IDP's HYP as of 09 Jul 21

[idpickering]

Can I just say thank you to all who’ve contributed to this thread.

One never stops learning about investing/HYPing imho, and I’ve learnt a lot from your offerings. One thing that stands out to me is, that there is a bit of over concentration in my HYP. I could certainly do with a bit more diversification I think, along the lines of the shares that Malcolm has kindly suggested maybe?

Ian.

[Itsallaguess]

One thing that stands out to me is, that there is a bit of over concentration in my HYP. I could certainly do with a bit more diversification I think.

I think it would be equally as important to make sure that such over-concentrations at either sector or super-sector level are more clearly visible to you Ian, rather than having to have them pointed out by others..

Cheers,

Itsallaguess

[idpickering]

One thing that stands out to me is, that there is a bit of over concentration in my HYP. I could certainly do with a bit more diversification I think.

I think it would be equally as important to make sure that such over-concentrations at either sector or super-sector level are more clearly visible to you Ian, rather than having to have them pointed out by others..

Cheers,

Itsallaguess

A fair point. I hold my hands up to that thanks.

Ian.

[Itsallaguess]

One thing that stands out to me is, that there is a bit of over concentration in my HYP. I could certainly do with a bit more diversification I think.

I think it would be equally as important to make sure that such over-concentrations at either sector or super-sector level are more clearly visible to you Ian, rather than having to have them pointed out by others..

A fair point. I hold my hands up to that thanks.

A couple of years ago we introduced a 'Portfolio Overview' sheet to the HYPTUSS tool that can be used as a stand-alone feature to help with these types of sector or super-sector weighting risks.

Here's a couple of snapshots that we showed back in 2019 when the feature was first introduced, which shows both 'Sector' and 'Super Sector' information for the dummy HYP we were using at that time -

Sector overview example - https://i.imgur.com/oBJfBcm.png

Super-sector overview example - https://i.imgur.com/8my7La7.png

Whilst there's default sector and super-sector definitions in the vanilla download of the tool, it's very simple for anyone to change the data-sheet entry for any particular share if they wish to re-name any particular sector or super-sector that they'd prefer something to be sitting in, so the whole process was always meant to be very user-configurable with those particular definitions.

Anyway, I didn't know if you were aware of this feature of the tool, so I thought I'd mention it just in case you might find it helpful given the super-sector issue raised in this thread.

This 'Portfolio Overview' feature can be used as a standalone facility in the tool, and there's no requirement to use the other in-built features if they're not required.

You'll hopefully note from the above snapshots that there's also a useful 'Generate Lemon Fool Table' button on the overview page, that can be used to automatically generate tabular data of the overview information, for simple pasting into a Lemon Fool post, which will then allow posting of that overview information in the correct format here, if that's useful.

Cheers,

Itsallaguess

[Arborbridge]

One thing that stands out to me is, that there is a bit of over concentration in my HYP. I could certainly do with a bit more diversification I think.

I think it would be equally as important to make sure that such over-concentrations at either sector or super-sector level are more clearly visible to you Ian, rather than having to have them pointed out by others..

Cheers,

Itsallaguess

A fair point. I hold my hands up to that thanks.

Ian.

...by which I infer that IAAG is politely suggesting you might try the HYPTUSS? This would then easily highlight sector and super sector contributions.


I looked at LXI and HICL and it can see some dilemmas if you need to choose between them. Both are on high premia, HICL has the better yield but LXI has the better NAV increase over the same period. etc, etc - but it's all there for you to check. I must say, my initial reaction to the HICL annual report was - yawn! - full of fine words that didn't mean much to me, expensive looking people and pictures. As for what the company actually invest in - that seemed to fade into the background of endless words and I ran out of enthusiasm after page gezillion. Even the HL resume doesn't nail anything specific - waffle. It reminded me of those modern art exhibitions where the art is difficult to understand and the accompanying notes leave one quite bemused. Half the skill is in writing the pretentious nonsense!
However, no doubt you can read it if you want to.

