The Lemon Fool

Good afternoon all.

Coming back to this thread if I may, I mentioned in this thread here; viewtopic.php?p=466290#p466290 that I was going to top up my Greencoat UK Wind shares this month. That happened this morning, upon which I topped up my holdings by 11%. They now weigh in as being 3.6% in capital value terms of my, still, 28 share HYP. That'll do for them for now I think. I'm still mulling over a small top up of my Rio Tinto holdings for next month, but will make my mind up nearer the time.

Ian.

Thanks Ian,

I'm also thinking of buying more RIO next month, I'm just waiting on a transfer of my L&G (work pension) to my SIPP now that I've retired.
This is the first month I've lived off investment income as opposed to Salary and it's taken a little getting used to!

I like RIO and don't mind that they are cyclical.

regards,
Darka

Darka wrote:Thanks Ian,

I'm also thinking of buying more RIO next month, I'm just waiting on a transfer of my L&G (work pension) to my SIPP now that I've retired.
This is the first month I've lived off investment income as opposed to Salary and it's taken a little getting used to!

I like RIO and don't mind that they are cyclical.

regards,
Darka

Thanks for your input Darka. Lucky for me that I don’t live on my dividends just yet. I have an Army pension and my Wife still works, and is happy to carry on doing so bless her. There will come a time in a year or so when my dividends will be used for living on, but for now at least, they get reinvested on a monthly basis, into my chosen pick at that time.
As for RIO, I did sell some of my holdings not long ago as they’d become to overweight in capital value terms for my taste. I don’t mind RIO being cyclical either.

Ian.

idpickering wrote:

Darka wrote:Thanks Ian,

I'm also thinking of buying more RIO next month, I'm just waiting on a transfer of my L&G (work pension) to my SIPP now that I've retired.
This is the first month I've lived off investment income as opposed to Salary and it's taken a little getting used to!

I like RIO and don't mind that they are cyclical.

regards,
Darka

Thanks for your input Darka. Lucky for me that I don’t live on my dividends just yet. I have an Army pension and my Wife still works, and is happy to carry on doing so bless her. There will come a time in a year or so when my dividends will be used for living on, but for now at least, they get reinvested on a monthly basis, into my chosen pick at that time.
As for RIO, I did sell some of my holdings not long ago as they’d become to overweight in capital value terms for my taste. I don’t mind RIO being cyclical either.

Ian.

RIO is tempting I must admit, but 9% yield is eye-watering. Is it just the good times in the mining industry (top of the cycle), or does it portend a dividend cut? That is the question bugging me!

FD

funduffer wrote:
RIO is tempting I must admit, but 9% yield is eye-watering. Is it just the good times in the mining industry (top of the cycle), or does it portend a dividend cut? That is the question bugging me!

FD

I hear you FD, and thanks for your input. It’s not a given that I’ll buy more RIO tbh. As I said, I will make my mind up nearer the time, that being mid Feb. I’m also reminded of Dod’s comments about the danger of ‘chasing the yield’ or words to that effect. A month is a long time in the market and things change, so we’ll see. I did mention buying more ULVR, but again, we’ll see?

Ian.

funduffer wrote:
RIO is tempting I must admit, but 9% yield is eye-watering. Is it just the good times in the mining industry (top of the cycle), or does it portend a dividend cut? That is the question bugging me!

FD

I have the yield at 12.4%, but some of that yield is due to special dividends, which may not be repeated. They paid them with the 2018 Final, the 2019 interim, skipped a year, then with the 2020 final and the 2021 interim.

One lives in hope and expectation. I trimmed mine in April 2019 at £47.26 when overweight, bought back later that year in November when top of the midden for topping up at £41.18 and then trimmed again in July 2020 at £46.38 when again overweight. Currently they would be topped up again, were it not for their high share of portfolio income. Without the specials, they would qualify.

TJH

idpickering wrote: It’s not a given that I’ll buy more RIO tbh.
Ian.

Now I'm confused. Didn't you earlier say you've trimmed them recently?

Arb.

Arborbridge wrote:

idpickering wrote: It’s not a given that I’ll buy more RIO tbh.
Ian.

