Highest yielding shares underperformed FTSE 100 over five years

[Dod101]

. Unlike you, I do not allow others to make such decisions for me.

I have no idea on what basis you are saying that but most people who follow my posts I think would by now have realised that I do not 'allow others to make such decisions for me'.

Yes you do! You sold Vodafone Group (VOD) simply because it was high yield, a yield which is of course determined by the market, not you. The market has therefore made the decision for you

In fact I am very independent in my decision making and have always been.

Your holdings in Investment Trusts, who decides what share purchases are to be made with that money?

In all seriousness, far from making your own decisions, you would rather "follow" the market, which you then go on to claim is all knowing and always right!

There is nothing wrong with being a follower by the way. Indeed for those who lack the confidence in their ability to make enough correct decisions, it is probably a good idea.

Your comments are not worth a serious response

Dod

[SentimentRules]

Ian

I'm also curious about what you said earlier when you were highlighting my lack of knowledge in the HYP practical.

"It's not part of the strategy to be bullish or bearish "

And now you say:


"The HYP Strategy is a classic case of "not following" the market, but rather going against it"


Why would it even be a consideration re follower/non follower? It seems you wouldn't even know which the market was, or care, given your earlier statement.

[IanTHughes]

The "non-follower" is one who ignores those so-called signals and does their own thing only after making their own investigation of the share in question.

So what investigations into Vodafone lead you to believe it was a "buy" rather than a "sell"?

I did not think that the dividend would be cut. To be more exact, I believed that, although a cut was possible and indeed there were arguments in favour of such action, in the end it would not be cut. This was based on my review of, principally: Debts, Cash Flow, Free Cash Flow and earnings. In the past, with other decisions, I have been right. Obviously in this case I was wrong, but so what?

I thought the underpinning "Doris" theory of HYP was that you don't examine the entrails of the Report and Accounts looking for hidden value and hidden accounting trickery.

The original "Doris" never purchased any of her shares, rather she inherited them! The idea that you believe that the HYP Strategy means not having to check out, at the very least, the latest Annual Report plus all subsequent Interim Reports and Trading Updates, is laughable! All it does is demonstrate how little you know about the Strategy!


Ian

[IanTHughes]

Ian

I'm also curious about what you said earlier when you were highlighting my lack of knowledge in the HYP practical.

"It's not part of the strategy to be bullish or bearish "

I never said that

Ian

[SentimentRules]

Uspaul666

Apologise Ian. I'm corrected.

Do you agree with him?

[IanTHughes]

I have no idea on what basis you are saying that but most people who follow my posts I think would by now have realised that I do not 'allow others to make such decisions for me'.

Yes you do! You sold Vodafone Group (VOD) simply because it was high yield, a yield which is of course determined by the market, not you. The market has therefore made the decision for you

In fact I am very independent in my decision making and have always been.

Your holdings in Investment Trusts, who decides what share purchases are to be made with that money?
In all seriousness, far from making your own decisions, you would rather "follow" the market, which you then go on to claim is all knowing and always right!
There is nothing wrong with being a follower by the way. Indeed for those who lack the confidence in their ability to make enough correct decisions, it is probably a good idea.

Your comments are not worth a serious response

Is that why they never receive one?


Ian

[IanTHughes]

Uspaul666

Apologise Ian. I'm corrected.

Do you agree with him?

I have never given any thought to that question. But I can tell you that I am not an Investment Chartist.


Ian

[SentimentRules]

Fair comment

Just wondering though, would you ever consider etfs and investment trusts now for your portfolio?

If it was a recession I'd get it alright, to go a bit more risk into identified value /income potential for single constituents .

[IanTHughes]

Fair comment

Just wondering though, would you ever consider etfs and investment trusts now for your portfolio?

Not for my HYP Portfolio, that would not make any sense to me. However, if I felt that investing in an ETF or an Investment Trust would achieve my Investment aims better than I am doing now with my HYP, of course I would consider them! So far, that has not been the case.


Ian

[Alaric]

Obviously in this case I was wrong, but so what?

You had a belief that it was "right" to top up, based from your contemporary writings almost exclusively on the dividend yield. That's the point really. Stocks with high dividend yields are either dogs or recovery.

