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Spiderbill's Hyp-ish Portfolio Review Jan 2017

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spiderbill
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Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20184

Postby spiderbill » January 5th, 2017, 1:28 am

(Trust me - you really don't want to read the previous ones! They're even longer than this)

Summary Headlines
Current Value £78k, of which all but £9k is HYP-oriented.
Running Yield of whole portfolio is 4.52%


* Effective rate after witholding taxes

Purchases
I've done a fair bit of buying this year, maxing out my ISA before Xmas.

Prior to the April 2016 tax year end:
Chesnara - new purchase at median level
Legal & General - 50% top-up
Imperial Brands - doubled my holding
Aviva - substantial top up as it's one I'm keen on and the price was low with a good yield - has risen about 10%
Taylor Wimpey - new holding at median
Hansteen - 50% top-up

In April I added a new ISA with a new broker (TDDirect) while retaining the existing HSBC account which would only be added to with dividends from shares within it. (HSBC seem to be downplaying their system and I may move all my shares there if the iii purchase of TDD isn't too bad.)

By this time I had pondered a great deal and (at last!) had a fairly clear plan of where my investments were going. I planned to work towards a core of trusted shares which I was happy to have at around 3 times my then median level, followed by a further few at around 2-2.5 times median. Most of the minnows below median would be disposed of as either no longer being trusted or due to being early purchases outside ISA protection. Where appropriate the latter would be bought back inside ISAs at more sensible holding levels. This process would be helped by the proceeds from the forced sale of Amlin which had made me a nice profit.

After the tax year change:
KCOM - top-up
Petrofac - doubled my holding from accumulated dividends and proceeds from Amlin
RPC - top-up (non-HYP share) - from accumulated dividends and proceeds from Amlin - has risen 40%
Glaxo - top up with accumulated dividends and proceeds from Amlin in the old account
National Grid - 50% top-up
HSBC - 90% top up - I reckoned it had finally fallen far enough and was due a return to favour, and if it didn't work then I would have sold my non-ISA shares in it and it would effectively have been bed & ISA'd. In fact it has risen 43%
BAE - 55% top-up - up 10%
Aviva - 50% top-up - up 16%
Petrofac - top up from accumulated dividends
Charles Taylor - doubled my holding. Was doing fine till they announced an aqusition but has dropped 17% since then.
Hansteen - 25% top-up
Vodafone - Median purchase having sold a small rump non-ISA holding
Imperial Brands - 50% top-up
Marston - Median purchase before ex-div date. In retrospect should maybe have bought more as more funds became available just after.
National Grid - 33% top-up
British Land - new purchase at median
Marston - doubled holding after ex-div date
Berkeley Group - new purchase at median

Sales
Tesco - should have done it ages ago, (should never have bought it in the first place)
Spirent - ditto
Vodafone - rump holding
Amlin - takover
More sales due shortly - Molins, RSA, Majestic Wine, Centrica, Debenhams - to clear up the minnows and redistribute to higher earners

I have enough cash in the ISA for 2 more median purchases or top-ups.


Growing Dividends
As I've developed the portfolio, the dividends - which looked so small at the start - have really started to grow to significant levels.
Having only really started investing shares in earnest in 2011 the dividends have been:
2013 - £294
2014 - £779
2015 - £1306
2016 - £2186
The projected figure for 2017 is currently between £3330 (my estimate) and £3520 (HYPTUS Forecast), however it will undoubtedly be higher than that in practice as a recent inheritance will allow me to increase my holdings by at least the new ISA allowance once April arrives.

I haven't yet been able to lay aside time to unitise the portfolio so it's difficult to get an exact idea of how good the preformance is compared to other alternatives, but I'm pretty happy with the income side of things and feel like a nice stream is being created.
I will also be looking closely at buying a handful of ITs in order to cover some world areas that I currently don't have exposure to. That learning process may also help me decide if I want to switch my pension pot into a SIPP and run it on mixed HYP and IT lines.

