Change by Dod in his portfolio

[Dod101]

As I outlined on another thread, I have now sold half of my holding in BAT and with the proceeds put half into buying some more Greencoat UK and the other half into Unilever. This will entail a loss of some dividend income but too bad. The price of withdrawing support for tobacco. I will sell the balance of BAT when I feel my income can afford it but in the meantime I plan to do the same with Imperial Brands in the new year.

Greencoat is now more or less a full holding sitting at about the median.

Dod

[Arborbridge]

As I outlined on another thread, I have now sold half of my holding in BAT and with the proceeds put half into buying some more Greencoat UK and the other half into Unilever. This will entail a loss of some dividend income but too bad. The price of withdrawing support for tobacco. I will sell the balance of BAT when I feel my income can afford it but in the meantime I plan to do the same with Imperial Brands in the new year.

Greencoat is now more or less a full holding sitting at about the median.

Dod

What a coincidence -I've been wondering how I could also unwind my holding and what I would do in its place*.
Thanks for the lead on this and in keeping us updated. ULVR must be giving a big hit on income compared with BAT.

*I've already taken a hit while disposing of PNN and VOD. And my income forecast for next year is not great, according to HYPTUSS. Certainly nowhere near the RPI rate.

[Arborbridge]

As I outlined on another thread, I have now sold half of my holding in BAT and with the proceeds put half into buying some more Greencoat UK and the other half into Unilever. This will entail a loss of some dividend income but too bad. The price of withdrawing support for tobacco. I will sell the balance of BAT when I feel my income can afford it but in the meantime I plan to do the same with Imperial Brands in the new year.

Greencoat is now more or less a full holding sitting at about the median.

Dod

Which was the other thread, BTW?

[Dod101]

As I outlined on another thread, I have now sold half of my holding in BAT and with the proceeds put half into buying some more Greencoat UK and the other half into Unilever. This will entail a loss of some dividend income but too bad. The price of withdrawing support for tobacco. I will sell the balance of BAT when I feel my income can afford it but in the meantime I plan to do the same with Imperial Brands in the new year.

Greencoat is now more or less a full holding sitting at about the median.

Dod

Which was the other thread, BTW?

I was thinking of the BAT Company News thread and these comments are not appropriate for it. I am disgusted with the tobaccos and do not need to prostitute myself for the sake of their undoubtedly attractive income. If I sell half of my Imperial holding in January then between the two that will be a significant hit to my income but I hope I might make it up over the year. If not I am not worried as I have surplus income anyway. The fact that nearly all of it is tax free from ISAs or my SIPP helps hugely.

Dod

[Newroad]

Interesting, Dod.

Is the withdrawal of support a

(1) Moral decision, or a
(2) Financial decision?

If (1), why not before now? Similarly (if you hold any/all) what about companies which provide alcohol, weapons, gambling etc?

If (2), I understood it was all about "natural yield" or similar, so what's the deeper thinking there?

At a personal level, I have not made any decisions based on (1) thus far. Were I to choose to dispose of BATS, a quick look at Dividend Data would make the likely replacement for me ULVR.

Regards, Newroad

[Dod101]

Interesting, Dod.

Is the withdrawal of support a

(1) Moral decision, or a
(2) Financial decision?

If (1), why not before now? Similarly (if you hold any/all) what about companies which provide alcohol, weapons, gambling etc?

If (2), I understood it was all about "natural yield" or similar, so what's the deeper thinking there?

At a personal level, I have not made any decisions based on (1) thus far. Were I to choose to dispose of BATS, a quick look at Dividend Data would make the likely replacement for me ULVR.

Regards, Newroad

Actually the original reason was the wake up call of the write off of £25 billion in the recent announcement by BAT. Then the Times had an article about the behaviour of the tobacco companies re encouraging vaping amongst young people. I also posted a bit about the long term viability of tobacco dividends/share prices but no one seemed interested in taking me up on that. So it is really a combination of things. It is a dying industry and not one I really need to be associated with. Hence my gradual withdrawal.

I would never hold gambling or weapons companies. Alcohol seems to me a bit different although I can see the moral argument. As a modest participator in its evils, I can be a bit more sympathetic to that industry.

