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HYP Process examples - where would anyone start?

Practical discussions about equity High-Yield Portfolios (HYP) for income
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Itsallaguess
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HYP Process examples - where would anyone start?

#190389

Postby Itsallaguess » January 1st, 2019, 2:20 pm

On a recent BiscuitBar thread, DiamondEcho asked where anyone would start today if they wanted to look at HYP as a potential income-investment strategy.

During some discussions around that, it was clear that there's a rich history of really helpful posts that walk us through some sample HYP processes, from a number of very helpful and knowledgeable posters, but these aren't easy to find from a standing-start.

Given DiamondEcho's frustration on the BiscuitBar thread, I thought it would be helpful to try to collate a few of these thread-links onto a single topic here, on HYP Practical, so below is a list of a few I've managed to collate, and it would be great if anyone else has any helpful process or screen information of their own stashed away on their bookmarks, if they could add them to this list, especially perhaps if they are held on the WayBackMachine from the TMF days.

Some links -

Some 'from-scratch' HYP-process links from a number of different start-up HYP's by Gengulphus - https://tinyurl.com/yba6gkke



A 'from scratch' simple HYP screen-process compiled by JohnnyCyclops from TMF - https://tinyurl.com/y9trscox



Gengulphus walks us through the 51st purchase decision of his demo-HYP (GDHYP) - https://tinyurl.com/ybgfrtuy

The pre-poll process for the above 51st purchase - https://tinyurl.com/ybdh4nn6


Any additions to the above 'from-scratch' HYP processes, or any well-documented HYP process-links that discuss top-ups or new-purchase decisions would be most welcome on this thread, which I hope might become useful in future if someone asks a similar 'Where do I start?' question.

With thanks to DiamondEcho for asking the original question that's prompted the generation of this thread.

Cheers,

Itsallaguess

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Re: HYP Process examples - where would anyone start?

#190393

Postby kiloran » January 1st, 2019, 2:36 pm

HYP guidelines essentially suggest higher-yield shares with a large market capitalisation, a good history of dividend payouts and not too much bias towards any single market sector. To select such shares, HYPers have often used the Digital Look stock screening tool, but with all the changes at Digital Look over the past year or so, the stock screener is either unreliable or non-functional.

An alternative is the StepOne FTSE350 spreadsheet at: http://lemonfoolfinancialsoftware.weebl ... se350.html
This is updated monthly and contains relevant information such as yield, dividend history, dividend cover, market sector, etc for the FTSE350 companies. Data can be sorted, ranked, filtered using Excel or OpenOffice/LibreOffice

--kiloran

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Re: HYP Process examples - where would anyone start?

#190394

Postby moorfield » January 1st, 2019, 2:41 pm

Itsallaguess wrote:
Given DiamondEcho's frustration on the BiscuitBar thread, I thought it would be helpful to try to collate a few of these thread-links onto a single topic here, on HYP Practical, so below is a list of a few I've managed to collate, and it would be great if anyone else has any helpful process or screen information of their own stashed away on their bookmarks, if they could add them to this list, especially perhaps if they are held on the WayBackMachine from the TMF days.




Good idea. It would be useful to have some sticky links here back to the Stone Tablets. I've lost track too of where they are now, which reminds me of the last scene from one of my favourite films.

I thought we'd settled that. The Ark is somewhere very safe.



Happy New Year 2019 to You All.

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Re: HYP Process examples - where would anyone start?

#190397

Postby kiloran » January 1st, 2019, 2:51 pm

The original(?) PYAD articles may be of interest:
https://web.archive.org/web/20161228113 ... portfolio/

--kiloran

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Re: HYP Process examples - where would anyone start?

#190399

Postby ReformedCharacter » January 1st, 2019, 2:59 pm

I must admit to having scraped almost every post on the HYP Practical board from the TMF just prior to its closure. I don't feel inclined to trawl through them at the moment but I would of course be happy to pass them on.

RC

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Re: HYP Process examples - where would anyone start?

#190400

Postby kempiejon » January 1st, 2019, 3:05 pm

Good jumping off point Itsallaguess.
As Kiloran points out the PYAD articles are a good early call.
My easy way is list the ftse100 by decreasing yield, check for a history of increasing dividends the longer the better and pick a new company in each sector then check for nasties like announcements of dividend changes. If this doesn't get enough candidates, relax the market cap/dividend history.

