Selection of underperforming shares

[IanTHughes]

To quote you back at yourself: Do you have any evidence of that or are you just making it up? Given your tendency to always support HYP regardless, the burden of proof is on you. Can you show us records in the way that TJH convincingly can?

Unlike your made up statistics, my HYP is posted on the HYP Practical board, as I have told you on many occasions

Link please.

Oh please, make an effort!


Ian

[Lootman]

Unlike your made up statistics, my HYP is posted on the HYP Practical board, as I have told you on many occasions

Link please.

Oh please, make an effort!

I am not your dancing bear. If you cannot furnish a link then readers will simply assume that you are bluffing. Why the hesitation?

[PinkDalek]

I have. Found it using username and HYP.

[dspp]

Moderator Message:
Please can everyone calm down. Stick to the point, stay in thread, debate matters politely, don't get personal. regards, dspp

[IanTHughes]

Link please.

Oh please, make an effort!

I am not your dancing bear. If you cannot furnish a link then readers will simply assume that you are bluffing. Why the hesitation?

So you agree, your criticism of HYP, without any evidence, is simply a bluff! Thank you for confirming that!


Ian

[Lootman]

Oh please, make an effort!

I am not your dancing bear. If you cannot furnish a link then readers will simply assume that you are bluffing. Why the hesitation?

So you agree, your criticism of HYP, without any evidence, is simply a bluff! Thank you for confirming that!

Your inability to link is noted. QED. No need to discuss further.

[Alaric]

The latest Gospel is being monitored on a monthly basis.

viewtopic.php?f=15&t=17909#p234372

Quoting the current market value, dividends and accrued dividends benchmarks it against the "under the bed" or current account portfolio. It's winning.

What's not shown is how the alternative of dumping the entire initial investment in a FTSE 100 Tracker, proxy IT or IT basket would have fared.

It would have done better had Vodafone not been one of the original selections. That's not hindsight because it was queried at the time as having a yield too high to be sustainable and likely to be cut.

[Wizard]

The latest Gospel is being monitored on a monthly basis.

viewtopic.php?f=15&t=17909#p234372

Quoting the current market value, dividends and accrued dividends benchmarks it against the "under the bed" or current account portfolio. It's winning.

What's not shown is how the alternative of dumping the entire initial investment in a FTSE 100 Tracker, proxy IT or IT basket would have fared.

It would have done better had Vodafone not been one of the original selections. That's not hindsight because it was queried at the time as having a yield too high to be sustainable and likely to be cut.

But IanTHughes thinks three years is too short of a period to judge an HYP's success, so surely the performance of an HYP over a few months is irrelevant?

[IanTHughes]

The latest Gospel is being monitored on a monthly basis.

viewtopic.php?f=15&t=17909#p234372

Quoting the current market value, dividends and accrued dividends benchmarks it against the "under the bed" or current account portfolio. It's winning.

This virtual portfolio is barely 3 months old so It is far too early to make any conclusions.

What's not shown is how the alternative of dumping the entire initial investment in a FTSE 100 Tracker, proxy IT or IT basket would have fared.

Nobody is stopping you from doing just that. Let us know when you have that set up


Ian

[AsleepInYorkshire]

- if one ignores part of its returns

But isn't that what those who profess to following the doctrines of "HYP" do? They congratulate themselves on achieving a higher income than they might have got from investing in a FTSE 100 tracker, but are reluctant to check whether they've lost or under performed on capital value in the process. Equally they sneer at stocks with low yields but high dividend growth and the price growth that can go with that.

If I have understood the underlying strategy of HYP as practised by the denizens of the HYP board they aren't necessarily looking to beat the market. I think the strategy was originally devised to deal with poor returns on annuities when that's all that was really on offer. I also suspect it was for those who wanted to help themselves and are content to use this strategy as their own. My apologies if I've over simplified this when trying to make my point. I looked earlier this year at the strategy. I decided it wasn't suitable for me.

And before I get my typing fingers chastised by moderators looking to keep me focused on both the board and the thread I would just like to slip in that I am always looking to share with others in order to help me develop my own strategy. Noting that would be a discussion on anther board

AiY

[Gengulphus]

- if one ignores part of its returns

But isn't that what those who profess to following the doctrines of "HYP" do? They congratulate themselves on achieving a higher income than they might have got from investing in a FTSE 100 tracker, but are reluctant to check whether they've lost or under performed on capital value in the process. Equally they sneer at stocks with low yields but high dividend growth and the price growth that can go with that.

