Where are the Ideas?

[torata]

It’s something I intend to do. Ie nothing.
Ian.

I am sure I heard you say that last year, and the year before that...

Bit like my regular "I'm never going to drink that much again" self-promises.

torata

[idpickering]

It’s something I intend to do. Ie nothing.
Ian.

I am sure I heard you say that last year, and the year before that...

Bit like my regular "I'm never going to drink that much again" self-promises.

torata

This is true, and something I’m trying to work on.

Ian.

[miner1000]

I guess what I was driving at here, is that with hindsight, I probably should have invested in some tech giants a few years ago that pay a good dividend return today. Microsoft is one such share, and strict HYP principles to one side for a moment, If we had bought Microsoft and Apple a couple of years ago, we would be enjoying a rather good income stream from them, not to mention a significant increase in capital value (which of course we are not interested in).

With the changes in working practices that have followed on from Covid, there is certainly a different economy out there now. Internet companies are doing quite well, Videoconferencing has become mainstream and presumably companies in this space will be able to become HYPish at some time in the future. Others are also doing well. Some packaging companies, freight services, supermarkets etc. Whilst others (WH Smith for example) have gone from being at the top of my tobuy list, to the bottom.

So I just feel that even from a HYP perspective, we could begin to consider where the big dividend payers might be in a few years time. As well as what shares in our current HYPs may never return to their former glory.

I know this touches on growth and value in some ways and may therefore be somewhat off topic for this board, but it also touches on the practical aspects of running a HYP. we can't just put the Blinkers on and say everything is going to be the same going forward. Some shares have been severely impacted by Covid (RDSB, the Banks) whilst others, such as BAE, are little changed or seem enhanced. It cannot be right to just carry on buying the same old same old. Online retailing has seen huge increases in activity. Office landlords are heading the other way.

I would be happy to significantly re organise my HYP if I really thought some shares should go and some other previously non HYPable shares should be bought with a view to the future.

Digital payment platforms? Everybody used contact-less payment systems now. Should we be looking at that space?

I am probably just experiencing a bit of a senior moment and should lie down for a week before doing anything, but having sat on my heels for the past six months, the HYP world just looks to me like it is changing a bit and perhaps we need to have a closer look at other areas of the economy.

Right. Time for a beer (I'm in Australia).

Miner

[Wasron]

Miner,

Have you followed DrunkenMarcus’ dividend growth portfolio over on portfolio management?

viewtopic.php?p=55267#p55267

That might fit with your changing perspective

Regards

[dealtn]

I would be happy to significantly re organise my HYP if I really thought some shares should go and some other previously non HYPable shares should be bought with a view to the future.

Still sounds like you're asking in the wrong place. Those "previously non-HYPable shares" are probably still non-HYPable.

[miner1000]

I would be happy to significantly re organise my HYP if I really thought some shares should go and some other previously non HYPable shares should be bought with a view to the future.

Still sounds like you're asking in the wrong place. Those "previously non-HYPable shares" are probably still non-HYPable.

You are probably right, however, I am a one board HYPer. I dont visit any other boards, so I am not going to start now. My HYP is mature. I dont visit this board much, and I am certainly not going to waste valuable leisure time searching around the other boards. So no worries about responding. If this is not practical enough, I will mull things over myself and make some decisions if and when I think they may be right.

You are probably a builder so you have to time and interest to do the research on other boards and websites, but that stuff is not for me.

Regards,

Miner

[Arborbridge]

I would be happy to significantly re organise my HYP if I really thought some shares should go and some other previously non HYPable shares should be bought with a view to the future.

Still sounds like you're asking in the wrong place. Those "previously non-HYPable shares" are probably still non-HYPable.

You are probably right, however, I am a one board HYPer. I dont visit any other boards, so I am not going to start now. My HYP is mature. I dont visit this board much, and I am certainly not going to waste valuable leisure time searching around the other boards. So no worries about responding. If this is not practical enough, I will mull things over myself and make some decisions if and when I think they may be right.

You are probably a builder so you have to time and interest to do the research on other boards and websites, but that stuff is not for me.

Regards,

Miner

Well, it would be the right board (that is, the question is not OT), but I suspect that those who remain here do not have the ideas to put forward. Unfortunately, the HYPP board has undoubedly been "hollowed out" as they say, and maybe HYPers simply do not think in the terms you need. i.e. we would tend not to speculate over where markets are going, but just pick up on shares which seem to be good eating at the time.

