FAQ

[Arborbridge]

If you agree cap performance can be discussed then that too is at odds with the above.

Isn't it a question of degree? I don't remember anyone being castigated for reporting capital growth: in fact I do so myself from time to time as did/does Pyad and several others (TJH, Breelander are two others).
I think this discussion is in great danger of becoming unreasonably picky. Most aspects of HYP can be discussed here particularly if it is a smaller reference within a post giving other comments. For example, I have from time to time compared my HYP with my IT performance on HYP practical - just to report it is fine, but what has never been allowed is endless reams of discussion about whether HYP is "better than" than, say, an IT basket. And that I see as perfectly reasonable on a board specialising in HYP. By all means discuss differences on the HY strategies board or investing for income one.

This whole discussion, in my view, is making a very simple proposition into something more complex for the sake of it. People are seeing difficulties where there either are none, or if there are, where a few tweaks will solve it. The FAQs like any "rules" are there to be interpreted against the background of what is "reasonable" to the average HYPer. I'm beginning to wonder if some people are being disingenuous argument against the status quo for the sake of it: one of the reasons the two boards were split in the first.

Someone earlier mentioned not "raging" but instead, going with the flow. To my mind, this is looking at it the wrong way round. It is those who want to change the status quo who are doing the "raging", and it is those who ought to go with the flow. There is absolutely no need to dilute the HYP Practical board, when all the necessary discussion can take place on other boards.

Arb.

[Arborbridge]

Gengulphus,
You deserve a couple of reccs for your last couple of posts.


Arb.

[Lootman]

With regard to the statement about the forum not being the place to discuss capital growth, that doesn't come from the TMF FAQ, and it's rather at odds with the first 'hallmark' . . capital growth can be an investment aim of a HYP - it's just not the primary one. And it would be rather silly to try to ban all discussion of an investment aim of the portfolio being run. So basically, I think the statement about the forum not being the place to discuss capital growth needs toning down.

There is a reasonable distinction between the mechanics of an investment system and the intentions of those who use it. For example, at least theoretically I could adopt all the rules of a HYP approach not for the income, but rather because I believe that a high yield elevates the level of risk in a portfolio, and therefore increases the potential for higher capital gains. Moreover I may reinvest all dividends to turbo-charge my growth ambitions.

To my mind that is within scope as long as all the "rules" of how to run a HYP are followed in regard to the "five hallmarks". My attitude towards capital growth alone does not render my use of the system irrelevant to this board.

there was simply no point putting e.g. active traders using TA and LTBH HYPers together on a board intended for discussion about how they make everyday practical decisions for their portfolio. Quite possibly some of them need tweaking for the different environment here - but not wholesale chucking away without a word of rationale!

Agreed. Where we would need to deviate is where a rule existed on TMF that they imposed for their own corporate reasons and isn't considered relevant here. Or where the practical need for fewer boards here necessitates a broadening of scope.

Another issue is moderation. Although in general you need the rules in place before you can discuss how to moderate, in this case it would be foolhardy to implement strict rules and fine distinctions if we know that moderation here will probably be less functional. TMF spent what was probably tens of thousands of pounds a year maintaining a fairly strict and comprehensive form of moderation. There is no evidence so far that anything like that level of resources will be available here.

If a rule cannot be enforced there isn't a lot of point in having the rule in the first place. So let's adopt rules that require a level of moderation that can be supported rather that what we might ideally like to have, or what we became used to having on TMF.

[Lootman]

I was lazy and did not read the FAQs.

I never read them either, and I'd be willing to bet 90% or more of the visitors to that forum never read them either.

And that's not necessarily a problem as long as what they say are normal, reasonable and predictable by a person of average intelligence. For instance, I have never read the statutes on murder or any other crime, but I manage to avoid breaking those laws anyway. I make a reasonable assumption about what behaviours are banned and about what the rules are, and act accordingly. As long as the rules are reasonable and I understand best practices for civil behaviour, it doesn't matter if I haven't studied chapter and verse.

The flip side of that is that if the rules are so detailed and counter-intuitive that one has to study them carefully before posting, then it's always going to be a struggle for people to abide by them. And for all the comprehensive moderation at TMF (which likely won't exist here) and the writing of the FAQ's and all the debate about splitting the HY board and the peer group pressure, there was always an undercurrent of disagreement and squabbling on the HY board that never really went away, and even carried on over here for a while, drawing the ire of our sponsors.

Nothing beats common sense and plan English.