That's a classic example of quoting out of context - what I wrote was "- establishing the period of time required to judge a strategy if one ignores part of its returns", and they are not doing that. You are commenting on ignoring part of the returns for the purpose of actually judging a HYP strategy, which you are of course fully entitled to do. But I was commenting on ignoring part of the returns for the purpose of establishing how long is needed before one can reasonably rely on the results of judging a HYP strategy by its returns, which is a different issue. Editing my comments down (by deleting the emboldened words) to make it appear as though I was talking about the same thing as you are is a waste of everyone's time - your time because I can easily point out the edited-to-be-out-of-context quote, my time pointing it out, everyone else's time reading this exchange... Please don't do it - it's much simpler and more straightforward to just say what you want to without manufacturing apparent disagreements with me by editing quotes, and also much more in keeping with the request in the site rules that "To make this a valued and successful discussion forum, LemonFool asks all users to be respectful, understanding and helpful to other posters."

In case you or anyone else thinks this is mere pedantry or making a mountain out of a molehill, what I'm saying and what you're saying lead to very different conclusions about what one should do in practice. My investigations into the performance differences between the FTSE350HY and FTSE350LY indices tell me that 3 years or 5 years pretty definitely are not enough to get meaningful results out of comparing high-yield and low-yield versions of strategies that invest in mid-to-large cap shares and 10 years is at most enough to get a glimmer of such results. That leads me to the practical conclusion that I shouldn't even try to judge such strategies on as such short periods - and even after running my HYP for a bit over 16 years, I'm sufficiently doubtful that that's long enough to mean that I'm not even going to try to judge the strategy on its returns so far. What I can and do try is to judge it on whether it's doing the job that I intended it to when I started it: provide me with the retirement income that I want, in a way I find sufficiently safe and low-effort, and that allows me to easily switch if my intentions change. The answer to that is "Yes, so far and the foreseeable future - but there's a lot of future beyond that..." - and that's no more self-congratulation than e.g. marathon runners checking whether their time is up to their intended schedules and whether they still feel they're running comfortably as they pass various distances. (Not that I have any real idea whether you think I'm one of those who 'profess to following the doctrines of "HYP"' - I don't even know what you mean when you refer to such doctrines, and there are quite a few that I don't agree with when they're stated in their all-too-common oversimplified forms. E.g. one that's relevant to this matter of whether one ignores capital performance is commonly stated as "capital doesn't matter" but should IMHO more correctly be stated as something like "capital matters, but paying attention to capital fluctuations is a waste of time and effort".)

What you're saying would lead to me trying to judge the strategy on its total returns, pretty much the opposite of my conclusion that I should not try to judge it on its returns at all, but only on the more practical, less academic matter of meeting my aims for it so far.

Gengulphus

[88V8]

..."capital matters, but paying attention to capital fluctuations is a waste of time and effort".

What you're saying would lead to me trying to judge the strategy on its total returns, pretty much the opposite of my conclusion that I should not try to judge it on its returns at all, but only on the more practical, less academic matter of meeting my aims for it so far.

Unfortunately one cannot see income fluctuations in one's stockbroking account, but capital variations are all too apparent.
So it's human nature to be distracted by them.
Especially the red ones, of which I have plenty.

We have different aims, those of us who read this and the HYP board. And different ages.
Some old, some younger, some are 'building', some are living off the income.
Some have descendants to whom they hope to leave capital, some just have the cat. Or in our case not, as the cat died.

So inevitably we will not agree as to the best methodology, if indeed there is such a thing.

For me, it's just about the income. TR is not on my radar.
I supplement my dividend shares with Fixed Interest to give a non-cuttable foundation. I can do that because of my age and the current low-inflation environment.
Last year, FI made up 46% of our 'HYP' income.
And our HYP, incidentally also includes a couple of ITs.

In recent months I have been trending away from HYP shares. In our ISAs, the last six purchases have been five FI and one IT, and in my trading account three FI and one IT. Too many cutters in the HYP universe at present, and we already hold quite enough of the usual suspects.

Over the nine years - yes, not long - that I've been focussed on income, our HYPish has provided an above-FTSE yield and a rising income.
It suits me.

But if I were to advocate my approach as having universality, it would be wrong. My age, my aims, the fact that we have overall plenty of surplus income, my disregard of TR, all feeds in.

There is no universal truth.
Just as well. That would be very boring.

V8

[daveh]

I am not your dancing bear. If you cannot furnish a link then readers will simply assume that you are bluffing. Why the hesitation?

So you agree, your criticism of HYP, without any evidence, is simply a bluff! Thank you for confirming that!

Your inability to link is noted. QED. No need to discuss further.

Look your both just arguing for arguing sake. It wouldn't have been difficult to have posted the link, nor to have gone and found it. If it will stop you both arguing over pointless trivialities here it is:

viewtopic.php?f=15&t=16707

[Gengulphus]

It is absolutely incorrect to say that total return is a consequence of the generation of income. The whole point about total return is that it is the aggregate of return from income and the return from capital. What I suppose the quote intended to say was that capital growth is a consequence of the generation of income. Even that does not necessarily follow but it probably does if we assume that the income generated increases year on year.