Dod

[88V8]

I am disgusted with the tobaccos and do not need to prostitute myself for the sake of their undoubtedly attractive income.

But you selling the shares makes not a jot of difference to the tobaccos.
The shares don't know you own them and neither does the company.

Plus, Greencoat is part of the 'too much wind' problem that is costing us all money.

It's hard, doing the right thing.

V8 (holds both tobaccos)

[Arborbridge]

I am disgusted with the tobaccos and do not need to prostitute myself for the sake of their undoubtedly attractive income.

But you selling the shares makes not a jot of difference to the tobaccos.
The shares don't know you own them and neither does the company.

Plus, Greencoat is part of the 'too much wind' problem that is costing us all money.

It's hard, doing the right thing.

V8 (holds both tobaccos)

It's hard, doing the right thing. Quite so - near impossible. Indeed, some would argue that the whole notion of investing in shares is immoral. But that not an argument for here!

I think doing the right thing is what Dod is about, so the idea that it makes not one jot of difference isn't uppermost for Dod: he is doing the right thing by his moral compass, and that is more important in this case.

I've wrestled with this over the years. I decided to invest in baccy and drink, but not bombs. That's on the flaky theory that people have a choice whether to drink or smoke, but not whether they get bombed.

I get that big tobacco needs to replace its income and move into the less harmful vaping - but deliberate marketing to children is a step too far for me. Could they be persuaded to draw back from that to save their image? Maybe (though doubtful on previous form), but that probably wouldn't be acting for the right reasons.

Arb.

[Newroad]

Hi 88V8.

Further to Dod's reply, it appears his main reasoning, or at the very least, the inciting factor, was financial not moral.

However, your broader point is well made. You may be familiar with Stuart Kirk, now an FT columnist, but resigned/dismissed for speaking out against certain financial approaches to dealing with climate change

https://www.bbc.co.uk/news/business-62085294

He later observed similarly to you below

https://www.ft.com/content/bfbe6f9e-89d7-4027-ade1-687b9e8a5331

An excerpt from the above is (my bold)

"Plea number 5 recognises the limitation of secondary markets when it comes to a low carbon future. If investors really want to be green, they need to hand money directly to companies helping the transition. And withdraw it from those that ain’t.

The truth is that primary market investments, such as private equity, venture capital or direct lending remain inaccessible to most FT readers. And even if not, these asset classes still do not exist at a scale required to reach net zero.

So delegates, we beg you to do everything you can to create more direct funding vehicles. While you’re at it, somehow relax the rules around who can put their money in them. Today, most regulators around the world deem them only suitable for sophisticated investors."

I'm sure you can appreciate the same applies to big tobacco et al as it does to low carbon aims - i.e. you can only really tackle it in the primary market, not the secondary market.

Regards, Newroad

[Arborbridge]

Hi 88V8.

Further to Dod's reply, it appears his main reasoning, or at the very least, the inciting factor, was financial not moral.



Regards, Newroad

Looking at the sequence of comments from Dod, you are probably correct. It was more to do with a dying industry and the poor culture. But the moral argument (especially about vaping advertising, I suspect) was the icing which enabled him to regard the loss of income as worthwhile.


Arb.

[CliffEdge]

Businesses (especially privately owned) are generally amoral.

[Dod101]

Hi 88V8.

Further to Dod's reply, it appears his main reasoning, or at the very least, the inciting factor, was financial not moral.



Regards, Newroad

Looking at the sequence of comments from Dod, you are probably correct. It was more to do with a dying industry and the poor culture. But the moral argument (especially about vaping advertising, I suspect) was the icing which enabled him to regard the loss of income as worthwhile.


Arb.

These comments are pretty much how I feel. I have never been all that keen on tobacco shares because the product no doubt kills people. I have just spent some weeks in hospital and it is amazing the number of patients, recovering from operations, who need to be hooked up to oxygen. Mostly that is because of a history of smoking either current or in the past.

But my comments following the huge write off by BAT and then the disclosure that the tobacco companies are doing all they can to hook young people on to vaping was the last straw.

It is a wrench to lose the dividends but sometimes you need to do what you need to do.

