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Split the HYP

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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Tight HYP discussions only please - OT please discuss in strategies
tjh290633
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Re: Split the HYP

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Postby tjh290633 » July 28th, 2021, 11:16 am

chris wrote:
You have quoted BT.A as an example there. Currently expected to resume dividends early next year, the price is now joint second, up 39% since the start of the year after several years of falling prices.


I refer TJH to my initial comment about significant events which impact a sector or in this case the whole market. The events of 2020 are such that virtually every share was significantly impacted to some extent or another depending on where the start and finish points for comparison are,. Therefore I would largely ignore falls in 2020 and rebounds in 2021. In fact any share that didn't recover by at least 20% from 2020 levels is potentially problematic.

I did sell my entire holdings of Centrica, BT and British Land in the period, added significantly to my SIPP and bought 3 new share holdings:

DS Smith - currently up 34%
Rio Tinto - currently up 46.5%
Johnson Matthey - currently up 52%

I show these not to prove that I am a great stock picker, goodness knows I am not, and have residual holdings in Petrofac and Cineworld to prove it! My point is that these are not companies who have suddenly had stellar results, they are companies that were hit hard by the pandemic and have since rebounded and I am just putting the resurgence of BT in perspective - as TJH says, 'after years of falling prices'. I'm not so sure that the market now sees them as a star player because they have resumed dividends. In fact if you take the low point and high point of Centrica, even that moved 30%!

What I am trying to do is to look at how I should be reviewing my portfolio and when to sell. For TJH, it is a case of rebalancing and moving cash around to avoid concentrations of income and if it works for him, that is fine and perfectly reasonable. I am less concerned about concentration and will only sell if I feel that the company concerned is not going to give me the future revenue I need. In this respect, I would prefer a current yield that is not such high yield but is a reliable payer, than a company who may have a more chequered history. That is why, I am looking at stop losses of 25% on some more recent purchases. My portfolio tells me that, 2020 excepted, when a share falls by that sort of amount, it rarely recovers and that may be the time to sell up an move on, as it will normally have a negative impact on future dividends.

I agree that 2020 was an unusual year, but I did give data from 2016 onwards.

DS Smith has, or should have, benefitted from the shift to online purchasing.

RIO has just announced massive increase in interim dividend asnd a speciasl dividend to go with it. Naturally the price has fallen this morning.

Johnson Matthey is in precious metals, which have a lot to do with catalytic processes. Low yield, though.

I do not believe in stop losses. When the tide goes out all ships fall with it. I prefer to use the median value of my own holdings as a criterion, not individual share prices.

TJH


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