HYP1 is 19 (and a bit)

[Wizard]

Posted here to allow negative comment on HYP1 not permitted on HYP-P...

Yet another record income year

Here is the data for the year ended 12 November 2019, the nineteenth year of this non-tinker portfolio.

..........................................Income......................Value

Anglo American              432.87              9,714
BA Tobacco                1,735.06             25,290
BT Group                    875.03             11,195
Dixons Carphone              83.77              1,568
Glaxo                       281.60              6,102
InterCon Hotels             379.76             19,851
Land Sex                    309.49              6,033
Lloyds                      250.82              4,586
Mitch & But                   0.00              3,065
Persimmon                 2,483.95             25,981
Pearson                     169.29              6,203
RD Shell B                  578.94              9,141
Rio Tinto                 2,547.00             21,445
RSA                         101.12              2,613
United Utilities            328.59              6,895

Total  £                 10,557.29            159,682

...

Thanks for the update Stephen. Very impressive, and a great example that less tinkering is more. A lesson I shall strive to abide by going forward. I’ve been to fickle in the past, I admit, whilst trying to better my returns. There is no need to overthink things, and HYP1 is evidence of that. It is good that I realise my own failings though, something I’m working on.

Ian.

Ignoring the amusing fact that the date of the HYP1 update was missed in the auto-post mode praise of PYAD, I would have thought recent events confirm the risks of no-tinker pointed out in the thread when this update was given last year not show what a good thing it is. "Yet another record income year" screamed PYAD from the roof tops, well I doubt he'll be able to scream it for the 20th update.

Persimmon represented almost a quarter of the dividends for HYP1 and that has now gone. The good thing about that is that it means most of the other shares represent a small percentage cut to income when the dividend is in trouble, so the other seven cutters have had less of an impact in aggregate than Persimmon. Some could argue that with two of the three big payers still continuing to pay unaffected by Covid-19 all is well with HYP1, but IMHO the 'eggs in a very small number of basket risks' has been made clear by the Persimmon cut. If Rio or BAT were to wobbly now HYP1 is going to be looking at a very bad income year.

[Alaric]

Posted here to allow negative comment on HYP1 not permitted on HYP-P...

Somewhere in the original articles about HYP was a statement to the effect that one of the objectives was a high and hopefully increasing dividend income. If that was the sole or a primary objective and coupled with buy and hold, a package of ITs is rather better at mitigating the income downside risk, if only because of the way they can be managed using past reserves to subsidise income shortfalls.

At a more general level, it demonstrates that if you select fifteen diverse shares, some will come good over a long time period.

[Wizard]

Anyhow, it's cheery to see our old friend HYP1 continuing "to do the business" it was designed for.
Arb.

There was obviously a mix up with the dates or something. Does anyone know how HYP1 is doing in reality?

Not great IMHO, but sure there will be a range of views.

Seven of the fifteen have cut to zero, Shell has reduced by 33%. I make it a reduction of c.£4,670 assuming no recover for cutters this year, I think that is about a 44% fall. If Rio and BAT keep paying that will not change a great deal. Essentially the portfolio currently has fewer than half the constituents paying a dividend, with masskve concetration on two of the remaining payers.

[Dod101]

I do not wish to get into a 'have a go at pyad and HYP' mode but there is no doubt that the Covid 19 crisis has shown how dangerous the HYP 1 income producer is. All portfolios need to evolve with time. Just look at the constituents of the FTSE100 over 19 and a bit years. The same phenomenon is obvious with the 'frozen in time' HYP1.

Dod

[ayshfm1]

Leaving aside concentration issues.

We (or at least I anyway) had already iterated to the conclusion that the HYP system had the potential to be volatile. To compensate either it throws off a lot more cash than is needed, or one holds a cash buffer.

Cov-19 simply hammered home that conclusion.

The cash buffer is the imponderable, too big and income potential is wasted too small and hardship/force selling is necessary. How HYP 1 fares over the next two years will go a long way to hinting on just how big that cash buffer should be.

(I don't see a swift bounce back myself)

[mike]

Seven of the fifteen have cut to zero, Shell has reduced by 33%. I make it a reduction of c.£4,670 assuming no recover for cutters this year, I think that is about a 44% fall. If Rio and BAT keep paying that will not change a great deal. Essentially the portfolio currently has fewer than half the constituents paying a dividend, with masskve concetration on two of the remaining payers.

