FAQ

[Gengulphus]

No, they cry "off topic" because it isn't about running a HYP in practice. You post it on HYSS.

There's still a gap. Take your example of TJH. He is definitely talking about his practical running of a portfolio, but implicit in that is the idea that the Pyadic principles can and should be improved upon. I don't think one can conceptually resolve that dilemma perfectly. But certainly in my view, I want to see practical real-life demonstrations of how Pyad's principles can be improved on HYPP, rather than mixed up with all the talk about preference shares, ITs, ETFs, Zeroes, options selling and whatever else on HYSS.

All sorts of things are implicit in everything we say. For example, it's implicit in various of my posts about my HYP that I have ethical objections to living on profits earned in the tobacco industry, that I like to keep my tax affairs simple by staying away from foreign tax systems, that I like holidaying in the UK, and many other things. That doesn't make everything about ethics, taxes and holidaying stuff that should be posted about on HYPP! Equally, it doesn't make everything about them completely forbidden territory for HYPP - such things are often necessary as background to understand the practical actions.

Likewise with TJH's strategy. His mentions of it are entirely fine as necessary background to explain what he's doing with his HYP in practice, but anyone who wants to discuss strategies more generally doesn't get to use that as an excuse to post on HYPP. They should post on HYSS, and if they feel it's a good idea, stick a quick invitation to join them into a relevant thread on HYPP.

Just to be clear, I'm explaining how things are supposed to work with the TMF board distinction. That can be changed here, but with the board structure quite clearly having been copied from TMF, you need to give good reason. Attempts to pick holes in the TMF distinction that are based on a faulty understanding of that distinction are unlikely to be regarded as good reason!

Put simply, I believe that the value of presenting such alternative but related practices on HYPP exceeds the downside of some people having to make the marginal effort of ignoring topics that don't interest them.

And I believe they have just as much value whether presented on HYSS or on HYPP: the only difference lies in who has to do the "marginal effort". Either those (like me most of the time) who want to read about practical HYP matters and don't want to read about strategic HYP matters have to ignore the latter on HYPP, or those (like you, and me some of the time) who want to read about both have to ignore the "talk about preference shares, ITs, ETFs, Zeroes, options selling and whatever else" on HYSS (or there has to be a third forum, but I'm not suggesting that any more than you are). It's basically just a matter of what keeps the total "marginal effort" down...

Gengulphus

[Gengulphus]

i think the future matters more - i suggest --

simplify , add flexibility , subtract status quo.

So put everything (and I really do mean everything, not just everything HYPish) on to one board. You can't get a simpler board structure than one board which covers everything, and it gives you complete flexibility to choose any available board and post whatever you like on it - and it certainly abandons the status quo!

;-}

The serious point behind that is that the board structure is there to organise the threads in a way that makes it easier for readers to find and subscribe to (or bookmark) the ones they're interested in. That imposes an obligation on posters (to post to the correct board) because the benefit to the many readers of the site outweighs the cost to the poster - and because the poster also often gets a benefit, namely that readers who can answer his or her question actually see it.

I.e. "add usability" should definitely be among your objectives. And they will conflict with each other at times, and when they do, trade-offs will have to be made.

And personally, I would take "subtract status quo" away from them. Either the other objectives justify a change, in which case "subtract status quo" isn't needed, or they don't and "subtract status quo" translates as "change for change's sake"...

Gengulphus

[Lootman]

Just to be clear, I'm explaining how things are supposed to work with the TMF board distinction. That can be changed here, but with the board structure quite clearly having been copied from TMF, you need to give good reason.

Fair point. But even without getting into HYP specifics there are a number of differences between TMF and TLF that may not allow a simple default of the TMF rules to apply here:

1) There are far fewer boards on TLF in general, and in other areas of TLF we've already seen the merging of TMF boards and the resultant broadening of scope. One can argue there is a high-level policy decision in place here to have fewer broader boards.

2) The structure of TLF is less board-specific and more topic-specific. In fact, so far at least, I have pretty much ignored the boards and focused only on topics. That may change as TLF becomes busier but it would be inconceivable to have adopted such an approach on TMF. In other words, it matters less to me here which board a topic is on anyway, which also means I can live with whatever decision is taken.

3) The TMF boards were a reflection of TMF's commercial orientation and its professional moderation resources and goals. Those don't apply here and, in particular, moderation is likely to work quite differently and probably less strictly. Insofar as the TMF rules about HY boards were predicated on a level and type of moderation unique to TMF, then they may need to change here to reflect those limitations.

4) The constituency here is different. Some on TMF have not migrated, like Luniversal who has said he will not do so. Others have re-emerged and been more active here precisely because they feel liberated from TMF constraints, like Pyad (so he said) and er, me. As you have said, polls may show whether that changes things, but of course we'd have to first agree on how to phrase such a poll, given how much the precise phrasing can impact the outcome!

[Gengulphus]

Just to be clear, I'm explaining how things are supposed to work with the TMF board distinction. That can be changed here, but with the board structure quite clearly having been copied from TMF, you need to give good reason.

