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Going forward

General discussions about equity high-yield income strategies
Matchless
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Going forward

#415493

Postby Matchless » May 27th, 2021, 9:55 am

Which of our HY favourites that are not looking so good going forward at the moment, are likely to reinvent themselves over the next say 5 years - I’m thinking of the oils, fags, retail/office property companies etc. Otherwise high yield could perhaps be replaced with safe yield.

tjh290633
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Re: Going forward

#415672

Postby tjh290633 » May 27th, 2021, 9:51 pm

I have found in the past that one year's losers are next year's winners. Not 100% successful, but a pattern can be seen if you look at a number of years.

TJH

funduffer
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Re: Going forward

#415981

Postby funduffer » May 29th, 2021, 7:30 am

I have a fair size holding in Marstons.

They started well, had a great yield, and then the pandemic came.

Now - no dividends and paper capital loss.

It may take a while, but I think pubs will prosper again, and I am going to hang on for a bit longer to see what happens over the summer. Not expecting dividend resumption for a while though.

More broadly, the oil companies will have to reinvent themselves. Business as usual is a death knell. Shell are getting into electricity, EV charging and the like, but it is usually difficult for companies in old, established sectors to break out into new ones where there are many new entrants. I am not confident about the future of Shell and BP.

Tobacco companies still have a future for now. I read the other day that this number of smokers in the world has reached an all time high, which I found surprising. With cheap production costs, I think the cash cow will continue to deliver for a few more years yet. How, or whether they reinvent themselves, remains to be seen.

FD

Dod101
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Re: Going forward

#415982

Postby Dod101 » May 29th, 2021, 7:44 am

That is the sort of question I ask myself every time I look at my portfolio. I hold only Shell of the oil majors and suspect that it will reinvent itself. Tobacco in the longer run? Let's say if I were staring today I would not be buying them but I hold both Imps and BAT and will probably continue to hold them both.

I have not held any of the big real estate companies for a long while because I have never made much out of them even in the so called good times. I cannot be bothered at my age, but nowadays I would be looking to the new industries rather than those old ones. OTOH that needs a change in outlook because the new industries tend not to give much income and that is the Board we are on. Unfortunately or otherwise the broad financials sector is the most promising for income I think.

Dod

tjh290633
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Re: Going forward

#416033

Postby tjh290633 » May 29th, 2021, 11:17 am

I have just realised that it is 2 months since I updated my table of winners and losers. Here is the situation as at the close last night, for the change since 1st January this year.

Epic     Change   Yield
IMI 42.49% 1.36%
LLOY 36.91% 1.14%
KGF 33.25% 2.29%
BT.A 32.21% 4.40%
AV. 26.45% 5.11%
MKS 21.35% 0.00%
MARS 20.83% 0.00%
PSON 20.25% 2.38%
BP. 20.15% 5.06%
DGE 18.28% 2.07%
CPG 18.01% 0.00%
S32 17.52% 1.60%
TATE 13.58% 4.02%
SMDS 11.69% 2.87%
RIO 10.86% 6.73%
BHP 10.29% 5.42%
SGRO 10.12% 2.12%
AZN 9.86% 2.57%
UU. 9.84% 4.40%
NG. 8.58% 5.23%
BA. 7.73% 4.50%
LGEN 6.80% 6.18%
VOD 6.09% 6.12%
BLND 4.29% 2.95%
IMB 4.20% 8.63%
TW. 3.38% 4.83%
SSE 2.80% 5.23%
RDSB 1.92% 3.82%
ADM 1.14% 5.32%
PHP 0.65% 4.03%
BATS 0.18% 7.95%
GSK 0.16% 5.95%
IGG -0.58% 5.04%
RKT -2.66% 2.74%
TSCO -3.52% 4.10%
ULVR -3.77% 3.53%

Av.Chg 11.70% 3.88%

You might like to look at the movement at each end. MARS has already gained quite a lot. I see in a press report that DGE and RKT are fancied for performing well this year. That's hedging the bets, as DGE has already had a good rise. The FTSE100 is up 8.7% so far this year, so from NG. downwards the shares are underperforming. All my shares with zero yield are well up. Come 12 months we may well see a reversal of fortunes for some of them.

