Highest yielding shares underperformed FTSE 100 over five years

[csearle]

"Your understanding of the HYP Strategy is once again incorrect! The HYP Strategy does not recommend simply choosing the highest yield. Either you are being deliberately misleading, or you seriously do not yet know, despite being told several dozen times, that the............### HYP Strategy strongly advocates both Diversification across Business Sectors and only selecting high yield shares ......?###where the dividend is believed to be sustainable."

So yeah. Just high yield.

The clue is in the name. Hard to be a high yield portfolio if many small to mid are diluting it.

Not with the HYP Practical board. Please take the time read the guidelines to find out roughly what HYP Practical means in the context of that particular board. Thanks.

[IanTHughes]

Your understanding of the HYP Strategy is once again incorrect.

I couldn't really care.

You do not care? Rather than properly representing the HYP Strategy before you criticise it, you simply invent incorrect HYP criteria nonsense that can then be easily criticised? Says it all really.

The tactics of the HYP strategy identifies shares where the price has fallen in recent times and for all I know will continue to fall.

I certainly do not base my HYP purchase decisions on what you know!

Well I see no point in buying for an 8% yield and incurring a 10% or more capital loss as a consequence.

Nor do I!

ITV has just been topped up.

Topped up by whom?

Why doesn't the recent price performance put such investors off? Anyone buying this time last year would have seen the price drop from 177 to around 110.

A year ago, with a yield of less than 4.5%, ITV was not a candidate for my HYP.

It might turn around, there again it might not. They might maintain their dividend, but if they are experiencing poor trading conditions they might not be able to afford to.

Of course, which is why the HYP Strategy advocates studying the fundamentals to determine, as best one can, whether the dividend is sustainable. If it appears to be in danger of a cut, do not buy!


Ian

[SentimentRules]

You said I had no idea what HYP means. And i was misleading by suggesting variations.

So HYP on practical board is a "variation" of the true concept?

Then i think we agree on the broader definition of HYP...

[SentimentRules]

Your understanding of the HYP Strategy is once again incorrect.

I couldn't really care.

You do not care? Rather than properly representing the HYP Strategy before you criticise it, you simply invent incorrect HYP criteria nonsense that can then be easily criticised? Says it all really.

The tactics of the HYP strategy identifies shares where the price has fallen in recent times and for all I know will continue to fall.

I certainly do not base my HYP purchase decisions on what you know!

Well I see no point in buying for an 8% yield and incurring a 10% or more capital loss as a consequence.

Nor do I!

ITV has just been topped up.

Topped up by whom?

Why doesn't the recent price performance put such investors off? Anyone buying this time last year would have seen the price drop from 177 to around 110.

A year ago, with a yield of less than 4.5%, ITV was not a candidate for my HYP.

It might turn around, there again it might not. They might maintain their dividend, but if they are experiencing poor trading conditions they might not be able to afford to.

Of course, which is why the HYP Strategy advocates studying the fundamentals to determine, as best one can, whether the dividend is sustainable. If it appears to be in danger of a cut, do not buy!


Ian

Most people buy not expecting a cut. And it comes about 50% below capital input.

Vodafone Tesco Lloyds and 60 other ftse listings as past examples

When price goes under capital input they think 'income covering it'. That's the first mistake

[SentimentRules]

Anyway let's consider the HyP correlation. Its heavily dependant on markets maintaining a bullish run. Very much so. There are cuts in yield today even without a correction. At market highs.

I'm very bearish in the next quarter for general indices.

I assume hyp holders are bullish?

[uspaul666]

Anyway let's consider the HyP correlation. Its heavily dependant on markets maintaining a bullish run. Very much so. There are cuts in yield today even without a correction. At market highs.

I'm very bearish in the next quarter for general indices.

I assume hyp holders are bullish?

It’s not part of the strategy to be bullish or bearish. Either way, the right time to buy would still be now.

[SentimentRules]

What do you guys recommend next for the portfolio?

Your considerations for holdings would aid me in grasping a market neutral outlook. Never came across it before in funds. But they buy Puts and all sorts during holds to cover capital.

So just wondering what income instruments never require capital cover or market direction

[SentimentRules]

If i went to Goldman Sachs and said i want to put 5 million into an income fund - can you please explain the management of it?

If they said to me ...what management? Just buy and not really care what the markets do - I'd go running.

But i can absolutely assure you- they wouldn't be saying that. They would tell me how they will actively manage risk, downturns etc to protect capital as best as possible. And so on. It's what clients pay them for 're income investment risk management. Easy buy. It's the risk that needs controlling.

However not saying your style is incorrect. Just saying its unusual to say the least.

[csearle]

What do you guys recommend next for the portfolio?

