change to HYP-P guidelines

[Lootman]

So TJH has out performed HYP1 18 out of the last 21 years, is what you've shown us. Well done.

That makes sense to me because a completely unmanaged top-heavy portfolio will be more volatile. So there will be some years when it gets lucky and it's two or three dominant shares will out-perform. But the rest of the time, not so much.

Ian is really advocating a form of momentum investing, where a share is held or bought simply because it has out-performed in the past. The irony there is that momentum investing is often considered the antithesis of value investing, which of course is what HYP is based on.

[Clariman]

Moderator Message:
Admin Review
Admin has been asked to review this topic because of a relatively high number of problem reports, including ones made repeatedly. I want to make three points.

Firstly, if you want to report a post, that is fine, but please only report it ONCE. Multiple reports from the same user(s) about the same post(s) causes unnecessary work for the Moderation team. Your report will get read and acted on where appropriate.

Secondly, it is perfectly appropriate for a user to ask another to substantiate a claim that is made. That is part of healthy debate. However, if the other user is reluctant to substantiate the claims, for whatever reason, that is their prerogative. It is OK to ask politely again but there comes a time when you've got to accept that it may not be forthcoming.

Thirdly, and most importantly, please keep it polite at all times. Mods have had to edit some posts and others have been unpleasant or accusatory while still being just within the site rules. It isn't very edifying.

As an aside, I think one could make the case that most of this discussion is off-topic given that the Mods were just making an announcement about a change of board guidelines. We'll let it run for now, but keep it nice. Thanks

Clariman

[88V8]

Moderator Message:
Admin ReviewAs an aside, I think one could make the case that most of this discussion is off-topic given that the Mods were just making an announcement about a change of board guidelines.

Ahh, but it shows that we care...

V8

[Bubblesofearth]

Sorry Ian, but I see it differently, much less of a difference, to the extent of no clear/consistent winner. HYP1 (non tweaked) may have the slight edge in risk/reward terms, but only very marginally.

Do the calculations include dealing charges? Over time these could be the biggest drag on a portfolio that is traded (top-slicing is still trading) vs one that is left alone even if the theory of letting winners run is flawed.

BoE

[tjh290633]

Sorry Ian, but I see it differently, much less of a difference, to the extent of no clear/consistent winner. HYP1 (non tweaked) may have the slight edge in risk/reward terms, but only very marginally.

Do the calculations include dealing charges? Over time these could be the biggest drag on a portfolio that is traded (top-slicing is still trading) vs one that is left alone even if the theory of letting winners run is flawed.

BoE

As far as my data is concerned, dealing fees and stamp duty are included in every transaction. Account charges are paid outside the ISA, but are de minimis in terms of capital value and are less than 0.1% of dividends. I have given details elsewhere, but do not have details to hand at the moment.

TJH

[Bubblesofearth]

As far as my data is concerned, dealing fees and stamp duty are included in every transaction. Account charges are paid outside the ISA, but are de minimis in terms of capital value and are less than 0.1% of dividends. I have given details elsewhere, but do not have details to hand at the moment.

TJH

Dealing charges should surely be calculated as a fraction of the value of the trade not the whole portfolio? Typically for big caps I would expect around 1% minimum each time. More for small trades because of brokers fixed fees.

BoE

[csearle]

Dealing charges should surely be calculated as a fraction of the value of the trade not the whole portfolio?

Did he suggest otherwise? C.

[1nvest]

Total returns HYP1 assuming dividends were reinvested

The dividends were not re-invested, they were withdrawn.

This means that if I was at all interested in "Accumulation Units", which of course I am not, a number of units would have to be sold at whatever was the price at the time of the withdrawal.

Enjoy!

Ian

TR is just another equalisation measure, same as dividend yield, earnings yield etc. A means to compare on a like for like basis. The data you present as evidence is highly start to end date specific, that is highly variable. You might selectively choose start/end dates to argue either way, better is a more levelled overall average measure, and for that TR is a appropriate metric.