Arb.

PS my comment about IAAG was written before his latest post

[idpickering]

I think it would be equally as important to make sure that such over-concentrations at either sector or super-sector level are more clearly visible to you Ian, rather than having to have them pointed out by others..

A fair point. I hold my hands up to that thanks.

A couple of years ago we introduced a 'Portfolio Overview' sheet to the HYPTUSS tool that can be used as a stand-alone feature to help with these types of sector or super-sector weighting risks.

Here's a couple of snapshots that we showed back in 2019 when the feature was first introduced, which shows both 'Sector' and 'Super Sector' information for the dummy HYP we were using at that time -

Sector overview example - https://i.imgur.com/oBJfBcm.png

Super-sector overview example - https://i.imgur.com/8my7La7.png

Whilst there's default sector and super-sector definitions in the vanilla download of the tool, it's very simple for anyone to change the data-sheet entry for any particular share if they wish to re-name any particular sector or super-sector that they'd prefer something to be sitting in, so the whole process was always meant to be very user-configurable with those particular definitions.

Anyway, I didn't know if you were aware of this feature of the tool, so I thought I'd mention it just in case you might find it helpful given the super-sector issue raised in this thread.

This 'Portfolio Overview' feature can be used as a standalone facility in the tool, and there's no requirement to use the other in-built features if they're not required.

You'll hopefully note from the above snapshots that there's also a useful 'Generate Lemon Fool Table' button on the overview page, that can be used to automatically generate tabular data of the overview information, for simple pasting into a Lemon Fool post, which will then allow posting of that overview information in the correct format here, if that's useful.

Cheers,

Itsallaguess

Thanks very much for taking the time to put up your interesting post. I’ve never used the tool tbh. I shall have to try it I guess.

Ian.

[idpickering]

...by which I infer that IAAG is politely suggesting you might try the HYPTUSS? This would then easily highlight sector and super sector contributions.


I looked at LXI and HICL and it can see some dilemmas if you need to choose between them. Both are on high premia, HICL has the better yield but LXI has the better NAV increase over the same period. etc, etc - but it's all there for you to check. I must say, my initial reaction to the HICL annual report was - yawn! - full of fine words that didn't mean much to me, expensive looking people and pictures. As for what the company actually invest in - that seemed to fade into the background of endless words and I ran out of enthusiasm after page gezillion. Even the HL resume doesn't nail anything specific - waffle. It reminded me of those modern art exhibitions where the art is difficult to understand and the accompanying notes leave one quite bemused. Half the skill is in writing the pretentious nonsense!
However, no doubt you can read it if you want to.

Arb.

PS my comment about IAAG was written before his latest post

Thanks for your post Arb. My concern regarding LXI is that they’re on a yearly high right now, so might watch out for a dip in the sp. I’m going to look at the other shares Malcom mentioned too. As for HICL, I like the look of them tbh.

Ian.

[Arborbridge]

Thanks for your post Arb. My concern regarding LXI is that they’re on a yearly high right now, so might watch out for a dip in the sp. I’m going to look at the other shares Malcom mentioned too. As for HICL, I like the look of them tbh.

Ian.

I'd agree about the high and much of that improvement is because the premium has increased (i.e demand for the shares) rather than the NAV (i.e. progress in the business). I believe the premium is arouns 13%, which seems a bit steep: is that paying to be fashionable?

You might want to look at 3iN for infrastructure, which I have held for some years now in my IT basket (though it is also HYP allowed). The problem here may be that the yield is not competitive at present.

Arb.

[MDW1954]

I looked at LXI and HICL and it can see some dilemmas if you need to choose between them. Both are on high premia, HICL has the better yield but LXI has the better NAV increase over the same period. etc, etc - but it's all there for you to check. I must say, my initial reaction to the HICL annual report was - yawn! - full of fine words that didn't mean much to me, expensive looking people and pictures.

