BLT dilemma

[Arborbridge]

OK folks, it's pickering time again.

BLT has reached a point where according to TJH's ideas (which I'm "shadowing") I ought to be selling. The yield is below 2% - I believe it's around 1.5% historic. So I should bite the bullet, take the capital loss on the nose and go for something of higher yield. Would that be the right decision?

OR

The worst it seems may be past, the price has rallied dramatically, the forecast eps is increasing, the forecast to next June shows the yield could be 3.1% - which would not qualify as a sell.
I'm torn here between being a wannaby dorisian and a what I really am - a slow tinkerer!

So, help me with my pickering on this one. Having gone through a large amount of pain, should I wait for the slow return of gain? - or cut now. What would you do, and what are holders of BLT doing?

Arb.

PS I do have "mining" interests represented by BRCI, the IT.

[Darka]

Personally I feel like I've sold too much during the last year, so for 2017 I don't intend to sell anything unless forced into it.

I too have a loss on BLT but believe they will come back up one day and I will be holding them for the next 30-40 years or so - my overall portfolio yield is ok even taking into account the low BLT yield, so I'm going to keep them.

I regret some of my rushed sales and intend to let things ride for a while as my ability to time the market is as bad as everyone else's.

I'm pretty sure if I sell and move the money elsewhere, I stand a chance of that new company doing something stupid at some point and just compounding the losses.

I also tend to focus on forward yield as opposed to historic.

regards,
Darka

[StepOne]

I do hold BLT and I am doing nothing. This is almost always the best course of action in an HYP.

If you can't 'do nothing', then the next best plan is 'don't do anything'.

Failing that, you could use my alternative, which is the 6-month procrastination. Basically you write down the current share price, and make a note to yourself to re-visit in 6 months time. You might find that the picture is clearer then.*

Cheers,
StepOne

*..or possibly not - in which case invoke another 6-month procrastination.

[Darka]

Forgot to add...

I'm down about 10% on BLT (capital), but if I add in dividends then I'm only down by 1.9%.

I also hold RIO (Rio Tinto) and they are up by 18.7% (capital) and with dividends up by 29.3%.

Not that I have any scientific reasons for this, but I tend to like to buy two shares in each sector and it seems to work out ok doing that - not all the time obviously, but a little diversification within a sector has seemed to help.

Regards,
Darka

[micrographia]

Recall a few spirited discussions on having a miner in a HYP in the other place. What I took from them - reflect on the likelihood that a share in such a demonstrably cyclical sector will probably do something similar a few more times in your lifetime. If you are OK with that, hold and perhaps top-up in the troughs. If not, sell and don't have a mining share in your HYP. I hold BHP, but am still on the fence about its suitability as a fire and forget HYP share.

Regards, EEM.

[csearle]

What would you do, and what are holders of BLT doing?

I'm in the same boat except BLT is my only miner.

My urge to sell because of BLT's yield hasn't overcome the stiction caused by the good diversity it offers.

Regards,
Chris

[kempiejon]

I do hold BLT and I am doing nothing. This is almost always the best course of action in an HYP.

If you can't 'do nothing', then the next best plan is 'don't do anything'.

Yup, that's where I'm at, I hold, I'm doing nothing, like most of the rest of my shares I've bought. Like you Arb, I have BRCI too and have been adding, that's not HYPish though.
Selling would immediately increase your income of course but as you note the forecast are not totally dismal and one could proffer the idea that the worm has turned for miners and what you buy might be worse for your capital and/or income - or not.

I'll stick.

[Garudadri]

I concur with most of the posters. I hold BLT and will continue to do so. In fact, I might buy more in case there is a pullback. The commodity super cycle is still going to show an upward swing hopefully. This company is well diversified and hopefully will improve on the cash flow front . This would increase yield and this will happen over the next 2 years, unless there are major global events.

[funduffer]

Arb,

I am in a similar position - BLT is my only miner (except for a small holding of South32), and I am down overall.

As a very slow tinkerer, my view is to hold, and see out the cycle (which looks to have turned anyhow).

I would not top up BLT however, until the yield is higher, the dividend growing again, and the cover adequate.

I still hold South32, which spun off from BLT last year. I am up on that, but there is no signs of a higher yield yet, so that is another one to ponder. This is more likely to be the miner I sell I think.

