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John Wood Group finals

For discussion of the practicalities of setting up and operating income-portfolios which follow the HYP Group Guidelines. READ Guidelines before posting
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absolutezero
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Re: John Wood Group finals

#398858

Postby absolutezero » March 25th, 2021, 11:08 am

csearle wrote:
absolutezero wrote:This is the big HYP flaw as I see it.
If a company stops paying out altogether with no immediate prospect of reinstating dividends, that is not a high yield share.
Exactly. That is why those that run a "tinkering" HYP (as many, many of us do) might well divest themselves of such shares and use their HYP selection criteria to select a substitute candidate, so not really a flaw at all?

Chris

Surely that would be an hyp and not an HYP!

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Re: John Wood Group finals

#398862

Postby absolutezero » March 25th, 2021, 11:10 am

johnw11 wrote:
absolutezero wrote:
johnw11 wrote:

EDIT
I sold on 11 August at 227.4p. And they are up 19% on that now.
I bought IG at 752p. Now up 13% plus a yield of about 6% or so. I'm no worse off, plus I get future IG dividends while WG is still not paying.
Granted, I could have bought another dog that proceeded to sink and cut dividends, but I didn't.


The dividend cut was announced on 2nd April, which was when I was thinking you had sold them and taken the larger hit, not delayed it until August when the price was better.

I do agree that normally if a company stops paying dividends then I will sell and buy a dividend producing company, it just the timing for when I do that. 2020 was a truly exceptional year and nearly all my holdings have reinstated their dividend, albeit some of them at a reduced level. WG is one of the exceptions and I waiting for the next intermim announcement to see if they start again.

John

A reasonable assumption.
I assumed that most of the dividend cuts were knee jerks to conserve cash (not an entirely silly thing for a company to do at the time).
When no dividend resumption was likely, then I bailed.

I still hold ITV - stupidly - but my thesis there is some big American media company will take it over for a premium. (Or not!)

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Re: John Wood Group finals

#398882

Postby Gengulphus » March 25th, 2021, 12:12 pm

absolutezero wrote:
csearle wrote:
absolutezero wrote:This is the big HYP flaw as I see it.
If a company stops paying out altogether with no immediate prospect of reinstating dividends, that is not a high yield share.
Exactly. That is why those that run a "tinkering" HYP (as many, many of us do) might well divest themselves of such shares and use their HYP selection criteria to select a substitute candidate, so not really a flaw at all?

Surely that would be an hyp and not an HYP!

And the difference you perceive between a "hyp" and a "HYP" is? The board guidelines only talk about "HYP"s and at least as far as I'm concerned, the two terms you've used are simple typographical variations of "HYP" - i.e. they mean exactly the same thing...

Gengulphus

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Re: John Wood Group finals

#399015

Postby absolutezero » March 25th, 2021, 8:09 pm

Gengulphus wrote:
absolutezero wrote:
csearle wrote:Exactly. That is why those that run a "tinkering" HYP (as many, many of us do) might well divest themselves of such shares and use their HYP selection criteria to select a substitute candidate, so not really a flaw at all?

Surely that would be an hyp and not an HYP!

And the difference you perceive between a "hyp" and a "HYP" is? The board guidelines only talk about "HYP"s and at least as far as I'm concerned, the two terms you've used are simple typographical variations of "HYP" - i.e. they mean exactly the same thing...

Gengulphus

HYP is the purest of pure THOU SHALT NOT TINKER AND THOU SHALL LEAVE YOUR PORTFOLIO INTACT - even if half the shares in it are dogs and they yield 1.2% and pull down your overall yield.

hyp is the TINKER ALL YOU LIKE variant to maximise dividend income.

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Re: John Wood Group finals

#399016

Postby csearle » March 25th, 2021, 8:12 pm

absolutezero wrote:HYP is the purest of pure THOU SHALT NOT TINKER AND THOU SHALL LEAVE YOUR PORTFOLIO INTACT - even if half the shares in it are dogs and they yield 1.2% and pull down your overall yield.
That is just plain wrong.

Please read this board's guidelines before posting on this board again...
It is acknowledged that individual HYP investors may from time to time see the need to sell individual HYP stocks, perhaps in response to adverse performance, portfolio imbalance, or a corporate action, e.g. takeover.

C.

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Re: John Wood Group finals

#399023

Postby absolutezero » March 25th, 2021, 8:22 pm

csearle wrote:
absolutezero wrote:HYP is the purest of pure THOU SHALT NOT TINKER AND THOU SHALL LEAVE YOUR PORTFOLIO INTACT - even if half the shares in it are dogs and they yield 1.2% and pull down your overall yield.
That is just plain wrong.

