Alaric wrote:
Following Carillion, the light dawned that high yield equalled distressed share price and distressed share price equalled company in trouble (sometimes).
Alaric,
I've got to be brutally honest, because you seem to be
wilfully and
persistently missing the
clear and
important point that writing off a
portfolio income strategy because you are able to point to instances where
some sub-components of such a strategy might stumble as part of the natural business lifecycle is less about a '
light dawning' on the strategy itself, and very much more about the '
light dawning' on your own lack of understanding of it....
Value investing will have sub-components that stumble. Does that enable you to write off value investing as a strategy?
Momentum investing will have sub-components that stumble. Does that enable you to write off momentum investing as a strategy?
Every investment strategy will have sub-components that stumble.....
Can you see where I'm going here?
It's your
logic that is flawed, and not, per-se, a particular investment strategy, whether that be HYP, Value, Momentum, or any other investment strategy that,
by investing in the stock market in the first place, is almost
guaranteed to pick
some sub-components that stumble....
But the HYP strategy isn't just
about those sub-components, it's about the
wider income-portfolio itself, that
holds those sub-components, and so long as the
income-portfolio itself can cope with those inevitable 'sub-component stumbles', then
overall, the strategy can,
and clearly does given the evidence presented to you here, provide satisfactory results for those using it.
Your
wilful persistence in not recognising this
specific point, even after it's been pointed out to you many, many times, and your
continued insistence on holding up
single sub-components such as Carillion when trying to suggest that the
whole HYP strategy is a failure, whilst at the same time
ignoring portfolio-level evidence that the HYP strategy itself, at portfolio level, is
quite capable of *coping* with such '
sub-component stumbles' does not, unfortunately, have a good explanation behind it...
In addition to the above, the icing on the cake with your arguments against the HYP strategy now seems to be that you think a better approach might be to simply
buy a FTSE tracker and enjoy
market-equalling returns, including a yield of around 4%.
So just to be clear then, you're decrying a
self-select income-strategy because it will in all
probability select a few duds in it's investment-lifetime, and you would propose to
replace that approach with one that
definitely will contain all the duds in that market.....
It seems that we're to wait for '
the light to dawn' on that particular approach too then.....
Cheers,
Itsallaguess