For instance by your approach I could select a subset period within the available data of a 2008 start date to the end of 2013 (again these are Nov HYP1 and April TJH years based actual data values)




Oh look, TJH HYP produced more than 50% more income than HYP1 and also its capital value appreciated near 70% more than HYP1. That isn't evidence of anything other than a relative comparison over a particular period of start/end date years. Doesn't really reflect the broader picture/average. Is a totally contrived choice of start/end dates to make TJH HYP to look considerably superior to that of HYP1.

TR of course is reflective of actual total rewards, which for some (many) is important. On the broader picture and HYP1 vs TJH HYP pretty much come out with very similar total returns, that also compared to the FT250 total returns. Different styles/stocks where one opted not to rebalance/tweak, the other two did, yielded similar total returns.

As per other figures I presented in my earlier post, whilst TJH HYP had higher volatility (standard deviations) you may note that was a reflection of higher upside volatility

TJH April HYP1 Nov
10.26% 9.23% Avg
11.10% 11.02% Median
22.04% 15.57% Stdev
-42.37% -41.09% Min
68.11% 33.64% Max
8.58% 8.15% LLR
7.97% 7.95% CAGR

Higher stdev, similar Min's, over twice the Max.

Whilst the annualised were near the same, the log linear regression (trend line) for TJH was steeper (higher/better) for TJH HYP. But again that isn't a perfect measure, is somewhat still reflective of start and end dates.

The evidence from a independent perspective is that the two, HYP1 and TJH HYP, at least for the limited data that is available, is towards equalisation. For a number of investors each doing the same, starting/ending at different dates, the average is such that there is no single consistent winning/better choice of the two.

[1nvest]

Right here right now, would you rather inherit HYP1 or THJ's portfolio?

Who know the correct answer - the future cannot be determined - but THJ's still looks like a HYP whereas HYP1 looks to be breaking all those sensible rules.

Even Jack Bogle suggested the ultimate portfolio to be to buy a initial bunch of stocks (he, being American, proposed selecting from the largest S&P500 stocks), bought and held.

When you buy into a cap weighted index you're placing more weight into yesterdays winners and in so doing leaving less weighting into others. The suggestion being that to instead initially equal weight ... and let that find its own forward time cap weighting, where you'll end up having time averaged more weight in the better performing individual stocks.

HYP1 does not advocate buying into existing HYP1 holdings/weightings, specifically states to initially equally weight each stock, and thereafter leave that as-is.

[IanTHughes]

So let me see ……

The only way to measure two portfolios where all income is withdrawn, is by inventing re-investment figures carefully selected to show one pre-selected winner. Still not enough? I know, why don’t we change the dates so that we can ensure that our pre-selected fictitious figures are greater than the other fictitious figures. A hindsight special, that should do the trick!

Being told that one really should put in the effort and do research for anyone that asks, research that you may not even need, either because someone else does not want to do it for themselves, or maybe because that kind of research is beyond their capabilities.

Being told that doing a review of other peoples’ research, research which of course is not provided for you, silly boy go find it yourself, is exactly the same as asking someone who claims that they themselves have invented their own way of determining a yield trap, for some explanation as to how they came up with looking at another possible investment and then doubling the number they first thought of.

You could not make it up!

But wait a minute …….. you don’t have to make it up. It’s all part and parcel of the increasingly useless contributions made on this board! My old Grandma used to say that there is one born every minute!

Only one Grandma?

Enjoy!


Ian

[csearle]

Moderator Message:
I rather agree with one reporter who feels that this thread has become increasingly pointless.

I think it would do no harm to call it to a halt. There will doubtless be tinker v. non-tinker discussions in the future. This one has become rather acrimonious.

If anyone strongly wishes for this thread to continue then please make your case, otherwise I'll lock it in due course. - Chris

[1nvest]

Moderator Message:
I rather agree with one reporter who feels that this thread has become increasingly pointless.

I think it world do no harm to call it to a halt. There will doubtless be tinker v. non-tinker discussions in the future. This one has become rather acrimonious.

If anyone strongly wishes for this thread to continue then please make your case, otherwise I'll lock it in due course. - Chris

It is also acknowledged that it may be rational to "top slice" an overweight low-yield share and consequently, following normal HYP practice, reinvest the proceeds in a higher yielding share, thereby automatically ratcheting a portfolio's income up above the natural growth rate.

But yes, best locked.