Highest yielding shares underperformed FTSE 100 over five years

[IanTHughes]

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

Yes there was but I grant you, not nearly as strict as pyad employed in his recent HYP Portfolio selection

far from studying reports and trading updates

How does one check "net gearing of under 50%", "high borrowings" without looking at an annual report? There were also other items that a prospective investor could only reach within a Annual Report, or are you suggesting that Investors should rely on Yahoo, ADVFN and the like never making a mistake? A very silly idea in my opinion!

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.

Do tell, what were Britannic Assurance involved in at the time?

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

I do not want anything both ways and do not understand your statement!


Ian

[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.

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

James

Everyone says that . Trading makes less or medium term holding makes less etc . But who says it? Mostly those that failed stt it or never did it.

I can tell You, many people will say the above you write re hold...fails. But only because they too failed at it or never did it. .

There is an adage out there.. .. If you dont know what your doing, don't enter markets or, hold.

Market dynamics arw changing now and i think for the longer term. Stocks are going to just become trading tools more and more as other ways for people develop like etfs etc

The day of buy and hold forever is near an end

[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

Yes there was but I grant you, not nearly as strict as pyad employed in his recent HYP Portfolio selection

far from studying reports and trading updates

How does one check "net gearing of under 50%", "high borrowings" without looking at an annual report? There were also other items that a prospective investor could only reach within a Annual Report, or are you suggesting that Investors should rely on Yahoo, ADVFN and the like never making a mistake? A very silly idea in my opinion!

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.

Do tell, what were Britannic Assurance involved in at the time?

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

I do not want anything both ways and do not understand your statement!


Ian

Ian who cares? All that matters is your with the money, and dont lose money when in error.

Why don't you do what i do? Let the city decide on the fundamentals. Its them that wull decide the faith. Then just tag in when you aee them forming that opinion on the market before it moves. .

My fundamental opinion means squat. Yours too. Markets go where they decide.

[IanTHughes]

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.
im not sure how you consider that switching all the time. It's just management. Something im sure you do every day.

I never said switching all the time. Why must you persist in misquoting me I wonder?

However, to use your gardening analogy, it is of course quite simple to mow the grass and do a bit of weeding on an occasional basis but what you are suggesting is a complete digging up - reploughing even - on a regular basis with the further requirement to re-design the garden, again on a regular basis, not to mention the requirement to make all those plant selections - again and again!

So, not exactly as easy as sitting in one's HYP deckchair simply enjoying the view, maybe even taking a nap?

I'm only saying these things, not to say i im better.

Well that is good because nothing you have written on these boards shows you know more than anyone else who posts here, and you probably know less, although that is only my opinion

I'm saying these things because genuinely concerned for people using that particular variation of HYP.

Nonsense! First you are doing it simply to impress how smart you are by peppering your posts with what you laughingly believe to be slick market talk. I am most decidedly unimpressed by the way! Second you are suggesting that a fairly straight-forward Income generating portfolio strategy, easily understood even by newbie investors and simple to manage, a strategy that has stood the test of time with documentary evidence as to its doing what an Income Investor is looking for, with a strategy that is more complicated, more costly, more time-consuming and unproven. On top of all those negatives, you are ignoring the main Income Aim of the Investors concerned!

No, you have no concern, genuine or otherwise, for anyone but yourself! If you did you would see the success that the HYP Strategy has brought to its adherents, commend them for looking after their own investments, and leave well alone!

It's all smiles now a ten year bull run.

The Bull market, as defined by market professionals, has only been going since the end of 2015 / beginning of 2016, barely three years! If you want to appear smart you really should study up on these things.


Ian

[SentimentRules]

There is a QE, low interest rate paper bull market going a decade. Sure you could call that period a technical dip into bear . But it wasn't an official recession. Just a technical dip. No recession? No change.

Management, what i suggest is doing what needs to be done. Markets aint gonna forgive you because you can't be bothered to do a bit of work really

[JamesMuenchen]

How does one check "net gearing of under 50%", "high borrowings" without looking at an annual report? There were also other items that a prospective investor could only reach within a Annual Report, or are you suggesting that Investors should rely on Yahoo, ADVFN and the like never making a mistake? A very silly idea in my opinion!