I remember JohnnyCyclops regularly publishing his simple screen as an example for a starting off HYP.
His digital look screen parameters are very similar to those I used when my HYP was born. Though I did cast an eye over gearing/debt too.
I don't think Webfg who have absorbed digital look are as handy.

These days as my HYP is mature well diversified and top ups are small compared to portfolio value the screening is less important as I just look at my holdings and confirm they still meet my requirements and top up the highest yielder that won't break concentration limits.
I use dividenddata.co.uk for the FTSE100 yield (currently 4.8%)
If looking for new picks or confirming my existing holdings are good I'd use the following-
market cap min of £1000M but I would prefer to pick a FTSE100 over a 250
cover of 1.5 (but I relax that to 1.x for Utilities)
5 years of growing dividends (I allow a static dividend but not for the whole 5 year term and would also look at forecast dividend if a 4 year history was all available)
I will cast an eye over other numbers, profit, turnover, liabilities, PE, ROCE, I also look at rate of growth of dividends.
I use sector and super sectors to limit concentration - some of my own adaptions. I check company announcements about any dividend policy where a commitment of above inflation dividend growth a plus point.

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Re: HYP Process examples - where would anyone start?

#195928

Postby Sentient » January 23rd, 2019, 7:18 pm

Thank you for reference for Dividend cover spreadsheet and to whoever undertakes the update.

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Re: HYP Process examples - where would anyone start?

#195992

Postby Breelander » January 24th, 2019, 12:01 am

kempiejon wrote:I remember JohnnyCyclops regularly publishing his simple screen as an example for a starting off HYP.
His digital look screen parameters are very similar to those I used when my HYP was born. Though I did cast an eye over gearing/debt too.
I don't think Webfg who have absorbed digital look are as handy.


The original Digital Look is still alive and well (albeit well hidden). Got to http://finance.digitallook.com/ and sign in (that's finance, not www at the beginning of the url). The screening tools are at http://finance.digitallook.com/dlmedia/ ... ning_tools

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Re: HYP Process examples - where would anyone start?

#196004

Postby Arborbridge » January 24th, 2019, 7:39 am

Breelander wrote:
kempiejon wrote:I remember JohnnyCyclops regularly publishing his simple screen as an example for a starting off HYP.
His digital look screen parameters are very similar to those I used when my HYP was born. Though I did cast an eye over gearing/debt too.
I don't think Webfg who have absorbed digital look are as handy.


The original Digital Look is still alive and well (albeit well hidden). Got to http://finance.digitallook.com/ and sign in (that's finance, not www at the beginning of the url). The screening tools are at http://finance.digitallook.com/dlmedia/ ... ning_tools


But oddly, if you go to the digital look page for company research (I did it for Greene King) where there are various tabs for "chart" "financials" etc, clicking on "summary" take you not to the digital look summary where I started, but to the Webfg page. It seems to allow a one time assess to digitalook and then you get diverted to Webfg.

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Re: HYP Process examples - where would anyone start?

#196046

Postby 88V8 » January 24th, 2019, 10:05 am

Dividend Champions is another source of Sturdies and Semi-Sturdies
http://dividendlife.com/uk-dividend-champions-home/

It downloads an Excel, there are monthly updates. A lot of nice data incl p/e, cover, yield, market cap, segment.
Many of the yields are uninteresting, its focus is X years of rising divis.
See the tabs at the bottom.

The 'Champions' have 25+ years of rising divis.

Alert: CLLN was there with 18 years, and IRV with 20 years.
The past is not a guide to the future.

V8

PS I'd want to check the data - BATS yield 4.7% ? Hmmm.

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Re: HYP Process examples - where would anyone start?

#196072

Postby IanTHughes » January 24th, 2019, 10:52 am

88V8 wrote:PS I'd want to check the data - BATS yield 4.7% ? Hmmm.

The file is dated 11 August 2018 so I think a bit out of date


Ian

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Re: HYP Process examples - where would anyone start?

#196145

Postby Breelander » January 24th, 2019, 1:42 pm

Arborbridge wrote: oddly, if you go to the digital look page for company research (I did it for Greene King) where there are various tabs for "chart" "financials" etc, clicking on "summary" take you not to the digital look summary where I started, but to the Webfg page. It seems to allow a one time assess to digitalook and then you get diverted to Webfg.