Capital (HYP purists look away now!)
Capital has been less satisfactory. I'm up overall but on the UK shares nothing like as much as I might have hoped. The overall figure of current values compared to buying prices shows an increase of 18% over 6 years, but most of this is actually from one share - my much warned-about 21% holding of Sun Life of Canada - which happily continues to rise and has recently been boosted further by both the post-Brexit drop in the pound and by a post-Trump rise in its intrinsic share price.

I had planned to top-slice it a couple of months ago and move the resultant funds into higher yielding UK shares that don't suffer from withholding tax, but the inheritance made that unnecessary and I'm now glad I didn't as the value has risen £4k in the last 4 months! (Brokers forecasts are still positive so I'm swithering about taking some profits now or holding on a bit longer.)

The UK shares have by contrast only risen about 5.8% for those bought between 2011 and early 2014, and 3.2% for those bought since then, which is really rather poor. Partly this is accounted for by a few horrors - the constant shorting of Carillion (down 34%), the poor performance of Centrica (down 38%), the crash of Tesco, the not yet fully recovered Petrofac, while stalwarts like Glaxo, HSBC and Shell have only recently recovered their purchase levels after periods of plunging lows. Recently there have been various contrasting fortunes - partial oil recovery while gold miners rose and then plunged again, defensives (Imperial, National Grid) rising after Brexit then dropping back down again, some unexpected profit warnngs (KCOM) and aquisitions that don't seem to have gone down well (Charles Taylor).

However at least I'm in positive territory and overall I now feel that the balance of the portfolio is more stable and the majority of the fallen minnows have been reduced in significance and the rest will likely soon be sold off.

It would be interesting to see how this all progresses if I were to have another 5 years of building phase, but in fact I'll be retiring this year so the changes I make in the next few months may well be the last major ones. After that the value of the HYP approach will really come under test.

Now if only I could decide what to do with my pension pot...

Thanks for listening and any comments most welcome.

cheers

Spiderbill
(All typos and mistakes due to recently flu-addled brain)

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20209

Postby Dod1010 » January 5th, 2017, 8:11 am

Spiderbill

I count 38 shares and even when you get rid of your minnows you will still have 33 shares. That to my mind is too many and you have several obvious ones still to remove, such as Cairn Energy, Morgan and Laird. Then I would rank the remaining 30 or so in order of yield and cut the low yielders, certainly below 3%, and look very carefully at those yielding more than 6%. These are strange times because normally, especially with interest rates the way they are, anything over 6% would be an automatic no, no! I would keep HSBC and Shell but the others you should I think look at very carefully. If you can convince yourself that the dividend will at least be held then fine, but you ought I think to be very critical of the likes of Carillion and some of the others. Even HSBC and Shell are not out of the woods but their dividends are looking more secure than they were and if so the market should continue to respond by increasing their share prices this year. It may not happen of course.

Bearing in mind your plans for retiring you need to get that core of trusted shares as you call them in place soonest and maybe a little bit of fun money to play around with. As it is, with respect, it looks like a portfolio for someone with all the time in the world to play with.

Don't take my word as gospel and as always think it through yourself!

Dod

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20298

Postby tjh290633 » January 5th, 2017, 12:14 pm

Dod1010 wrote:I count 38 shares and even when you get rid of your minnows you will still have 33 shares. That to my mind is too many and you have several obvious ones still to remove, such as Cairn Energy, Morgan and Laird. Then I would rank the remaining 30 or so in order of yield and cut the low yielders, certainly below 3%, and look very carefully at those yielding more than 6%. These are strange times because normally, especially with interest rates the way they are, anything over 6% would be an automatic no, no! I would keep HSBC and Shell but the others you should I think look at very carefully. If you can convince yourself that the dividend will at least be held then fine, but you ought I think to be very critical of the likes of Carillion and some of the others. Even HSBC and Shell are not out of the woods but their dividends are looking more secure than they were and if so the market should continue to respond by increasing their share prices this year. It may not happen of course.


