HYP Practical - Some Changes

[Alaric]

Just to clarify.

Is it acceptable to discuss on High Yield Shares and Strategies a comparison between a HYP designed according to "HYP Strategies" and a representative Investment Trust with similar investment objectives? That's with particular reference to the concept that comparing their respective total returns is the valid comparison and that in the current environment the HYP is likely to be suffering with dividend cancellations.

[tjh290633]

Just to clarify.

Is it acceptable to discuss on High Yield Shares and Strategies a comparison between a HYP designed according to "HYP Strategies" and a representative Investment Trust with similar investment objectives? That's with particular reference to the concept that comparing their respective total returns is the valid comparison and that in the current environment the HYP is likely to be suffering with dividend cancellations.

Of course it is. However with your sticking your oar in, the atmosphere in that topic became intolerable and it has been removed.

Watch your step.

TJH

[Wizard]

Just to clarify.

Is it acceptable to discuss on High Yield Shares and Strategies a comparison between a HYP designed according to "HYP Strategies" and a representative Investment Trust with similar investment objectives? That's with particular reference to the concept that comparing their respective total returns is the valid comparison and that in the current environment the HYP is likely to be suffering with dividend cancellations.

Of course it is. However with your sticking your oar in, the atmosphere in that topic became intolerable and it has been removed.

Watch your step.

TJH

An unpleasant atmosphere is not to be welcomed, but it seems now things are going from bad to worse. It is not possible to compare an HYP to an IT on HYP-P because rightly it has nothing to do with the practical management of an HYP. Surely HYS&S is the right place for the discussion of this matter. If people are posting inappropriately the posts should be deleted, not the whole thread. Deleting the whole thread punishes everyone by preventing them from being able to see the analysis. HYP-P is supposed to be a place where the pros and cons of HYP can't be discussed, so putting such an analysis thread on HYP will be a very strange outcome.

[MDW1954]

The post hasn't been deleted, just temporarily moved. As TJH says, the atmosphere had become intolerable.

MDW1954

[Wizard]

The post hasn't been deleted, just temporarily moved. As TJH says, the atmosphere had become intolerable.

MDW1954

OK, thanks for that, I saw some of the posts but did not really read them as it was seeming heading to yet another repeat of an argument that has already happened many times. Sounds like things boiled over a bit this time. Hopefully there will be coo,er heads when the thread is back up on the board.

[Arborbridge]

An unpleasant atmosphere is not to be welcomed, but it seems now things are going from bad to worse. It is not possible to compare an HYP to an IT on HYP-P because rightly it has nothing to do with the practical management of an HYP. Surely HYS&S is the right place for the discussion of this matter.

"It is not possible to compare an HYP to an IT on HYP-P" - I believe that is factually incorrect, unless the rules have changed dramatically.

As I understand it - and this was backed up by TJH as a mod a long time ago - it has always been allowable to compare one's HYP to a benchmark on the HYP-P board, and it would be the "right" place to do so - if I'm right about that, and it is the wish of the poster. That benchmark could be a number of targets, but in my case it is usual for me to compare with my basket of ITs for the simple reason that would be my main alternative investment scheme. It would also be valid to use another benchmark - e.g. FTSE TR index or CTY if that seems more useful to that particular investor.

If you or anyone else want to do this on HYS-S, that's also fine (I believe I might have done so myself) but I do not see either decision as "right" or "wrong".

What isn't allowable is discussion of whether HYP is a good thing or not, so I don't. Conclusions could be and will be inferred by the reader, but should not be used to fire missiles at HYP. If other people start discussing it, then they are OT - it's their problem, not mine.

And just for the record, I'm not intending to discuss this further: I'm just laying out what I know is/was the custom and practice on HYP-P.


Arb.

[seagles]

An unpleasant atmosphere is not to be welcomed, but it seems now things are going from bad to worse. It is not possible to compare an HYP to an IT on HYP-P because rightly it has nothing to do with the practical management of an HYP. Surely HYS&S is the right place for the discussion of this matter.

"It is not possible to compare an HYP to an IT on HYP-P" - I believe that is factually incorrect, unless the rules have changed dramatically.

As I understand it - and this was backed up by TJH as a mod a long time ago - it has always been allowable to compare one's HYP to a benchmark on the HYP-P board, and it would be the "right" place to do so - if I'm right about that, and it is the wish of the poster. That benchmark could be a number of targets, but in my case it is usual for me to compare with my basket of ITs for the simple reason that would be my main alternative investment scheme. It would also be valid to use another benchmark - e.g. FTSE TR index or CTY if that seems more useful to that particular investor.

If you or anyone else want to do this on HYS-S, that's also fine (I believe I might have done so myself) but I do not see either decision as "right" or "wrong".