Arb,

My view is that with distinctive asset-specific REITs, unlike ITs, discounts and premia are of limited value. A controversial view, maybe, but it's worked for me.

With ITs, the argument with a premium is that -- if you can stomach the trading costs -- it's possible to go into the market and pick up the underlying shares more cheaply. Likewise with a discount, you're getting (say) £11 of assets for £10. With REITs, that argument is less applicable. As ordinary investors, we can't buy those same assets.

It's also worth pointing out that with HICL, a ten-year chart shows that it has only ever traded at a discount for a short period once, post-referendum. With LXI, at least 2020 gave us a chance at a discount, as it did with some other REITs. I bought into quite a few of those opportunities, topping up several of my holdings -- from memory, CREI, NRR, EBOX, RGL, LXI, SUPR, and WHR.

I believe you hold BBOX and PHP? BBOX has traded at a premium of >25% for a lot of the past year. It presumably didn't put you off, so why should a (much lower) premium at HICL? I can't quickly put my hands on PHP data, but wouldn't be surprised if the situation wasn't similar.

MDW1954

[idpickering]

I looked at LXI and HICL and it can see some dilemmas if you need to choose between them. Both are on high premia, HICL has the better yield but LXI has the better NAV increase over the same period. etc, etc - but it's all there for you to check. I must say, my initial reaction to the HICL annual report was - yawn! - full of fine words that didn't mean much to me, expensive looking people and pictures.

Arb,

My view is that with distinctive asset-specific REITs, unlike ITs, discounts and premia are of limited value. A controversial view, maybe, but it's worked for me.

With ITs, the argument with a premium is that -- if you can stomach the trading costs -- it's possible to go into the market and pick up the underlying shares more cheaply. Likewise with a discount, you're getting (say) £11 of assets for £10. With REITs, that argument is less applicable. As ordinary investors, we can't buy those same assets.

It's also worth pointing out that with HICL, a ten-year chart shows that it has only ever traded at a discount for a short period once, post-referendum. With LXI, at least 2020 gave us a chance at a discount, as it did with some other REITs. I bought into quite a few of those opportunities, topping up several of my holdings -- from memory, CREI, NRR, EBOX, RGL, LXI, SUPR, and WHR.

I believe you hold BBOX and PHP? BBOX has traded at a premium of >25% for a lot of the past year. It presumably didn't put you off, so why should a (much lower) premium at HICL? I can't quickly put my hands on PHP data, but wouldn't be surprised if the situation wasn't similar.

MDW1954

Thanks for your ever welcome input Malcolm. Tbh, I don’t worry to much about trying to ‘get a bargain ‘per se’. For an investment that’s meant to held for the long term, I don’t think such things matter all that much in the long run.

My available dosh in my HYP that’s intended to be invested on 22nd July only amounts to a third size of a full average value holding in my HYP. I could always wait for that amount to get bigger moving into August, but knowing me, I like to get invested ASAP. I don’t mind admitting that HICL are front runner as my likely pick.

Ian.

[idpickering]

Further to my last, as diversification is the name of the game, maybe I should look at the other shares Malcolm pointed out first? I have TRIG and UKW already in that general sector, ie infrastructure.

Ian.

[Arborbridge]

My view is that with distinctive asset-specific REITs, unlike ITs, discounts and premia are of limited value. A controversial view, maybe, but it's worked for me.

With ITs, the argument with a premium is that -- if you can stomach the trading costs -- it's possible to go into the market and pick up the underlying shares more cheaply. Likewise with a discount, you're getting (say) £11 of assets for £10. With REITs, that argument is less applicable. As ordinary investors, we can't buy those same assets.

It's also worth pointing out that with HICL, a ten-year chart shows that it has only ever traded at a discount for a short period once, post-referendum. With LXI, at least 2020 gave us a chance at a discount, as it did with some other REITs. I bought into quite a few of those opportunities, topping up several of my holdings -- from memory, CREI, NRR, EBOX, RGL, LXI, SUPR, and WHR.

