On Doris

[IanTHughes]

There are even a few ITs in the FTSE350.

IT's net market cap £226Bn (as of end of April 2020). Which also explains its heavy 'Financials' sector tilt (I.T.'s counted as being in the financials sector, despite individually widely diversifying).

Actually, the main reason why the HYP Strategy excludes ITs is because of the HYP requirement for equal capital investment into individual companies and Business Sectors. As far as I am aware, no IT offers such equal diversification which would make it impossible to create a portfolio diversified as HYP requires, if ITs were included.


Ian

[Alaric]

Actually, the main reason why the HYP Strategy excludes ITs is because of the HYP requirement for equal capital investment into individual companies and Business Sectors.

What is the point of this requirement other than having a rule for the sake of it? Any Business Sector only containing low yield shares is going to attract a zero capital investment.

[IanTHughes]

Actually, the main reason why the HYP Strategy excludes ITs is because of the HYP requirement for equal capital investment into individual companies and Business Sectors.

What is the point of this requirement other than having a rule for the sake of it? Any Business Sector only containing low yield shares is going to attract a zero capital investment.

I am sorry but you really should read up on and, if possible, understand HYP as a strategy, before attempting to criticise or indeed make any comments about it.

The diversification requirement is for an equal capital investment into a minimum of 15 shares or sectors only. It is therefore obvious, to most people anyway, that many, even most, individual companies and sectors will have no investment capital allocated at all! What is your point?

By the way, have you found that recalcitrant article whereby:

GIven that ITs were around and long established in 2000, why did the original pyad articles rubbish them as a destination for annuity substitute funds?

I am so looking forward to reading that so please do let us know how your search is going and do post a link here when you locate it. I did have a thought that might help you. Have you checked within the Bermuda Triangle?


Ian

[Dod101]

I always thought it was ridiculous that ITs appear in any index. Other funds do not. It is a distortion because of the effective double-counting of the underlying assets.

Despite what is said at times, an Investment Trust is a joint stock company in its own right and so it is included in the appropriate index if it qualifies by market cap. Very few if any ITs invest solely in UK shares. Even such dedicated UK ITs as say City of London have got some foreign shares. The last time I looked for instance it held Swire Pacific for some reason, based in and quoted in Hong Kong. Many ITs have only a small proportion of their assets in London shares so there is probably not as much double counting as you might imagine, although if pyad did place an embargo on ITs for a HYP that may well have been the reason why.

Dod

[Alaric]

The diversification requirement is for an equal capital investment into a minimum of 15 shares or sectors only.

What though is the purpose of this requirement, given that it has the side effect of excluding ITs from consideration?

A constant repetition of what you regard as the rules of "The HYP Strategy" is all very well, but I am asking why these rules in the first place.

[Itsallaguess]

The diversification requirement is for an equal capital investment into a minimum of 15 shares or sectors only.

What though is the purpose of this requirement, given that it has the side effect of excluding ITs from consideration?

A constant repetition of what you regard as the rules of "The HYP Strategy" is all very well, but I am asking why these rules in the first place.

And a constant repetition of you asking 'Why these rules is the first place' is all very well, but really Alaric, where exactly is it getting anyone when you keep asking the wrong people that question....

Cheers,

Itsallaguess

[Alaric]

where exactly is it getting anyone when you keep asking the wrong people that question....

I did get an answer on why not ITs, even if it's the somewhat feeble "It says so in the rules".

[IanTHughes]

The diversification requirement is for an equal capital investment into a minimum of 15 shares or sectors only.

What though is the purpose of this requirement, given that it has the side effect of excluding ITs from consideration?

A constant repetition of what you regard as the rules of "The HYP Strategy" is all very well, but I am asking why these rules in the first place.

In which case you are asking the wrong person. The person to ask is Stephen Bland - aka pyad - who you can contact by private message here on TLF. You are probably unaware, but Stephen was the person who first articulated the HYP Strategy. Do let us all know what he says in response to your so well thought out questions.

I should however advise that, before contacting Stephen, it might help in the first instance if you would actually read those articles that you yourself so thoughtfully linked to in a previous post. Just a suggestion you understand


Ian

[Alaric]

You are probably unaware, but Stephen was the person who first articulated the HYP Strategy.

I am well aware of that. I've read some of his articles and seen his opinions. You can no doubt guess what I think of them.

On the TLF site you appear to be the principal spokesman and apologist for what you term the HYP Strategy. Certainly you leapt to its defence when I noted that selecting stocks by reference to dividend yield could be equivalent to selecting stocks by reference to how far the price had fallen in recent periods.

[IanTHughes]

You are probably unaware, but Stephen was the person who first articulated the HYP Strategy.

I am well aware of that. I've read some of his articles and seen his opinions. You can no doubt guess what I think of them.

Really? So why do you not ask Stephen the questions you want answered about what you recognise is his strategy? Why do you know so little about HYP when you claim to have read the relevant articles by pyad?

On the TLF site you appear to be the principal spokesman and apologist for what you term the HYP Strategy. Certainly you leapt to its defence when I noted that selecting stocks by reference to dividend yield could be equivalent to selecting stocks by reference to how far the price had fallen in recent periods.

I am neither an apologist nor a spokesman, principal or otherwise, for any investment strategy. My response to your posts are mostly to correct your misunderstandings about what constitutes the HYP strategy. My comments in regard to your claiming that "selecting stocks by reference to dividend yield could be equivalent to selecting stocks by reference to how far the price had fallen in recent periods" amply demonstrated that misunderstanding on your part, in my view.


Ian

[Alaric]

My comments in regard to your claiming that "selecting stocks by reference to dividend yield could be equivalent to selecting stocks by reference to how far the price had fallen in recent periods" amply demonstrated that misunderstanding on your part, in my view.

I don't see that it has anything to do with my understanding or otherwise of your strategy. Rather it's a question of arithmetic.Under normal circumstances the dividend yield is the recent annualised dividend divided by the price. Suppose you perform the calculation to compare two shares and one shows a higher yield than the other. You repeat the calculation a while later. There hasn't been a dividend in the meantime so the numerators are the same as before. This time the order is reversed. How can this be? Only by the prices not moving together. So what's now the higher yielding share has become so because the price has fallen relative to the other. The same concept applies when a yield has risen comparative to an index.


There are stocks like Unilever which can be desirable to hold because of their long term performance. Arguably an optional time to buy is when the share is (relatively) cheap. That can be monitored either by checking the price directly, that it's below X, or indirectly that the dividend yield exceeds y%.

[tjh290633]

Moderator Message:
This topic has now gone way past its natural end point, I am therefore locking it.

TJH