Arb.

[miner1000]

Well, it would be the right board (that is, the question is not OT), but I suspect that those who remain here do not have the ideas to put forward. Unfortunately, the HYPP board has undoubedly been "hollowed out" as they say, and maybe HYPers simply do not think in the terms you need. i.e. we would tend not to speculate over where markets are going, but just pick up on shares which seem to be good eating at the time.

Arb.

Thanks Arb,

I do think HYP is going to be slightly different going forward. If I get any ideas myself about potential HYP candidates for the post Covid era, I will post them here.

Regards,

Miner

[Arborbridge]

Well, it would be the right board (that is, the question is not OT), but I suspect that those who remain here do not have the ideas to put forward. Unfortunately, the HYPP board has undoubedly been "hollowed out" as they say, and maybe HYPers simply do not think in the terms you need. i.e. we would tend not to speculate over where markets are going, but just pick up on shares which seem to be good eating at the time.

Arb.

Thanks Arb,

I do think HYP is going to be slightly different going forward. If I get any ideas myself about potential HYP candidates for the post Covid era, I will post them here.

Regards,

Miner

That would be welcome. I'm not looking to add holdings for the moment, so I keep a "watching brief" ratherthan being active in searching for things. Maybe you are right - we ought to look to future trends. Unfortunately, much of the trends seem to be rather lower yielding, high tech ones.
There are some little fish who feed on the big fish and changing trends which give us some opportunities - Tritax big box being one - but the big bucks would (I'm guessing) be made in taking a punt on growth shares in new industries. Which doesn't suit my style as an investor in retirement.

Arb.

[Charlottesquare]

Thanks Arb,

I do think HYP is going to be slightly different going forward. If I get any ideas myself about potential HYP candidates for the post Covid era, I will post them here.

Regards,

Miner

That would be welcome. I'm not looking to add holdings for the moment, so I keep a "watching brief" ratherthan being active in searching for things. Maybe you are right - we ought to look to future trends. Unfortunately, much of the trends seem to be rather lower yielding, high tech ones.
There are some little fish who feed on the big fish and changing trends which give us some opportunities - Tritax big box being one - but the big bucks would (I'm guessing) be made in taking a punt on growth shares in new industries. Which doesn't suit my style as an investor in retirement.

Arb.

Whilst possibly too small by mkt cap, £434m, Warehouse REIT (WHR) at 5.4% yield might be a more niche property play.

Although actually an IT Aberdeen Standard European Logistics Income PLC has direct property holdings, a smaller £249m mkt cap and yields 4.97%.

Both, to greater or lesser degree, may bodyswerve the retail/leisure/office holdings of other REIT /REIT type investments thus running with what may well be the newer norms in 21st century retail.

I appreciate likely off topic for this board but it is hard to make suggestions outwith the usual suspects without straying.

[starter]

Ideas are tough art this l the moment. I bought quite a lot in March because the sweetshop was open and my portfolio is the expected sea of red, which is OK, but there have been a while heap of dividend cuts and even if they do start paying paying out at lower rates, I'm still a bit worried about being burned. Executives have got the idea that they can get away with cutting the cost of capital and there's not really anywhere for investors to go.

I have some money sitting on the sidelines and I'm not sure that there are enough FTSE dividend stocks left now without crowding into the same sectors. So what I'm very slowly looking at is:

1) Widening to FTSE 250 dividend stocks
2) Relooking at dividend interruptors like banks - although I've got a few in my portfolio already and there is a lot more speculation than I like here
3) Repointing to dividend growth stocks paying pitiful current dividends - I'm in my late forties so I don't need the dividends now
4) Going to large caps abroad which means I don't have to compromise on capitalisation, dividend history or current yield and I get more diversification but there's an admin overhead

[Arborbridge]

Ideas are tough art this l the moment. I bought quite a lot in March because the sweetshop was open and my portfolio is the expected sea of red, which is OK, but there have been a while heap of dividend cuts and even if they do start paying paying out at lower rates, I'm still a bit worried about being burned. Executives have got the idea that they can get away with cutting the cost of capital and there's not really anywhere for investors to go.