I think that you are drawing the lines too tightly, Dod. I set my lower limit at about 2%, and I let the upper level go where it will. Looking at the upper echelons, I have:

Rank   EPIC   Yield
1 CLLN 7.80%
2 MKS 7.20%
3 ADM 6.91%
4 TW. 6.76%
5 PSON 6.47%
6 GSK 6.36%


Would you really clear all those out? Looking at the lower end, below 3%, I have:

Rank EPIC   Yield
30 KGF 2.99%
31 DGE 2.79%
32 INDV 2.41%
33 RB. 2.18%
34 CPG 2.15%
35 BLT 1.65%
36 S32 0.46%
37 TSCO 0.00%


I admit that the bottom three, plus INDV, could be culled and reinvested to provide more dividend income, but I prefer to wait for now and see what develops.

TJH

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20368

Postby Breelander » January 5th, 2017, 2:40 pm

tjh290633 wrote:I admit that the bottom three, plus INDV, could be culled and reinvested to provide more dividend income, but I prefer to wait for now and see what develops.


I'm known for 'holding for recovery', but even I made an exception for Indivior (INDV). I decided it had no place in my HYP so I sold it immediately - not that it went far, I 'sold' it to my fledgling 'Value Trading Portfolio'.
Breelander (2014) wrote: I came to the conclusion that INDV would feel more at home in my Value Trading portfolio. Accordingly I made an 'in-specie' transfer to my Value Trading portfolio... To avoid any bias it seemed sensible to time the transfer as if it had occurred just before the market opened. The price I used for INDV was the initial Uncrossing Trade price of 120p.
https://web.archive.org/web/20141227122 ... 38923.aspx

After the maiden dividend was confirmed as the last ever...
Following its review of future dividend policy, Indivior PLC does not propose to pay further dividends in the foreseeable future.
...that seems a sensible choice. As a 'Value' share it has done quite well (if a little erratically). It's currently around 304p, more than 150% up on its market debut at 120p. It's almost 'economical' for me to sell my (very) small holding now.

Bree.

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20381

Postby Dod1010 » January 5th, 2017, 3:06 pm

tjh290633 wrote:I think that you are drawing the lines too tightly, Dod. I set my lower limit at about 2%, and I let the upper level go where it will. Looking at the upper echelons, I have:

Rank   EPIC   Yield
1 CLLN 7.80%
2 MKS 7.20%
3 ADM 6.91%
4 TW. 6.76%
5 PSON 6.47%
6 GSK 6.36%


Would you really clear all those out?

TJH


I would not necessarily clear those out but as I said, I would be looking at them all very critically. I would say that the market has little faith in the sustainability of their dividends (with the probable exception of Admiral where their special is now anything but.) I hold Glaxo and I think it might just avoid cutting. With a yield of 7.8% Carillion must be a prime suspect for a cut. As I said in another thread to buy at these yields is 'chasing the yield' and I would never do that.

Dod

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20393

Postby Arborbridge » January 5th, 2017, 3:33 pm

I count 38 shares and even when you get rid of your minnows you will still have 33 shares.


I'm not sure why you think 38 is "too many". It's not on grounds of administration, but I expect because you do not believe there are 33-38 suitable shares at any one time. I'd prefer to cut share specific risks by having at least 30 shares
The implication, I would think, is that you have a kind of revolving door of shares that are in or out at various epochs. That sounds like trading, albeit slowly.

Anyhow, I'm interested to hear what is wrong with 38 - especially when you this number would be considered on the border of a "concentrated" high risk portfolio by many funds managers.

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20432

Postby idpickering » January 5th, 2017, 4:49 pm

Arborbridge wrote:

Anyhow, I'm interested to hear what is wrong with 38 - especially when you this number would be considered on the border of a "concentrated" high risk portfolio by many funds managers.


May I chip in here Arb if I may. At 24 holdings in my HYP, I'm nowhere near 38, but I am toying with bringing Admiral and United Utilities on board, maybe? My reasoning here is to nudge up my divis and I don't have a water utility currently. Hmm? Going back to the 38 stock issue though, I guess if it's a 'buy and forget' HYP it's less of a concern perhaps?

Regards,

Ian.