Because the HYP as used on HYP-P values diversification the next recommendation would depend amongst other things on the existing constituents and (for example) their dividend contributions. So it is not really possible to come up with a one-size-fits-all next buy recommendation. C.

[SentimentRules]

Diversification is a method that's the very same for capital investors. Absolutely no difference there.

I mean the neutral outlook and ignore risk by ignoring markets. What are the recommendations.

I'm also confused by this part.. .

You do your research on constituents. Competitors. Debt etc. Sector.

But then ignore the general bull or bear markets all things exist within ? And are strongly influenced by?

If your market outlook was say a major correction due. And your stock is highly correlated to the index . Ignore it? Yes if not care about bull/near markets. Isn't that very bad timing fircincime value? Maybe 2-5 years of wasted capital?

[IanTHughes]

What are the recommendations.

You taking the trouble to read up and understand the HYP Strategy would be my recommendation!


Ian

[SentimentRules]

Anyway let's consider the HyP correlation. Its heavily dependant on markets maintaining a bullish run. Very much so. There are cuts in yield today even without a correction. At market highs.

I'm very bearish in the next quarter for general indices.

I assume hyp holders are bullish?

It’s not part of the strategy to be bullish or bearish. Either way, the right time to buy would still be now.

I've read your words hence my last message.

[SentimentRules]

I'm just trying to say... why ignore what can force a capital 30% downturn for a few years (general markets ), when you could easily add bullish bearish outlook to the system. And Not have that dead capital period in income.

I have people telling me they are receiving x amount from Vodafone each year pre and post cut. They are doing ok.

But when they tell me their buy prices, it suggests they are completely ignoring capital. The true figures as of today being a loss. They mentally are realising income, but not capital . That's called market blindness.

Then they argue the SP will recover and so income will be realised. Really? SP will recover? What assurances? Because in 1999 I had lloyds income buyers telling me this at 500p

[IanTHughes]

I'm just trying to say... why ignore what can force a capital 30% downturn for a few years (general markets ), when you could easily add bullish bearish outlook to the system. And Not have that dead capital period in income.

Damn, where did I put my Zandali / English dictionary?


Ian

[SentimentRules]

Lol. And market dictionary .

[Alaric]

If it appears to be in danger of a cut, do not buy!

What about Vodafone then? When it appeared in that Bland portfolio back in March, a number of people queried its presence. Buying at the previous yield was ignoring the possibility or even probability of a cut.

ITV is at a much higher yield than a year ago not because of a dramatic increase in dividends, but because the share price has collapsed. Rightly or wrongly the market is unimpressed with its future prospects.

[SentimentRules]

Itv

Rising yield in it suggests another 50% SP slaughter on the way. (Not analysis. Just general comment based on past experience with markets)

I dont know their fundamentals . If taking dividend debt off books by reducing it to 0% will appease markets or not. Must look but i doubt it. Even if it does.. .be a long climb back to total return breakeven.

[IanTHughes]

If it appears to be in danger of a cut, do not buy!

What about Vodafone then? When it appeared in that Bland portfolio back in March, a number of people queried its presence. Buying at the previous yield was ignoring the possibility or even probability of a cut.

Not at all! I cannot answer for pyad but I can say that I bought into Vodafone Group (VOD) at about the same time because, in my opinion, a dividend cut was not likely, certainly not probable.

ITV is at a much higher yield than a year ago not because of a dramatic increase in dividends, but because the share price has collapsed. Rightly or wrongly the market is unimpressed with its future prospects.

The market does not make selections for my HYP! Can you not accept that not everyone agrees with you?


Ian

[Alaric]

in my opinion, a dividend cut was not likely, certainly not probable.

That's rather poor judgement then. But then doesn't HYP depend on getting such calls right?

A stock has a dividend yield of 4%, it's ignored. The price halves and HYP people get excited because the dividend yield is now 8%. Several next steps are possible. The price recovers to where it was or beyond with little change to the dividend, making it a low yielder and thus a sale candidate. The Company decide to cut the dividend, reducing the yield back to around average. HYP people would like to believe that dividend will be maintained or increased from its present level, notwithstanding the market price trying to tell us that the share is possibly in trouble.

[IanTHughes]

in my opinion, a dividend cut was not likely, certainly not probable.

That's rather poor judgement then. But then doesn't HYP depend on getting such calls right?

No. Incorrect again

A stock has a dividend yield of 4%, it's ignored. The price halves and HYP people get excited because the dividend yield is now 8%. Several next steps are possible.

Of course! As an HYPer I try to ascertain, to the best of my ability, whether the dividend is sustainable or not. If I believe it is sustainable and may grow, I buy. If not, I do not buy! What can I ask is wrong with that? Why do you find that process so difficult to understand?



Ian