Breelander wrote:Here's one....
Stephen Bland (2003) wrote:... many readers on the HYP discussion board have expressed themselves to be uncomfortable with the idea of a total lack of trading. I see two main situations where trading can be desirable. One is where a share cuts, or maybe even merely holds, its dividend and the other is where it has risen very strongly thus reducing the running yield so that in both cases, a better income could be obtained by selling and reinvesting in a higher yielder if a suitable choice is available -- not always that easy.
https://web.archive.org/web/20111224174 ... 031212.htm
Thank you for this Bree. I was so taken aback by this article I wanted to digest it before responding, but having read and re-read it I still consider it a revalation.
To summarise the relevant elements what Bland (PYAD) was saying seems to be as follows:
1. He thinks trading in an HYP is a bad idea - "One rule I set myself for the high yield portfolios (HYP) I portray here is that there is never any voluntary trading of the shares, so the only changes that occur are those mandated by some action from the companies such as takeovers or reorganisations."
2. It is acceptable to trade in an HYP though, he thinks it will reduce returns - "But if investors think they can do better by trading then go for it, it's your money. My view is though that you will probably lose out to a pure buy and holder."
3. He goes much further, in fact he says managing an HYP any way an investor wants is fine - " Clearly everyone who runs an HYP will do it their own way in any event but since I write about the strategy, I write about my preferred way while realising naturally that it will not suit everyone."
4. He recognises that what he advocates is nor really meant for the type of people who frequent TLF - "You can't please 'em all, so I tend to aim my version of the strategy at my theoretical HYPer, that granny in Hove whose daughter has set up a permanent portfolio."
I find this article and the consequences of what it said remarkable for two reasons.
First, what I have said recently about some approaches not being HYP is just plain wrong. As per point 3 above as long as you are aiming for income as far as Bland is concerned do what you want, it is still HYP. He even uses the word "trade" which is usually used her to describe activity that is not HYP in nature. So buy and sell as you see fit, diversify as much or as little as you want, include or exclude non-UK shares as you see fit, include some ITs or not, etc.*
Second, the limitations placed on what can and cannot be discussed on this board are completely arbitrary. They allow some elements of the approach Bland uses himself to be relaxed, but not others. But on what basis? Why is discussion of some REITs OK but not other ITs? Why can some posters discuss their trading activity but others not discuss non-UK shares? There is no justification in what Bland says, because he says in point 3 that everyone will run their HYP in their own way, so Bland is saying an HYP with half non-UK shares is still in his eyes an HYP, it is only TLF guidance that says it is not.
A remarkable article to link to and as I say a complete revelation, it will fundamentally change how I approach this board going forward.**
Again, thank you for the link Bree.
* It may be that this was a marketing exercise, an attempt to expand the 'envelope' of Bland's HYP brand, but whatever the motive the article says what it says.
** Some may ask if I mean this or if I am being provocative, to answer that upfront, this is a genuine revelation to me.