Now I'm confused. Didn't you earlier say you've trimmed them recently?

Arb.

Yes I did, but since then they’ve got cheaper again, therefore offering a higher yield. I don’t want to be accused of trying to time the market or anything, but what I’m talking about is much like Terry just said in his post above.

Ian.

idpickering wrote:

Arborbridge wrote:

idpickering wrote: It’s not a given that I’ll buy more RIO tbh.
Ian.

Now I'm confused. Didn't you earlier say you've trimmed them recently?

Arb.

Yes I did, but since then they’ve got cheaper again, therefore offering a higher yield. I don’t want to be accused of trying to time the market or anything, but what I’m talking about is much like Terry just said in his post above.

Ian.

OK, so you've changed your tactics a little, and presumably RIO is now underweight. Hopefully, you have set limits to the various values like Terry does, otherwise you will find you're are buying and selling too frequently.

Sorry to mention it, but the HYPTUSS is very good for giving you a steer on this sort of idea, and is based on what TJH actually does. If you are intending to do something similar from now on, might it help you to download it and see how your portfolio stacks up?

Arb.

Arborbridge wrote:
OK, so you've changed your tactics a little, and presumably RIO is now underweight. Hopefully, you have set limits to the various values like Terry does, otherwise you will find you're are buying and selling too frequently.

Sorry to mention it, but the HYPTUSS is very good for giving you a steer on this sort of idea, and is based on what TJH actually does. If you are intending to do something similar from now on, might it help you to download it and see how your portfolio stacks up?

Arb.

I hear you Arb. I do like to try to keep my holdings of similar weighting in capital value weight, but am cautious regarding over trading. In fact, I think it was Terry who mentioned to me some time ago that I'd got a nicely balanced HYP, with no obvious causes for concern with regards to being maybe overweight in any given share. I seem to recall him saying something along the lines of no need to worry unless one of my holdings exceeds double capital value weighting?

On that though, I'm a big fan of Stephen Bland's item "HYPer Savers" in which he suggests that when one has a 'full' HYP with regards to the number of holdings, and nothing new tempts one, one should start again. That is, double up the capital value weighting of the highest yielding share. That is why LGEN is almost a double value weighted holding. I'm ok working my HYP like that tbh. Nothing new tempts me, so I concentrate on bringing my holdings up tpo average capital value weight, and going forward, if they're worthy, I may well make them a double holding. I have tried to locate that article but it seems to have vanished?

Ian.

tjh290633 wrote:

funduffer wrote:
RIO is tempting I must admit, but 9% yield is eye-watering. Is it just the good times in the mining industry (top of the cycle), or does it portend a dividend cut? That is the question bugging me!

FD

I have the yield at 12.4%, but some of that yield is due to special dividends, which may not be repeated. They paid them with the 2018 Final, the 2019 interim, skipped a year, then with the 2020 final and the 2021 interim.

One lives in hope and expectation. I trimmed mine in April 2019 at £47.26 when overweight, bought back later that year in November when top of the midden for topping up at £41.18 and then trimmed again in July 2020 at £46.38 when again overweight. Currently they would be topped up again, were it not for their high share of portfolio income. Without the specials, they would qualify.

TJH

Yes, RIO historic yield is 9% without specials, 12.4% with specials.

On the other hand BHP is at 8.8% so I suspect it is a mining thing rather than specific to RIO.

FD

idpickering wrote:

Arborbridge wrote:
OK, so you've changed your tactics a little, and presumably RIO is now underweight. Hopefully, you have set limits to the various values like Terry does, otherwise you will find you're are buying and selling too frequently.

Sorry to mention it, but the HYPTUSS is very good for giving you a steer on this sort of idea, and is based on what TJH actually does. If you are intending to do something similar from now on, might it help you to download it and see how your portfolio stacks up?

Arb.

I hear you Arb. I do like to try to keep my holdings of similar weighting in capital value weight, but am cautious regarding over trading. In fact, I think it was Terry who mentioned to me some time ago that I'd got a nicely balanced HYP, with no obvious causes for concern with regards to being maybe overweight in any given share. I seem to recall him saying something along the lines of no need to worry unless one of my holdings exceeds double capital value weighting?