I have some money sitting on the sidelines and I'm not sure that there are enough FTSE dividend stocks left now without crowding into the same sectors. So what I'm very slowly looking at is:

1) Widening to FTSE 250 dividend stocks
2) Relooking at dividend interruptors like banks - although I've got a few in my portfolio already and there is a lot more speculation than I like here
3) Repointing to dividend growth stocks paying pitiful current dividends - I'm in my late forties so I don't need the dividends now
4) Going to large caps abroad which means I don't have to compromise on capitalisation, dividend history or current yield and I get more diversification but there's an admin overhead

As regards point 1) I note the chancellor's help to industry is (or may be) conditional on not paying out dividends. I would suggest in that case it would be better to aim for the largest possible companies and skip the smaller ones - which would point you away from the FTSE250.
If you don't want the income, that could be a different matter, of course.

Arb.

[funduffer]

Ideas are tough art this l the moment. I bought quite a lot in March because the sweetshop was open and my portfolio is the expected sea of red, which is OK, but there have been a while heap of dividend cuts and even if they do start paying paying out at lower rates, I'm still a bit worried about being burned. Executives have got the idea that they can get away with cutting the cost of capital and there's not really anywhere for investors to go.

I have some money sitting on the sidelines and I'm not sure that there are enough FTSE dividend stocks left now without crowding into the same sectors. So what I'm very slowly looking at is:

1) Widening to FTSE 250 dividend stocks
2) Relooking at dividend interruptors like banks - although I've got a few in my portfolio already and there is a lot more speculation than I like here
3) Repointing to dividend growth stocks paying pitiful current dividends - I'm in my late forties so I don't need the dividends now
4) Going to large caps abroad which means I don't have to compromise on capitalisation, dividend history or current yield and I get more diversification but there's an admin overhead

If I were you, in my 40's, and still building a HYP, I would freeze it for now and invest elsewhere until the pandemic has passed and dividends resume. In the meantime, I would just park funds in a passive world equity index fund, or similar, to hedge your bets. At least then, you are investing in companies that are more likely to survive the pandemic.

FD

[moorfield]

If I were you, in my 40's, and still building a HYP, I would freeze it for now and invest elsewhere until the pandemic has passed and dividends resume. In the meantime, I would just park funds in a passive world equity index fund, or similar, to hedge your bets. At least then, you are investing in companies that are more likely to survive the pandemic.

There are enough candidates around for "HYPersavers" to consider buying or topping up as usual, they just need to be prepared to do a little more digging to find them. Two that I have bought recently are:

IMB - now got its long suspected dividend rebase out of the way which is now twice covered by its free cashflow and looks very undervalued.

BRW - lower down the FTSE350, no debt on its balance sheet and hasn't suspended or cancelled its dividend.

[Dod101]

There are enough candidates around for "HYPersavers" to consider buying or topping up as usual, they just need to be prepared to do a little more digging to find them. Two that I have bought recently are:

IMB - now got its long suspected dividend rebase out of the way which is now twice covered by its free cashflow and looks very undervalued.

BRW - lower down the FTSE350, no debt on its balance sheet and hasn't suspended or cancelled its dividend.

BRW turns out to be Brewin Dolphin. Don't know much about them but do they call themselves wealth managers? If so they may have better prospects than the average fund manager. Easier to fleece individuals than funds.

Imperial Brands (IMB) are due to make a trading statement on the 8 October I think and they may give some indication of how they see the business developing under the new CEO but we cannot get away from the fact that it is in a declining industry. It does not say much for the future of a HYP if that is the best we can come up with. I am not getting at moorfield, I have no better suggestion. I have held it for a long while and the cost of my current holding is well below zero. I have long since extracted my original cost but that does not make me feel any better.

Dod

[moorfield]

I am not getting at moorfield, I have no better suggestion.

There are more I can suggest, but not here.

[NeilW]

hat would be early next year for Brexit and mid next year (hopefully) for a vaccine.

That would be optimistic on both counts. Brexit is going to take a while to bed in - depending upon what mistakes the politicians make - and talking to actual people who create vaccines, as opposed to those trying to sell them, tells you that four years is a more realistic timescale for a truly effective vaccine and that is with a following wind.