What isn't allowable is discussion of whether HYP is a good thing or not, so I don't. Conclusions could be and will be inferred by the reader, but should not be used to fire missiles at HYP. If other people start discussing it, then they are OT - it's their problem, not mine.

And just for the record, I'm not intending to discuss this further: I'm just laying out what I know is/was the custom and practice on HYP-P.


Arb.

Arb,

Remember that we have "new" guidelines now on HYP P, so there may well be different and tighter "rules" now. My reading is that you can compare the performance of your Portfolio against a benchmark and that benchmark may be an IT. However discussions deeper than that should be on the Strategies board. So saying that you "measure" your results against CTY is ok but not much deeper than that, so if you wanted to discuss details of why you chose CTY over any other IT or benchmark then strategies. That was my reading of the "new guidelines".

[Wizard]

An unpleasant atmosphere is not to be welcomed, but it seems now things are going from bad to worse. It is not possible to compare an HYP to an IT on HYP-P because rightly it has nothing to do with the practical management of an HYP. Surely HYS&S is the right place for the discussion of this matter.

"It is not possible to compare an HYP to an IT on HYP-P" - I believe that is factually incorrect, unless the rules have changed dramatically.

As I understand it - and this was backed up by TJH as a mod a long time ago - it has always been allowable to compare one's HYP to a benchmark on the HYP-P board, and it would be the "right" place to do so - if I'm right about that, and it is the wish of the poster. That benchmark could be a number of targets, but in my case it is usual for me to compare with my basket of ITs for the simple reason that would be my main alternative investment scheme. It would also be valid to use another benchmark - e.g. FTSE TR index or CTY if that seems more useful to that particular investor.

If you or anyone else want to do this on HYS-S, that's also fine (I believe I might have done so myself) but I do not see either decision as "right" or "wrong".

What isn't allowable is discussion of whether HYP is a good thing or not, so I don't. Conclusions could be and will be inferred by the reader, but should not be used to fire missiles at HYP. If other people start discussing it, then they are OT - it's their problem, not mine.

And just for the record, I'm not intending to discuss this further: I'm just laying out what I know is/was the custom and practice on HYP-P.


Arb.

Arb,

Remember that we have "new" guidelines now on HYP P, so there may well be different and tighter "rules" now. My reading is that you can compare the performance of your Portfolio against a benchmark and that benchmark may be an IT. However discussions deeper than that should be on the Strategies board. So saying that you "measure" your results against CTY is ok but not much deeper than that, so if you wanted to discuss details of why you chose CTY over any other IT or benchmark then strategies. That was my reading of the "new guidelines".

Exactly my point seagles, a mention is fine, but an indepth discussion in a dedicated thread is almost certain to go off topic.

[Arborbridge]

Wizard, seagles,

I'm glad you are essentially agreeing with me. "Benchmark good: Discussion bad"
Nothing further to add.

[Wizard]

Wizard, seagles,

I'm glad you are essentially agreeing with me. "Benchmark good: Discussion bad"
Nothing further to add.

Yes indeed, everyone in agreement with my initial point

[Alaric]

I'm glad you are essentially agreeing with me. "Benchmark good: Discussion bad"

There isn't agreement on what form a benchmark should take. For a drawdown HYP there are two sources of value, namely the income withdrawn and the capital remaining. For an accumulating HYP there's the accumulated capital value after reinvestment. Or is this disputed because of the HYP mantra "capital doesn't matter"?

[Arborbridge]

Wizard, seagles,

I'm glad you are essentially agreeing with me. "Benchmark good: Discussion bad"
Nothing further to add.

Yes indeed, everyone in agreement with my initial point

No no, it was with my point

[Arborbridge]

I'm glad you are essentially agreeing with me. "Benchmark good: Discussion bad"

There isn't agreement on what form a benchmark should take. For a drawdown HYP there are two sources of value, namely the income withdrawn and the capital remaining. For an accumulating HYP there's the accumulated capital value after reinvestment. Or this disputed because of the HYP mantra "capital doesn't matter"?

But I think the individual can choose provided it isn't done in an offensive way. Most of us report both capital and income increases over on HYP-P and it's up to each person to compare with his chosen benchmark or benchmarks. If one wants to pontificate about it, the strict guideline should only be against the HYP aim, I suppose, which can be expressed as a "high and rising income with some chance of an increase in capital". I don't believe the original aim was any more exact than that. But as well as income, I've always inserted a note about XIRR without anyone saying: "Oo, you can't do that".

Because the aims were no more specific, it leaves room for investors to do their own thing as regards comparison. I guess in practice most of us HYPers would think in terms of what else we might do with out capital - and for me that is either an annuity or ITs. I've never felt that mentioning such comparisons or similar have ever been unwelcome on HYP-P. From my POV, HYP was always an ongoing experiment, not a religion as some people seem to think, therefore the lifeblood of keeping records is the end comparison.