On that though, I'm a big fan of Stephen Bland's item "HYPer Savers" in which he suggests that when one has a 'full' HYP with regards to the number of holdings, and nothing new tempts one, one should start again. That is, double up the capital value weighting of the highest yielding share. That is why LGEN is almost a double value weighted holding. I'm ok working my HYP like that tbh. Nothing new tempts me, so I concentrate on bringing my holdings up tpo average capital value weight, and going forward, if they're worthy, I may well make them a double holding. I have tried to locate that article but it seems to have vanished?

Ian.

Bree's link
https://web.archive.org/web/20071231131 ... avers.aspx

#319402 TLF post....by the power of Google!

Thanks Bree. My whole HYPing has been based on that item for years.

I couldn’t find it in the archives tbh.

Ian.

idpickering wrote:

I hear you FD, and thanks for your input. It’s not a given that I’ll buy more RIO tbh. As I said, I will make my mind up nearer the time, that being mid Feb. I’m also reminded of Dod’s comments about the danger of ‘chasing the yield’ or words to that effect. A month is a long time in the market and things change, so we’ll see. I did mention buying more ULVR, but again, we’ll see?

Ian.

Don't forget buying miners when the yield is high often doesn't work out - the share price has already fallen given what is happening/what is forecasted to happen in commodity markets. Almost always, the companies will need to cut the divi. Share prices of course move faster than companies changing their dividend payout levels thus the extremes in dividend yields

Remember the last down cycle in commodity markets both BHP and RIO had very high dividend yields, and for months the then BHP CEO was adamant not only would they maintain the dividend but introduced a "progressive" policy of raising the dividend year on year. Despite centuries of boom/bust commodity markets BHP thought they could have a growing dividend every year! Of course, reality eventually prevailed.

Buying BHP or RIO is more a punt on raw commodity demand for the next few years, not an investment where management add value to product/services. Management of both has proven v poor with billions of wasted value. For long term share price growth and sustainable dividends plenty of other HYP shares. Your not getting much long term share price growth with either compared to the market, and volatile dividends as well!

onslow wrote:

idpickering wrote:

I hear you FD, and thanks for your input. It’s not a given that I’ll buy more RIO tbh. As I said, I will make my mind up nearer the time, that being mid Feb. I’m also reminded of Dod’s comments about the danger of ‘chasing the yield’ or words to that effect. A month is a long time in the market and things change, so we’ll see. I did mention buying more ULVR, but again, we’ll see?

Ian.

Don't forget buying miners when the yield is high often doesn't work out - the share price has already fallen given what is happening/what is forecasted to happen in commodity markets. Almost always, the companies will need to cut the divi. Share prices of course move faster than companies changing their dividend payout levels thus the extremes in dividend yields

Remember the last down cycle in commodity markets both BHP and RIO had very high dividend yields, and for months the then BHP CEO was adamant not only would they maintain the dividend but introduced a "progressive" policy of raising the dividend year on year. Despite centuries of boom/bust commodity markets BHP thought they could have a growing dividend every year! Of course, reality eventually prevailed.

Buying BHP or RIO is more a punt on raw commodity demand for the next few years, not an investment where management add value to product/services. Management of both has proven v poor with billions of wasted value. For long term share price growth and sustainable dividends plenty of other HYP shares. Your not getting much long term share price growth with either compared to the market, and volatile dividends as well!

Wise words indeed, thank you. As it is I’m toying with looking elsewhere anyway maybe?

Ian.

onslow wrote:Buying BHP or RIO is more a punt on raw commodity demand for the next few years, not an investment where management add value to product/services.

Mind you pyad had an affinity for holes in the ground. C.

csearle wrote:Mind you pyad had an affinity for holes in the ground. C.

Thanks for your input Chris. I don't mind admitting it was Stephen who influenced me a lot when I started HYPing, and his liking for holes in the ground, coupled with my liking to double up in any given sector if viable/worthy, is why I hold both BHP and RIO.

With regards to a potential of me maybe buying more RIO next month, it'd only be a small top up if I did. Either way, I'll decide nearer the time.

Ian.