AstraZeneca and stop losses -- moved from HYP-P

[grimer]

https://www.lynparza.com/ovarian-cancer ... tment.html

It is manufactured by AZN.

The Investors Chronicle currently has a 'sell' rating on the share. I almost sold yesterday, but settled upon a fairly tight (6%) stop loss. I'll keep an eye on things and may adjust my stop loss upwards if the share price continues to rise.

[Dod101]

https://www.lynparza.com/ovarian-cancer/ovarian-cancer-treatment.html

It is manufactured by AZN.

The Investors Chronicle currently has a 'sell' rating on the share. I almost sold yesterday, but settled upon a fairly tight (6%) stop loss. I'll keep an eye on things and may adjust my stop loss upwards if the share price continues to rise.

This is not exactly HYP like behaviour! I hold but it is not a very big holding. Otherwise the rapid price rise might be making a case for trimming but I see no reason to sell out and certainly not on account of the IC's opinion.

Dod

[Arborbridge]

This is not exactly HYP like behaviour! I hold but it is not a very big holding. Otherwise the rapid price rise might be making a case for trimming but I see no reason to sell out and certainly not on account of the IC's opinion.

Dod

I've held for a few years. The current ROCE, dividend cover, etc, are making me nervous. I don't see any point in waiting for the market to resolve those issues.

Moderator Message:
Stop losses aren't part of HYPing, and are probably more properly considered as trading. Let's avoid further discussion, please. -- MDW1954

I beg to differ - we've had this one mentioned before. It is perfectly possible to mention a stop loss within the ambit of HYP practical and it's no different to any other portfolio management tool. It isn't more "properly" considered as trading, whatever that means - and it is "properly" (!) an additional factor we can use like any other - such as selling/trimming when a yield is too low (another type of "stop" used by TJH for example) or cash flow is too low.

It needs no discussion, but just note that over many years I have mentioned that I've decided to sell a particular share, at an opportune moment, occasionally aided by a stop loss to take advantage of a rise, but sell automatically if a share falls. I'm no more trading than anyone else is here who sells out when a share crosses certain self imposed boundaries, and we don't prevent mention of those events. If I choose to do so again, I shall certainly mention it. It's a perfectly commonsense and practical thing to do - particularly if one is going away on holiday.


Arb.

Moderator Message:
Arb, despite your comment above being a discussion of moderation, I am leaving it, rather than deleting it. I am, however, moving this discussion of stop losses to High Yield Strategies. You are welcome to discuss it there. -- MDW1954

[Dod101]

I am with Arb on this one. My comment was anyway meant tongue in cheek. I use limit orders quite often (basically what a stop loss is) In fact I used one to top slice Unilever. The order was to sell x number of shares when/if the price hit £50. Quite often they hit these highs only for a short time and that is the only way to get the price. I did the same some time back when top slicing HSBC at £7. That is surely acceptable HYP Practical behaviour.

Here we go again with one of these silly arguments? Surely not.

Dod

[Arborbridge]

Here we go again with one of these silly arguments? Surely not.

Dod

Thank you for your support Dod. I do not see anything to discuss - unless people want advice on how to set a stop loss, or what it entails. It's already been noted within the past few months that mention of stop losses are perfectly allowable on the HYP practical board. Anyone who sends an "alert" at the mention of the word stop-loss has a problem or is being overzealous. Any mod who deletes a message in response to such an alert is in breach of current custom and practice and is unjustified.
To transfer the thread to here like some dirty little secret as though it cannot be mentioned in polite circles is absurd.

Arb.

[77ss]

....
The Investors Chronicle currently has a 'sell' rating on the share. I almost sold yesterday, but settled upon a fairly tight (6%) stop loss. I'll keep an eye on things and may adjust my stop loss upwards if the share price continues to rise.

I hold, and see no reason to sell. I do, however, have a top-slice target of 7060p.

[tjh290633]

We have said it often enough, but it bears repeating. An HYP is essentially an equal weight portfolio, and the owner is at liberty to set his own limits. These can be holding weight limits, dividend yield, share of income or of portfolio cost, sector weight limits, etc. Quite how you go about setting these limits and what steps you use to correct any imbalances is up to the individual.

Deciding when to sell a holding can be a difficult step. Again you have to be guided by parameters which you set. Setting a stop loss is one, although I prefer to use the median holding weight rather than absolute values, as that yardstick tells me more than just a holding value in monetary terms.

All that said, trading is not an enterprise to be entered into lightly, as the Marriage Service might have put it.

TJH

[Dod101]

Deciding when to sell a holding can be a difficult step. Again you have to be guided by parameters which you set. Setting a stop loss is one, although I prefer to use the median holding weight rather than absolute values, as that yardstick tells me more than just a holding value in monetary terms.

You are one of the few who uses the term median. Is that what you mean and if so why? Much easier to calculate the average I'd say.

Dod

[Breelander]

You are one of the few who uses the term median. Is that what you mean and if so why?

I use median too. The average is far too easily skewed by an outlier (high or low). I find the median more representative.

Much easier to calculate the average I'd say.

Not really, Excel has a MEDIAN function

[Dod101]

Interesting. I did not know that Excel had a MEDIAN function. Unnecessary of course because if like me you hold 29 shares, the MEDIAN is just the value of the 15th share. I currently hold 29 shares 14 lie within 25% plus or minus of my average, with 5 above that and 10 below. Naturally the shares I have most confidence in are at the top end and the least confidence at the lower end........and then along comes AstraZeneca which suddenly propels itself very comfortably into the upper end of the middle band. IT and Glaxo have always been at the lower end.

