What are you buying today?

[moorfield]

Frankly I wish we could ban any coronavirus threads. I try not to read them but they crop up everywhere on this site.

Deadpan humour at its best. Brilliant Dod.

[chris]

Hi

I haven't read the whole thread so am not sure if anyone else thinks this but to my mind, I am always slightly perplexed at this 'top slicing' especially at this time. If we look at the impact on what we are doing, we are basically saying that we are reducing the holding of a company which has proved strong and resilient to the falls in prices and therefore is probably less likely to cut its dividend and replacing it with a bigger slice of a company which has been less resilient and therefore is more likely to cut. Now there may be some points at which we feel that the market has penalised a company more than it should but I am not sure I would sell a resilient stock to fund it. I am far more likely to 'bottom slice' and take out some of the worst performing shares, even at large losses, to invest in better companies. When I read that someone is top slicing and thinking of investing in TUI, Centrica, Marstons, Petrofac etc. because these are the companies that come up on the 'reinvest' spreadsheet then I am inclined to put my head in my hands. For me, I would be selling those companies (in the first dip I got rid of my residual holding in Centrica - at last) and thinking about some of the more resilient shares.

Therefore although they may be lower yielding, I would prefer more of Unilever, Diageo, Britvic and potentially some that have been hit hard but will survive like Shell, Legal & General etc. It may make my portfolio a bit more top heavy, but I will still have a good portfolio of shares that I do not sell to make it reasonably balanced.

I'm probably swimming against the tide here but I think it best to set out an alternative view to the top slicing mantra.

[tjh290633]

Hi

I haven't read the whole thread so am not sure if anyone else thinks this but to my mind, I am always slightly perplexed at this 'top slicing' especially at this time. If we look at the impact on what we are doing, we are basically saying that we are reducing the holding of a company which has proved strong and resilient to the falls in prices and therefore is probably less likely to cut its dividend and replacing it with a bigger slice of a company which has been less resilient and therefore is more likely to cut. Now there may be some points at which we feel that the market has penalised a company more than it should but I am not sure I would sell a resilient stock to fund it. I am far more likely to 'bottom slice' and take out some of the worst performing shares, even at large losses, to invest in better companies. When I read that someone is top slicing and thinking of investing in TUI, Centrica, Marstons, Petrofac etc. because these are the companies that come up on the 'reinvest' spreadsheet then I am inclined to put my head in my hands. For me, I would be selling those companies (in the first dip I got rid of my residual holding in Centrica - at last) and thinking about some of the more resilient shares.

Therefore although they may be lower yielding, I would prefer more of Unilever, Diageo, Britvic and potentially some that have been hit hard but will survive like Shell, Legal & General etc. It may make my portfolio a bit more top heavy, but I will still have a good portfolio of shares that I do not sell to make it reasonably balanced.

I'm probably swimming against the tide here but I think it best to set out an alternative view to the top slicing mantra.

I agree with a lot of what you say. I have just put a post on viewtopic.php?p=291551#p291551 saying much the same thing. As it happens, MARS and WMH are both disqualified from being topped up, although WMH did get some when I trimmed back SSE two weeks ago, along with Shell and DS Smith. BP and Lloyds Banking Group were topped up last week when I trimmed UU. Like you say, resilience is the name of the game at this time.

TJH

[Arborbridge]

Hi

I haven't read the whole thread so am not sure if anyone else thinks this but to my mind, I am always slightly perplexed at this 'top slicing' especially at this time. If we look at the impact on what we are doing, we are basically saying that we are reducing the holding of a company which has proved strong and resilient to the falls in prices and therefore is probably less likely to cut its dividend and replacing it with a bigger slice of a company which has been less resilient and therefore is more likely to cut. Now there may be some points at which we feel that the market has penalised a company more than it should but I am not sure I would sell a resilient stock to fund it. I am far more likely to 'bottom slice' and take out some of the worst performing shares, even at large losses, to invest in better companies. When I read that someone is top slicing and thinking of investing in TUI, Centrica, Marstons, Petrofac etc. because these are the companies that come up on the 'reinvest' spreadsheet then I am inclined to put my head in my hands. For me, I would be selling those companies (in the first dip I got rid of my residual holding in Centrica - at last) and thinking about some of the more resilient shares.

Therefore although they may be lower yielding, I would prefer more of Unilever, Diageo, Britvic and potentially some that have been hit hard but will survive like Shell, Legal & General etc. It may make my portfolio a bit more top heavy, but I will still have a good portfolio of shares that I do not sell to make it reasonably balanced.

I'm probably swimming against the tide here but I think it best to set out an alternative view to the top slicing mantra.

Actually, you are not alone inwhat you've writte, for I have sometimes commented that HYP procedure seems the very opposite of normal investment wisdom: "run the winners, cut the losers".
There are mitigations in the HYP idea - we don't invest for the next few months, but for a very long hold; we don't invest indescriminately but look at safety factors; we don't over-invest in one company but keep to limits.

But yes, HYP on the face of it is the reverse of what we are conventionally advised to do and particularly in this unusual market - as I've pointed out before - we could modify our usual behaviour such as automatic trimming, in order to avoid too much trading until the position is clearer.

Arb.

[Wizard]

Doesn't seem like the market is very impressed with Sunak's economic package, a sea of red again.

[monabri]

Doesn't seem like the market is very impressed with Sunak's economic package, a sea of red again.

I see LGEN was down to ~159p at one stage (~11% yield) *



* in reference to a previous question on insurers and the effect of yesterday's speech by Mr Sunak.