TJH

Dod101
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Re: Going forward

#416088

Postby Dod101 » May 29th, 2021, 3:28 pm

Five months is of course too short a timescale to show very much but I suppose about all it does show is that there is a bit of rotation going on but of course that happens all the time. Some/(most?) in the lower half of your table are though very decent shares.

Dod

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Re: Going forward

#416497

Postby Arborbridge » June 1st, 2021, 7:08 am

Dod101 wrote:Five months is of course too short a timescale to show very much but I suppose about all it does show is that there is a bit of rotation going on but of course that happens all the time. Some/(most?) in the lower half of your table are though very decent shares.

Dod


Maybe it points to which shares to look at for topping up? - i.e. the ones which have dropped, all things being equal, and given that one intends to keep the shares LTBH.

Arb.

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Re: Going forward

#416498

Postby Itsallaguess » June 1st, 2021, 7:37 am

Arborbridge wrote:
Dod101 wrote:
Five months is of course too short a timescale to show very much but I suppose about all it does show is that there is a bit of rotation going on but of course that happens all the time. Some/(most?) in the lower half of your table are though very decent shares.


Maybe it points to which shares to look at for topping up? - i.e. the ones which have dropped, all things being equal, and given that one intends to keep the shares LTBH.


I always thought that one of the reasons why the HYP strategy chose to diversify across a wide number of business sectors was that it's generally acknowledged that business-cycles will, at any given time, have some sectors doing well and others doing relatively worse, and that over a number of business cycles, it would generally even itself out so that a sector-diversified income-portfolio might broadly just 'chug along', allowing those internal cycles to do their thing whilst investors got on with their lives.

Of course, there's always going to be outlier companies that might need more focussed attention and possible manual-intervention over the years, and a watchful eye needs to keep a look-out for those outliers, but I generally think that HYP investors with very high share churn-rates might often be interfering with those underlying 'sector-diversification business-cycle benefits', and often in a detrimental way if they find themselves always chasing those 'in the limelight' sectors that might well be about to take their own turn on the business-cycle down-slope....

Cheers,

Itsallaguess

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Re: Going forward

#416500

Postby Dod101 » June 1st, 2021, 7:45 am

Itsallaguess wrote:
Arborbridge wrote:
Dod101 wrote:
Five months is of course too short a timescale to show very much but I suppose about all it does show is that there is a bit of rotation going on but of course that happens all the time. Some/(most?) in the lower half of your table are though very decent shares.


Maybe it points to which shares to look at for topping up? - i.e. the ones which have dropped, all things being equal, and given that one intends to keep the shares LTBH.


I always thought that one of the reasons why the HYP strategy chose to diversify across a wide number of business sectors was that it's generally acknowledged that business-cycles will, at any given time, have some sectors doing well and others doing relatively worse, and that over a number of business cycles, it would generally even itself out so that a sector-diversified income-portfolio might broadly just 'chug along', allowing those internal cycles to do their thing whilst investors got on with their lives.

Of course, there's always going to be outlier companies that might need more focussed attention and possible manual-intervention over the years, and a watchful eye needs to keep a look-out for those outliers, but I generally think that HYP investors with very high share churn-rates might often be interfering with those underlying 'sector-diversification business-cycle benefits', and often in a detrimental way if they find themselves always chasing those 'in the limelight' sectors that might well be about to take their turn on the business-cycle down-slope....


Yes but I do not think that either of us is talking about churning, merely seeking candidates for a top up. I have always felt that LTBH is the way to go. Mind you, I would like to introduce a new topic aimed at the likes of Arb and I who are both I gather well into the drawing down stage of our HYPs. There must come a time when topping up (which I do not do a lot of) becomes unnecessary and excess income might be better deployed in supporting grandchildren for example. This is not the forum for that discussion but I wonder which one is?