By the way, when the split happened I was having one of my TMF sabbaticals, so I can't speak to whether it improved things at the time or not. But it introduced at least one new class of argument - whether a topic should be on this board or that board. I recall at one point there was serious discussion of a further split into 3 boards. That was ultimately rejected, not least because it was predicted that it would lead to more arguments about what belongs where. Splitting, per se, can create problems as well as solve them, and I recall arguments on the TMF Christian Fools board even though it was carved out from the TMF Religious Fools board. Further dividing up the protestants and the catholics might nor have fixed that.

[jackdaww]

I was lazy and did not read the FAQs.

I never read them either, and I'd be willing to bet 90% or more of the visitors to that forum never read them either.

=======================

if that is true , and it may well be , then the board TITLE has to be much better .

[Arborbridge]

Agreed, Jackdaww, the title might be improved* but the real point is that learning about the board comes from having an FAQ set as a marker of the boundaries, and good moderation which promotes a backbone of custom and practice. That's what worked on TMF and will work here.

Having wide boundaries or a free for all just leads to chaos.

*though I have yet to see any suggestions.
Arb.

[melonfool]

Agreed, Jackdaww, the title might be improved* but the real point is that learning about the board comes from having an FAQ set as a marker of the boundaries, and good moderation which promotes a backbone of custom and practice. That's what worked on TMF and will work here.

Having wide boundaries or a free for all just leads to chaos.

*though I have yet to see any suggestions.
Arb.

Or add a 'sub-title; as some boards have?

Mel

[Raptor]

Or add a 'sub-title; as some boards have?

Mel

Would be my preferred option and have suggested that on an other topic, which I can no longer find......

Raptor.

[Deev8]

The major issue, as in many aspects of life, is that you can't draft legislation / rules / guidelines that are an adequate substitute for everyone using a bit of common sense and a dash of courtesy.

Dave

[Arborbridge]

everyone using a bit of common sense and a dash of courtesy.

So true Deev8. And that's where we must add another mention of how good the Mods were (in general) on TMF. It was their reasonable approach and occasional explanations to people (to me, at any rate and I infer others too) in their emails
which kept the atmosphere wholesome.

Much of this is like the English law: what would the average person on the Clapham Omnibus think was reasonable? Interesting how much in law is based on our British ideas of "reasonableness" rather than the letter of the law.


Arb.

[Stonge]

The main restriction... is that it is for discussing ways of running a HYP, but not whether schemes other than HYP are a better idea.

What else do you need?

[Dod1010]

If I go back to the OP, we have no definition of a HYP so going on to say 'Not even about other high yield investment strategies' seems a bit odd. We all know what was intended to be discussed on the TMF HYP Practical Board but I certainly found it altogether too restrictive.

A High Yield Portfolio is just that although we could say that it should normally be composed of individual shares if we like, but otherwise whether for instance tinkering or not or ignoring Strategic Ignorance seems completely irrelevant to me.

The HYP Strategies Board was hardly used so there is not a lot of point in encouraging one here. Surely the essence of this Board is to try not to be too prescriptive about what can and cannot be discussed

[Stonge]

DOD - agreed.

High Yield was always a misnomer. IMHO the root of most of these confusions.

Board title should be something like 'Income Share Portfolios using Share Dividends as an alternative to an annuity'

Simple.

[melonfool]

Board title should be something like 'Income Share Portfolios using Share Dividends as an alternative to an annuity'

Simple.

Well, that could be the sub-title.

Mel

[Stonge]

Mel: I agree, could make a sub-title when spruced up by one of the experts on here.

[Arborbridge]

A High Yield Portfolio is just that

Is that like Brexit means Brexit?

There is no confusion when one realises (which doesn't surely take too much effort) that an HY Portfolio is NOT the same as HYP. And the HYP concept is well defined, so there's hardly an excuse for a mix up, except for newcomers - who can soon be put on the right track with reference to FAQs or various articles.

HYP Practical for HYP only.

HY Strategy for all other HY types.

So simple really. It is just too simple, so people are looking to complicate life?

Yes, it may have taken a few weeks for me to grasp the differences, but I really think it isn't beyond intelligent investors to appreciate the difference. Me thinks I see mountains being made out of very small mole-hills.

Arb.

[Dod1010]

The trouble is Arb, no-one has the proprietorial rights to HYP and I take the three letters simply as a shortened version of High Yield Portfolio or HY Portfolio if you like.

That is why I say a High Yield Portfolio is just that. You are inferring that HYP has a special meaning. I for one cannot accept that other than that it means High Yield Portfolio. The whole idea of The Lemon Fool is to keep it simple and avoid too many Boards of dubious value and as I said the HYP Strategies Board was never used much except as it happens by the late lamented Luni.

[melonfool]

the late lamented Luni.

He's not even been gone 24 hours!

