Practical discussions about equity High-Yield Portfolios (HYP) for income

[MrFoolish]

"No idea, but why this fixation for Doris?"

I guess the same questions come up time after time but are never answered by pyad. With a bit of clarification about what he intended we could happily ignore the whole Doris thing.

Alternatively, we could all make our own sensible, grown-up adjustments and diverge a bit from the pyad official line, but then our posts get culled from the main HYP board. It's a no win situation.

[MDW1954]

Alternatively, we could all make our own sensible, grown-up adjustments and diverge a bit from the pyad official line, but then our posts get culled from the main HYP board. It's a no win situation.

I am a moderator. I suggest that you read the HYP guidelines: what counts as HYP on HYP-Practical is NOT strictly Pyadic. The share universe is different, the selection method is different, and the management is different.

We have recently added quasi-REITs to the mix, too -- eg BSIF, FSFL. These are ITs, but permissible as quasi-REITs.

MDW1954

[MrFoolish]

I am a moderator. I suggest that you read the HYP guidelines: what counts as HYP on HYP-Practical is NOT strictly Pyadic. The share universe is different, the selection method is different, and the management is different.

OK, thanks, I wasn't aware of that. I'll give it some consideration.

[Bubblesofearth]

Life throws all sorts of slings and arrows: some of us are better at dodging them than others, but that does not prevent me from empathising with those who have been less fortunate.

Arb.

I wasn't talking about those less fortunate, I was talking about financial choices one makes in life. Everyone, at least everyone in the UK, has the choice to live within their means just as everyone has the choice as to whether they rack up large piles of debt or invest unwisely. And you may not like to hear it, or agree with me, but I've come across far too many people happy to spend way beyond their means and then willing to blame their resulting situation on others or on external circumstances.

Just a small example, I know someone who has invested in a number of holiday let properties and now wants HMG to cover the loss of rental income during the cv crisis. I believe they are drawing up a petition for it. Maybe HMG should compensate me for loss of share dividend income?

To go back to the OP, anyone whose entire income derives from equities (whether dividend, capital drawdown or a mix of the two) is taking a risk. There is a lot of literature out there about appropriate asset allocation and I've never seen anything advocating an all-equity strategy.

BoE

[MDW1954]

I am a moderator. I suggest that you read the HYP guidelines: what counts as HYP on HYP-Practical is NOT strictly Pyadic. The share universe is different, the selection method is different, and the management is different.

OK, thanks, I wasn't aware of that. I'll give it some consideration.

Cheers. By the way, to quote chunks of text, press the quote button (the inverted comma sign). Then you get the effect that I've added above.

MDW1954

[MrFoolish]

"By the way, to quote chunks of text, press the quote button (the inverted comma sign). Then you get the effect that I've added above."


Yes, I know. When you fix it to show the closing pair of quotation marks, I'll make use of that facility

[AJC5001]

Given the number of references to Doris, anyone wanting to know what Pyad said should read the article concerned. http://web.archive.org/web/20100421194933/http://www.fool.co.uk/news/investing/high-yield/2006/12/20/doris.aspx
Then perhaps we can stop making up who or what she was to justify some point about Pyad and/or HYP and say something more relevant instead.

Adrian

[Arborbridge]

"By the way, to quote chunks of text, press the quote button (the inverted comma sign). Then you get the effect that I've added above."


Yes, I know. When you fix it to show the closing pair of quotation marks, I'll make use of that facility

When you use the quote facility, the fact that the text is in a different colour in effect becomes the quotation marks.

If you are not going use the facility because you don't like the missing " - that's your prerogative, if a little pedantic. However, using the quote facility also notifies the person that you are quoting them, which is actually useful for you and your continuing discussion with them. You lose this if you only manually use the quotation marks.

Arb.

[Arborbridge]

Given the number of references to Doris, anyone wanting to know what Pyad said should read the article concerned. http://web.archive.org/web/20100421194933/http://www.fool.co.uk/news/investing/high-yield/2006/12/20/doris.aspx
Then perhaps we can stop making up who or what she was to justify some point about Pyad and/or HYP and say something more relevant instead.

Adrian

What's truly astonishing is that anyone would care enough to bother.

I have a feeling that some people have weaponised Doris (against her will, I'm sure!). Often she is used to criticise or even poke fun at HYPers by non-HYPers or semi-HYPers or to prove a point. I believe these people aren't interested in Doris, but just want to raise an argument for the sake of it.

Arb.

[Itsallaguess]

I have a feeling that some people have weaponised Doris (against her will, I'm sure!). Often she is used to criticise or even poke fun at HYPers by non-HYPers or semi-HYPers or to prove a point. I believe these people aren't interested in Doris, but just want to raise an argument for the sake of it.

'Argument', or maybe just 'a discussion', perhaps?

