk taking capacity to do so. It is wonderful with hindsight to see what pays off but it will not always be so and I should think that more than 5 times out of 10 an investor will come to grief at some point using your strategy. There is no need for you to try to prove anything; clearly by your statements you have done well. May your luck continue.

Dod

[Steveam]

I don’t suppose that Pastcaring’s success with CBA has anything to do with Australia, commodities and China. As if this was predictable 25 years ago. Pastcaring has, by his account, done well but to pretend that this is other than lucky and risky is self delusional.

I’ve also done well over many years and, despite being highly diversified, I still attribute a great deal of the success to luck. I certainly have some horror stories to tell along the way such as repeatedly adding to my Royal Bank of Scotland holdings as the price dropped (a six figure loss), selling technology far too early and missing a six figure gain, etc. I’ve survived and prospered through all this and the mistakes because I’ve been diversified and been able to allow compounding to do its work.

I do remember JimSusan and think he was very dangerous. The fact that he apparently had other assets makes his messages deceitful as well as dangerous. I think Pastcaring is also dangerous and I’m pleased others have called him out about the risk he has taken - he can do whatever he likes but it’s dangerous.

Best wishes,

Steve

[Alaric]

In the UK at least, we've discovered that banks have an unerring ability to promote dubious (PPI) and occasionally illegal (Reading HBOS) schemes. When they get found out as increasingly happens, they end up paying out far more in compensation than they ever made in profit.

[Itsallaguess]

Personally I’d like to be able to express sympathy for another human being, without needing to kick them in the vegetables for mistakes a decade ago.

Our childhood fables are full of people that in some ways deserve some sympathy, but as with all fables, it's the over-riding message that's important, and unfortunately JimSusan gave us all a High-Yield story to turn into a TMF-fable, and one that will be passed down for some time, I imagine.

It's a quite sobering tale regarding the huge danger of investing with little regard to diversification, and it wasn't as though he wasn't told of the risks he was taking - I can assure you that he was. He just decided not to listen....

Of course we can sympathise with the situation he ended up with, but we can do that whilst still remembering the cause of that situation, and raise it as a warning to others, should they choose to listen...

It's really no good saying 'I'm well aware that it can go bust' if we then allow ourselves to be positioned as though it actually never will.....

Cheers,

Itsallaguess

[Dod101]

I might have added to my post to Pastcaring that he could easily have picked two 'for certain' long term successes in say 1995. One would have been that nice conservative Scottish Bank RBS (or indeed the even more conservative Bank of Scotland which became HBOS) and GEC with its money pile and ultra conservative Arnold Weinstock running it. We know what happened to these two.

I am not aware of the JimSusan story but can imagine.

Dod

[Walrus]

Moderator Message:
DELETED. No snarky comments about each other, or discussion about Moderation matters. Please let Mods do the Modding, just hit report and move on. Thanks, dspp

Moderator Message:
There is no place for name calling on any board. If you have something constructive to say on the HYP Practical board, there is nothing to stop you. Likewise others are able to comment on other High Yield Strategies on this board. Just watch your step.

TJH

[jackdaww]

Moderator Message:
DELETED. No snarky comments about each other, or discussion about Moderation matters. Please let Mods do the Modding, just hit report and move on. Thanks, dspp