Just to correct, Shell has reduced from 188c to 64c, so a drop to 33%, not by 33%

[Wizard]

Seven of the fifteen have cut to zero, Shell has reduced by 33%. I make it a reduction of c.£4,670 assuming no recover for cutters this year, I think that is about a 44% fall. If Rio and BAT keep paying that will not change a great deal. Essentially the portfolio currently has fewer than half the constituents paying a dividend, with masskve concetration on two of the remaining payers.

Just to correct, Shell has reduced from 188c to 64c, so a drop to 33%, not by 33%

Thanks Mike. That means a 46% income drop, c.£4,860 in cash terms.

[Wizard]

I do not wish to get into a 'have a go at pyad and HYP' mode but there is no doubt that the Covid 19 crisis has shown how dangerous the HYP 1 income producer is. All portfolios need to evolve with time. Just look at the constituents of the FTSE100 over 19 and a bit years. The same phenomenon is obvious with the 'frozen in time' HYP1.

Dod

Indeed Dod, and as it is the standard bearer for a 'no-tinker' portfolio by extension the whole PYADic approach, given there is no concept of income reserves, just a presumption of great wealth to start with such that a mere 46% drop in income would hardly be noticed!

[Lootman]

Posted here to allow negative comment on HYP1 not permitted on HYP-P.

I do not knowingly look at HYP-P that much. But do the recent guideline changes mean now that essentially nothing critical can be said about something like HYP1 on the HYP-P board, and nothing good will be said about it here?

It seems bizarre if we end up with two boards for the two opposite viewpoints on this and other similar topics. And a post on both boards for any given subject. Or is that the intent?

I suspect the November 2020 report on HYP1 will be interesting to see. Maybe it will be a "record" year in a rather different way? Or maybe it just won't be published at all? Although to give the author some credit, as I recall he did continue to publish the annual report even when income was down 40% or so in 2008. He just placed more emphasis than usual on the capital return

[Alaric]

But do the recent guideline changes mean now that essentially nothing critical can be said about something like HYP1 on the HYP-P board, and nothing good will be said about it here?

It's one-sided. Nothing bad can be said about HYP1 or any of them on the HYP-P board. HYP can be praised on this board, but anyone doing so is likely to have to defend the strange beliefs that have come packaged with HYP in various interpretations.

[Wizard]

Posted here to allow negative comment on HYP1 not permitted on HYP-P.

I do not knowingly look at HYP-P that much. But do the recent guideline changes mean now that essentially nothing critical can be said about something like HYP1 on the HYP-P board, and nothing good will be said about it here?

It seems bizarre if we end up with two boards for the two opposite viewpoints on this and other similar topics. And a post on both boards for any given subject. Or is that the intent?

I suspect the November 2020 report on HYP1 will be interesting to see. Maybe it will be a "record" year in a rather different way? Or maybe it just won't be published at all? Although to give the author some credit, as I recall he did continue to publish the annual report even when income was down 40% or so in 2008. He just placed more emphasis than usual on the capital return

I don't think it would be an issue to hold positive and negative views on the management of an HYP on HYP-P. But it is subtle. If you think the 'no-tinker' approach is strategically flawed, then saying this about HYP1 on HYP-P would IMHO be contrary to the guidance to not discuss strategy. I know the guidance does not preclude selling, but it does seem to require everything is at the time of purchase intended to be LTBH. I personally believe there is little that should really be covered on HYP-P given its practical management mandate, but I know others disagree. Ultimately I neither run an HYP nor am I considering doing so, on that basis my read is I should not be posting there, again, I believe others interpret the guidance differently.

[onthemove]

Posted here to allow negative comment on HYP1 not permitted on HYP-P.

I do not knowingly look at HYP-P that much. But do the recent guideline changes mean now that essentially nothing critical can be said about something like HYP1 on the HYP-P board, and nothing good will be said about it here?
It seems bizarre if we end up with two boards for the two opposite viewpoints on this and other similar topics

That's a complete mischaracterisation of the position.

HYP-P is for people who just want to get on with running an HYP without having the constant, wearing, grinding, tedious irritation from a number of people that, although they themselves clearly do not subscribe to the HYP idea, for some reason feel the overwhelming urge to constantly, repeatedly accentuate the negatives of HYP, rather than just running their own portfolios however they see fit and discussing that on other more appropriate boards.