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20444

Postby Arborbridge » January 5th, 2017, 5:21 pm

Ian,

The origin of my larger HYP, as you probably remember, was that I took up Luni's idea of "pairing", which seemed eminently sensible. Like some of Luni's ideas, he later renounced it, and said it wasn't necessary.
However, it worked reasonably well and has been some protection against individual share risks. I'm happier knowing that it a share dividend "goes down" it will only account for a relatively small part of my income.

Against this is Dod's point which is that of diworsification, but to be honest, I wouldn't be able to judge if I was diworsing or diversing - that's above my pay grade. Quite how Dod or anyone can be sure that there picks will not eventually end up on the scrap heap - or scrap HYP - I don't know. It's a knack which I just don't have. I've tried all sorts of clever ideas since I started investing around 1986, but none has produced anything more than fair to middling returns. HYP seems to suit me in retirement. It is for people like me with limited ability, and I accept it.

I had not been pairing, I would still argue for a larger HYP - let's say 25 to 35 shares.

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20522

Postby spiderbill » January 5th, 2017, 8:36 pm

Dod1010 wrote:...
Then I would rank the remaining 30 or so in order of yield and cut the low yielders, certainly below 3%, and look very carefully at those yielding more than 6%. These are strange times because normally, especially with interest rates the way they are, anything over 6% would be an automatic no, no! I would keep HSBC and Shell but the others you should I think look at very carefully. If you can convince yourself that the dividend will at least be held then fine, but you ought I think to be very critical of the likes of Carillion and some of the others. Even HSBC and Shell are not out of the woods but their dividends are looking more secure than they were and if so the market should continue to respond by increasing their share prices this year. It may not happen of course.
...
Dod


Hi Dod, thanks for your thoughts. We do indeed live in strange times! If Luni was still here he'd be having apoplexy at some of the yields around at the moment. I've taken the view so far that one of two things was happening:
1. That (until the recent surge over 7000) the FT100 was something of an aberration compared to some other indexes in that it was flat compared to a few years ago and that it would eventually rise and the yields would return to more normal levels.
2. That the QE that the banks were pumping into the system was having the effect of pushing up dividends above normal levels but that ventually inflation would kick in and drag the effective yield down again.

(Either or both of these theories may be complete tosh but hey - most enonomic theories are!)
If 1 is true then the higher yields don't matter and indeed need to be taken advantage of while they're there. If 2 is true then if I go for yields that are too safe then I won't have enough of a revenue tream to cover my planned retirement spending once inflation kicks in.
That's my story and I'm sticking to it ;)

I agree that I need to do some more weeding but I'm reluctant to sell when things are down just for tidiness - shares such as Laird and Essentra, bought on TMF advice and very successful for a while, may well self-heal and give me a better out position, and if they are managing to continue their dividends while I wait then why sell now? Others like Majestic and Centrica and Debenhams may well be beyond hope and will go at the first decent opportunity. Cairn was always a (very) small punt and has been way down for a long time - it's finally back within 17% of the purchase price and seems to be rising so it'll do no harm to let it run a bit longer and see if they make any more important discoveries.

As for Carillion it's a bit of an oddity isn't it? Had it not dropped 34% from my buying price then the yield would be a lot closer to "normal", but unlike many others the SP drop hasn't been accompanied by a divi drop. I've heard a number of people suggest they are a special case in that the shorting is accompanied by a matching long position for hedging purposes, but yes, I do watch them very carefully for signs of anything going wrong.

Interesting that you reckon Shell and HSBC are the safest - what's your opinion of Glaxo, National Grid, Aviva, L&G, Imperial and BAE? (I recall you being a bit dubious on Petrofac)

And finally, I take your point about getting on with things. I did start all this later than I would have preferred and the first two years were largely a learning experience. However the momentum has picked up a lot in the last year particularly and the next few months should see a much more stable and suitable vehicle.