This was based on my review of, principally: Debts, Cash Flow, Free Cash Flow and earnings.

Recent share price performance not being a factor then, other than inflating the dividend yield?

[SentimentRules]

Understandable.

I'm not saying your wrong. And if your in profit, well then obviously not wrong.

But cycles do exist. When its prudent to flip from constituents to trusts/etfs. Recession /record highs. Risk control of the cycles.

Of course i didnt ask the most important question. If you build the bulk of that portfolio in 2008 or 2010/11, then fair deuce.

[IanTHughes]

Understandable.
I'm not saying your wrong. And if your in profit, well then obviously not wrong.

As it happens I am in profit but, profit is of secondary importance when one's Investment Aim is to grow an income stream.

But cycles do exist. When its prudent to flip from constituents to trusts/etfs. Recession /record highs. Risk control of the cycles.

Of course cycles exist, in the markets and in the broader economy as well, I know that! The UK Stock Market is currently a Bull Market and if you were to ask me if it will at some point turn into a Bear Market, I would say: "in all likelihood, yes!". However if you were then to ask me when that Bear Market would start, I would have no idea. 3 months? 1 year? 3 years? 10 years? No idea! So when am I supposed to do that switch? No idea.

Of course i didnt ask the most important question. If you build the bulk of that portfolio in 2008 or 2010/11, then fair deuce.

I first started a value portfolio in 2006, switched into an HYP in 2007/2008. To be honest I cannot remember off-hand exact dates, but before the main market crash. Fortunately for me, I needed to take out most of that still rather small investment before the worst ravages of the crash had come about. I then had the further good fortune to re-start my HYP, this time with significantly more start-up capital, in February 2012. My HYP therefore started with a three year market increase before levelling out somewhat in 2015. For over a year, or maybe two, there was no red in my spreadsheet! I am the first to admit that purely by chance, my HYP got off to one of the best possible starts!


Ian

[uspaul666]

Understandable.

I'm not saying your wrong. And if your in profit, well then obviously not wrong.

But cycles do exist. When its prudent to flip from constituents to trusts/etfs. Recession /record highs. Risk control of the cycles.

Of course i didnt ask the most important question. If you build the bulk of that portfolio in 2008 or 2010/11, then fair deuce.

You’re still talking like you need to be a smart person who knows how the market moves, who can predict recessions, peaks and troughs, who constantly monitors their investments, who has stop losses, who perhaps uses currency hedging, who knows how to calculate XIRR, who checks on share prices every day, etc, etc. If you do then great, you stand to become very rich and you have my hearty congratulations.
Pyad HYP needs none of those things. It’s a simple boring set of rules that produces a pretty good result, certainly better than an annuity, with almost no effort at all apart from a very occasional desire to wade into yet another cross purposes discussion on a discussion board.

[SentimentRules]

Thats why I was interested. . The intelligence in the simplicity is staggering. Impressive. Actually amazing.

I've started it today and dumped all other approaches.

Thank you.

[SentimentRules]

Understandable.
I'm not saying your wrong. And if your in profit, well then obviously not wrong.

As it happens I am in profit but, profit is of secondary importance when one's Investment Aim is to grow an income stream.

But cycles do exist. When its prudent to flip from constituents to trusts/etfs. Recession /record highs. Risk control of the cycles.

Of course cycles exist, in the markets and in the broader economy as well, I know that! The UK Stock Market is currently a Bull Market and if you were to ask me if it will at some point turn into a Bear Market, I would say: "in all likelihood, yes!". However if you were then to ask me when that Bear Market would start, I would have no idea. 3 months? 1 year? 3 years? 10 years? No idea! So when am I supposed to do that switch? No idea.

Of course i didnt ask the most important question. If you build the bulk of that portfolio in 2008 or 2010/11, then fair deuce.

I first started a value portfolio in 2006, switched into an HYP in 2007/2008. To be honest I cannot remember off-hand exact dates, but before the main market crash. Fortunately for me, I needed to take out most of that still rather small investment before the worst ravages of the crash had come about. I then had the further good fortune to re-start my HYP, this time with significantly more start-up capital, in February 2012. My HYP therefore started with a three year market increase before levelling out somewhat in 2015. For over a year, or maybe two, there was no red in my spreadsheet! I am the first to admit that purely by chance, my HYP got off to one of the best possible starts!