Is an 'argument' in this area just a 'discussion' that someone might not happen to agree with?

Even if you're right, then surely it's still far better to allow the debate, rather than someone try to 'weaponise silence' on the subject?

A discussion someone might not be interested in is surely simple for them to ignore, is it not?

Imposed silence on a subject that people might want to discus, however, well that's much harder to ignore, I always find....

Cheers,

Itsallaguess

[Bagger46]

We know a few Dorises. These real people are different from pyad’s Doris, in that they would not go near a HYP. They usually hold a portfolio of ITs, occasionally with a few prefs thrown in. A few are well off, a few not so much. All hold a suitable cash buffer. I phoned a few recently, no planned change to their portfolio.

Bagger

[Arborbridge]

I have a feeling that some people have weaponised Doris (against her will, I'm sure!). Often she is used to criticise or even poke fun at HYPers by non-HYPers or semi-HYPers or to prove a point. I believe these people aren't interested in Doris, but just want to raise an argument for the sake of it.

'Argument', or maybe just 'a discussion', perhaps?

Is an 'argument' in this area just a 'discussion' that someone might not happen to agree with?

Even if you're right, then surely it's still far better to allow the debate, rather than someone try to 'weaponise silence' on the subject?

A discussion someone might not be interested in is surely simple for them to ignore, is it not?

Imposed silence on a subject that people might want to discus, however, well that's much harder to ignore, I always find....

Cheers,

Itsallaguess

Nothing wrong with a discussion, but you probably recognise as well as I do that there are some who like to pick an argument for the sake of it and in that category, there are those who use Doris as a weapon to be picky with HYPers, or neo-HYPers.

Don't tell me you haven't noticed, and don't tell me I'm trying to close down discussion by weaponising silence, because that's far from it.

[Itsallaguess]

Nothing wrong with a discussion, but you probably recognise as well as I do that there are some who like to pick an argument for the sake of it and in that category, there are those who use Doris as a weapon to be picky with HYPers, or neo-HYPers.

Don't tell me you haven't noticed, and don't tell me I'm trying to close down discussion by weaponising silence, because that's far from it.

Well I'm too long in the tooth to think that a particular 'side' can claim any sort of moral high ground when it comes to 'others' being argumentative on the subject of HYP...

Even if I was a 100% committed HYPer, then some of my co-proponents would make me blush with embarrassment at times, such is the strength of their iron-willed determination on the subject...

It takes two to tango Arb...

Cheers,

Itsallaguess

[Arborbridge]

It takes two to tango Arb...

Cheers,

Itsallaguess

It takes one to tango* and others to point out that they are doing so

*yes you can!

[dealtn]

You know what? In an idle moment (of which I have plenty at the moment) I am beginning to wonder if this HYP business is all that it is cracked up to be.

Dod

It's certainly an interesting thought.

Look at results out from a company such as Bioventix (BVXP) out today. Profits up 31%, Dividend up 20%.

I doubt this company ever qualified as a High Yield Investment, let alone as a HYP candidate, but 5 years ago could be bought at a price a quarter of what it is today. The dividend is now 3 times what it was 5 years ago. Of course it isn't easy, but a focus on finding companies that have the prospects to realistically grow their revenues, profits, and thus future dividends, rather than those that are currently paying a certain yield, may well be preferable in achieving a rising dividend stream than alternative strategies.

With discussions taking place on another thread about Yield-On-Cost, rather than Current Yield, isn't it possible for an income strategy to be considered that seeks "Future High Yield On Investment" candidates?

[Alaric]

isn't it possible for an income strategy to be considered that seeks "Future High Yield On Investment" candidates?

Presumably that's what the professional fund managers of Equity Income funds look to do, assuming that they are allowed to diverge from hugging a benchmark. Some are going to be better than others at picking potential winners.

As well as sorting by dividend yield, it would also be possible to sort by the sum of dividend yield and dividend growth rate. Results have to be treated with caution as this identifies recovery stocks as well, those where the dividend was cut or cancelled and is now being restored towards its previous level.

[Lootman]

You know what? In an idle moment (of which I have plenty at the moment) I am beginning to wonder if this HYP business is all that it is cracked up to be.

It's certainly an interesting thought.

Look at results out from a company such as Bioventix (BVXP) out today. Profits up 31%, Dividend up 20%.

I doubt this company ever qualified as a High Yield Investment, let alone as a HYP candidate, but 5 years ago could be bought at a price a quarter of what it is today. The dividend is now 3 times what it was 5 years ago. Of course it isn't easy, but a focus on finding companies that have the prospects to realistically grow their revenues, profits, and thus future dividends, rather than those that are currently paying a certain yield, may well be preferable in achieving a rising dividend stream than alternative strategies.

With discussions taking place on another thread about Yield-On-Cost, rather than Current Yield, isn't it possible for an income strategy to be considered that seeks "Future High Yield On Investment" candidates?