Thanks again
Spiderbill

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20557

Postby spiderbill » January 5th, 2017, 10:02 pm

idpickering wrote:
Arborbridge wrote:
Anyhow, I'm interested to hear what is wrong with 38 - especially when you this number would be considered on the border of a "concentrated" high risk portfolio by many funds managers.


May I chip in here Arb if I may. At 24 holdings in my HYP, I'm nowhere near 38, but I am toying with bringing Admiral and United Utilities on board, maybe? My reasoning here is to nudge up my divis and I don't have a water utility currently. Hmm? Going back to the 38 stock issue though, I guess if it's a 'buy and forget' HYP it's less of a concern perhaps?


Arb, Ian, responding to this aspect of the topic, I should say that this portfolio isn't exactly a classic HYP - it started as me learning as I went, picking up some TMF SA recs and generally making mistakes and successes in about equal measure. I started with purchases that were far too small by normal assesments and as a result I've been left with some dogs and some odd & ends that I wouldn't have bought now that I've gradually moved to a more HYP-based philosophy. Looking down the list I can see 8 or 9 that will be sold sooner or later leaving around 30, of which 27 are HYP and 3 are non-HYP.

Apart from Life Insurance where I'm somewhat overweight, I feel the diversity is fairly decent so far and there's not many I'd want to get rid of in a hurry. Looking at possible shares that I might want to buy I can see maybe 5 or 6 contenders. Added to the 27 that gives about 30-33 for a final mature HYP selection and that feels comfortable to me. Any more and IMHO it feels like straining to find sufficient yield without undue risk, any less and a sudden individual disaster or a sectoral downturn can have too much of an effect. The old idea of a 15 share HYP has always felt too small to me.

(Adding on to that size of HYP a handful of growth shares such as my 3 then gives scope for riding trends and making some capital gains to add spice to the basic HYP income model.)

cheers
Spiderbill

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20605

Postby Dod1010 » January 6th, 2017, 8:48 am

Arborbridge wrote:Anyhow, I'm interested to hear what is wrong with 38 - especially when you this number would be considered on the border of a "concentrated" high risk portfolio by many funds managers.


I do not think I could find 38 shares that would fit my criteria without adding the risk of picking up one or two that did not fit my various unscientific tests such as culture or sectors I do not like. Furthermore that would be an average of around 2.6% per share, too small to make a lot of difference one way or the other. I prefer a relatively high concentration for just that reason. That is illustrated in Spiderbill's portfolio which he is clearly well aware of.

As for trading? In 2016 I sold one share and bought a new one. I sold Cobham and bought Primary Health Properties. That is not what I call trading. Any portfolio needs a bit of tidying up occasionally. Cobham will no doubt come good at some point, either by internal tidying up or by a takeover and I will miss out but too bad. In the meantime the new Finance Director, CEO and Chairman are getting their feet under their desks and will be preparing to tell shareholders what they intend to do. Maybe suspend the dividend, have another rights issue or sell something, or some combination of all three. I do not like uncertainty and thought that buying PHP would bring stability if no excitement.

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20609

Postby Bubblesofearth » January 6th, 2017, 9:10 am

Spiderbill

The only issue I would have with your portfolio is the high % in Sunlife. There's nothing at all wrong with having 38 shares and I would leave well alone (apart from maybe trimming Sunlife). For one thing, the amount of money you have in some of these lower % holdings means that dealing costs will be an uncomfortably large fraction of any trading you do.

BofE

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20611

Postby Dod1010 » January 6th, 2017, 9:13 am

Spiderbill

Firstly, do not take what I think as gospel, I am no expert, just a conservative investor living off my HYP dividends with views that do not always coincide with those expressed on this Board!

I am not sure that Centrica is beyond hope as I have not looked at it for a while. I sold it when it cut its dividend but it is a utility and should surely recover so it would not now be top of my list for the chop.

As for your specific queries, I hold some of those you mention so I know about them.

Glaxo. It seems, a bit like Shell and HSBC, to be just about able to hold its dividend (Incidentally I think only HSBC has positively said it will hold its dividend and neither it nor Shell are yet out of the woods) I am certainly intending to hold.