There's also the macro view put forward by Goodhart and Pradhan that we are at a demographic turning point. Here's Roger Bootle's view on it

Goodhart and Pradhan’s analysis is striking not only for the explanation of past and current trends, but also for what it says about the future. They argue that we are now at a demographic turning point. In both the East and West, populations are ageing rapidly. Many countries, including Japan, Germany and China, are going to experience dramatic drops in the working age population, accompanied by major dissaving by the old and retired. Only continued rapid population growth in Africa and India may stand in the way of a significant shift in global economic conditions.

Global ageing is going to lead to a reversal of many of the things that have come to be regarded as the new normal. Once the Covid crisis is over, during the next few decades there will be an intensifying shortage of labour that will drive up real wages and reduce inequality.

What that means is a transfer away from profits towards wages and smaller profits means smaller dividends.

What we need is a big boost in productivity so that fewer young people can produce enough for themselves and all those who are older.

[Dod101]

I am not getting at moorfield, I have no better suggestion.

There are more I can suggest, but not here.

Well my best buy in the last six months was 3i Infrastructure. I like it because it has a decent dividend (3.6%) which looks sustainable and unlike say HICL is not dependent on PPP but has a well spread portfolio in both activities and geography. It has also increased in share price since I bought it.

So there is an idea.

Dod

[Gengulphus]

BRW turns out to be Brewin Dolphin. Don't know much about them but do they call themselves wealth managers? ...

See https://www.brewin.co.uk/ - it shouldn't take you long to find the answer to your question...

Imperial Brands (IMB) are due to make a trading statement on the 8 October I think and they may give some indication of how they see the business developing under the new CEO but we cannot get away from the fact that it is in a declining industry. It does not say much for the future of a HYP if that is the best we can come up with. I am not getting at moorfield, I have no better suggestion. I have held it for a long while and the cost of my current holding is well below zero. I have long since extracted my original cost but that does not make me feel any better.

Where did you get your "fact that it is in a declining industry" from? From a non-HYP point of view, I'd like it to be true - but more to the point here, searching the internet for things like "size of global tobacco industry" produces a whole lot of results indicating that the tobacco industry is still expanding and forecast to continue to expand for at least the next few years...

And I agree that having long since extracted one's existing cost shouldn't make one feel any better (or worse) about holding it now: what matters for that is extracting its current value plus a reasonable return on that value in the future, not the past. But being in a declining industry doesn't make that impossible - it just means that the share price must be lower to be a good bargain than in an expanding industry. So even if you're right about IMB being in a declining industry, it might still be a good bargain if its share price is low enough.

And with its company-predicted dividend of 137.7p this year and current share price of 1396p, implying a yield of just under 10%, I think it might well be low enough. As a finger-in-the-air thought experiment, suppose one were to reinvest half of that dividend and draw down the other half. The drawn-down half would still be a respectable HYP yield, while the reinvested half would counteract any reduction due to being in a declining industry, more than wiping that reduction out if it was by less than about 5% per year. I.e. one could effectively synthesise a 5%-yielder with sustained or growing capital value in that way, provided the industry isn't contracting by more than about 5% per year. And while I can certainly imagine the tobacco industry going into decline, I find it hard to imagine it being anything more than a long, slow decline...

Note I'm not suggesting actually putting that thought experiment into practice by actually deciding on a policy of reinvesting half of IMB's dividends in IMB itself - it's just a quick way of reckoning whether a share price of a possibly-declining-but-not-dead company is low enough for its returns to still count as worthwhile. The reason that I'm not suggesting it as a policy is that I think all HYP purchases should be decided upon at the time of purchase in the light of what's known at that time, not by a "I'm going to reinvest half of this holding's dividends in more of the same company" decision made in advance.

Gengulphus

[Dod101]

I made my comment about Imperial being in a declining industry from the fact that cigarette smoking is not exactly an expanding pastime, at least not in Europe and much of the developed world, although unlike you apparently, I have not checked the figures.

That is not to say that it might not make a decent short term investment at about the current price but I will not be buying more, at least I cannot foresee myself doing that. From its highs of a few years ago, it has cost me and many others a great deal of potential profit for the sake of an unsustainably high yield. I will be interested to see what the new management in tend to do. Logically the share price should be rising since it seems likely that they business will continue to throw off decent profits for some time to come, some of which may well go to pay down debt.

Dod