Arb.

[seagles]

I'm glad you are essentially agreeing with me. "Benchmark good: Discussion bad"

There isn't agreement on what form a benchmark should take. For a drawdown HYP there are two sources of value, namely the income withdrawn and the capital remaining. For an accumulating HYP there's the accumulated capital value after reinvestment. Or this disputed because of the HYP mantra "capital doesn't matter"?

But I think the individual can choose provided it isn't done in an offensive way. Most of us report both capital and income increases over on HYP-P and it's up to each person to compare with his chosen benchmark or benchmarks. If one wants to pontificate about it, the strict guideline should only be against the HYP aim, I suppose, which can be expressed as a "high and rising income with some chance of an increase in capital". I don't believe the original aim was any more exact than that. But as well as income, I've always inserted a note about XIRR without anyone saying: "Oo, you can't do that".

Because the aims were no more specific, it leaves room for investors to do their own thing as regards comparison. I guess in practice most of us HYPers would think in terms of what else we might do with out capital - and for me that is either an annuity or ITs. I've never felt that mentioning such comparisons or similar have ever been unwelcome on HYP-P. From my POV, HYP was always an ongoing experiment, not a religion as some people seem to think, therefore the lifeblood of keeping records is the end comparison.


Arb.

Capital comparisons are fine but they should not be the "aim" on HYP P as it is an income strategy. I never have a problem with declaring XIRR or TR as an aside to how the HYP is doing. Not something that bothers me as I am more interested in how my Income Portfolio is progressing along the lines of "unitisation". I declare all this on my "annual" foray in the Portfolio review forum. I use the power of Excel to "split" my income portfolio between ITs and HYP shares and that is my comparison as to how the 2 High Income parts work against each other. The only "Captial" comparison I usually make is the comparitive size of the 2 parts, I think last time I looked it was 65% ITs, 45% Shares but that is always a 1 day snapshot when I "review" the protfolio at the end of the Tax year. Capital appreciation is nice to have but when the Strategy is to provide an annual income (eventually) that should be the aim of your comparisan on HYP P, IMO

[Gengulphus]

Copying a quote from a thread which I cannot currently access, on a board I cannot even name (viewtopic.php?p=318567#p318567):

Whoever claimed ownership over the acronym HYP and exactly what it means will not lose sleep over it I'm sure.

Originally, no-one "claimed ownership" of it. Someone (probably pyad, but I don't know for certain) used it, and it became the standard term on the original TMF "High Yield Portfolio" board by the normal process - i.e. people used it because it was convenient and what everyone else was using, not because of any ownership claim.

One aspect of the raging arguments that led to the 2008 split of that original TMF board into "High Yield - HYP Practical" and "High Yield - Share Strategies" (if I remember the TMF board names correctly) was major differences of opinion about what actually counted as a "High Yield Portfolio" as described by the original board name. This was causing numerous reports of posts being off-topic, which the TMF moderators were having considerable difficulty dealing with because they were neither HYPers themselves nor particular followers of the board, and how much of a deviation from pyad's original HYP strategy was acceptable on the board had never been defined - having a reasonable idea about it basically depended on having experienced the board reasonably extensively (I know this because I received a couple of emails from them around that time basically saying "We're out of our depth trying to adjudicate this - please help about whether this discussion is on-topic or not!").

That eventually led to the board split - which was actually done as:

* a renaming of the original board as "High Yield - Share Strategies", with its topic broadened to include all high-yield share strategies - see its guidance;

* the creation of "High Yield - HYP Practical", about strategies that have a number of points in common with pyad's original HYP strategy (briefly: income-oriented, directly-held high-yield shares, needs reasons to expect dividend safety, diversified, LTBH, fully-invested) and only about running them in practice, not comparisons with other strategies - see its original guidance.

An important point about that is that both of the resulting boards were defined in such a way that a non-HYPer moderator could adjudicate whether a post was on-topic or not. It wasn't the most important aspect of the split - that was to allow the "to HYP or not to HYP?" discussions to continue where they were but also enable those who were not (or no longer) interested in them to get away from them - but it was important to enable the TMF moderators to do their job reasonably smoothly.

Anyway, it seems to me that the creation of that HYP Practical guidance on TMF was basically when ownership of the acronym was claimed, and the people who claimed ownership were the TMF moderators. And while you're almost certainly right that they're not losing any sleep over it, the TLF HYP Practical guidance we're discussing seems to me to be clearly a matter of the TLF admins and moderators taking over that ownership (with some minor modifications to the required aspects of HYP strategies, e.g. 'fully-invested' has been dropped). And the signs are that they do care about it - not necessarily to the point of losing sleep, but we wouldn't be having this discussion if they hadn't cared enough to review and revise the guidance!