National Grid. They have a big return of capital coming to shareholders this year, and I currently intend to buy more National Grid with my share. There is always the risk of regulator's interfering with utilities but they seem , subject to that, to be fine.

Aviva. I have written in the past about my aversion to Aviva and RSA. Nearly always, just as soon as we think they have sorted themselves out some other disaster turns up (I do not mean that in an insurance sense; I mean corporate governance) Is this time any different? I simply would not buy.

L & G. I have held this share for upwards of 20 years. In recent times their dividend has been increasing significantly. They are changing the make up of their portfolio quite a bit and I have to accept that they know what they are doing. Their accounts like any life insurer are difficult to read and make sense of. Their culture has always been very long term and conservative and that does not change overnight so I am happy to hold.

Imperial Brands. A typical HYP share and really with BAT as near to the perfect HYP share as we have. There is of course a long term risk to tobacco but I think we have lot of life left yet and it will certainly be there for the rest of my lifetime.

BAE. I pay little attention to it as an investment proposition because I cannot think that on moral grounds I want to hold it, So I had better pass on this one.

Does that help? Bear in mind that there is a fair amount of group think on these Boards and there is no safety in numbers in investing. I could be completely wrong, but obviously I do not think so!

Dod

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20622

Postby vrdiver » January 6th, 2017, 10:14 am

As others have said, Sun Life seems a little risky at that %. Good that it has gone up, but how will you feel if it drops back down?
Mrs VRD had a very large (% of her HYP) holding in her company shares (from a SAYE share scheme) which did very well for quite a few years, but eventually meant we weren't sleeping well, so it got trimmed. I purposefully don't track the "what if" scenarios as that is just potential for self-doubt and a world of pain, but I do note that I have subsequently topped up on her company share, so am happy to note that it has gone up and down, just like many HYP shares.

Regarding the total number of holdings: if admin is under control then I see no reason to sell just for the sake of it. There is an argument to sell underperforming shares, but you need to define underperforming, and also the duration that this needs to occur before you act. Once at the trigger point you also need to decide whether to actually act, or to await further events if you like the way the recovery story is unfolding. Nobody is the same, so you have to do what works for you.

In much the same way as Arb has described, I have no idea ahead of time which of the shares currently in the doldrums will shine again and which will not, so I tend to be LTBH and look at the portfolio performance* rather than the individual shares, often noting that as one of my HYP components recovers, another stumbles...

VRD


*Performance is measured by year-on-year dividend comparison.

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20641

Postby Dod1010 » January 6th, 2017, 11:28 am

Further to my earlier ;post, it may be of interest to note that in the IC today, they tip each of Cairn Energy, Aviva and Imperial Brands as a buy. I understand what they are saying and they be right on Aviva, but I just do not trust it and would rather hold Legal & General. As for Imperial, I am sure they are right and if they are right on Cairn Energy, Spiderbill might as well continue to hold it even although it is a very small part of his portfolio.

Dod

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20647

Postby Arborbridge » January 6th, 2017, 11:50 am

Dod,
I can appreciate your scepticism about Aviva. After all, it was very strongly suggested years ago as a good value share by Stephen Bland, and from what you say, it is still being tipped. It's still good value, presumably. I first bought in 2007, and it wasn;t until 2013 that it showed a profit in terms of TR - and I'm still 7% down if you take out dividends. Today the XIRR is a princely <2%. Looking on the bright side, you might say it is serving its purpose: providing an income and without a write off of your capital. Not the best, not the worst.

But, in a way, this illustrates my previous point. Even taking shares written up favourably by people who know far more than I, you end up with quite a few duffers or semi-duffers. It also plays in to my other constant dilemma of when to "let go". Having achieved a positive TR at last, the temptation is to sell the wretched thing and concentrate on something which has given me more return. However, would that be exactly the wrong move? If I did that will all my mediocre shares, I would probably be getting down to about 30-ish - but how would I know, as VRD suggests, that I wouldn't be just concentrating on the next one to stumble?

I wouldn't know: nobody does.

Arb.