Mel

[ManInTheStreet]

I'm not sure I really care about this discussion. If we are not careful we could be asking head-of-a-pin questions. As long as we are sensible and don't pollute the board with lots of off topic stuff I think it will be fine. OK, so we have already had:

Farewell to Luni
Arb's last post

Those are fine but I would be unhappy if I couldn't find the nuggets of gold on suggested shares to buy and company performance because of a proliferation of threads like this. (Caveat emptor of course.) The value of this board on TMF to me was to give me confidence in investing directly in shares ('OMG, you don't buy shares do you?' And my wife's perennial 'Tesco!? What do you know?'); and along the way to see how others did it. Occasional off-topic asides have always been tolerated. The practical-ness of this board for me has been to demonstrate, time and again with different people over different time periods, that the HYP strategy as put forward by PYAD, and tweaked by many, can be run simply and successfully by anyone, as long as you have some worldly awareness of what you are doing.

In other words, the HYP approach is possible and can give you reasonable rewards, but be aware of these points... I started to dip my toe into the HYP water nearly three years ago, and now I think I'm in it up to my knees. My experience matches what has been described on this board. As long as I keep getting evidence, and hints, from others about the success and pitfalls of running their HYPs, and the immensely useful company results posts, this board will do for me.

I only invest in what I know. And lurking here I know a lot more about shares than I did three years ago.

[Gengulphus]

Board title should be something like 'Income Share Portfolios using Share Dividends as an alternative to an annuity'

Simple.

No, sorry, it isn't simple. You and Mel have already found one obvious thing wrong with it, namely that it's way too long to be a board title, by moving on to considering it instead as a sub-title. (Even TMF's "High Yield - HYP Practical" board title was really a bit too long - look at how often people just called it "the HYP Practical board"...)

I see other things wrong with it, but before dealing with them, I'll take up your suggestion of sprucing it up. That's because I'm going to want to add some extra elements to fix the problems I see with it, and sub-titles also mustn't be too long. So let's try first to shorten it... There's no need to say "Share" twice, and there's some duplication between "Income" and "as an alternative to an annuity". Furthermore, the "as an alternative to an annuity" is on very dubious ground: contrary to popular belief on the board, pyad's original articles about the strategy didn't mention annuities, and actually mentioned guaranteed income bonds as the insurance company product that might be replaced, and indeed a HYP's investment characteristics are closer to those of a guaranteed income bond than to those of an annuity (for example, a risk of damaging capital rather than a certainty of totally destroying it).

The other thing wrong with "as an alternative to an annuity" is that it contains an implicit pre-judgement that a HYP strategy is only suitable in circumstances where you might consider using an annuity. There are indeed people around who believe that or something close to it, but there are also those (like me) who believe it's also useful in other circumstances. And the difference between those positions is very much one of what strategies are and aren't good ones - i.e. basically a strategic argument of precisely the type that the TMF High Yield - HYP Practical board was set up to allow people to escape from! Basically, the important thing about a HYP from the practical point of view is that it's aimed at producing dividend income: what the investor wants that income for and what they regard as the alternatives to the HYP are strategic matters.

So I would keep "Income" and drop "as an alternative to an annuity". With a bit of further editing to reflect my comments in the last paragraph, I get to 'Share Portfolios aimed at getting Dividend Income'. On to the things I see as wrong with it... It fails to mention diversification, dividend safety, the low level of trading and the fully-invested aspects of the TMF definition. Of those, I think the fully-invested aspect could probably be omitted - it's almost implied by the others - and the others could be fitted into the sub-title with a few extra words: 'Diversified, Little-Traded Share Portfolios aimed at getting Sustainable Dividend Income'.

That's the "HYP" part of the board's definition dealt with, though the sub-title is getting a bit long. There's still the "Practical" part to be dealt with - that sub-title on its own will invite all discussion about such portfolios, and I think "HYP Practical" in the title is a bit too cryptic to counteract that invitation. My feeling is that that's best addressed by modifying both the title and the sub-title, to produce something like:

Running HYPs in Practice
HYPs are Diversified, Little-Traded Share Portfolios aimed at getting Sustainable Dividend Income

I'm not claiming that's a perfect description of the topic, but I think it's reasonably close. And it could almost certainly do with some more polishing - in particular, the sub-title is a bit long.

But it's as far as I'm going to try to take it at present, because it's ignoring the elephant in the room: what the board's topic should be. I think it's a decent first pass at a solution if the board's topic is the same as that of the TMF High Yield - HYP Practical board, but there are clearly unresolved differences of opinion about that - and as I've said before, I don't think we can get resolution on that until we have polls to allow us to assess opinion and interest in using the resulting board.

Gengulphus