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What is tinkering if not trading in a HYP?

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Crazbe7
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What is tinkering if not trading in a HYP?

#188376

Postby Crazbe7 » December 20th, 2018, 2:38 pm

From the HYP practical board guidance

"Discussion of potential shares, and of shares which have been selected in the past, is acceptable on the HYP Practical Board. The construction, management and performance of HYPs is acceptable."

Recently from a moderator "If you are discussing trading, you are not discussing HYP". But management e.g. 'tinkering' e.g. selling e.g. trading is allowed. What complete and utter nonsense.

Crazbe7

.

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Re: What is tinkering if not trading in a HYP?

#188390

Postby PinkDalek » December 20th, 2018, 3:29 pm

I took trading to mean buying and selling regularly, perhaps in view of political fears, capital gains or losses etc, with little regards to the HYP Guidance and high yield portfolio per se. Whereas the purist HYP includes LTB&H, as in:

“A long term buy and hold (LTBH) of these shares is envisaged.”

You wrote “I have sold all my retail, utility, housing and REITs shares in my HYP in the last three months and now sit 30% in cash - sales + dividends.”. That doesn’t sound like an HYP (as defined in the Guidance).

You may also wish to read the parallel Topic, here on 101.

Describing what you don’t agree with or don’t understand as “utter nonsense” isn’t Civil.

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Re: What is tinkering if not trading in a HYP?

#188409

Postby Lootman » December 20th, 2018, 4:50 pm

PinkDalek wrote:You wrote “I have sold all my retail, utility, housing and REITs shares in my HYP in the last three months and now sit 30% in cash - sales + dividends.”. That doesn’t sound like an HYP (as defined in the Guidance).

That's true but if the motivation were described a little differently then such actions might still be deemed on-topic for a HYP. For instance I might write:

"I am concerned about the prospect for a recession and dividend cuts in 2019, like we saw in 2008. I therefore wish to raise the cash safety margin in my HYP from 10% to 30%. This will require sales in sectors that are at the most risk of dividend cuts. I see those sectors as being retail, utility, housing and REITs. Comments?"

Would that not be kosher as a practical topic for the HYP board? HYP doesn't say anything about how much to allocate to a HYP, but I've certainly seen discussions about cash safety margins and they were deemed on-topic.

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Re: What is tinkering if not trading in a HYP?

#188416

Postby Dod101 » December 20th, 2018, 5:09 pm

But the cash safety margins were I think expected to arise from the income generated not from sales. I have substantially changed my HYP this year not from any particularly strategic viewpoint but just because certain shares no longer appealed and I now find myself with a relatively low exposure to Utilities. In fact only National Grid is left, ( I never held any support services and long ago sold my retail (Sainsbury)) This year though I sold BT, British Land and SSE, all 'usual suspect' HYP shares. I call that trading, although I also think it could creep in under tinkering. All a matter of degree.

I happen to agree with the OP. Much of the HYP guidance is not much use and quite artificial, although I do agree with the principle of HYP as a viable alternative to an annuity. It is just the practical guidance that I disagree with.

Incidentally it is wonderful to be able to write freely on this subject without always looking over my shoulder to the mods.

Dod

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Re: What is tinkering if not trading in a HYP?

#188421

Postby PinkDalek » December 20th, 2018, 5:25 pm

Lootman wrote:
PinkDalek wrote:You wrote “I have sold all my retail, utility, housing and REITs shares in my HYP in the last three months and now sit 30% in cash - sales + dividends.”. That doesn’t sound like an HYP (as defined in the Guidance).

That's true but if the motivation were described a little differently then such actions might still be deemed on-topic for a HYP. For instance I might write:

"I am concerned about the prospect for a recession and dividend cuts in 2019, like we saw in 2008. I therefore wish to raise the cash safety margin in my HYP from 10% to 30%. This will require sales in sectors that are at the most risk of dividend cuts. I see those sectors as being retail, utility, housing and REITs. Comments?"

Would that not be kosher as a practical topic for the HYP board? HYP doesn't say anything about how much to allocate to a HYP, but I've certainly seen discussions about cash safety margins and they were deemed on-topic.


Maybe, although it's a matter of semantics, but to your last point, I'm not sure about being deemed on-topic. Rather they weren't deemed off-topic in so far as they are presumably still there.