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20672

Postby Gengulphus » January 6th, 2017, 1:19 pm

spiderbill wrote:Apart from Life Insurance where I'm somewhat overweight, ...

Just "somewhat overweight" when it's around five times the weight of any other sector that I can see in your portfolio??? I can think of better descriptions!

Gengulphus

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20751

Postby spiderbill » January 6th, 2017, 4:42 pm

Bubblesofearth wrote:Spiderbill

The only issue I would have with your portfolio is the high % in Sunlife. There's nothing at all wrong with having 38 shares and I would leave well alone (apart from maybe trimming Sunlife). For one thing, the amount of money you have in some of these lower % holdings means that dealing costs will be an uncomfortably large fraction of any trading you do.

BofE


Thanks for that BofE. Yes the trading costs of getting rid of some of the dogs would be a high proportion of their value - it's finding the right time when the money generated can be put to much better use. In 20-20 hindsight I could have sold and bought more Shell when it was rock bottom but that was precisely when the pundits were all doom and gloom on the dividend.

I do intend to top-slice Sun Life and move the money gradually into more income oriented shares, it's just that it keeps rising every time I think of it! ;-) If it was still at the level of a year ago it'd be down to 15% of the portfolio.

Overall I've preferred to allow it to come down in proportion to the rest of the portfolio by buying more of other shares but realise it's been a gamble and that I'm lucky it has paid off. It's rather an extreme case of "running your winners" I suppose!
Post financial crash, which was when I started investing properly in shares, my feeling was that I already had them, they were rising, and they were generating cash. I could have sold the lot and reinvested more widely but I was still learning what I was doing and wasn't sure of making the right choices. If I'd put them into some of the minnows/dogs then I'd be a lot less well-off now

I almost certainly wouldn't have done it with most other companies, but Sun Life seems to be a very well run one with thankfully no sign of the sort of issues that such as RSA or a few years ago Aviva have shown. Just a pity about the withholding tax.

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Spiderbill

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20757

Postby spiderbill » January 6th, 2017, 4:56 pm

Gengulphus wrote:
spiderbill wrote:Apart from Life Insurance where I'm somewhat overweight, ...

Just "somewhat overweight" when it's around five times the weight of any other sector that I can see in your portfolio??? I can think of better descriptions!
Gengulphus


(Grin) Yeah, ok, I'll give you that. (heavens knows what you thought of the protfolio 3 years ago)
See my reply to BofE regarding Sun Life.
I was more thinking of the portfolio excluding Sun Life, which I regard as a special case. Still rather high but these pesky life insurers keep generating the most profits!

I am trying to increase a number of other sectors as and when the opportunities arise, (e.g. Telecomms, House Builders, and Drinks in recent months) so on a more serious note can I ask you which sectors you feel are the best value at the moment?

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Re: Spiderbill's Hyp-ish Portfolio Review Jan 2017

#20763

Postby spiderbill » January 6th, 2017, 5:13 pm

Dod1010 wrote:Spiderbill

Firstly, do not take what I think as gospel, I am no expert, just a conservative investor living off my HYP dividends with views that do not always coincide with those expressed on this Board!

(snip details)

Does that help? Bear in mind that there is a fair amount of group think on these Boards and there is no safety in numbers in investing. I could be completely wrong, but obviously I do not think so!

Dod


Hi Dod
You may not be an "expert" but you've pratical experience of "been there, done that" and your opinion is worth listening to - even if I were to utimately decide to go in a different direction based on my own specific situation. So I appreciate your input along with the other old heads on here. Group think is sometimes a danger and alternative opinions are the best antidote.

Yes, what you've said does help to clarify what your opinions are on the above shares, and it looks as if we're closer on most of these than I'd initially thought. Probably the main divergence is Aviva, and I can understand why you distrust them given your experience with them. I seem to have been rather luckier with my timing. I suppose the question is whether the company financial fundamentals matter more or less than any residual dodgy company culture. Neither of us can be sure of the latter but I can appreciate your feelings and I do try to watch for any signs of trouble.

Thanks again
Spiderbill


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