Fair point. But even without getting into HYP specifics there are a number of differences between TMF and TLF that may not allow a simple default of the TMF rules to apply here:

1) There are far fewer boards on TLF in general, and in other areas of TLF we've already seen the merging of TMF boards and the resultant broadening of scope. One can argue there is a high-level policy decision in place here to have fewer broader boards.

Indeed, and I wouldn't have been surprised if the two High Yield boards had been merged into one. I rather suspect from some early playing around with the board names and some private messages that there were thoughts along those lines, but they were set aside because it was clear that they were treading on toes, and the priority was to get this site up and running without repelling existing users. Whether that means set aside temporarily or permanently, I don't know...

2) The structure of TLF is less board-specific and more topic-specific. In fact, so far at least, I have pretty much ignored the boards and focused only on topics. That may change as TLF becomes busier but it would be inconceivable to have adopted such an approach on TMF. In other words, it matters less to me here which board a topic is on anyway, which also means I can live with whatever decision is taken.

Agreed on that also. The only real uses I have found for the board structure so far are:

* There's a method involving subscribing to forums and individual topics that presents you with all new posts on any topic on the boards and the individual topics.

* There's an alternative method involving subscribing to boards and bookmarking topics that presents you with all new posts on those topics and tells you about all new topics on the forums so that you can choose whether to bookmark them.

* If you're generally interested in a subject rather than having a specific question in mind that can give you a keyword to search for, they can help you find it. E.g. if one is generally interested in posts about the natural world, being able to look in http://lemonfool.co.uk/viewforum.php?f=59 is vastly better than trying to find the few such topics among the 869 (and rising) on the site.

* Setting the context for a topic title - this topic's title being a good example! It could be about a FAQ for any subject whatsoever without the context of being on the High Yield - HYP Practical board...

So the board structure should be chosen to get good value out of those uses.

3) The TMF boards were a reflection of TMF's commercial orientation and its professional moderation resources and goals. Those don't apply here and, in particular, moderation is likely to work quite differently and probably less strictly. Insofar as the TMF rules about HY boards were predicated on a level and type of moderation unique to TMF, then they may need to change here to reflect those limitations.

Agreed again, apart from the "probably less strictly". I suspect it will end up being less strict in some respects, more in others. For example, stooz has indicated that moderators will be able to do things like split topics and move them to appropriate places, and that would certainly make moderation easier. And I imagine that moderators will be willing to be helpful about using those facilities to untangle any sort of mess a topic has got itself into. But if that happens often on a board, it won't surprise me at all if they end up saying something to the effect of "We're here to clear up inadvertent messes, not to allow you to recklessly continue posting to a thread regardless of what it's supposed to be about. Clean up your act by starting new topics and shifting to new forums when appropriate, or else...". And mean it.

4) The constituency here is different. Some on TMF have not migrated, like Luniversal who has said he will not do so. Others have re-emerged and been more active here precisely because they feel liberated from TMF constraints, like Pyad (so he said) and er, me. ...

With regard to pyad, he didn't re-emerge here: he's been around for years, posting at quite a low frequency. He's said he may be more active here and has so far, but has explained the reason for that as "due to running my own HYP tipsheet" (http://lemonfool.co.uk/viewtopic.php?f=15&t=10&p=67#p67). That constraint may well be TMF-related, TMF being in something akin to the tipsheet business and this site not, but it's hardly the same sort of thing as the "TMF constraints" that you and others have felt under!

In any event, I'd be highly surprised if the constituency here has changed much so far from the TMF constituency. Yes, some individuals have come and gone, but there need to be quite a few of them to make a major difference among over 1700 members. That will doubtless change over time, but if we try to let predictions about that influence our thinking, we run into a chicken-and-egg issue: what predictions we make influences where we take the site, where we take the site influences how the constituency changes and thus whether our predictions come true...

As you have said, polls may show whether that changes things, but of course we'd have to first agree on how to phrase such a poll, given how much the precise phrasing can impact the outcome!

Yes, a potential problem we'll have to face when the time comes.

Gengulphus

[melonfool]

.
simplify , add flexibility , subtract status quo.

.

I liked it how it was and saw absolutely nothing wrong with it and no reason it can't simply carry on as it was. It already was very simple. Allowing other discussions actually makes it less simple, not more.

Mel

[Lootman]

With regard to pyad, he didn't re-emerge here: he's been around for years, posting at quite a low frequency. He's said he may be more active here and has so far, but has explained the reason for that as "due to running my own HYP tipsheet" (http://lemonfool.co.uk/viewtopic.php?f=15&t=10&p=67#p67). That constraint may well be TMF-related, TMF being in something akin to the tipsheet business and this site not

Yes, I'm sure the tipsheet was a factor but he has also engaged in a couple of criticisms of TMF here, hence my thinking that is a factor too. Examples:

"Maybe I'm getting increasingly atrabilious but, as someone who was on Fool UK almost from the start, I always detested all that shite. If someone desperately needs recs, stars, volume indicators etc. in order to communicate on a forum, they may have a bit of a problem."

And:

"With this fresh start, you should not want to ape the Fool with its silly stars, balloons, recs and similar puerile posting accoutrements. I always loathed all that crap there when I used to be a prolific poster. Recs in particular pervert the boards and encourage a sort of playground clique attitude which detracts from discussions."