Please read this board's guidelines before posting on this board again...
It is acknowledged that individual HYP investors may from time to time see the need to sell individual HYP stocks, perhaps in response to adverse performance, portfolio imbalance, or a corporate action, e.g. takeover.

C.

I remember people getting het up about moderation and lots of posts getting moved elsewhere because they talked about swapping one shareholding for another and that this was "against HYP methodology" as it is a LTBH strategy.

Have the rules changed here? I notice that guidance is dated June 2020.
I took an extended break from this site in 2018/19 when the moderation was operating along the lines I mentioned above.
What's changed? Are you saying tinkering is now no longer verboten?

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Re: John Wood Group finals

#399025

Postby csearle » March 25th, 2021, 8:28 pm

absolutezero wrote:Are you saying tinkering is now no longer verboten?
Welcome back. Sorry if I was a bit harsh. As far as I know tinkering has always been allowed. Even pyad didn't seem to rule it out; he just reckoned that most people wouldn't benefit from it.

Not sure exactly which episode led you to think as you did but in my mind you're right it is a Long Term Buy and Hold strategy but that doesn't (in my mind at least) preclude the odd sale if there seems little hope of recovery and there are more promising high-yielders available.

Chris

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Re: John Wood Group finals

#399027

Postby absolutezero » March 25th, 2021, 8:34 pm

csearle wrote:
absolutezero wrote:Are you saying tinkering is now no longer verboten?
Welcome back. Sorry if I was a bit harsh. As far as I know tinkering has always been allowed. Even pyad didn't seem to rule it out; he just reckoned that most people wouldn't benefit from it.

Not sure exactly which episode led you to think as you did but in my mind you're right it is a Long Term Buy and Hold strategy but that doesn't (in my mind at least) preclude the odd sale if there seems little hope of recovery and there are more promising high-yielders available.

Chris

It was rather harsh. The ellipsis made me think it was a rather snarky response.
Never mind. I'm over it now. But you might want to look at my post on Ian Pickering's HYP thread then...

Moving on.

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Re: John Wood Group finals

#399339

Postby Gengulphus » March 26th, 2021, 7:22 pm

csearle wrote:As far as I know tinkering has always been allowed. ...

There is an earlier version of the guidance still available, in viewtopic.php?f=15&t=8651&p=98961. It didn't explicitly allow tinkering as the current guidance does, but neither did it forbid it - so I suspect what people read into it depended on their understanding of "long term buy and hold (LTBH)". That and the current guidance aren't the only versions of the guidance that have ever existed, because small changes to it have been done by editing the existing guidance rather than posting a completely new version, but they are the main versions. (And if anyone is wondering what the TLF guidance was between TLF being set up on November 3rd, 2016 and that earlier version being posted on November 26th, 2017, the answer is that there wasn't any such guidance - all we had to go on for that year and a bit was the TMF guidance, which did explicitly allow tinkering.)

csearle wrote:... Even pyad didn't seem to rule it out; he just reckoned that most people wouldn't benefit from it.

He not merely doesn't rule it out - he very occasionally does it himself. Two examples I can remember and link to reasonably easily:

https://web.archive.org/web/20071014125 ... ading.aspx
viewtopic.php?f=15&t=9440

Gengulphus

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Re: John Wood Group finals

#401299

Postby Arborbridge » April 3rd, 2021, 7:44 am

absolutezero wrote:
Gengulphus wrote:
absolutezero wrote:Surely that would be an hyp and not an HYP!

And the difference you perceive between a "hyp" and a "HYP" is? The board guidelines only talk about "HYP"s and at least as far as I'm concerned, the two terms you've used are simple typographical variations of "HYP" - i.e. they mean exactly the same thing...

Gengulphus

HYP is the purest of pure THOU SHALT NOT TINKER AND THOU SHALL LEAVE YOUR PORTFOLIO INTACT - even if half the shares in it are dogs and they yield 1.2% and pull down your overall yield.

hyp is the TINKER ALL YOU LIKE variant to maximise dividend income.


The HYP you think of, we usually call a classical, Dorisian or Pyadic HYP. HYPs have evolved a little since the very first articles, even with some changes by Pyad himself as Gengulphus points out and included some "slack" if you like, for practical management purposes. However, if someone were running a HYP in which they tinkered as much as they liked - I doubt anyone here would accept that as being a HYP as we know it, Jim - though it would be an HY Portfolio! 8-)

Arb

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Re: John Wood Group finals

#401367

Postby Gengulphus » April 3rd, 2021, 1:15 pm

Arborbridge wrote:
absolutezero wrote:
Gengulphus wrote:And the difference you perceive between a "hyp" and a "HYP" is? The board guidelines only talk about "HYP"s and at least as far as I'm concerned, the two terms you've used are simple typographical variations of "HYP" - i.e. they mean exactly the same thing...