FD

[DiamondEcho]

I think it might depend upon whether you're in the build-phase of your HYP, or the passive/retirement phase.
If you're in the former [as I still am] I might be inclined to get shot of it, indeed I did a few years ago now when it was yielding materially more than 2%, IIRC c3.0% still. There any many fatter fish in the sea, and for the likes of BLT and miners etc the 'commodities super-cycle' tends to turn very slowly. Meanwhile it's not a HYP stock in any shape or form *IMHO*! And how can the virtuous HYPish circle of stock-price following on from a good yield turn on a stock generating under half the average yield of the index?

[I appreciate some HYPers will hold the likes of BLT, ULVR etc almost irrespective of what they yield as they feel they have to have representative stocks from every major sector. My own view on that is that on a longer-term timeline there are whole sectors that are out of favour with the market for most of an economic cycle [say 5 of 7 years?] which are worth avoiding as they only add 'diworsifaction'.

I have previously been flamed by the Disciples of HYP before for saying this, but 'Hey ho, there we go!' as the Ramones might have replied ]

[Ivyrobert]

I will continue to hold. " Keep calm and do nothing".

[Gengulphus]

I have previously been flamed by the Disciples of HYP before for saying this, but 'Hey ho, there we go!' as the Ramones might have replied

Well, if it happens again, I'd suggest you get a moderator to look at it. Either you're right that it's flaming, in which case the "Disciples of HYP" concerned will be asked to stop, or you're not, in which case you'll be asked to stop describing it as such and its posters as "Disciples of HYP". Either way, the quality of discussion here will be improved...

Gengulphus

[tjh290633]

I think that this is another of those where selling too soon could be a mistake. The SP is recovering from its lows, as commodity prices rise, and the dividend is likely to recover. Give it another couple of reports, until next year.

TJH

[vrdiver]

I hold BLT and will continue to hold (which is probably a "sell" signal all by itself!)

In my s/sheet they show an XIRR of over 17%, but it's a lucky phenomenon, as I originally purchased in Nov 2008 at £7.48* and trimmed 50% of the holding in April 2010, by when the price had tripled to £22.34*. I topped up in 2013, 14 and 15, when the price floated in the teens, so am underwater with the more recent purchases, but ahead overall.

On a long term view, I have no idea whether they will do better than say, Banks, Housebuilders or Pharma, but having a finger in quite a few pies helps me sleep well at night.

VRD


*from my s/sheet, so price is per share net of costs.

[Deev8]

What would you do, and what are holders of BLT doing?

I've held the shares for a little over four years, and I'm not planning on doing anything - I'm not selling, and they are currently ruled-out from being topped-up.

Dave

[midgesgalore]

OK folks, it's pickering time again...

... Having gone through a large amount of pain, should I wait for the slow return of gain? - or cut now. What would you do, and what are holders of BLT doing?

Arb.

I hold in my SIPP, not selling and not topping up.

midgesgalore

[Garudadri]

There is a chance that when the pullback occurs and if you are lucky to top up - the projected forward yield at which you get in , will be around 3-4%. Thereafter, if things are going well, the dividend will progressively increase. That way, it can still find a place in a HYP.

[kempiejon]

OK folks, it's pickering time again.

BLT has reached a point where according to TJH's ideas (which I'm "shadowing") I ought to be selling......

what I really am - a slow tinkerer!

TJH says "selling too soon could be a mistake," does that fact outweigh your true feelings and need to tinker? I think this could be a journey of self discovery, please update with your thoughts.

[Arborbridge]

I think this could be a journey of self discovery, please update with your thoughts.

My update is that my inclination was to play the Dorisian, but like being a Christian, it's a hard road to travel.
Which ever way you cut it, logically, I'd say it's finely balanced, however, I have a feeling that the outlook for BLT is likely to get better rather than worse. That begs the question, of course, whether "racheting up the income" with another share as Terry might say, would produced a beter result. We'll never know until it's too late is the truth of the matter.

So, I've read through all this thread - and thank you for all your input - and find, that in the words at the end " The Apprentice - You're Fired" - hold up Hired or Fired - there's a clear majority of "Hired" votes.

I'm sure a poll would suggest I should carry on holding, so I will do that for the moment.

So, end of pickering until the next share, which may not be long!

[Arborbridge]

I meant to comment, that I found TJH's reply an informative glimpe into his thinking.

It has formerly seemed that if a share breaches one of his limits he would take a fairly mechanical action, trimming or selling. In this case, BLT has fallen below his usual yield requirement, and I thought his action in that case would be to sell and redeploy. But his advice is to wait and see what develops.
Part of Terry's success might therefore be that he does not apply rules mechanically, but adds a squirt of his own secret sauce


Arb.