Come what may, if anything may be deemed to be borderline, it is so simple to post at viewforum.php?f=31 in the first place (with a cross post in the other place should one so desire).

I'm never sure why people prefer to start at viewforum.php?f=15. Including such comments in the OP as Some Alternative Income trusts (OT) which, in itself, is inoffensive but the thread in question then progressed away from the stricter definitions, as they always seem to do. The OP here then posted I also have 9 ITs (all held/no sales), off-topic here, but part of my HYP. Acknowledging off-topic but still mentioning it.

Why - we all know by now where that all leads?

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Re: What is tinkering if not trading in a HYP?

#188466

Postby tjh290633 » December 20th, 2018, 7:19 pm

Crazbe7 wrote:From the HYP practical board guidance

"Discussion of potential shares, and of shares which have been selected in the past, is acceptable on the HYP Practical Board. The construction, management and performance of HYPs is acceptable."

Recently from a moderator "If you are discussing trading, you are not discussing HYP". But management e.g. 'tinkering' e.g. selling e.g. trading is allowed. What complete and utter nonsense.

Crazbe7

.

I think that it is fairly clear that setting a limit on the weight of individual holdings, and having parameters for total disposals of holdings, are legitimate methods of managing an HYP.

Hence trimming back a holding because it is overweight, or disposing of a holding because its yield has fallen below an acceptable level, are allowable activities.

These activities are "managing" the HYP.

TJH

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Re: What is tinkering if not trading in a HYP?

#189043

Postby Arborbridge » December 24th, 2018, 9:02 am

Crazbe7 wrote:From the HYP practical board guidance

"Discussion of potential shares, and of shares which have been selected in the past, is acceptable on the HYP Practical Board. The construction, management and performance of HYPs is acceptable."

Recently from a moderator "If you are discussing trading, you are not discussing HYP". But management e.g. 'tinkering' e.g. selling e.g. trading is allowed. What complete and utter nonsense.

Crazbe7

.


Utter nonsense? - really? There's radical difference between trading and occasional buying and selling and to say otherwise is, well, nonsense. Maybe not quite "utter" nonsense, because people might argue about shades of difference - but then people will argue about anything if they put their minds to it, or even if they don't.
There are quite a few things in life where it's difficult to define a difference, but most people understand what is meant within the context. That just leaves the others floudering around thinking it's all utter nonsense.

If one understands what "trading" means within the context of investment practices (rather than making a "trade") then all is clear. If one doesn't, then listen up and learn.

Arb.

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Re: What is tinkering if not trading in a HYP?

#189048

Postby Dod101 » December 24th, 2018, 9:20 am

tjh290633 wrote:These activities are "managing" the HYP.


I am at a loss often enough with the Board guidance v pyad's concept and certainly their is a great deal of subtlety required. After all pyad basically said 'do nothing' so that would exclude any form of management of the HYP. I can understand the OP's point but alas nothing is black or white in this strange world of HYP.

It does not trouble me very much though, although as I said earlier in this thread (I think) I have done quite a bit of 'managing' of my HYP this year. Not of course trading even although this involved several lots of buying and selling; simply a bit of tinkering. Easy isn't it?

Dod

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Re: What is tinkering if not trading in a HYP?

#189071

Postby Arborbridge » December 24th, 2018, 11:16 am

Dod101 wrote:[Easy isn't it?

Dod


Well, yes, actually. I've never had a problem understanding the idea, and can never quite appreciate the nit-picking arguments put forward by others (rather rarely from you, I'd say!). It's clear that there is a spectrum here. We all acknowledge what is known as a Pyadic HYP, but we also acknowledge that later people added some bells and whistles but stayed within the general remit. That is, a long term buy and hold, largely do nothing, policy with the emphasis on income.

You Dod, for example, would know full well "trading" when you see it, as opposed to "managing" the HYP to keep within self imposed limits of one's own comfort. So the only possible point of discussion is where the cut off is in the spectrum - which actually has as much to do with motive and frequency.

Many things in life rely upon a "value judgement" and it only causes a problem if people choose to make it so. Take the word "frequent" itself. We'd probably agree that buying and selling every day is "frequent" whereas every six months or a year would not be. So to interpret this with regard HYP is only a matter of finding a concensus. When I see someone post that he/she has sold some stock from sheer nervousness but with the hope of buying back later when the price has fallen - I think, this isn't the HYP mentality. But when I see you, Dod, post that you held SSE for many years and feel you are too exposed so you've sold some or all because the story has changed - with no immediate intent of buying back in - I'd say that's allowable as sensible management.