Dod

[Dod101]

I am disgusted with the tobaccos and do not need to prostitute myself for the sake of their undoubtedly attractive income.

But you selling the shares makes not a jot of difference to the tobaccos.
The shares don't know you own them and neither does the company.

Plus, Greencoat is part of the 'too much wind' problem that is costing us all money.

It's hard, doing the right thing.

V8 (holds both tobaccos)

I appreciate that my action will not harm BAT, but it helps me hugely. I feel that I am doing the right thing. That’s what matters to me.

As for Greencoat, I am not all that enthused by wind farms but whether I hold shares in them or not is not going to make any difference and I like Greencoat. It is a big company and the cash flow is great. No other similar utility has been able to announce a share buyback; they always need to raise more money thus diluting existing shareholders. That puts Greencoat in a very strong position. Besides, it is quite amusing to look at the Braes of Doune wind farm and tell my family I have a financial interest in it.

Dod

[simoan]

It is a wrench to lose the dividends but sometimes you need to do what you need to do.

Dod

As you know, holding just for the dividend is not a good reason to hold any share IMHO. Because if/when it gets cut, what are you left with? Probably a greatly reduced income and a reduction in capital whilst holding a company with an awful balance sheet. It's much easier if you think about things from a total return perspective, but at the end of the day it's best to be able to sleep at night. I don't think anyone should ever feel remorse at going with their gut and selling an investment even if it turns out in the fullness of time to look wrong from an investment perspective.

All the best, Si

[bluedonkey]

Well, selling has the theoretical effect of depressing the share price and increasing the cost of servicing any new equity capital issued.

[richfool]

I let Merchants IT go a while back, because of its holdings of tobacco. I didn't see a medium or long term future in tobacco, not to mention the ethical aspects.

[Gerry557]

I'm not knocking your decision.

I found it difficult to find ethical companies to invest in. You can try and justify some things. Personally I have never owned baccy shares and they were probably a good investment. That isn't to say that I don't hold funds that probably do hold them.

I have held gambling and weapons shares. I sold the first partly over ethical concerns the latter cos it jumped in price. Whilst it can kill people it can also act as a deterant against others wanting to use similar device so can save lives too.

Same with oil. How many would die this winter if Just Stop Oil had their way. UKW and TRIG were supposed to be goodies but then other issues appear. Dead birds, landfill and costs for the poorer side.

I can't think of one share that is totally ethical. I suppose its a sliding scale measured against your own consiense.

[Dod101]

I'm not knocking your decision.

I found it difficult to find ethical companies to invest in. You can try and justify some things. Personally I have never owned baccy shares and they were probably a good investment. That isn't to say that I don't hold funds that probably do hold them.

I have held gambling and weapons shares. I sold the first partly over ethical concerns the latter cos it jumped in price. Whilst it can kill people it can also act as a deterant against others wanting to use similar device so can save lives too.

Same with oil. How many would die this winter if Just Stop Oil had their way. UKW and TRIG were supposed to be goodies but then other issues appear. Dead birds, landfill and costs for the poorer side.

I can't think of one share that is totally ethical. I suppose its a sliding scale measured against your own consiense.

Yes most decisions are a compromise but I was/am particularly troubled by the tobaccos. Re wind turbines affecting birds, well yes but do we want progress or not?
Whatever we do is going to upset nature one way or another but I think the tobaccos have lost any moral compass and besides are a dying industry.

Dod

[moorfield]

I would never hold gambling or weapons companies. Alcohol seems to me a bit different although I can see the moral argument. As a modest participator in its evils, I can be a bit more sympathetic to that industry.

Fair enough, but an obvious problem with making statements like this is that it does sometimes open up rabbit holes of hypocrisy.

Are you still holding any investment trusts that invest in these companies ?

[kempiejon]

I remember when the provider of my company pension had about 8 different funds to pick from and in the 90s launched an ethical fund. Looking at constituents I was surprised to find BP, Shell or other big oil companies. In the greenwashing this was because they spent more on renewables than other businesses combined.

More recently I was reading about an ESG fund that would still invest in companies with poor credentials as by staying invested the fund managers could be a positive influence for change.