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was "How many shares in a HYP"

General discussions about equity high-yield income strategies
Alaric
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Re: was "How many shares in a HYP"

#218422

Postby Alaric » April 30th, 2019, 12:04 pm

vrdiver wrote:other than the obvious ones of historical performance and meeting a minimum current yield.


If you see a five year history of a mostly declining share price, that can be indicative that the yield is what it is because of poor share performance, rather than superior dividend performance. That seems an obvious check, but not one that appears to be applied in the construction of demonstration portfolios.

IanTHughes
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Re: was "How many shares in a HYP"

#218423

Postby IanTHughes » April 30th, 2019, 12:06 pm

Alaric wrote:
IanTHughes wrote:You will have to give me a direct link to that recommendation as I cannot see any mention of Vodafone (VOD)


It was quoted recently on TLF. The most recent recommended "HYP" contains Vodafone.

IanTHughes wrote:So? You disagree with the selection, as I believe others do too, but so what?

When you disagree with the selection and it's been generated by a mechanical rule, that means the rule itself is disputed.

The HYP Strategy does not use mechanical rules. Something which, if you would only take the trouble to read up about the HYP Strategy, you would surely know.


Ian

Alaric
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Re: was "How many shares in a HYP"

#218425

Postby Alaric » April 30th, 2019, 12:09 pm

IanTHughes wrote:The HYP Strategy does not use mechanical rules. Something which, if you would only take the trouble to read up about the HYP Strategy, you would surely know.


How would you describe them then? If it selects Vodafone without being concerned about the prospects for maintenance of the dividend, it's still flawed.

IanTHughes
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Re: was "How many shares in a HYP"

#218428

Postby IanTHughes » April 30th, 2019, 12:12 pm

Alaric wrote:
vrdiver wrote:other than the obvious ones of historical performance and meeting a minimum current yield.


If you see a five year history of a mostly declining share price, that can be indicative that the yield is what it is because of poor share performance, rather than superior dividend performance

Sure, and if you believe that to be the case, then no doubt you will reject the selection. If, on the other hand, you disagree with that diagnosis, then the share remains a possible selection.


Ian

IanTHughes
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Re: was "How many shares in a HYP"

#218430

Postby IanTHughes » April 30th, 2019, 12:18 pm

Alaric wrote:
IanTHughes wrote:The HYP Strategy does not use mechanical rules. Something which, if you would only take the trouble to read up about the HYP Strategy, you would surely know.


How would you describe them then?

Describe what?

Alaric wrote: If it selects Vodafone without being concerned about the prospects for maintenance of the dividend, it's still flawed.

Of course, but it [HYP] does not do that, quite the opposite in fact. Dividend sustainability - hopefully increases - is a very important criteria that each HYPer should assess.


Ian
Last edited by IanTHughes on April 30th, 2019, 12:25 pm, edited 1 time in total.

vrdiver
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Re: was "How many shares in a HYP"

#218432

Postby vrdiver » April 30th, 2019, 12:22 pm

Alaric wrote:
vrdiver wrote:other than the obvious ones of historical performance and meeting a minimum current yield.


If you see a five year history of a mostly declining share price, that can be indicative that the yield is what it is because of poor share performance, rather than superior dividend performance. That seems an obvious check, but not one that appears to be applied in the construction of demonstration portfolios.

Remember that you'd be looking for a 5 year rising dividend (DPS, not yield), which would probably knock out a stock with a 5 year history of declining share price. Whilst a few companies might manage both (declining share price and growing dividends) you'd then have to be pretty tolerant about dividend cover (another usual filter) to let the share on board.

A depressed price with a track record of growing dividends and reasonable dividend cover might be a little gem rather than a trap! It's certainly one that I'd look into rather than dismiss out of hand.

VRD

Alaric
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Re: was "How many shares in a HYP"

#218439

Postby Alaric » April 30th, 2019, 12:54 pm

IanTHughes wrote:Describe what?


The rules of HYP.

IanTHughes
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Re: was "How many shares in a HYP"

#218440

Postby IanTHughes » April 30th, 2019, 12:58 pm

Alaric wrote:
IanTHughes wrote:Describe what?


The rules of HYP.

What rules? There are no rules, at least not that I am aware of. But, if after you have read up about the Strategy you think there are rules, please do let us know.


Ian

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Re: was "How many shares in a HYP"

#218458

Postby kempiejon » April 30th, 2019, 2:08 pm

vrdiver wrote:
Alaric wrote:On a 5 year view, the FTSE 100 total return is currently quoted as 6% annualised.

Vodafone is -1.76%
Diageo is 13.94%
Unilever is 14.44%

Going back 5 years which of these were the most likely selection according to "HYP Strategy"?

Go back a bit further and you'll find HYP investors like me who have all three in their HYP.

At the time of each purchase, all I knew was that they were reasonable candidates for MY HYP, based on MY filters and MY existing holdings.

Obviously, with hindsight, I'd have filled my boots with ULVR and DGE, but who was to know that they would be such stars? The portfolio of a wide selection of shares means that whilst some turn out to be abject failures (e.g. RBS), others more than make up for it.

Hindsight would have been useful, but I haven't figured out how to apply that to my HYP selections, other than the obvious ones of historical performance and meeting a minimum current yield. The system works for me, but then I'm not that sophisticated an investor, but I do live off my HYP, having retired some 17 years early on the strength of my belief in the system. Nearly five years on and so far, so good...

VRD


I hold all the above in my HYP including RBS and I'm not sure I would rule them as an abject failure, they contributed more to my income this year than last and hopefully there will be more next year than this. we're after a rising dividend amount after all.

Alaric
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Re: was "How many shares in a HYP"

#218463

Postby Alaric » April 30th, 2019, 2:16 pm

IanTHughes wrote:There are no rules,


Instructions if you prefer, such as the requirement to invest equal amounts of initial capital in 15 or so sectors.

There has to be something equivalent to rules else otherwise we could discuss anything we wanted in the HYP practical board without it being ruled off topic.

IanTHughes
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Re: was "How many shares in a HYP"

#218473

Postby IanTHughes » April 30th, 2019, 2:49 pm

Alaric wrote:
IanTHughes wrote:There are no rules,


Instructions if you prefer, such as the requirement to invest equal amounts of initial capital in 15 or so sectors.

Actually I call them "recommendations" but you must call them what you want.

Alaric wrote:There has to be something equivalent to rules else otherwise we could discuss anything we wanted in the HYP practical board without it being ruled off topic.

Ah, now I think you are talking about the "Board Guidance" which of course is here:

viewtopic.php?f=15&t=8651&p=98961#p98961

As it says quite clearly, this is the Board Guidance, not the rules/instructions/recommendations for the HYP Strategy and if you wish to discuss them, the Board Guidance that is, this is not the right board to do so.

Seriously, if you want to know about the HYP Strategy, just read up on it.


Ian


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