On both TMF and TLF, the ownership concerned had/has limited scope - clearly it never extended beyond the TMF/TLF website, and there's a very arguable case that in each case that it only really affects that website's HYP Practical board. I.e. if people really want to use the acronym "HYP" on HYS&S (or any other board besides HYP Practical) to mean something other than the type of strategy it is defined to be in the HYP Practical guidance, I don't see any prohibition on them doing so. That does not mean I think it's a good idea - as far as I'm concerned, it's a recipe for creating misunderstandings and conflict! But it's not against board rules anywhere other than on HYP Practical, and not against site rules unless it's a very clear deliberate attempt to not be "respectful, understanding and helpful to other posters".

Gengulphus

[Alaric]

Anyway, it seems to me that the creation of that HYP Practical guidance on TMF was basically when ownership of the acronym was claimed, and the people who claimed ownership were the TMF moderators.

What would be the opinion of something referred to as "The HYP Strategy"? That's singular rather than plural. I've been accused of not understanding it, so in the view of at least one poster it exists in a tangible form. How about the use of the term "HYPer" as perhaps used in "a true HYPer would".

[dealtn]

Capital appreciation is nice to have but when the Strategy is to provide an annual income (eventually) that should be the aim of your comparisan on HYP P, IMO

Except that a good "guide" to the potential future "annual income" is the Capital.

If past, and current, income has come at the expense of Capital eventually future income is likely to diminish. Similarly if past, and current, income has been lower but allowed Capital to grow, potential future income is likely to be growing.

If the only direction of analysis is from now and looking backwards that isn't particularly useful in predicting things in the other direction.

It doesn't mean "Total Income paid" isn't a valid measure, but it needs to be seen in that context. As far as I can see all strategies, be they Income or otherwise are concerned with the future. There is a reason we spend more time looking forwards when driving, than looking in our mirrors, and I suspect that is true of Investing also.

[Arborbridge]

Capital comparisons are fine but they should not be the "aim" on HYP P as it is an income strategy. I never have a problem with declaring XIRR or TR as an aside to how the HYP is doing. Not something that bothers me as I am more interested in how my Income Portfolio is progressing along the lines of "unitisation". I declare all this on my "annual" foray in the Portfolio review forum. I use the power of Excel to "split" my income portfolio between ITs and HYP shares and that is my comparison as to how the 2 High Income parts work against each other. The only "Captial" comparison I usually make is the comparitive size of the 2 parts, I think last time I looked it was 65% ITs, 45% Shares but that is always a 1 day snapshot when I "review" the protfolio at the end of the Tax year. Capital appreciation is nice to have but when the Strategy is to provide an annual income (eventually) that should be the aim of your comparisan on HYP P, IMO

We are very much in agreement and go about it in a similar way, though I've never ventured into bothering to report detailed comparisons on Portfolio Review. Maybe I should: it's just the extra effort... I just refer to capital en passant on HYP-P, which seems acceptable. One of the golden rules on there is that a mention of something which might be OT is accepted if it is in context and a minor part of whatever the main thrust of the post is. I've never found a problem if I bear that in mind. I think you'll find that my annual reports start off with a statement about annual income - thereby making clear at the outset that I understand the notion that HYP is first and foremost about income.

Arb.

[Gengulphus]

There isn't agreement on what form a benchmark should take. For a drawdown HYP there are two sources of value, namely the income withdrawn and the capital remaining. For an accumulating HYP there's the accumulated capital value after reinvestment. Or is this disputed because of the HYP mantra "capital doesn't matter"?

Yes, there's no agreement about what benchmark should be used, or even what form it should take (e.g. index, IT, inflation). Indeed, there isn't even agreement on whether to use a benchmark at all - some HYPers are perfectly happy if their HYP is simply fulfilling their needs, without feeling any need to compare against anything else. And as for "capital doesn't matter", there isn't any agreement on that either...

And as far as the HYP Practical guidance this thread is about is concerned, it's silent on benchmarks, capital and a number of other supposed HYP 'mantras' (e.g. "don't tinker" and "strategic ignorance") and details of the rules (e.g. it says that HYP shares "When bought, should reasonably be expected to sustain, and preferably grow their dividends in the future." without saying what form the reasons for that expectation should take). AFAIAA, this is deliberate, because the board is intended to cater for HYPers whose approaches vary on those things. Though discussing such differences should IMHO highly preferably be on an agree-to-differ basis, not a heated-argument one!

Gengulphus

[IanTHughes]

The only "Captial" comparison I usually make is the comparitive [sic] size of the 2 parts, I think last time I looked it was 65% ITs, 45% Shares

Now that is what I call really creative, or should that be "fantasy", accounting!


Ian