[idpickering]

Doesn't seem like the market is very impressed with Sunak's economic package, a sea of red again.

I see LGEN was down to ~159p at one stage (~11% yield) *



* in reference to a previous question on insurers and the effect of yesterday's speech by Mr Sunak.

My top up of LGEN on 20th is still going to happen.

Ian.

[monabri]

My top up of LGEN on 20th is still going to happen.

Ian.

Probably be at a 12% yield by then...

[Dod101]

And they have sold that business anyway as they reported in their Annual Results statement. More likely I think that there must be concern about whether they will deliver their recently announced dividend increase.......or any?

Dod

[monabri]

And they have sold that business anyway as they reported in their Annual Results statement. More likely I think that there must be concern about whether they will deliver their recently announced dividend increase.......or any?

Dod

That confirms my thoughts on LGEN. But if Aviva are planning on paying a divi then I'd hope ( yes, hope ) LGEN will too.

viewtopic.php?p=291779#p291779

[monabri]

What I'm not buying but would have liked to have topped up is Admiral but it is one of the few shares that seem to be "Coronaproof". The share price at the moment (15min delay) is 2303p v high of 2326p on Feb 14th.

[Wizard]

And they have sold that business anyway as they reported in their Annual Results statement. More likely I think that there must be concern about whether they will deliver their recently announced dividend increase.......or any?

Dod

That confirms my thoughts on LGEN. But if Aviva are planning on paying a divi then I'd hope ( yes, hope ) LGEN will too.

viewtopic.php?p=291779#p291779

At the moment I am not sure if anyone will be paying a dividend. I said at the outset, before the true scale of the potential economic impact became clear I thought a lot of companies would use this as a reason to rebase. I think that position was wildly optimistic, hence why I said in the last day or so that if I forecast income I would set it to zero and view any income as a bonus in the next 12 months.

[AleisterCrowley]

Anyone looking at prefs? I notice a lot of mine have bombed along with the rest of the market (I thought they might be a bit more resilient)

[moorfield]

Anyone looking at prefs? I notice a lot of mine have bombed along with the rest of the market (I thought they might be a bit more resilient)

I still think ords have much more price upside than prefs, viz. SAN yielding less than HSBA which I commented on elsewhere recently.

(I know capital gains are not supposed to matter here but that in current times that may feel like primary school children being told winning doesn't matter on sports day - of course it does.)

[moorfield]

I think that position was wildly optimistic, hence why I said in the last day or so that if I forecast income I would set it to zero and view any income as a bonus in the next 12 months.

I think that's wise, Wizard, if anything to make folk really reflect on what they want/need from their hard-earned/saved investments. (I suspect many don't/haven't because they are too busy flaneuring around here discussing individual shares.) I am assuming I will miss my overall portfolio income targets this year and next, and will have to rebase my retirement targets. If I don't, it will be a pleasant surprise.

Until the markets outlook becomes clearer, whenever that will be, I think I may monthly drip feed cash into CTY (which we've discussed recently).

[Dod101]

Well Unilever paid its dividend today and there are a bunch of dividends which should arrive at the end of the month so all should not be lost and commerce is still working despite all the stuff we hear on the tele. Obviously, hospitality and tourism will be bombed out, that includes hotels, airlines, cruises, pubs and restaurants. Certainly anyone holding any of these can I am sure say goodbye to any thought of dividends from them. From the others who knows? I doubt that we will get no dividends but quite probably reduced ones. The only one so far not paying a proposed final seems to be William Hill and I have no sympathy for them. It is a horrible industry at the best of times. I am aware that this is the HYP Board but I think my comments apply to HYP shares (as well as to others)

But this too will pass.

Dod

[monabri]

Well Unilever paid its dividend today and there are a bunch of dividends which should arrive at the end of the month so all should not be lost and commerce is still working despite all the stuff we hear on the tele. Obviously, hospitality and tourism will be bombed out, that includes hotels, airlines, cruises, pubs and restaurants. Certainly anyone holding any of these can I am sure say goodbye to any thought of dividends from them. From the others who knows? I doubt that we will get no dividends but quite probably reduced ones. The only one so far not paying a proposed final seems to be William Hill and I have no sympathy for them. It is a horrible industry at the best of times. I am aware that this is the HYP Board but I think my comments apply to HYP shares (as well as to others)

But this too will pass.

Dod

Add MicroFocus to the "not paying a final divi" list. I have no holding in WMH nor MCRO so that's 2 bullets missed but I do hold Marstons .

[88V8]

Topped up LGEN.
The price - 169 - could have been bettered during the day but with a possible 10% yield, I'm not complaining.
I suppose most equity yields currently have to be qualified with the word 'possible'.

V8

[SoBo65]

I think even solid businesses may defer the next dividend until there is some clarity, so would not focus on short terms yields, but the ability of the business to pay a dividend (of whatever level) over the coming years.

[funduffer]

In the USA, 20% of calories are consumed eating out in restaurants or cafes. I don't know the percentage in the UK, but I am guessing it must be about 15%.

That is, 15% of all calories that will now have to be consumed using food from supermarkets rather than restaurants/cafes.

That is a huge boost in income over the next 3-4 months for the likes of Morrisons, Sainsburys (>5% yield) and Tesco if they can stock the shelves fast enough.

Also Aldi/Lidl don't deliver, so may lose custom from those stuck at home.

Also, I can't see Vodafone's business (>7% yield) being damaged much by the virus. People will talk more by phone, and use internet etc....

Maybe that's why their yields look so modest!

Just a few thoughts!

FD