The idea of a HYP is to keep it well balanced and so the average value (even if in practice it does not exist in the portfolio) is surely the anchor and allows one to easily see the outliers and how outlying they are. They may well indicate that some action should be taken.

Dod

[tjh290633]

Deciding when to sell a holding can be a difficult step. Again you have to be guided by parameters which you set. Setting a stop loss is one, although I prefer to use the median holding weight rather than absolute values, as that yardstick tells me more than just a holding value in monetary terms.

You are one of the few who uses the term median. Is that what you mean and if so why? Much easier to calculate the average I'd say.

Dod

Simply because the odd heavyweight or underweight holding can affect the average or mean value. The median is more typical of the portfolio. In my 35 share portfolio it is always the 18th share in my rankings.

TJH

[Dod101]

Deciding when to sell a holding can be a difficult step. Again you have to be guided by parameters which you set. Setting a stop loss is one, although I prefer to use the median holding weight rather than absolute values, as that yardstick tells me more than just a holding value in monetary terms.

You are one of the few who uses the term median. Is that what you mean and if so why? Much easier to calculate the average I'd say.

Dod

Simply because the odd heavyweight or underweight holding can affect the average or mean value. The median is more typical of the portfolio. In my 35 share portfolio it is always the 18th share in my rankings.

TJH

Don't understand. The median in a portfolio of 35 should be the value of the 15th share. My definition of MEDIAN must be different from yours.

Dod

[Bouleversee]

I'm afraid you are wrong on that one, Dod:

https://www.bing.com/search?q=median&fo ... GB&plvar=0

Median
The median is the middle number. To calculate the median of any set of numbers, you need to write the numbers in order. Put all the numbers in numerical order. If there is an odd number of results, the median is the middle number. If there is an even number of results, the median will be the mean of the two central numbers."

[IanTHughes]

You are one of the few who uses the term median. Is that what you mean and if so why? Much easier to calculate the average I'd say.

Simply because the odd heavyweight or underweight holding can affect the average or mean value. The median is more typical of the portfolio. In my 35 share portfolio it is always the 18th share in my rankings.

Don't understand. The median in a portfolio of 35 should be the value of the 15th share. My definition of MEDIAN must be different from yours.

The MEDIAN value represents the "middle"­ value of a given data sample. If the number of values in a given data sample is odd when counted, then it will be the "middle" value such that the number of values greater than or equal to the MEDIAN is the same as the number of values less than or equal to the MEDIAN. So for a portfolio of 35 holdings, the MEDIAN is the value of the 18th largest, which is of course also the 18th smallest. For a data sample with an even number of values one would split the values into a higher value half and a lower value half. The MEDIAN value would be: half way between the lowest value in the Higher Half of Values and the highest value of the Lower Half of Values.

tjh290633 is quite correct that the MEDIAN corrects for those values, at either end high or low, that might be considered outliers from the norm. As an example, if one was asked what is the "Average" Market Capitalisation of the FTSE 100, the MEDIAN value is about £8.84B whereas the MEAN value is £20.17B. I would suggest that, in this case, the MEDIAN was more representative of the FTSE 100 than the MEAN, which is somewhat skewed by half a dozen or so mega market capitalisations.

Hope that helps


Ian

[Dod101]

You are one of the few who uses the term median. Is that what you mean and if so why? Much easier to calculate the average I'd say.

Dod

Simply because the odd heavyweight or underweight holding can affect the average or mean value. The median is more typical of the portfolio. In my 35 share portfolio it is always the 18th share in my rankings.

TJH

Don't understand. The median in a portfolio of 35 should be the value of the 15th share. My definition of MEDIAN must be different from yours.

Dod

Of course in your portfolio the 18th share is the median. I used 15 because I have a 29 share portfolio and was thinking of that. Sorry, not making excuses. Thanks Bouleversee.

I am still not convinced though that using the median value rather than the average is helpful. After all, the whole idea of a HYP is to retain balance. Personally I try to keep most of my shares in the range of plus or minus 25% of the average holding. I have out of 29 shares, 14 in that range, 5 above it and the rest below.

Dod

[Dod101]

To return to this topic, I imagine few of us hold outliers such as can be found in the FTSE100. As I said, the idea of any HYP is to retain a reasonable balance and TJH, who uses the median, clearly does so or else he would not need his table to tell him which share is ripe for topping up or I assume for top slicing. Thus I cannot imagine that using the median can be much different from using the average value. My largest holding is about five times the value of my smallest but the difference between median and average is very small, because the majority of my shares cluster in the range of average plus or minus 25% or so. The outliers (at both ends) pretty well compensate for each other.

Interesting discussion.

Dod

[TUK020]

You are one of the few who uses the term median. Is that what you mean and if so why? Much easier to calculate the average I'd say.

Dod

HYPTUSS already gives the median to you - the "Value Ranking" column on the Portfolio sheet gives the order of holding, Just pick number 15 in your case

[Dod101]

Thanks but I hardly need HYPTUSS to tell me the median. Surely none of us needs that.

Dod

[YeeWo]

I hold, and see no reason to sell. I do, however, have a top-slice target of 7060p.

7085p as I type. What methodology had you used to arrive at 7060p? Presumably you're selling-some Now!(??).

[Dod101]

On the HYP practical Board I have just commented that I have top sliced this morning at £70.00. There was no methodology for me; it is just a nice round number. The question now is where to put the proceeds. It was to have been Glaxo but they are currently over £17.

Dod