To your final question there is no doubt to the answer. Shares that do not have a high yield but have the potential to have a high yield are valid for discussion on the HYP Practical Board. The pinned Board Guidelines post makes that clear:

"Discussion of potential shares, and of shares which have been selected in the past, is acceptable on the HYP Practical Board"

Moderator Message:
As this thread has been moved away from, HYP-P the discussion is broadened anyway.

And Bioventix is a great example of that in practice, and I have held it for a similar period as you. Although some here may object to it because it is an AIM-listed share.

[dealtn]

You know what? In an idle moment (of which I have plenty at the moment) I am beginning to wonder if this HYP business is all that it is cracked up to be.

It's certainly an interesting thought.

Look at results out from a company such as Bioventix (BVXP) out today. Profits up 31%, Dividend up 20%.

I doubt this company ever qualified as a High Yield Investment, let alone as a HYP candidate, but 5 years ago could be bought at a price a quarter of what it is today. The dividend is now 3 times what it was 5 years ago. Of course it isn't easy, but a focus on finding companies that have the prospects to realistically grow their revenues, profits, and thus future dividends, rather than those that are currently paying a certain yield, may well be preferable in achieving a rising dividend stream than alternative strategies.

With discussions taking place on another thread about Yield-On-Cost, rather than Current Yield, isn't it possible for an income strategy to be considered that seeks "Future High Yield On Investment" candidates?

To your final question there is no doubt to the answer. Shares that do not have a high yield but have the potential to have a high yield are valid for discussion on the HYP Practical Board. The pinned Board Guidelines post makes that clear:

"Discussion of potential shares, and of shares which have been selected in the past, is acceptable on the HYP Practical Board"

And Bioventix is a great example of that in practice, and I have held it for a similar period as you. Although some here may object to it because it is an AIM-listed share.

And yet, I would postulate, were such a suggestion take place on that Board, despite its theoretical adherence, I would expect a (er) practical dismissal at the minimum, and an inevitable cry of "Off Topic". It would be lovely to get a surprise though, and that not be the case. Maybe one to test in the future. Although unlikely, as I am not, and have never been a HYP-er, and my appearances there are usually in response to general questions on shares I hold, and I try not to venture into controversies if I can help it.

[Lootman]

It's certainly an interesting thought.

Look at results out from a company such as Bioventix (BVXP) out today. Profits up 31%, Dividend up 20%.

I doubt this company ever qualified as a High Yield Investment, let alone as a HYP candidate, but 5 years ago could be bought at a price a quarter of what it is today. The dividend is now 3 times what it was 5 years ago. Of course it isn't easy, but a focus on finding companies that have the prospects to realistically grow their revenues, profits, and thus future dividends, rather than those that are currently paying a certain yield, may well be preferable in achieving a rising dividend stream than alternative strategies.

With discussions taking place on another thread about Yield-On-Cost, rather than Current Yield, isn't it possible for an income strategy to be considered that seeks "Future High Yield On Investment" candidates?

To your final question there is no doubt to the answer. Shares that do not have a high yield but have the potential to have a high yield are valid for discussion on the HYP Practical Board. The pinned Board Guidelines post makes that clear:

"Discussion of potential shares, and of shares which have been selected in the past, is acceptable on the HYP Practical Board"

And Bioventix is a great example of that in practice, and I have held it for a similar period as you. Although some here may object to it because it is an AIM-listed share.

And yet, I would postulate, were such a suggestion take place on that Board, despite its theoretical adherence, I would expect a (er) practical dismissal at the minimum, and an inevitable cry of "Off Topic". It would be lovely to get a surprise though, and that not be the case. Maybe one to test in the future. Although unlikely, as I am not, and have never been a HYP-er, and my appearances there are usually in response to general questions on shares I hold, and I try not to venture into controversies if I can help it.

I think the key would be the reasonableness of the argument made for such a share being seen as a valid candidate in the future.

So if you advocate for inclusion of a share yielding, say, 1%, then the onus would be on you to make the case for a significant uplift in income within a reasonable period of time. If you successfully make that case then the discussion should be deemed appropriate, but not otherwise.

The important proviso being that the discussion is allowed pending you making your case. Whereas if you recommend whilst making no case, then those seeking to relocate your post would have more of a point. In other words I suspect the bar is a little lower for potential HY shares than it is for existing HY shares.

[Bubblesofearth]

So if you advocate for inclusion of a share yielding, say, 1%, then the onus would be on you to make the case for a significant uplift in income within a reasonable period of time. If you successfully make that case then the discussion should be deemed appropriate, but not otherwise.

Doesn't the market always assume that shares yielding 1% will grow their income, and presumably also dividends, rapidly over the coming years? Are these not simply called 'growth' shares?

BoE