All that said, he has argued for the HY boards to exist as they did on TMF, as of course have others. Whether that is a luxury that HY investors can continue to enjoy when so many other boards have been merged remains to be seen.

[88V8]

[I liked it how it was and saw absolutely nothing wrong with it and no reason it can't simply carry on as it was. It already was very simple. Allowing other discussions actually makes it less simple, not more.

Potentially, yes, because simple questions on Practical about 'which new share should I buy or should I top up &/or sell something' too easliy become subsumed into debates about whether one should ever sell or top-slice and if so when and what constitutes an acceptable yield and the merits of cover or free cash flow and Preference shares (guilty) and on and on.
Debates in which everyone transmits and no one receives, and the OP gets tired and drifts away.
So, debate is what the Strategies board is for.

Not disputing that Practical was a spin-off, back in the day. But now it's the main event and Strategies is ... everything else. Evolution.

However, cart, horse.
As has been said, few people read the FAQ. We do need FAQ, but more so we need clear straplines for each Board.
It needs incisive thinking to produce a strapline.
Anyone can ramble on for paragraphs, and I do, but to boil it down to a phrase, that's not so easy.

Phrase. Boil.

V8

PYAD - acronym... Perpetually Yieldy Annuity Displacement.

[AJC5001]

PYAD - acronym... Perpetually Yieldy Annuity Displacement.

'Fraid not

From TMF Value Shares Board
"Definition of PYAD"

Here it is:

P/E - under 2/3 all share
Yield - more than 50% of all share
Assets - greater than share price (nowdays PTB<1)
Debt - preferably none

These are the four fundamental filters through which the market is strained in order to separate out the initial selection of my value plays. There are a lot of other criteria which are then applied to any shares which pass through the above tight sieves.

Adrian

[Lootman]

P/E - under 2/3 all share
Yield - more than 50% of all share
Assets - greater than share price (nowdays PTB<1)
Debt - preferably none

The problem I have with those parameters is that they can vary greatly depending on what sector a share is in. For instance some sectors always have low P/E ratios, like energy and banks, while others are high like some tech and pharma companies. Debt is quite normal and desirable for a utility but can be a worry for an insurance company. A yield over 50% of the index is easy to find in some sectors but impossible in others. And discount-to-book is common with banks but unheard of for consumer staples because of the value of brands.

So if you rigidly stick to these criteria you can end up with a very unbalanced portfolio. Where these metrics are useful, I believe, is in assessing the relative merit of shares within the same sector. So my approach is first to list the sectors I want and then choose one or two constituents of each sector based on these kinds of metrics. If that means some have a lower yield or a higher P/E ratio then so be it. I believe the resultant portfolio will be more diversified and will have a dividend stream that is safer and more likely to grow.

[Breelander]

The problem I have with those parameters is that they can vary greatly depending on what sector a share is in... if you rigidly stick to these criteria you can end up with a very unbalanced portfolio.

The problem I have with those parameters are that they are actually from pyad's Value methodology which predates HYP and is a trading strategy. The two should not be confused, they are quite different...

...we sometimes see newcomers who don't always appreciate the differences between the strategies by asking questions on the value board that relate to HYPs or vice versa.

Because it's only the investor's intended use of the shares that distinguishes their investment purposes, one needs to have quite a clear mind on this and be able to stick to the distinction whatever happens, despite the potential temptation to permit crosstalk between the strategies.

http://news.fool.co.uk/news/investing/2 ... r-hyp.aspx

[Gengulphus]

P/E - under 2/3 all share
Yield - more than 50% of all share
Assets - greater than share price (nowdays PTB<1)
Debt - preferably none

The problem I have with those parameters is that they can vary greatly depending on what sector a share is in. For instance some sectors always have low P/E ratios, like energy and banks, while others are high like some tech and pharma companies. Debt is quite normal and desirable for a utility but can be a worry for an insurance company. A yield over 50% of the index is easy to find in some sectors but impossible in others. And discount-to-book is common with banks but unheard of for consumer staples because of the value of brands.

So if you rigidly stick to these criteria you can end up with a very unbalanced portfolio. ...

LOL!

The PYAD criteria were pyad's criteria for his Value strategy, which most certainly did produce very unbalanced portfolios: it was a strategy of the "put all your eggs in one basket and watch it very carefully" type. Very different from HYP strategies in that it was aimed at making capital gains rather than income generation, was therefore always looking to sell if it had anything to sell (which it sometimes didn't, having 'gone to cash'), was much less diversified (at times totally undiversified), and was most unsuitable for the investor who wanted to be able to neglect his or her portfolio for extended periods.

Gengulphus

[Lootman]

The PYAD criteria were pyad's criteria for his Value strategy

Ah yes, the one that was 75% invested in RBS and Aviva that crashed and burned? Yes, I remember it well thinking, as I did at the time, that its lack of diversification would be the death of it.

I'd argue that a basic level of diversification makes sense whether you are investing for value, growth, income or whatever. Otherwise it's not a strategy or a portfolio at all; it's a lottery ticket.