So the guidelines facilitate that the HYP'ers can just get on with running their portfolios in peace (on HYP-P), and if anyone really wants to argue over the merits of HYP, then they are fine to do so here, on HYS-S.

If anyone who runs an HYP (or anyone else) wants to join the discussion and argue the t*ss with those who've clearly made up their minds against it, then there's nothing limiting the discussion of the merits of HYP or otherwise on here.

If the discussion just ends up polarised like you envisage, with this board only discussing the negatives, then that just proves the point as to why the guidelines are needed - it would mean that those running the HYP aren't interested in arguing constantly with those who've made their minds up against it.

If people who run an HYP want to join the discussion on the merits, this board will end up with both sides of the argument.

If people running an HYP don't want to discuss it and just want get on with running theirs, then this board might end up as you suggest

But then, either way, the guidelines would be serving their purpose.

[1nvest]

But do the recent guideline changes mean now that essentially nothing critical can be said about something like HYP1 on the HYP-P board, and nothing good will be said about it here?

It's one-sided. Nothing bad can be said about HYP1 or any of them on the HYP-P board. HYP can be praised on this board, but anyone doing so is likely to have to defend the strange beliefs that have come packaged with HYP in various interpretations.

HYP-P section has the tendency to push users, postings (and potential donations) away. Would be better if HYP-P were elsewhere, behind closed doors IMO. Leaving a open door leading to censorship/abuse from moderators and a small group who opine that postings must fit in precisely with their mindset has natural push-away from the entire site consequence.

[Dod101]

Fundamentally if one does not agree that the strict HYP is the way to go (and I do not) then that is fine but there is really not a lot of point in continually sniping at it. If others are dedicated that is fine by me but fundamentally their loss. I am happy to comment occasionally on individual shares because the HYP P Board is useful for that or should individual shares be discussed on the Shares Board?

Anyway Some will find the HYP useful as a set of tight rules but quite probably as they gain investment experience they too will modify their views.

Dod

[MrFoolish]

HYP-P is for people who just want to get on with running an HYP without having the constant, wearing, grinding, tedious irritation from a number of people that, although they themselves clearly do not subscribe to the HYP idea, for some reason feel the overwhelming urge to constantly, repeatedly accentuate the negatives of HYP, rather than just running their own portfolios however they see fit and discussing that on other more appropriate boards.

From what I've seen, there's way more argument about what can and can't be posted than actual criticism of HYPs. No other discussion board on this site seems to need such a rigid set of rules.

[Hypster]

I think HYP-P Is intended to be a place where folks can discuss the practical application of running a HYP.

I don’t think they intend to prevent criticism of the strategy, just that comments on the merits of the strategy belong elsewhere, even gushing praise of the strategy would be off topic.

It ought to be a very quiet place - somewhere where folks can discuss things like:

“Do you top up at median or average”

“Should I redeploy my Greene King cash into another pub/brewer or elsewhere”

“In the current environment is 3.x a sufficient base for new selections”

“Do you hold an income reserve in the HYP or out of it?”

And so on...

[Arborbridge]

But do the recent guideline changes mean now that essentially nothing critical can be said about something like HYP1 on the HYP-P board, and nothing good will be said about it here?

It's one-sided. Nothing bad can be said about HYP1 or any of them on the HYP-P board. HYP can be praised on this board, but anyone doing so is likely to have to defend the strange beliefs that have come packaged with HYP in various interpretations.

HYP-P section has the tendency to push users, postings (and potential donations) away. Would be better if HYP-P were elsewhere, behind closed doors IMO. Leaving a open door leading to censorship/abuse from moderators and a small group who opine that postings must fit in precisely with their mindset has natural push-away from the entire site consequence.

I am sure there's some exaggeration going on here. I've never had any difficulty being critical of HYPs or HYP shares suggestions - I've never been deleted on that ground. But what I've not done, is question the whole HYP idea or tried to trash it, or discuss whether it's a good thing or not. It isn't even a subtle difference, and I'm cannot see why people have found it so difficult to comprehend. Of course one can say critical things about HYP, but just not spend one's life trying to repeatedly trash it!