I believe you hold BBOX and PHP? BBOX has traded at a premium of >25% for a lot of the past year. It presumably didn't put you off, so why should a (much lower) premium at HICL? I can't quickly put my hands on PHP data, but wouldn't be surprised if the situation wasn't similar.

MDW1954

I take the point about not being able to buy the same assets - that hadn't occurred to me. And as regards HICL, the premium does seem to be pretty much baked in, so one can presumably hope to keep the investment made somewhere near "par".
When I bought BBOX, I was lucky - it was before the premium rocketed and I bought at a discount and topped up around par in April 2020. As for PHP, I'm not sure either.
A small premium I'd stomach on the grounds that I do not intend to sell, but I'd baulk at 25%. If I ever bought at that, it would be sloppiness or a sudden rash of could care

Arb.

[Arborbridge]

Further to my last, as diversification is the name of the game, maybe I should look at the other shares Malcolm pointed out first? I have TRIG and UKW already in that general sector, ie infrastructure.

Ian.

Serious question: do you need to? You have a pretty good HYP as it is.

I admit LXI looks interesting as it has a wide remit, but the price is frothy.

Arb.

[monabri]

Further to my last, as diversification is the name of the game, maybe I should look at the other shares Malcolm pointed out first? I have TRIG and UKW already in that general sector, ie infrastructure.

Ian.

Serious question: do you need to? You have a pretty good HYP as it is.

I admit LXI looks interesting as it has a wide remit, but the price is frothy.

Arb.

I think buying a HYP like share when the price is frothy is a bad idea...

[ReformedCharacter]

I don’t mind admitting that HICL are front runner as my likely pick.

Ian.

FWIW they've proved to be a good HYP investment for me. I bought in 2013 and the holding shows an IRR of c. 8.7%. I see HICL as a 'steady plodder' and as such a worthwhile part of a HYP. I have some spare cash and might buy some more.

RC

[idpickering]

Further to my last, as diversification is the name of the game, maybe I should look at the other shares Malcolm pointed out first? I have TRIG and UKW already in that general sector, ie infrastructure.

Ian.

Serious question: do you need to? You have a pretty good HYP as it is.

I admit LXI looks interesting as it has a wide remit, but the price is frothy.

Arb.

Thanks for your input Arb, and kind words. Malcolm mentioned further up that I only had 6.6% in REITs of the property ilk. I’m toying with giving his suggestions another look see. I did before, and thought they were a bit small in cap size, but I will look again. HICL are still in the frame right now though.....maybe....

Ian.

[idpickering]

I don’t mind admitting that HICL are front runner as my likely pick.

Ian.

FWIW they've proved to be a good HYP investment for me. I bought in 2013 and the holding shows an IRR of c. 8.7%. I see HICL as a 'steady plodder' and as such a worthwhile part of a HYP. I have some spare cash and might buy some more.

RC

Thanks for your reassuring post. It’s nice to hear from someone with some skin in the game.

Ian.

[Arborbridge]

I think buying a HYP like share when the price is frothy is a bad idea...

I take it, a reference to my transgressing the time to buy is now?

[idpickering]

Further to my comments above about HICL Infrastructure, my account held with Halifax has been set to buy some of HICL next Thursday. That investment will be added to over the coming months, to bring HICL up to the average capital weighting of my other HYP holdings at that time.

I've been chatting to other Fools over on the new HICL board, on Company News earlier today about this, in this thread starting here viewtopic.php?p=427544#p427544

Ian.

[idpickering]

Further to my post above, the purchase of HICL shares scheduled to happen tomorrow, is still a go. Thereafter that'll be followed up with another buy of HICL shares next month. That's the plan anyway, but things might change by then.

Thanks to all who contributed to this thread.

Ian.