Frequency and motive are all one needs to think about in this matter of whether something is HYP or not. Everyone will come up with slightly different judgements, but that's life 8-)

Arb.

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Re: What is tinkering if not trading in a HYP?

#189085

Postby Crazbe7 » December 24th, 2018, 12:06 pm

I have maxed out on my ISA when allowed when in the UK, and this has formed the basis of my HYP. I trade infrequently within my HYP but the Brexit referendum and subsequent negotiations have caused what I consider 'unique' market movements. I felt it prudent to protect my investments and sold shares. It has been the right decision.

Based on ex-dividend timings my dividend income has not been reduced. I am fully aware of ex-dividend dates in Jan/Feb to increase my annual dividend income, although I still work and reinvest all income.

For those who question my knowledge of trading, fortunately, I have reached my Lifetime allowance for pension savings in the UK. I might just have a scintilla of knowledge on trading. :D :D :D

Merry Christmas all
Crazbe7

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Re: What is tinkering if not trading in a HYP?

#189093

Postby Dod101 » December 24th, 2018, 12:32 pm

Arb is illustrating the season of goodwill, thanks, and I of course reciprocate. The idea of selling with a view to buying back at a lower price is an attempt at timing the market, and, apart from being very difficult to get right, is certainly not in the spirit of a HYP, any HYP. Not something I would do because if a share is still looking good in terms of its trading, dividends and so on why would I sell? I know that there are always weak spots in the market (like now) and if you cannot stand that there is not a lot of point in being in the stock market in the first place. For those who have the time, nerve and patience periods of volatility can be good opportunities for trading profitably of course, mais ce n'est pas le HYP.

Trading is surely buying with a view to selling for a capital gain and that is not what HYP is about. Capital gains will tend to follow good increases in the dividend (does not always apply in the shorter term, see Imperial Brands and others) but that is an incidental result and as we all know, far from the primary purpose.

Anyway, seasons greetings to all. I will probably not contribute much more this side of Christmas.

Dod

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Re: What is tinkering if not trading in a HYP?

#189194

Postby tjh290633 » December 24th, 2018, 5:53 pm

Trading. It conjures up the picture of the day trader, continually buying and selling to try and make a few Bob on the day or, at best, not losing too much.

Trading within an HYP to me suggests selling a holding, which is still HYP-able, and buying a replacement holding which is also eligible for an HYP. This might be to increase the dividend income, which is a desirable objective and which is usually the outcome of a trimming and topping up exercise. Let us say you have a portfolio in which the spread of yields is 3% to 8%. You could decide to sell those currently below the market yield and reinvest in new shares well above the market yield. You have to maintain diversity while you are doing this.

To my mind, this is legitimate portfolio management.

On the other hand, deciding to sell AZN and replace it with GSK, for no good reason except that you want a change, now that is trading. It could be that you move from the higher yield to the lower, which compounds the felony.

Maybe others can suggest examples which can be considered to be trading.

TJH

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Re: What is tinkering if not trading in a HYP?

#189752

Postby uspaul666 » December 28th, 2018, 3:54 pm

tjh290633 wrote:Trading. It conjures up the picture of the day trader, continually buying and selling to try and make a few Bob on the day or, at best, not losing too much.

Trading within an HYP to me suggests selling a holding, which is still HYP-able, and buying a replacement holding which is also eligible for an HYP. This might be to increase the dividend income, which is a desirable objective and which is usually the outcome of a trimming and topping up exercise. Let us say you have a portfolio in which the spread of yields is 3% to 8%. You could decide to sell those currently below the market yield and reinvest in new shares well above the market yield. You have to maintain diversity while you are doing this.

To my mind, this is legitimate portfolio management.

On the other hand, deciding to sell AZN and replace it with GSK, for no good reason except that you want a change, now that is trading. It could be that you move from the higher yield to the lower, which compounds the felony.

Maybe others can suggest examples which can be considered to be trading.

