The Lemon Fool

As a lurker on TMF since 2004, I would firstly like to thank all of you who have regularly contributed to the boards which has given me knowledge and a confidence to invest, and also to Clariman and Stooz who have filled the discussion board void.

I take the PYAD approach to buy and not tinker, however, as you will see with my weightings, they are not particularly even (especially ULVR). Although my approach is more hands off, I am getting an itch to start ‘pickering’ (thanks Ian and looking forward to the day when ‘pickering’ is in the Oxford dictionary).

My HYP is as follows:



I’m looking to add a new share (not interested in tobacco or weapons) and have the following on my watchlist:

Greene King – first choice.
Diageo – Dividend too low.
Pearson – questionable future?
SSE – already have some utes.
L&G – could pair up with Aviva?
Royal Mail – not a long dividend history.
Builders – quite cyclical.

So please feel free to comment. Unsure whether to picker and even up my weightings or just go with strategic ignorance (to an extent), and any advice on a new share would be appreciated.

Thanks!

PR

My own HYP is very similar to your, and I've neglected the urge to tinker so far, but my biggest holding is 13% which is still quite a bit below your Unilever. I think at 20% I would be inclined to topslice a quarter to take it down to 15% weighting.

Is there any reason you are not considering Vodafone? You've doubled up on a few sectors, so why not telecoms? I think it's a safer bet than any of the ones you have listed, except possibly Diageo, but the yield there is too low.

Hi StepOne,

ULVR was my first holding (I was a few months old when my Dad purchased them in the 1960s - if only he'd reinvested the dividends!) so that's why it's so large.

I decided against VOD as their dividend cover is only 0.4 but have no qualms about doubling up. Are you aware of any reason why it is so low?

Are you aware of any reason why it is so low?

Not really, sorry. I guess that people are expecting either the EPS to rise, or the dividend to be cut, or a mixture of both. Even a 50% cut though would still have it yielding more than Diageo.

StepOne wrote:... I guess that people are expecting either the EPS to rise, or the dividend to be cut, or a mixture of both...

That wold be worries over Vodafone's 'Project Spring' - launched just after the Verizon sale. Also, for a long time there were rumours of Verizon wanting to take over VOD. That kept the price high for a while, but the rumours have been quiet for some time and speculators have apparently lost interest.

Bree. (holds VOD)

Thanks StepOne & Bree.

I will consider VOD but knowing my luck, Verizon will make a play once I've bought!!

Phileasrob wrote:I will consider VOD but knowing my luck, Verizon will make a play once I've bought!!

Then you'd probably get back more than you paid, use it to invest in something else. Corporate actions are an inevitable consequence of LTBH, its what pyad calls 'Market Trading'.

That's a fair point Bree. I see VOD goes ex-dividend on the 24th November so will have something to sleep on.

Phileasrob wrote:I’m looking to add a new share (not interested in tobacco or weapons) and have the following on my watchlist:

Greene King – first choice.
Diageo – Dividend too low.
Pearson – questionable future?
SSE – already have some utes.
L&G – could pair up with Aviva?
Royal Mail – not a long dividend history.
Builders – quite cyclical.

Go with your first choice, GNK. It's a new sector and worth getting into. Have a look at Marstons (MARS) as well. GNK yields 4.4% while MARS yields 5.2%.

With CNA, NG. and UU. you probably have enough exposure to utilities at this stage. You might add a housebuilder to your list at some time.

TJH

Phileasrob wrote:ULVR was my first holding (I was a few months old when my Dad purchased them in the 1960s - if only he'd reinvested the dividends!) so that's why it's so large.

Even without dividend reinvestment, I expect Unilever demonstrated an impressive return. Do you have any share price data? I like a concentrated portfolio and, personally, would not be too worried about trimming a quality operator like Unilever at all. In fact, it's arguably a good time to top up (for people with a smaller position, anyway!) compared to when it was almost 3800p a share a few months back!

What's the portfolio dividend yield, overall?

Best wishes


Mark.

I'd maybe buy a house builder. They are mostly debt free and paying great dividends. I think they are well positioned to weather any downturns, but I think the government is going to have to begin a massive house building program.

The hosting shortage is now so acute that it could lead to social unrest. Changes to planning laws coupled with compulsory purchase of farmland for council housing could reduce housing benefit bills (and the defecit) considerably. Less money spent on rent, and a consequent increase in disposable income, could give the economy a shot in the arm as well. We'll have to wait and see, but I can't see how things can continue like this.

grimer wrote:?..Changes to planning laws coupled with compulsory purchase of farmland for council housing could reduce housing benefit bills (and the defecit) considerably...

And if done on a big enough scale to make a difference will lose them votes and seats at the next election as most of those fields are in constituencies they hold. What they need to do is get more jobs where there is surplus housing stock. So whilst I hold one house builder IMHO a govt. policy driven house building boom may be talked about but won't be a reality.

Just my view.

Terry.

Terry (TJH):

Have a look at Marstons (MARS) as well. GNK yields 4.4% while MARS yields 5.2%.

I looked at MARS but preferred GNK due to the higher market cap & dividend cover, plus my local is a GNK pub so I would feel I am contributing to my (future) investment.

Mark:

Even without dividend reinvestment, I expect Unilever demonstrated an impressive return. Do you have any share price data? I like a concentrated portfolio and, personally, would not be too worried about trimming a quality operator like Unilever at all. In fact, it's arguably a good time to top up (for people with a smaller position, anyway!) compared to when it was almost 3800p a share a few months back!

What's the portfolio dividend yield, overall?

Sorry, I have no data at all. My Dad gave the ULVR shares to me when I was 18 and I just shoved the certificate in the draw and forgot about it. I got quite a big shock in my mid thirties when I started to take an interest in investing and saw how much they were worth! My portfolio dividend yield is 4.56%.

Grimer & Terry (Wizard):

I am unsure about adding a builder to my portfolio. Whilst we have a housing shortage, builders are all the rage, but I just wonder how long this will last and they start to suffer?

Will give some more thought to all your comments but am leaning towards GNK as a new holding in a new sector. Will post once I have decided.

Cheers!

Phileasrob wrote:Sorry, I have no data at all. My Dad gave the ULVR shares to me when I was 18 and I just shoved the certificate in the draw and forgot about it. I got quite a big shock in my mid thirties when I started to take an interest in investing and saw how much they were worth! My portfolio dividend yield is 4.56%.

No worries, and thank you. I think the old fashioned certificates, deposited somewhere safe for years, are a good way to go! No temptation to trade and incur all those costs LOL.

Best wishes


Mark.

ADrunkenMarcus wrote:

Phileasrob wrote:Sorry, I have no data at all. My Dad gave the ULVR shares to me when I was 18 and I just shoved the certificate in the draw and forgot about it. I got quite a big shock in my mid thirties when I started to take an interest in investing and saw how much they were worth! My portfolio dividend yield is 4.56%.

No worries, and thank you. I think the old fashioned certificates, deposited somewhere safe for years, are a good way to go! No temptation to trade and incur all those costs LOL.

Best wishes


Mark.

At 18, I was being strategically ignorant without knowing it. To be honest, that experience made me realise the power of investing and started me on this long road.

Thanks for your comments Mark & all the best to you.

PR

Hi all,

I decided to purchase GNK which has now given me a new sector and a bit more diversification.

Thanks to all those who commented!

PR