HYP-P is not entirely asymmetric either, but perhaps one has to be lesss obvious about it. For example, I'm known to be a HYPer, but I also publish reviews which could be said to be critical because comparisons between my HYP and other benchmarks are not always flattering - I just don't labour the point but let people draw whatever conclusion they want. I don't try to alter the niche world of HYP like some crusaders appear to.

As to your remark above about postings having to fit "precisely" I'd say that takes the biscuit. Your post this morning wasn't even remotely on the topic of the thread - on poster commented that your post was "about using another, completely different type of strategy alongside HYP - it wasn't even a share investment strategy and certainly couldn't be described as even "HYPish"! " It's no surprise that it was deleted. As to pushing people away - no. If people want to discuss HYP and all it's wider reaches, they've always been able to do so. If they are dead against HYP and keep saying so, that's when the trouble begins, quite understandably.

Arb.

[Wizard]

Fundamentally if one does not agree that the strict HYP is the way to go (and I do not) then that is fine but there is really not a lot of point in continually sniping at it. If others are dedicated that is fine by me but fundamentally their loss. I am happy to comment occasionally on individual shares because the HYP P Board is useful for that or should individual shares be discussed on the Shares Board?

Anyway Some will find the HYP useful as a set of tight rules but quite probably as they gain investment experience they too will modify their views.

Dod

My bold.

Personally I think it very much depends on the discussion. If the question being addressed is “Is share XYZ a good fit for my HYP?” I think HYP-P is very much the right place to discuss that. But if the question is “Is company XYZ a good investment?” I believe that should be discussed elsewhere, not least because I think the guidance precludes some Fools from posting on HYP-P, so they are excluded from the discussion. But I know some who do post on HYP-P believe a much wider scope is reasonable.

[Arborbridge]

Fundamentally if one does not agree that the strict HYP is the way to go (and I do not) then that is fine but there is really not a lot of point in continually sniping at it. If others are dedicated that is fine by me but fundamentally their loss. I am happy to comment occasionally on individual shares because the HYP P Board is useful for that or should individual shares be discussed on the Shares Board?

Anyway Some will find the HYP useful as a set of tight rules but quite probably as they gain investment experience they too will modify their views.

Dod

But as you know, Dod, we've had pretty wide discussions on HYP-P and you have always been welcome to say your piece in a perfectly polite and constructive way. You've just never come on trying to tell people that HYP is rubbish - in other words, as you say, you are not in the habit of sniping.

And I hope you and Lootman will post there because both of you play by the rules, indeed, trying to be constructive rather than destructive.

Arb.

[Wizard]

It's one-sided. Nothing bad can be said about HYP1 or any of them on the HYP-P board. HYP can be praised on this board, but anyone doing so is likely to have to defend the strange beliefs that have come packaged with HYP in various interpretations.

HYP-P section has the tendency to push users, postings (and potential donations) away. Would be better if HYP-P were elsewhere, behind closed doors IMO. Leaving a open door leading to censorship/abuse from moderators and a small group who opine that postings must fit in precisely with their mindset has natural push-away from the entire site consequence.

I am sure there's some exaggeration going on here. I've never had any difficulty being critical of HYPs or HYP shares suggestions - I've never been deleted on that ground. But what I've not done, is question the whole HYP idea or tried to trash it, or discuss whether it's a good thing or not. It isn't even a subtle difference, and I'm cannot see why people have found it so difficult to comprehend. Of course one can say critical things about HYP, but just not spend one's life trying to repeatedly trash it!

HYP-P is not entirely asymmetric either, but perhaps one has to be lesss obvious about it. For example, I'm known to be a HYPer, but I also publish reviews which could be said to be critical because comparisons between my HYP and other benchmarks are not always flattering - I just don't labour the point but let people draw whatever conclusion they want. I don't try to alter the niche world of HYP like some crusaders appear to.

As to your remark above about postings having to fit "precisely" I'd say that takes the biscuit. Your post this morning wasn't even remotely on the topic of the thread - on poster commented that your post was "about using another, completely different type of strategy alongside HYP - it wasn't even a share investment strategy and certainly couldn't be described as even "HYPish"! " It's no surprise that it was deleted. As to pushing people away - no. If people want to discuss HYP and all it's wider reaches, they've always been able to do so. If they are dead against HYP and keep saying so, that's when the trouble begins, quite understandably.

Arb.

My bold.

This is not a dig, I am not being provocative. But I would be really interested in what you mean by the phrase in bold.