Lootman wrote:Bland's main edge was that, as an accountant, he understands balance sheets. If you believe that you can gain an edge by reading them, then good for you. Personally I have never read one in my life
Now there's a surprise
Ian
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Lootman wrote:Bland's main edge was that, as an accountant, he understands balance sheets. If you believe that you can gain an edge by reading them, then good for you. Personally I have never read one in my life
IanTHughes wrote:I personally, would much prefer an initial 7% yield with a growing dividend to an initial 3% yield with a growing dividend.
Alaric wrote:IanTHughes wrote:I personally, would much prefer an initial 7% yield with a growing dividend to an initial 3% yield with a growing dividend.
A 3% yield growing at 8% is a higher rate of return than a 7% yield growing at 2%.
Alaric wrote:If you want dividend growth, it would a better filter to add the dividend and growth rate together and sort on that. With that method, you don't reject performers such as Compass, Unilever etc. because their dividend performance has pushed the share price up and the initial dividend yield down.
IanTHughes wrote:So what?
Alaric wrote:IanTHughes wrote:I personally, would much prefer an initial 7% yield with a growing dividend to an initial 3% yield with a growing dividend.
A 3% yield growing at 8% is a higher rate of return than a 7% yield growing at 2%.
I hold Compass. Until I fortuitously sold I also held Carillion. Carillion was on a much higher yield than Compass. Which was the better buy and what would the HYP guidelines and filters of 5 years ago have had you buy?
If you want dividend growth, it would a better filter to add the dividend and growth rate together and sort on that. With that method, you don't reject performers such as Compass, Unilever etc. because their dividend performance has pushed the share price up and the initial dividend yield down.
CryptoPlankton wrote:It amazes me how this whole argument keeps staggering on round and round in circles. If, as is clearly the case, there are people who are content with their use of the HYP strategy then of course it works. Is it the very best long-term total return investment strategy? Almost certainly not - it isn't designed for that. But it generally appears to do what it says on the tin. It seems those that carefully read the tin are satisfied with that and those that don't seem to expect it to perform some function that it wasn't intended for. Horses for course and all that...
Alaric wrote:IanTHughes wrote:So what?
Invest for total return. Ignore capital values and you mislead yourself.
Alaric wrote: If you invest £ 10,000 in shares, receive £1,000 in dividend a year later, but the shares are now worth £ 9,000, that's just the same as if you didn't bother to invest at all and spent £ 1,000.
Invest £ 10,000 notionally at a 2% dividend yield but it increases at 10% before you receive it a year later.
So that's £ 200 in dividend and an extra £ 20 in dividend increase. Presuming the share continues to be priced at a 2% yield, it's now going to be worth £ 11000. So you've got £ 220 in dividend and £ 11000 in share value. If you need more than £ 220 as income, sell enough gain to meet your income requirement. If you don't have an income requirement just reinvest the £ 220.
IanTHughes wrote:If you invest £ 10,000 in shares, receive £1,000 in dividend a year later, and the shares are now worth £11,000, that means a year later, you have received £1,000 and which, together with the dividend, means you are £1,000 ahead of where you would have been if you didn't bother to invest at all, and have been able to spend £1,000.
IanTHughes wrote:Alaric wrote:IanTHughes wrote:I personally, would much prefer an initial 7% yield with a growing dividend to an initial 3% yield with a growing dividend.
A 3% yield growing at 8% is a higher rate of return than a 7% yield growing at 2%.
So what? Which would produce the better Income result that HYP strives for?
And a 3% yield growing at 8% is a lower rate of return than a 7% yield growing at 8%.
So what?Alaric wrote:If you want dividend growth, it would a better filter to add the dividend and growth rate together and sort on that. With that method, you don't reject performers such as Compass, Unilever etc. because their dividend performance has pushed the share price up and the initial dividend yield down.
So I was right. You would select a 3% yield with a growing dividend rather than a 7% yield, with a growing dividend. Further, you justify that decision based on your ability as a Fortune Teller!
Well, you must do what you believe is right, I will stick to the reality of the HYP Strategy.
Ian
Alaric wrote:IanTHughes wrote:If you invest £ 10,000 in shares, receive £1,000 in dividend a year later, and the shares are now worth £11,000, that means a year later, you have received £1,000 and which, together with the dividend, means you are £1,000 ahead of where you would have been if you didn't bother to invest at all, and have been able to spend £1,000.
Isn't that out at the far end of the likelihood scale? A share so out of favour that its dividend yield hits 10% but then its share price recovers 10%. If you are lucky enough to find one, that's a 20% return.
