Alaric wrote:Gengulphus wrote:Has any HYPer said that they're upset by such an occurrence?
Im sure I've seen comments that the yield was so low, therefore it wasn't a HYP, so they had to sell. ...
Not an answer to my question, I'm afraid. They may have said they had to sell (*), but did they say they were
upset by having to sell? I've certainly sold part or all of a HYP holding in similar circumstances - probably the most extreme example is Halma, which I originally bought in late 2003 on a historical yield of about 4.1% and topped up on various occasions over the next few years at similar yields. Since then, its capital value has increased a bit under fifteen-fold and its dividend a bit under three-fold, with the result that its yield is now about 0.8%, and I've top-sliced it on six occasions since 2008, as a result of which I only have about a quarter of my peak number of shares. What's left is still one of the larger holdings in my HYP at about 1.4 times average size and about 3.0 times the total amount I invested in the original purchase and top-ups, and the sales proceeds I've had from the top-slicing are about 1.7 times that total amount - and of course I've had the dividends as well.
So while I've certainly sold a large part of my holding, I'm equally certainly
happy with that outcome, not upset!
(*) Which should obviously be taken in the sense that their strategy's rules said they should sell, not literally
having to sell - that does happen, but generally only as a result of legal action such as bankruptcy, compulsory purchase at the end of a successful traditional takeover offer, etc.
Alaric wrote:Gengulphus wrote:In short: HYPers should care about what the yield is at the times when they buy or sell shares, and only with regard to the shares they're buying or selling (using the terms loosely, e.g. taking up rights in a rights issue counts as buying, although technically it isn't buying). For all other purposes, they should instead care about what happens to the dividend, not the yield.
Why then are "they" so opposed to looking at stocks with yields below the average of the FTSE, but where the dividends have a history of growing strongly?
[
Note: the italicised bit of your quote of what I said is context I've restored to make it easily apparent from the quote what I meant by "all other purposes".]
Are you talking about being opposed to looking at stocks with yields below the average of the FTSE with regard to possibly buying them for their HYP? If so, what I wrote with the context restored makes it clear that that's not one of the "all other purposes" that the bit you did quote is talking about, i.e. I said that HYPers should care about the yield in that case.
Or are you talking about being opposed to looking at stocks with yields below the average of the FTSE that are already in their HYP and that they're wondering whether to sell. In that case, again it's the edited-out context that applies, i.e. I said that HYPers should care about the yield in that case.
Or are you talking about being opposed to looking at stocks with yields below the average of the FTSE that are already in their HYP and that they're neither contemplating buying nor selling? In that case, the bit you quoted does apply and I stick to it: the HYPer has no need to look at the share's yield and what's happening to it, until and unless they contemplate adding to the holding or selling part or all of it.
Note also that the restored context makes it clear that by "they", I meant HYPers. The
HYP Practical board guidance is written by Clariman, who AFAIAA is not a HYPer, and so the rule that it contains about the yield of a HYP share being above that of the FTSE 100, and is probably set by him and stooz (who also AFAIAA is not a HYPer) as owners of the site after discussion with the moderators. It also has the exception implied by "
Discussion of potential shares, and of shares which have been selected in the past, is acceptable on the HYP Practical Board." - so the share that is already in one's HYP, having been bought on a yield of 6% and now having a yield of 3% as a result of its price doubling, is not excluded from being discussed there.
So the HYP Practical board rule is not terribly good evidence of what HYPers in general think should be the rule for HYPs, more of what the owners and moderators of the site think is a workable rule for the board, and I would be fairly certain that some HYPers think it too loose a restriction, some think it about right and some think it too tight. About all that you can reasonably deduce from the HYP Practical rule about the HYPers who use the board is that they are not
too unhappy with it and are willing to live with it. That leaves quite a lot of room for differing opinions about what it ideally should be! (Though note I'm not trying to start a discussion about that here - the place for such a discussion is on the Biscuit Bar, and here I'm just saying that the existing rule does not imply that HYPers are generally "so opposed" to shares that don't meet it. At a guess, it's probably more that moderators are "so opposed" to having a rule that requires a lot of work to check up on if a post is reported...)
Gengulphus