HYP is the purest of pure THOU SHALT NOT TINKER AND THOU SHALL LEAVE YOUR PORTFOLIO INTACT - even if half the shares in it are dogs and they yield 1.2% and pull down your overall yield.

hyp is the TINKER ALL YOU LIKE variant to maximise dividend income.

The HYP you think of, we usually call a classical, Dorisian or Pyadic HYP. ...

I would strongly recommend calling them "non-tinkering HYPs" rather than any of those terms. It actually makes it clear in which way you're distinguishing the two types of HYP, with just one bit of background knowledge required, namely that "tinkering" is HYP jargon for "voluntary selling". (The term "no-voluntary-sales HYP" would be even more descriptive, but it's got very little (if any) history of being used and it's a bit too long-winded.)

In contrast, all three of "Pyadic HYP", "Dorisian HYP" and "classical HYP" require knowledge of old TMF articles that AFAIAA no longer exist on the TMF site and can only be found in archived form. Also, "Pyadic HYP" suffers from the problems that pyad has selected and run multiple HYPs, using slightly different methods (tinkering vs not tinkering being one of the differences), and that he's made various recommendations about how to run them, of which not tinkering is just one. For instance, his original article recommended "no more than about 15 shares", "Stick to FTSE 100 companies", "choosing one from each sector", "pick only those companies that have increased dividends regularly over the last few years" (and probably others as well that I've missed on a quick skim) as well as "simply buy and hold forever". Calling some HYPs "Pyadic" leaves it totally unclear which of those recommendations one is referring to. Of course, one might only be talking about HYPs that treat all of those recommendations as strict commandments that are not to be broken under any circumstances - but that leads to the rather silly conclusion that HYP1 has never been a "Pyadic HYP", even when it was first selected in pyad's follow-up article: that article admits that he went outside the FTSE100, and offers no reason to regard the miners Anglo American and Rio Tinto as being in different sectors.

So while I'd be reasonably certain that a poster who uses the term "Pyadic HYP" knows what they mean by it, I as a reader am left having to guess what meaning they have in mind (unless of course they explain that, but they almost never do, and if they did it would defeat the object of using a brief term!). Other readers will be in the same position, and it's practically inevitable that different guesses will be made. I.e. using "Pyadic HYP" is a good way to create misunderstandings... "Classical HYP" is much the same - basically, using it leaves it unclear which of the recommendations in the 'classic' articles and posts about HYPs are being treated as commandments and which as mere recommendations.

"Dorisian HYP" is somewhat different, as just about the only things we know about Doris's portfolio are that "Over some forty years, at £7m it was around 65 times its value when she inherited it at a then value of £108,000 back in the thirties" (which made her "pretty rich, so much so that she never really knew how much she had, which it has been said is one mark of a rich person"), that it delivered "an income of something like £275,000 a year" (making its yield about 4%, but I've no idea whether that was a high yield for the time), that it was "a selection of the blue chips of their day" and that "she never did any trading. The only changes to the portfolio over all those years were consequently those mandatory impositions resulting from corporate activity." I.e. it might have been selected along HYP lines (though the article specifically notes that pyad didn't know how it had been selected), and the only thing known about the way it had been run was that it was non-tinkering. So it's reasonably clear that the only aspect of how a portfolio is run that "Dorisian HYP" can be referring to is not tinkering. Or rather, that would be clear were it not for the fact that Doris has been portrayed in many ways on TMF and TLF, including as an old lady who is struggling financially. (The Doris of the article would probably have hardly noticed a year of widespread dividend cuts and a number of investee companies going bust that resulted in her income being halved or even worse, perhaps finding that she didn't have as much cash available to donate to charity as usual but nothing more. That's a position that very few investors are in, and it does make a difference to how imprudent it is to pay no attention to one's portfolio!)

So while the phrase "Dorisian HYP" can only really mean a non-tinkering HYP if one goes back to the only real source of information about 'Doris', that source is rather obscure, and searching for it is likely to produce quite a few conflicting ideas of what it's referring to.

Gengulphus

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Re: John Wood Group finals

#401370

Postby Arborbridge » April 3rd, 2021, 1:31 pm

Gengulphus wrote:
Arborbridge wrote:The HYP you think of, we usually call a classical, Dorisian or Pyadic HYP. ...

I would strongly recommend calling them "non-tinkering HYPs" rather than any of those terms.
Gengulphus


Very logical and I agree with the reasoning. However, the fact is that we use those terms, and I expect they will still be in common use, even after your pointing out they can be misleading.
What I wrote was only pointing out the status quo, the common usage, warts and all.


Arb.


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