The general thrust of the argument is I think that if we take an income generating share and the income increases each year indefinitely, then capital growth is almost certain to follow otherwise, in the long run, we would have a share generating its own value in dividends annually. We have not reached that stage yet.

In other words, total return is a consequence of the continuing (and non-shrinking) generation of income, partly as an immediate direct effect of the generation of income, and partly as an indirect effect of the continuing generation of income via its effect on capital growth, but it's not an immediate and direct consequence of the generation of income.

So the statement that total return is a consequence of the generation of income is neither absolutely correct nor absolutely incorrect - it needs further information about how exactly "consequence" and "generation of income" are to be read before one can decide on its correctness or otherwise.

Gengulphus

[Gengulphus]

A recent comment from the HYP - Practical Board in the context of those disappointed with the price performance of their selections.

Often the accent has been on total return, rather than income generation. To do so misses the whole point of the exercise. Total return is a consequence of the generation of income.

Complete rubbish. I have traded/invested in non income producing stocks for years. So obviously total return could not have been a consequence of income generation.

Another example of the same 'logic': the statement "death is a consequence of swallowing significant amounts of potassium cyanide" is obviously complete rubbish, because plenty of people have died who have never swallowed significant amounts of potassium cyanide.

Gengulphus

[ReformedCharacter]

Another example of the same 'logic': the statement "death is a consequence of swallowing significant amounts of potassium cyanide" is obviously complete rubbish, because plenty of people have died who have never swallowed significant amounts of potassium cyanide.
Gengulphus

I am loath to question someone who so frequently demonstrates impeccable logic, but I have to say that I find your example difficult to understand. The statement:

death is a consequence of swallowing significant amounts of potassium cyanide

is (I would say) logically true.

But If you had said, for example:

All death is a consequence of swallowing significant amounts of potassium cyanide, then that would be logically false, or 'complete rubbish' as you put it.

RC

[Wizard]

Another example of the same 'logic': the statement "death is a consequence of swallowing significant amounts of potassium cyanide" is obviously complete rubbish, because plenty of people have died who have never swallowed significant amounts of potassium cyanide.
Gengulphus

I am loath to question someone who so frequently demonstrates impeccable logic, but I have to say that I find your example difficult to understand. The statement:

death is a consequence of swallowing significant amounts of potassium cyanide

is (I would say) logically true.

But If you had said, for example:

All death is a consequence of swallowing significant amounts of potassium cyanide, then that would be logically false, or 'complete rubbish' as you put it.

RC

I think the bottom line is that the statement about the link between income generation and total return has been read by some as meaning the poster believes that positive total return inevitably follows from income generation. That is clearly not true as there can be a positive total return without income generation as much as there can be income generation without a positive total return. But the statement made was sufficiently opaque and / or imprecise as to mean that whether that is what the poster meant is really something only the poster will ever know.

[Dod101]

[

death is a consequence of swallowing significant amounts of potassium cyanide

is (I would say) logically true.

But If you had said, for example:

All death is a consequence of swallowing significant amounts of potassium cyanide, then that would be logically false, or 'complete rubbish' as you put it.

This is not the Pedants' Board but I think it depends how you 'see' the statement. I thought the same as you at first but then if you think about death as a standalone state, it is patently untrue that 'death is a consequence of swallowing significant amounts of potassium cyanide.'

It can be, but as we all know there are many other causes of death as well.

OT so I will not expand this but I can see how the statement on total return can be read in exactly the same way. Interesting.

Dod

[tjh290633]

I think the bottom line is that the statement about the link between income generation and total return has been read by some as meaning the poster believes that positive total return inevitably follows from income generation. That is clearly not true as there can be a positive total return without income generation as much as there can be income generation without a positive total return. But the statement made was sufficiently opaque and / or imprecise as to mean that whether that is what the poster meant is really something only the poster will ever know.

Perhaps we can look at it from a slightly different angle. Dividend generation is always a positive contributor to total return. Capital growth or shrinkage can be either positive or negative in its contribution to total return.

I am amused by those who think that capital can only increase in value. Recent events ought to disabuse them of that concept.

TJH

[Wizard]

I think the bottom line is that the statement about the link between income generation and total return has been read by some as meaning the poster believes that positive total return inevitably follows from income generation. That is clearly not true as there can be a positive total return without income generation as much as there can be income generation without a positive total return. But the statement made was sufficiently opaque and / or imprecise as to mean that whether that is what the poster meant is really something only the poster will ever know.

Perhaps we can look at it from a slightly different angle. Dividend generation is always a positive contributor to total return. Capital growth or shrinkage can be either positive or negative in its contribution to total return.

I am amused by those who think that capital can only increase in value. Recent events ought to disabuse them of that concept.

TJH

I completely agree, hence my comment that there could be income generation without positive total return. Indeed that is exactly what have have pointed out has happened in my HYP, income has been generated, but capital loses have been greater meaning an overall negative return.