In his articles, Pyad often mentioned screening using his subscription "Company REFS" data, which may even still have come on a CD when HYP1 was published.

Many (including me) used StepOne's free spreadsheet for screening.

You can find some other examples here:
http://lemonfoolfinancialsoftware.weebly.com/
(The HYP Top-up spreadsheet there is often discussed on the HYP boards as the HYPTUSS.)

It may be a silly idea in your opinion, but clearly that's how some HYP practitioners roll.

Do tell, what were Britannic Assurance involved in at the time?

I don't know. Neither did Pyad with much certitude. ICBA to check. Neither could Pyad.

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

I do not want anything both ways and do not understand your statement!

If you refer people to Pyad's HYP1 as an example of performance, then you can't deny that the methods used to put it together are any part of the strategy.

[SentimentRules]

Well Ian

We have a lot in common.

We both believe there are better ways, and we both doggedly believe in our own ways.

Pretty natural.

But I went through basically every system known to man. Back tested every single one of them (I do that a lot because i don't be digging up the garden you see)

I've back tested every technical and fundamental approach out there so far. 1-3-5-10-20 year back tests.Software is amazing these days

I have a feeling you came to this system, and your preaching to me without having put any other to the test.

So well done on that.

Been a pleasure

[IanTHughes]

How does one check "net gearing of under 50%", "high borrowings" without looking at an annual report? There were also other items that a prospective investor could only reach within a Annual Report, or are you suggesting that Investors should rely on Yahoo, ADVFN and the like never making a mistake? A very silly idea in my opinion!

In his articles, Pyad often mentioned screening using his subscription "Company REFS" data, which may even still have come on a CD when HYP1 was published.

Many (including me) used StepOne's free spreadsheet for screening.

You can find some other examples here:
http://lemonfoolfinancialsoftware.weebly.com/
(The HYP Top-up spreadsheet there is often discussed on the HYP boards as the HYPTUSS.)

It may be a silly idea in your opinion, but clearly that's how some HYP practitioners roll.

Well, thank goodness you and these others do not manage my HYP! Furthermore, I am certain that pyad does refer to Annual Reports and fairly certain that he has no knowledge of, nor any interest in, any Top-Up spreadsheet that you or anyone else may use! I too have never used it, although I am of course aware of its existence.

Do tell, what were Britannic Assurance involved in at the time?

I don't know. Neither did Pyad with much certitude. ICBA to check. Neither could Pyad.

They were involved in Life Assurance, as pyad clearly stated!

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

I do not want anything both ways and do not understand your statement!

If you refer people to Pyad's HYP1 as an example of performance, then you can't deny that the methods used to put it together are any part of the strategy.

I have never made any such denial! Why do you persist in saying that I have? It was and remains the first demonstration of the HYP Strategy in action, that I am aware of.


Ian

[Alaric]

There is a QE, low interest rate paper bull market going a decade.

The yield on fixed interest UK Government Debt (Gilts) is between 0.5% and 2% according to a Bank of England yield curve.

What might cause them to rise by 3% to a historically more normal range of 3.5% to 5%? What would that do to share prices?

If retail investors can get 3.5% to 5% without risk to capital, will they continue to fish for return in the darker waters of equities?

I expect it does something alarming to housing markets as well. If a government wanted to ease the pain of such a transition, it could reintroduce tax relief on mortgage debt,

[SentimentRules]

There is a QE, low interest rate paper bull market going a decade.

The yield on fixed interest UK Government Debt (Gilts) is between 0.5% and 2% according to a Bank of England yield curve.

What might cause them to rise by 3% to a historically more normal range of 3.5% to 5%? What would that do to share prices?

If retail investors can get 3.5% to 5% without risk to capital, will they continue to fish for return in the darker waters of equities?

I expect it does something alarming to housing markets as well. If a government wanted to ease the pain of such a transition, it could reintroduce tax relief on mortgage debt,

Absolutely. Its one of the biggest issues for central banks and gov. They dug themselves a massive hole that needs jumping into at some stage.

Market crash.
Housing crash.
Personal debt subprime wraps kicking in.

2008 was nothing.. .a baby

[SentimentRules]

They say global debt is up 50% since 2008.

I would think it's probably double that. Massaged numbers etc.