Dod

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Re: Going forward

#416508

Postby Arborbridge » June 1st, 2021, 8:15 am

Itsallaguess wrote:
Arborbridge wrote:
Dod101 wrote:
Five months is of course too short a timescale to show very much but I suppose about all it does show is that there is a bit of rotation going on but of course that happens all the time. Some/(most?) in the lower half of your table are though very decent shares.


Maybe it points to which shares to look at for topping up? - i.e. the ones which have dropped, all things being equal, and given that one intends to keep the shares LTBH.


I always thought that one of the reasons why the HYP strategy chose to diversify across a wide number of business sectors was that it's generally acknowledged that business-cycles will, at any given time, have some sectors doing well and others doing relatively worse, and that over a number of business cycles, it would generally even itself out so that a sector-diversified income-portfolio might broadly just 'chug along', allowing those internal cycles to do their thing whilst investors got on with their lives.

Of course, there's always going to be outlier companies that might need more focussed attention and possible manual-intervention over the years, and a watchful eye needs to keep a look-out for those outliers, but I generally think that HYP investors with very high share churn-rates might often be interfering with those underlying 'sector-diversification business-cycle benefits', and often in a detrimental way if they find themselves always chasing those 'in the limelight' sectors that might well be about to take their own turn on the business-cycle down-slope....

Cheers,

Itsallaguess


Why do you mention churn? I'm using this list as a pointer to which shares to topup. It wasn't meant particularly seriously simply because the HYPTUSS (Terry's method) does it for us.

Maybe the confusion was Dod mentioning "rotation" which might have made you think of actively selling out and buying back? - that wasn't what I meant.

Buying the ones which have dropped is similar to buying the ones whose yield has increased.

Arb.

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Re: Going forward

#416530

Postby Itsallaguess » June 1st, 2021, 10:01 am

Arborbridge wrote:
Why do you mention churn? I'm using this list as a pointer to which shares to topup. It wasn't meant particularly seriously simply because the HYPTUSS (Terry's method) does it for us.

Maybe the confusion was Dod mentioning "rotation" which might have made you think of actively selling out and buying back? - that wasn't what I meant.


Hi Arb,

Yes - it was primarily in relation to Dod mentioning 'rotation', but I think the comment still stands in relation to the whole idea of a portfolio of diverse sectors coming into and out of favour 'naturally' over the course of a number of years..

Cheers,

Itsallaguess

Dod101
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Re: Going forward

#416542

Postby Dod101 » June 1st, 2021, 10:56 am

When I mentioned rotation, I did not mean rotation on an individual basis, I meant it as it is often used when describing the market. Whatever reason shares come into and apparently out of fashion or popularity or whatever name you like to give it, there is no doubt that share prices do wax and wane and you can see that in the table produced by TJH. That is not the same thing as churning an individual portfolio and if I had meant that I would have said so. Obviously my expression could be taken two ways and i am sorry for the confusion.

Dod

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Re: Going forward

#416555

Postby bluedonkey » June 1st, 2021, 11:54 am

Rogation perhaps?

Charlottesquare
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Re: Going forward

#417405

Postby Charlottesquare » June 4th, 2021, 9:25 pm

Dod101 wrote:When I mentioned rotation, I did not mean rotation on an individual basis, I meant it as it is often used when describing the market. Whatever reason shares come into and apparently out of fashion or popularity or whatever name you like to give it, there is no doubt that share prices do wax and wane and you can see that in the table produced by TJH. That is not the same thing as churning an individual portfolio and if I had meant that I would have said so. Obviously my expression could be taken two ways and i am sorry for the confusion.

Dod


The big question right now, to me anyway, appears to be, will out of favour entities rotate back or is what will happen more one of these significant economic changes where certain companies in certain sectors are just too big to be repositioned as the market changes are too significant? Time, of course, will tell, my own conclusion was I was prepared to move to ITs, sacrifice income and have more exposure to tech stock/overseas ITs, but that of course strays from High Yield.

In effect is 2020/2021 mere fashion change or is there a longer term change for eternity. (Effectively is it more like Codpiece makers still waiting for their industry to come back into fashion)


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