DiamondEcho wrote:Something that comes out of this discussion is that it seems we have no published strategy. Hence if a newbie came to the board how might he figure out what to do?
That's because we use HYP strategies - plural - with different HYPers using different HYP strategies. They have some general characteristics in common - aimed at getting income, investing in a well-diversified selection of high-yielding equities, with attempts to select ones whose dividends are safe, and generally hanging on to them for a long time (so little or no voluntary selling). Within that, there's scope for quite a lot of variations, such as:
* how widely one looks for the shares - e.g. UK only or also including foreign shares, and if the latter, whether only the main foreign markets or also emerging ones;
* which of historical, rolling historical and forecast yield one looks at;
* how high a share's yield has to be to count as high;
* which 'dividend safety criteria' one uses to attempt to select shares whose dividends are safe;
* how well-diversified - people range at least from 15 shares up to 40+;
* whether one does no voluntary selling or a little of it;
* if one does a little voluntary selling, what it's aimed at - for instance, at increasing income by trading up from a company whose yield has become low to one with a significantly higher income, or at reducing the company-specific risk to income caused by holdings that have grown to produce a large fraction of the portfolio income;
* almost certainly quite a few others I haven't thought of offhand.
We do have a number of strategies published by specific HYPers, but we don't have a published "The HYP strategy" because we would never agree on it! What we have in common is not a highly specific strategy that we can tell people they should use, but a broad strategic approach within which we can offer people quite a lot of different strategies - but that have enough in common to provide some sort of common ground for discussion.
That does inevitably mean that newbies will have to look at the options on offer and choose which to use - or indeed create a new option for themselves, e.g. by picking and combining the elements of other HYPers' strategies that make sense to them.
DiamondEcho wrote:Previous comments up-topic^ about the sift-metrics I noted and are guided by are useful. They are based on Stephen Bland's earliest posts outlining the strategy. But since that goes back to the year 2000 it might be reasonable to consider the given metrics/hurdle-rates as long expired. And that would explain why my notes contain an updated version, quite probably assisted by TJH's linked^ post.
So it's an example of what I just described - you picked and combined elements of others' strategies to create one for yourself. You could very reasonably have said "Them's my rules" about them - but if you suggest that everyone should be following them by saying things like "Them were the rules", expect disagreement!
DiamondEcho wrote:If it's correct that we have no published HYP selection and management strategy, perhaps we could collectively Wiki-Lemon one?
That's doomed to failure IMHO, because e.g. pyad's original HYP strategy (as used for HYP1) and tjh290633's are quite simply incompatible on a number of points - such as that tjh290633's strategy goes for over twice as much diversification as pyad's (over 30 shareholdings so far rather than just 15) and tjh290633's has a policy of voluntarily selling shares for investment reasons (such as a holding growing overweight or dropping to too low a yield), while pyad's has a policy of never doing so (*). My own HYP strategies (I have four, one for my main HYP and three for demo HYPs) differ from both of them and from each other - and I'm pretty certain that there are various other Fools whose HYP strategies differ from all of them.
Faced with that sort of incompatibility, an attempt to collectively form one strategy will simply become a never-ending argument about which way it should be resolved. As evidence of that, we've had many years of such discussions about portfolio size, 'tinkering' (voluntary selling) and various other issues on TMF, with no sign of them being resolved...
What might stand a better chance is some sort of repository of multiple HYP strategies, for people to browse through and pick the one they like - or more than one that they want to 'hybridise'. It would need some sort of rules, e.g. along the lines of "anyone can contribute their strategy; others can ask for clarification and it should (within reason) be provided; others should not use that as a way of attacking the strategy - if they think it should be done differently, they should instead contribute their own strategy".
(*) It has very occasionally sold for admin reasons, basically to ease the job of running and reporting on HYP1 - there have been three such cases to date. (Selling United Utilities rights as the quickest and simplest way through its rather messy 2-stage rights issue; selling some tiny Mondi holdings when they were demerged from Anglo American; selling Alliance & Leicester to avoid ending up holding a foreign share when it was taken over.)
Gengulphus
Well I'm glad it is accepted that the strategy can be somewhat adapted to suit personal circumstances, experiences and goals. I do suspect anyway that many likely run their own minor variations upon a core theme, all believing we have individual and equally valid reasons. Not least because identifying a currently valid set of criteria for a 'core theme' is work in progress.