Not quite, if your browser shows the url when you hover over a tab you'll see that 'Summary', 'Share price' and 'News' are www... links while all the other tabs are finance... links. Any www... link gets diverted to WebFG.

You can still get the DL version of any www... link but you'll have to right-click, copy the url, paste it into your browsers address bar then change www to finance before looking up the url, like this for the Green King 'News' tab:
http://finance.digitallook.com/companyr ... _news.html

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Re: HYP Process examples - where would anyone start?

#196149

Postby pyad » January 24th, 2019, 1:54 pm

One point here which I dont think has been emphasised sufficiently. HYPers should never use a database as their sole source of share selections.

They are okay for an initial selection but having done that investors really ought to check the latest accounts and subsequent updates for each share chosen from the database, before purchase. The reason is that databases, even the subscription ones, are too often unreliable due to sometimes being out of date or just plain wrong. It's not uncommon to find that a share which looked appealing on the database is shown to be unacceptable on further examination when going back to the original company accounts and updates.

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Re: HYP Process examples - where would anyone start?

#196161

Postby Arborbridge » January 24th, 2019, 2:29 pm

Breelander wrote:Not quite, if your browser shows the url when you hover over a tab you'll see that 'Summary', 'Share price' and 'News' are www... links while all the other tabs are finance... links. Any www... link gets diverted to WebFG.

You can still get the DL version of any www... link but you'll have to right-click, copy the url, paste it into your browsers address bar then change www to finance before looking up the url, like this for the Green King 'News' tab:
http://finance.digitallook.com/companyr ... _news.html



Thanks for explaining that - how strange.

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Re: HYP Process examples - where would anyone start?

#196180

Postby Raptor » January 24th, 2019, 3:21 pm

pyad wrote:One point here which I dont think has been emphasised sufficiently. HYPers should never use a database as their sole source of share selections.

They are okay for an initial selection but having done that investors really ought to check the latest accounts and subsequent updates for each share chosen from the database, before purchase. The reason is that databases, even the subscription ones, are too often unreliable due to sometimes being out of date or just plain wrong. It's not uncommon to find that a share which looked appealing on the database is shown to be unacceptable on further examination when going back to the original company accounts and updates.


Very good point. I would also say that even if a share doesn't meet initial selection and you do like them, recheck their latest accounts, customer relation pages or other sites. I say that as I have found "yield" figures from data web-sites to sometimes be very inaccurate! The example that springs to mind, at the moment, an IT shown on webfg as 2.2% yield which is twice that. I am sure there are other HYP shares that others can recall.

Raptor.

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Re: HYP Process examples - where would anyone start?

#196200

Postby Itsallaguess » January 24th, 2019, 3:52 pm

pyad wrote:
One point here which I dont think has been emphasised sufficiently. HYPers should never use a database as their sole source of share selections.

They are okay for an initial selection but having done that investors really ought to check the latest accounts and subsequent updates for each share chosen from the database, before purchase.

The reason is that databases, even the subscription ones, are too often unreliable due to sometimes being out of date or just plain wrong. It's not uncommon to find that a share which looked appealing on the database is shown to be unacceptable on further examination when going back to the original company accounts and updates.


Totally agree, and this specific point is made by me on almost every table of data that I've ever posted both on this website and back in the Motley Fool days.

However, with that said, I think most of us like to start somewhere when looking for inspiration, and that's unlikely to involve sitting down with a pile of Annual Results publications from the outset, so whilst it's absolutely right to provide caution on the use of compiled data, from any source, I do think such data has a very good role to play in terms of starting to steer a course through what are otherwise a huge number of potential options available to us....

In addition to this, I also strongly believe that using such data, if it turns out to be relatively reliable, can help immensely in terms of helping individuals to find simple investment processes that are ultimately repeatable, end-to-end.

I really do think that finding such processes are one of the huge stumbling blocks in the way of helping investors make the change from having a scatter-gun approach, to one that starts to look like a proper route mapped out, when wanting to make decisions on their investments.