But even if it's just 50% up on 2008, that's a whole lot of new subprime debt out there. Because wages hardly moved since 2008.

Get ready to buy everything 50-60% cheaper is my view. Whenever it comes

[Alaric]

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.

It was a traditional life assurer with fund manager offshoots. Many of these, including Britannic, have now disappeared into Phoenix. From that sector, Legal & General would presumably have been a better pick.

It didn't last that much longer before crashing.
https://www.theguardian.com/business/2003/mar/05/money

That might have been an after effect of the Equitable crash when the FSA demanded a less cavalier treatment of policy guarantees.

[IanTHughes]

We have a lot in common.

Please, speak for yourself, not me.

We both believe there are better ways, and we both doggedly believe in our own ways.

Again, do not presume to speak for me, especially when you are so wrong! I have simply found the strategy that addresses my aims, is relatively simple to implement, has been shown to work and works for me! I do not suggest it is the best strategy for everyone, nor even better than any other Strategy! Such puffed up nonsense I leave to the likes of you!

But I went through basically every system known to man. Back tested every single one of them (I do that a lot because i don't be digging up the garden you see)

I've back tested every technical and fundamental approach out there so far. 1-3-5-10-20 year back tests.Software is amazing these days

Oh well done you! Do you want a medal or something?

I have a feeling you came to this system, and your preaching to me without having put any other to the test.

You are the preacher, not me. All I do is to point out the ridiculously incorrect nonsense that people on these boards, like yourself, persist in reporting about the HYP Strategy.

I have found a strategy that works for me, why should I look further just to satisfy the likes of you? Unlike you, I have many better thinks to do


Ian

[SentimentRules]

It's not to satisfy me. I was concerned what the market is going to do to you. Particularly pension.

But it's ok. I'm not too worried now.

Im one of those by the way 're.. . Coming for your capital in markets haha. So I do know what my helpful advise was to you.

Anyway thank you for the last message ceremony. Il buy you an alter so you look professional for the next preaching session

[SentimentRules]

Market changes:

Have you ever pondered the notion , that what worked before, does not always work in the future?

I know in the past, holding strategies did ok. Capital or income investors.

However, have you ever tried to gauge who is replacing the old school thinking in banks, funds etc?

What their attitudea are to markets. Afterall they will soon be the leaders of the above.

In my view there is a big a shift occurring. And it's been speeded up by etfs etc, where individual stocks will be practically classed a trading tool, by the most influential.

In truth, right now they are just a control tool. Price control. And then they are making the real money in other areas. So that's an issue with much capital input into held stocks in the city these days. Making a profit in those directly is not their primary target.

I think we are already 70% there.

[SentimentRules]

It's why I am always testing strategies. No matter how long one works, one day it wont. And i need to be on top of what is working when that day comes.
Could be tomorrow. Could be another 20 years. But be ready anyway.

[Alaric]

And it's been speeded up by etfs etc, where individual stocks will be practically classed a trading tool, by the most influential.

I'm not sure why ETFs should make a major difference. They are just index trackers after all, so will include all the dross as well as the pearls. Big cap stocks can be an investment trust in their own right, with lots of different businesses under the same roof.

Index Trackers (in the UK) have been around for almost as long as the modern form of the FTSE indexes themselves, which is mid 1980s.

"Famous name" fund managers are usually quite selective on how many distinct shares are held by the funds they manage.

[SentimentRules]

ETF market is sucking up retail money that used to be going into stocks, day by day. More and more funds too. And their costs are attractive. Etf market should top 1 trillion soon if it hasn't already.

This has introduced a massive market to derisked cheap investing .

So more and more, your finding traders outweighing investors in the stocks directly. And of course the few major funds in for price control. But they don't do that much after that.

In essence, the income investors are relying more and more in traders for value and positive income. 're to move prices in their selections. And we all know what traders are like . Love shorts as much as buys.

Volatile times on the way.

The above only touches on the topic and isn't fully developed yet. A period of transition

The Americans love their options more and more.

That's starting to grow with etfs too

[SentimentRules]

In summary, a shift from direct stock investing is occurring.

And up to everyone to assess the future ramifications for their own methodologies

[SentimentRules]

1 trillion just EU etfs by the way. Dunno the global number. Never looked