Ian

When to do the switch....of course nobody can pinpoint the day the recession starts. But probabilities, after a decade record bull, are that a record recession will surely follow. And if you take the average time of last bull runs in history, then the switxh can be done with some confidence today.

Because you still need a get of bull time on the etf/trust ,

The main purpose is to protect income from constituent disaster, and dividend hits, at such highs, via etf/trust diversity.

Then when the recession is here, back to constituents that look like they weathered it well. And use those for the big capital value gains too, again
So you might ask well won't the etf get capital hit in recession? Sure. Apart from the rwcession proof ones , they will . But it wont go into administration or get left behind in the sector bounce later . You can stay holding them really .

Needn't sweat the disaster. Then buy stocks again . Hold for another average bull time run

[IanTHughes]

Understandable.
I'm not saying your wrong. And if your in profit, well then obviously not wrong.

As it happens I am in profit but, profit is of secondary importance when one's Investment Aim is to grow an income stream.

But cycles do exist. When its prudent to flip from constituents to trusts/etfs. Recession /record highs. Risk control of the cycles.

Of course cycles exist, in the markets and in the broader economy as well, I know that! The UK Stock Market is currently a Bull Market and if you were to ask me if it will at some point turn into a Bear Market, I would say: "in all likelihood, yes!". However if you were then to ask me when that Bear Market would start, I would have no idea. 3 months? 1 year? 3 years? 10 years? No idea! So when am I supposed to do that switch? No idea.

Of course i didnt ask the most important question. If you build the bulk of that portfolio in 2008 or 2010/11, then fair deuce.

I first started a value portfolio in 2006, switched into an HYP in 2007/2008. To be honest I cannot remember off-hand exact dates, but before the main market crash. Fortunately for me, I needed to take out most of that still rather small investment before the worst ravages of the crash had come about. I then had the further good fortune to re-start my HYP, this time with significantly more start-up capital, in February 2012. My HYP therefore started with a three year market increase before levelling out somewhat in 2015. For over a year, or maybe two, there was no red in my spreadsheet! I am the first to admit that purely by chance, my HYP got off to one of the best possible starts!

When to do the switch....of course nobody can pinpoint the day the recession starts. But probabilities, after a decade record bull, are that a record recession will surely follow. And if you take the average time of last bull runs in history, then the switxh can be done with some confidence today.

Because you still need a get of bull time on the etf/trust ,

The main purpose is to protect income from constituent disaster, and dividend hits, at such highs, via etf/trust diversity.

Then when the recession is here, back to constituents that look like they weathered it well. And use those for the big capital value gains too, again
So you might ask well won't the etf get capital hit in recession? Sure. Apart from the rwcession proof ones , they will . But it wont go into administration or get left behind in the sector bounce later . You can stay holding them really .

Needn't sweat the disaster. Then buy stocks again . Hold for another average bull time run

I am not at all interested for the following reasons:

- Far too much switching to and fro which will make the cost of running my portfolio soar.
- No idea as to the best time to make the various switches other than some very vague historical average time periods.
- No evidence that implementing such a plan will even improve my returns.
- Using up my own valuable time which is much better employed on other things like making money

But hey, you go for it if you want to!

And do let us know all of the details as you go along - test portfolio - so that the next time you propose this kind of portfolio management you do at least have some evidence to back it up other than your own imagination


Ian

[JamesMuenchen]

The idea that you believe that the HYP Strategy means not having to check out, at the very least, the latest Annual Report plus all subsequent Interim Reports and Trading Updates, is laughable! All it does is demonstrate how little you know about the Strategy!

It's possible that non-practitioners know more about it than you do. You've only be looking at it for a few years, as I understand.

For instance, you keep citing PYD's HYP1 as an example of the success of the Strategy.