Anything that can help with the maturity of that investment-process should be seen as a good thing, in my view, and compiled online-data can help with such developments in a very good way, so long as the clear caveat of ensuring to check anything thoroughly that might be used to influence any final investment decision is made.

Cheers,

Itsallaguess

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Re: HYP Process examples - where would anyone start?

#196321

Postby 88V8 » January 24th, 2019, 10:58 pm

IanTHughes wrote:
88V8 wrote:PS I'd want to check the data - BATS yield 4.7% ? Hmmm.

The file is dated 11 August 2018 so I think a bit out of date


Egad. Hadn't noticed. And it's the latest.
So, farewell to that source of prospects.

V8

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Re: HYP Process examples - where would anyone start?

#196324

Postby Lootman » January 24th, 2019, 11:37 pm

Itsallaguess wrote: I think most of us like to start somewhere when looking for inspiration, and that's unlikely to involve sitting down with a pile of Annual Results publications from the outset, so whilst it's absolutely right to provide caution on the use of compiled data, from any source, I do think such data has a very good role to play in terms of starting to steer a course through what are otherwise a huge number of potential options available to us....

In addition to this, I also strongly believe that using such data, if it turns out to be relatively reliable, can help immensely in terms of helping individuals to find simple investment processes that are ultimately repeatable, end-to-end.

I agree. What most investors need is some kind of short cut through the otherwise ridiculous amount of work that someone might have to perform to get any kind of edge in the market. So an online source, ideally some kind of screen where you can nominate the factors that you believe in, is invaluable.

In fact I'm rather surprised to see much emphasis placed on reading company accounts and annual reports. Would the mythical Doris know how to do that? What would she see that accountants and analysts missed? I've been investing for 35 years and have never used them. Partly because it is a lot of work. Partly because I figure the data in there is already priced in. And partly because they are boring :D

So for example my inputs are databases, screens, charts (*) and a qualitative assessment, where I consider the company's prospects, products and protections. I need a starting point and a statistical and perhaps graphical representation of data is the necessary primary process for making more detailed analysis manageable. In other words the process is top-down and not bottom-up. Most of the work is winnowing out the non-contenders quickly and easily.

Finally I'd add that I believe this to be a reasonable methodology for any investment style and not just strategies that focus on UK dividend-paying shares.

(*) Just to be clear, I don't use charts to determine what to buy, only when and at what price to buy.

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Re: HYP Process examples - where would anyone start?

#196341

Postby Arborbridge » January 25th, 2019, 7:57 am

Lootman wrote:In fact I'm rather surprised to see much emphasis placed on reading company accounts and annual reports. Would the mythical Doris know how to do that? What would she see that accountants and analysts missed? I've been investing for 35 years and have never used them. Partly because it is a lot of work. Partly because I figure the data in there is already priced in. And partly because they are boring :D

So for example my inputs are databases, screens, charts (*) and a qualitative assessment, where I consider the company's prospects, products and protections. I need a starting point and a statistical and perhaps graphical representation of data is the necessary primary process for making more detailed analysis manageable. In other words the process is top-down and not bottom-up. Most of the work is winnowing out the non-contenders quickly and easily.



I'm glad you wrote that, particularly the first paragraph quoted, for it sums up my own position. I've been through plenty of management accounts, of course - and sat in meetings with accountants too. My overall feeling is that accountants might have an "eye" for going to the right item and reading between the lines where necessary, but I don't. There are only a few companies where I find the accountants straight forwardly easy to read, and quite frankly, I've given up bothering most of the time.

Websites give the numbers I want, and if there are errors occasionally, so be it. The overall maxim "Near enough is good enough" suits me - though I do very occasionally check something in a company account.

Check basic facts if you like - which is what Pyad was suggesting - but trying to make any sense about a companies health or direction isn't so easy. Accounts of companies on the slide are designed to obfuscate, after all, and sometimes tell downright lies if they can get away.

Arb.

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Re: HYP Process examples - where would anyone start?

#196372

Postby IanTHughes » January 25th, 2019, 9:42 am

Lootman wrote:In fact I'm rather surprised to see much emphasis placed on reading company accounts and annual reports. Would the mythical Doris know how to do that?

Doris inherited her shares. She did not have to make a single purchase decision and did not want to. She simply collected the dividends and other cash proceeds - lapsed rights etc.


Ian


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