TJH

I’m with everything you say. To go further, if it helps some, I’d suggest it’s not really what you do but why you do it that makes the difference between trading and tinkering. Firstly, if you sell to improve your profit w.r.t. a particular share then that’s trading, if you do the same to improve diversity or reduce an overweight holding for the portfolio as a whole then that’s tinkering. Secondly, If you sell AZN and buy GSK then that’s trading but If you sell half your AZN and buy GSK then that’s a multiple holding in a single sector and is (probably) an improvement to the portfolio overall. Thirdly, a desirable feature of a HYP is that it should be easy, not require too much effort and not require you to be ‘smarter’ than the market so if you really want to occasionally sell a holding, every other year or so then so be it. But then don’t post on the practical board congratulating yourself for making such a wise play in retrospect because that also would be trading and might be an example of confirmation/survivorship bias.
It’s so weird that others don’t understand this difference that I wonder if, order to think his way, I have somehow trained myself to understand/have faith/be a zealot or something. Interesting.

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Re: What is tinkering if not trading in a HYP?

#189766

Postby absolutezero » December 28th, 2018, 4:15 pm

The problem comes with the **** types who don't allow any selling whatsoever and the fact the extremely tight rules on HYP posting here aren't tight at all and allow for 'maintenance'.

Consider this:
A share's yield falls to, say, 2% because it's share price has tripled.
The investor decides to sell the entire holding and buy something yielding, say 6%.

Is that management or trading?
Or even tinkering? Whatever that might be.
(It's a cop out phrase for trading. It's used as a sneaky way of selling without upsetting the **** brigade.)
Some say it's down to your motive for selling.
Tell you what. I'll take the capital gain but tell you I am reinvesting in a higher yielder. How would you know?
You're kidding yourselves.

The extreme HYPers scream and hit the prefect button because it's trading. "He's taken a capital gain. Someone call the teacher!"
But no, says the investor. "I am doing 'maintenance' and maximising my dividend income."
No, say the ****. "You are trading. You have sold!!! Teaccchhhheerrrrr!"
The mod then decides it's trading and banishes the thread to the HYP bin.
Discussion ceases.
The forum is worse off as a result.

Season posters start to not bother posting as much (or at all) and the forum dies a death.
But the **** are happy because they have purity. A dead forum, but at least it's pure.

Others, like me, just look at this and think it's stupid.
It's all High Yield Investing.
You're after the dividends, rather than the capital gain but if you get the capital gain and want to organise your money how you see fit, then good for you.

The **** HYPers sit and seethe.

It boils down to:
What is tinkering?
What is trading?
What is management?

The mods have made a rod for their own backs here.

Moderator Message:
Edited to remove pejorative use of a clinical label

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Re: What is tinkering if not trading in a HYP?

#189861

Postby Dod101 » December 29th, 2018, 12:13 am

Actually the absolutezero post says it all. What a load of nonsense is talked (or written) here. This is Room 101 so it will not matter, but........

Dod

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Re: What is tinkering if not trading in a HYP?

#189883

Postby Arborbridge » December 29th, 2018, 10:00 am

Dod101 wrote:Actually the absolutezero post says it all. What a load of nonsense is talked (or written) here. This is Room 101 so it will not matter, but........

Dod


It seems to me that absolutezero is the one who is "seething" and getting his knickers in a twist over nothing. He doesn't "get it", apparently, and blames HYPers for that, calling out those HYPers who don't allow themselves to sell, as being the problem. Actually, there are exceedingly few of those HYPers - most of us reluctantly sell according to guidelines we have adopted - and I have never known those few investers to start complaining on HYP practical about those of us who "tinker". Maybe I inadvertently put my finger on a major difference between "tinkering" and "trading" when I used the word "reluctantly". Trading is done purposefully, tinkering is done reluctantly.

If he cannot understand it, and see the various differences, I'm sorry for him: that is his difficulty not mine, and not anyone else's.

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Re: What is tinkering if not trading in a HYP?

#189885

Postby Wizard » December 29th, 2018, 10:32 am

Poster A says:
mentioned further up this thread that I was toying with swapping Unilever with Tate & Lyle, well this I did two hours ago. I can't be doing with uncertainty, and although I realise nothing is certain in investing, I can't see this Unilever deal doing much but causing more angst for UK holders of the shares, so no thanks, and goodbye Unilever. I might get some flak here, but peace of mind is important to me. It is a shame, as they were always a good mainstay in my HYP. But as a lower yielding share, and all this kerfuffle, I'm happier out of it. Good luck to those that are hanging in there.