But some of us were there when HYP1 was created with a simple yield sort and some filters
https://web.archive.org/web/20140528041 ... 01113c.htm
To obtain a little more choice, I went marginally outside the FTSE 100 index and set £1.5b as my minimum capitalisation filter. This brings in a few shares that are just below the index. The other filters were an increasing dividend over the last five years and net gearing of under 50%. However I did relax the gearing filter because I wanted to bring in a utility. They have high yields but often high borrowings as well. I therefore went outside a purely mechanical approach on occasion and exercised a little personal judgement of my own. However, all the shares satisfy the increasing dividend and minimum cap rule.

There was no concept of sector diversification, and far from studying reports and trading updates, PYAD didn't even know what some of the picks did exactly:
Britannic (LSE: BRT), I believe, is involved wholly or mainly in life products.

You can't have it both ways … either HYP1 is an example of the strategy or it isn't.

[tjh290633]

Understandable.

I'm not saying your wrong. And if your in profit, well then obviously not wrong.

But cycles do exist. When its prudent to flip from constituents to trusts/etfs. Recession /record highs. Risk control of the cycles.

Of course i didnt ask the most important question. If you build the bulk of that portfolio in 2008 or 2010/11, then fair deuce.

I have found, over the last 50 years, that it is better to ride market fluctuations out, rather than try to compensate for them. I'm thinking of 1974, 1987, 2000, 2008, for example. 2008 is the outlier, where a major portfolio reconstruction was called for to restore portfolio income. That was because of the high proportion of companies stopping dividends and having to be culled.

It obviously helps to take advantage of falls in the market, but by and large, staying fully invested in equities has given good results.

Trying to trade the rises and falls appears to be a less successful approach.

TJH

[SentimentRules]

Ian

I run a book of 40 continuous individual stocks from around the globe. I run on average a book of 5 etfs. Same commodities....50 holdings.

So I do value. Not income. When your book/portfolio is running, there isn't a value or income driven investor out there that cant manage it all with ten mins a day.

We are same. We are all gardeners. Simply monitoring and weeding the garden..

Replacing an instrument when so required.
.ao im not sure how you consider that switching all the time. It's just management. Something im sure you do every day.

I'm only saying these things, not to say i im better. I'm saying these things because genuinely concerned for people using that particular variation of HYP.

It's all smiles now a ten year bull run. It's been the easiest time ij history for any Jack to make a few quid. But after that will follow the hardest lesson in history too.

Just don't want to see you lose your pension pot. And trust me.....

They are queing up to figure out how to get your capital. Not just your income.. . Only your capital will interest them soon.

Anyway... heyhoo as you say... I hope your imagination let's you manage your way out of it when the time comes.. .not far away now..

[SentimentRules]

The idea that you believe that the HYP Strategy means not having to check out, at the very least, the latest Annual Report plus all subsequent Interim Reports and Trading Updates, is laughable! All it does is demonstrate how little you know about the Strategy!

It's possible that non-practitioners know more about it than you do. You've only be looking at it for a few years, as I understand.

For instance, you keep citing PYD's HYP1 as an example of the success of the Strategy.

But some of us were there when HYP1 was created with a simple yield sort and some filters
https://web.archive.org/web/20140528041 ... 01113c.htm
To obtain a little more choice, I went marginally outside the FTSE 100 index and set £1.5b as my minimum capitalisation filter. This brings in a few shares that are just below the index. The other filters were an increasing dividend over the last five years and net gearing of under 50%. However I did relax the gearing filter because I wanted to bring in a utility. They have high yields but often high borrowings as well. I therefore went outside a purely mechanical approach on occasion and exercised a little personal judgement of my own. However, all the shares satisfy the increasing dividend and minimum cap rule.

There was no concept of sector diversification, and far from studying reports and trading updates, PYAD didn't even know what some of the picks did exactly:
Britannic (LSE: BRT), I believe, is involved wholly or mainly in life products.

You can't have it both ways … either HYP1 is an example of the strategy or it isn't.

Many know more than me. In terms of what they read in books, financial Times etc. I dont waste my time with publishing's sent out to the public , mostly via the city as sources.

And yes. For me it's 20 years. Many here maybe 30-40, even 50 years in markets.

But its what you do in those years that determine who is really wet behind the ears.