Alaric wrote:It remains my belief that just sorting by dividend yield alone finds all the junk.
IanTHughes wrote:That is why I use the HYP Strategy which sorts out High Yielding shares with a growing dividend
Itsallaguess wrote: I have the view that if we're going to personally modify the HYP 'single-company' approach to drop down the yield list, then additional and valuable diversification benefits with very little lost in terms of yield can then actually be delivered via a broadly Investment Trust approach instead....
dspp wrote:CryptoPlankton wrote:It amazes me how this whole argument keeps staggering on round and round in circles. If, as is clearly the case, there are people who are content with their use of the HYP strategy then of course it works. Is it the very best long-term total return investment strategy? Almost certainly not - it isn't designed for that. But it generally appears to do what it says on the tin. It seems those that carefully read the tin are satisfied with that and those that don't seem to expect it to perform some function that it wasn't intended for. Horses for course and all that...
CP,
One of the problems is that some people are successfully pursuing a strategy that they call HYP. Let me call them "pragmatic-HYP" types. However it contains some ingredients that are not in the tin labelled "purist-HYP". This poses a dilemma, both for : those who are trying to understand the ?? HYP ?? thingymajig and assess whether it will meet their needs, and then to get on and do it; and also for those who moderate the HYP-P board and have to deal with the sectarian strife over this. And lastly there are some who pursued a strategy that they thought was called ?? HYP ??, but found it didn't work for them and are wondering what the missing ingredient was, or was it them that was error prone.
regards, dspp
CryptoPlankton wrote: What I would say is that I am not aware of having seen the tin labelled "purist-HYP", this concept does seem to be a bit of a myth.
Alaric wrote:IanTHughes wrote:That is why I use the HYP Strategy which sorts out High Yielding shares with a growing dividend
Can you explain how this chooses Vodafone, particularly before a widely expected dividend cut? Presumably it would reject Compass despite its record of dividend increases.
Bouleversee wrote:IanTHughes wrote:Alaric wrote:If you want dividend growth, it would a better filter to add the dividend and growth rate together and sort on that. With that method, you don't reject performers such as Compass, Unilever etc. because their dividend performance has pushed the share price up and the initial dividend yield down.
So I was right. You would select a 3% yield with a growing dividend rather than a 7% yield, with a growing dividend. Further, you justify that decision based on your ability as a Fortune Teller!
Well, you must do what you believe is right, I will stick to the reality of the HYP Strategy.
Nothing to do with ability as a fortune teller so far as I am concerned, just bitter experience.
Bouleversee wrote: I would certainly rather top up my Compass or my Greggs, WH Smith, James Fisher and various others which have given steady increases on comparatively modest dividends, accompanied by considerable capital growth, than VOD which is enough of risk to continue to hold in my view and not worth the risk of adding. The market today seems to confirm that view.
Bouleversee wrote:Having been at this game for considerably longer than Ian H. can have been, experience has shown that the HYP approach has simply not worked for me since I was introduced to it, possibly because I haven't done any of the trimming and tinkering and possibly because I started following it at the wrong time.
Bouleversee wrote:It is the sustainability of the dividend that counts IMHO and the total return.
Bouleversee wrote:After all, one can always sell off some high performing shares if one needs a bigger income, which not everyone does to start with.
CryptoPlankton wrote:dspp wrote:CryptoPlankton wrote:It amazes me how this whole argument keeps staggering on round and round in circles....
CP,
One of the problems is that some people are successfully pursuing a strategy that they call HYP. Let me call them "pragmatic-HYP" types. However it contains some ingredients that are not in the tin labelled "purist-HYP". This poses a dilemma, both for : those who are trying to understand the ?? HYP ?? thingymajig and assess whether it will meet their needs, and then to get on and do it; and also for those who moderate the HYP-P board and have to deal with the sectarian strife over this. And lastly there are some who pursued a strategy that they thought was called ?? HYP ??, but found it didn't work for them and are wondering what the missing ingredient was, or was it them that was error prone.
regards, dspp
Hi dspp
I don't want to get sucked into this particular black hole, especially as it's a beautiful afternoon here ...
Cheers, CP
Alaric wrote:IanTHughes wrote:That is why I use the HYP Strategy which sorts out High Yielding shares with a growing dividend
Can you explain how this chooses Vodafone, particularly before a widely expected dividend cut?
Alaric wrote:Presumably it would reject Compass despite its record of dividend increases.
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