Then later in the same thread Poster B says:
I genuinely never thought I'd sell my Unilever holdings. Today I sold out with the intention of buying back once all of this gets settled. I can't see it flying away from here so it will probably now be subject to a bid!!! But I don't like all of the shenanigans and feel better off out of it.

To which Poster A replies:
Me neither Poster B, so I feel your pain. I'm not saying I'll never buy back in though, we'll see.

Just over a month later Poster A reported:
I totallly get where you’re coming from. It is nice to have a solid base to a HYP, however RB. Is not a high yielding share. Although I must admit that I brought Unilever back into my HYP the other day! Again!! I’m meddling to much for either my or my HYP’s health. But that’s it, I’m going to be stricter going forward. Digitallook may have done me a favour with no look November.


These are genuine quotes from HYP Practical threads, I have removed the names of the posters as I do not want to personalise it in that way. To me these sound like sales with a view to buying back, or at least potentially buying back, in the future that was then acted on only a month or so later. That feels like trading based on what has been said. But there was not a single comment on this by a mod. Why? Well in my humble opinion it is not because of what was written, but who wrote it.

I recognise that mods are human the same as the rest of us, so they have posters they like and posters they don't. If you are a favoured poster you and your posts will be treated one way, if you are disliked the same post may be treated differently. But mods are not clones, so one mod will like or dislike a particular poster more or less than another mod, that introduces another element of variability.

In the same way some posters will dislike certain mods and may try to push the envelope as a challenge to the mod's authority. I am sure some will say that is exactly what I am doing in this post :lol:

All I am saying is that a search for an absolute set of rules perfectly applied is fruitless, because the rules have been made and are being applied by humans, so human nature plays a part. Just work out where you sit in all this and you will have a better idea how your posts will be viewed and / or moderated.

Terry.

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Re: What is tinkering if not trading in a HYP?

#189887

Postby absolutezero » December 29th, 2018, 11:18 am

Arborbridge wrote:calling out those HYPers who don't allow themselves to sell, as being the problem.

There is a huge difference between 'not allowing' your self to sell and shutting down discussion of those who do 'allow' themselves.
. Maybe I inadvertently put my finger on a major difference between "tinkering" and "trading" when I used the word "reluctantly". Trading is done purposefully, tinkering is done reluctantly.

So you trade/sell/tinker! (No difference BTW. Just kidding yourself)
Motive is irrelevant. If you are a genuine HYPer then you NEVER sell unless the market does it for you.

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Re: What is tinkering if not trading in a HYP?

#189888

Postby absolutezero » December 29th, 2018, 11:22 am

Wizard wrote:Well in my humble opinion it is not because of what was written, but who wrote it.

Yup.
I recognise that mods are human the same as the rest of us, so they have posters they like and posters they don't. If you are a favoured poster you and your posts will be treated one way, if you are disliked the same post may be treated differently. But mods are not clones, so one mod will like or dislike a particular poster more or less than another mod, that introduces another element of variability.

Interesting that several of the more favoured posters are not posting as much these days. Private discussions reveal they are fed up of the modding, but not necessarily to their posts.

Then the mods who have an dislike of a poster should not moderate that particular poster. I'm a mod elsewhere and there are definitely certain ones who just rub me up the wrong way. I made the conscious choice not to mod them and leave it to one of the others. They also do the same with their 'list'. We have even told each other who we don't mod.
Just work out where you sit in all this and you will have a better idea how your posts will be viewed and / or moderated.

Terry.

I already have...
The other factor here is some posters use the prefect button in the same way as the mods.

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Re: What is tinkering if not trading in a HYP?

#189892

Postby ReformedCharacter » December 29th, 2018, 11:35 am

absolutezero wrote:Motive is irrelevant. If you are a genuine HYPer then you NEVER sell unless the market does it for you.


I'm not disagreeing with you but I wonder how many of those who post on the HYP Practical board are 'genuine HYPers' in that respect, when I asked a similar question a little while ago, I think only one poster claimed to be one. This isn't a criticism of anyone, but does I think, show that by and large most posters do not actually follow the strict method and therefore it seems odd to assume otherwise.

I'd like to thank Stooz, Clariman and the mods for their sometimes thankless but necessary effort to make these forums work so well - and to wish everyone a HNY.

RC


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