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Specific discussion of Luni's zones, moved from earlier Vodafone thread

Practical discussions about equity High-Yield Portfolios (HYP) for income
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moorfield
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Re: Specific discussion of Luni's zones, moved from earlier Vodafone thread

#222470

Postby moorfield » May 17th, 2019, 1:35 pm

kempiejon wrote:But as this is the HYP board and there are so many FTSE100 dividend payers yielding above that level I'd pick some of them?


Of course. It is a simply a yield benchmark I aim to beat with every new purchase or top-up. Or to ask the question differently - why buy ULVR when you can buy CTY at a higher yield?

Alaric
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Re: Specific discussion of Luni's zones, moved from earlier Vodafone thread

#222481

Postby Alaric » May 17th, 2019, 2:32 pm

moorfield wrote: Or to ask the question differently - why buy ULVR when you can buy CTY at a higher yield?


Perhaps because you hope that ULVR's higher dividend growth rate (7.5%) will continue and drive the price higher faster than the CTY price ( 4.68% over 5 and 4.19% over 10) according to the dividenddata site.
https://www.dividenddata.co.uk/ftse-div ... et=ftse250

A single share is riskier than a market basket, but can give higher returns as well as greater losses.

moorfield
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Re: Specific discussion of Luni's zones, moved from earlier Vodafone thread

#222484

Postby moorfield » May 17th, 2019, 2:48 pm

Alaric wrote:
moorfield wrote: Or to ask the question differently - why buy ULVR when you can buy CTY at a higher yield?


Perhaps because you hope that ULVR's higher dividend growth rate (7.5%) will continue and drive the price higher faster than the CTY price ( 4.68% over 5 and 4.19% over 10) according to the dividenddata site.
https://www.dividenddata.co.uk/ftse-div ... et=ftse250

A single share is riskier than a market basket, but can give higher returns as well as greater losses.


That's not something I'm going to lose too much sleep over. That of my whole portfolio income is the only growth rate that matters to me; and if it's not progressing as I've extrapolated (see my graph in Portfolio Management & Review), then I'll tinker.

MDW1954
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Re: Specific discussion of Luni's zones, moved from earlier Vodafone thread

#222488

Postby MDW1954 » May 17th, 2019, 3:16 pm

moorfield wrote:
That's not something I'm going to lose too much sleep over. That of my whole portfolio income is the only growth rate that matters to me; and if it's not progressing as I've extrapolated (see my graph in Portfolio Management & Review), then I'll tinker.


Moderator Message:
Which may be a suitable juncture to bring the thread back to Luni's zones, etc -- the discussion of which is the raison d'être of this elaborately-created thread, brought into being at user request. -- MDW1954

moorfield
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Re: Specific discussion of Luni's zones, moved from earlier Vodafone thread

#222555

Postby moorfield » May 17th, 2019, 7:47 pm

MDW1954 wrote:Which may be a suitable juncture to bring the thread back to Luni's zones, etc -- the discussion of which is the raison d'être of this elaborately-created thread, brought into being at user request. -- MDW1954


If I'm requoted, I normally try and answer - but you're right.

If the notion of a simple yield ceiling as a multiple of FTSE100 (or something very close to it, like CTY) is something the HYP community feels it can work with, for (non) selection purposes, then perhaps another constructive part of the discussion is the multiple itself. I've seen Luni write somewhere iirc 1.6x, and as people know I've started with 2.0x. I wonder if anyone can come up with any empirical basis to improve on that?

MDW1954
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Re: Specific discussion of Luni's zones, moved from earlier Vodafone thread

#222578

Postby MDW1954 » May 17th, 2019, 10:15 pm

moorfield wrote:
MDW1954 wrote:Which may be a suitable juncture to bring the thread back to Luni's zones, etc -- the discussion of which is the raison d'être of this elaborately-created thread, brought into being at user request. -- MDW1954


If I'm requoted, I normally try and answer - but you're right.

If the notion of a simple yield ceiling as a multiple of FTSE100 (or something very close to it, like CTY) is something the HYP community feels it can work with, for (non) selection purposes, then perhaps another constructive part of the discussion is the multiple itself. I've seen Luni write somewhere iirc 1.6x, and as people know I've started with 2.0x. I wonder if anyone can come up with any empirical basis to improve on that?


I normally approach this question like this:

Is the yield below a 1.5 multiple? If so, I'm generally not very worried.

Is it above a 1.5 multiple? I dig deeper.

Is the yield of the sector comparable, and also above a 1.5 multiple? I'm more relaxed.

Can I identify a clear reason why the multiple exists? And if so, do I agree with the reason, and is it relevant for a long-term income pick?

What has to change, for the multiple to change? And is this likely?


It's a bit woolly, I admit. But it's stood the test of time.

MDW1954


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