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HYP Concept waning?

General discussions about equity high-yield income strategies
Itsallaguess
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Re: HYP Concept waning?

#438416

Postby Itsallaguess » August 30th, 2021, 1:18 pm

mickeypops wrote:
……takes me back to the halcyon days of Luniversal’s zones, with its mezzanine and danger/Red etc. etc.

From a few years distance now, I think he knew what he was talking about more than he was given credit for, sometimes.


I thought the whole 'Zones' idea was a great concept, but just implemented in a way that was terribly over-complicated and completely about face...

It was often portrayed as a first-filter, with a requirement for what seemed to be an ever-expanding amount of data and effort, when all it ever really needed to be was a final-filter, towards the end of any personal selection process, thus cutting down tremendously on the initial data-gathering efforts...

Cheers,

Itsallaguess

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Re: HYP Concept waning?

#438500

Postby DiamondEcho » August 30th, 2021, 8:44 pm

Gersemi wrote:
DiamondEcho wrote:... I followed all the discussion including Pyads on TMF 10-20 years ago, which followed similar earlier over on TMF.com in the 90s, and that was based on some big-name investment guru whose name I've forgotten from the 50/60s.
Invest wisely and forget and meanwhile get on with other things. Maybe that's why people who follow the approach aren't inclined to keep on justifying it to others... ?

Benjamin Graham?


Thank you! and Doh (to me), that was the name that escaped me.

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Re: HYP Concept waning?

#438503

Postby DiamondEcho » August 30th, 2021, 8:51 pm

Itsallaguess wrote:I think there's definitely something in that, in the sense that the best adverts for a largely hands-off, low-maintenance income-strategy are likely to be those investors for whom it's simply working for in the background whilst they get on with other things...
The flip-side of that, of course, is that those vociferous HYP advocates who make what's supposed to be a simple strategy look so damned complicated and fussy might actually put off anyone who might actually show an interest in it...Itsallaguess


Which is why (IIRC) the original HYP board split out into two. There was the original 'historic strategy' which suited plenty of people, but their single concise topic became swamped with busy people (ie not HYPers) assuming the approach needed tweaking, updating, 'correcting'.


...where's Mike4, he was usually in the middle of these kind of arguments (cough: productive developments) :lol:

Wizard
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Re: HYP Concept waning?

#438550

Postby Wizard » August 31st, 2021, 8:07 am

DiamondEcho wrote:
Itsallaguess wrote:I think there's definitely something in that, in the sense that the best adverts for a largely hands-off, low-maintenance income-strategy are likely to be those investors for whom it's simply working for in the background whilst they get on with other things...
The flip-side of that, of course, is that those vociferous HYP advocates who make what's supposed to be a simple strategy look so damned complicated and fussy might actually put off anyone who might actually show an interest in it...Itsallaguess


Which is why (IIRC) the original HYP board split out into two. There was the original 'historic strategy' which suited plenty of people, but their single concise topic became swamped with busy people (ie not HYPers) assuming the approach needed tweaking, updating, 'correcting'.


...where's Mike4, he was usually in the middle of these kind of arguments (cough: productive developments) :lol:

What we have here is no board exclusively for "the original 'historic strategy'". Rather we have the HYP Practical board (as defined by TLF) which is almost exclusively for a small group who, in various ways, practice a modified form of the 'historic strategy'. But who having made their own modifications, primarily in relation to selling and / or rebalancing, resist other suggested modification, such as geographic scope. We have this board for those who would further modify the 'historic strategy', but for whatever reason it has never really gained traction. The split should work, but it never has.

Itsallaguess
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Re: HYP Concept waning?

#438560

Postby Itsallaguess » August 31st, 2021, 8:33 am

Wizard wrote:
What we have here is no board exclusively for "the original 'historic strategy''.

Rather we have the HYP Practical board (as defined by TLF) which is almost exclusively for a small group who, in various ways, practice a modified form of the 'historic strategy'. But who having made their own modifications, primarily in relation to selling and / or rebalancing, resist other suggested modification, such as geographic scope.

We have this board [High Yield Shares & Strategies] for those who would further modify the 'historic strategy', but for whatever reason it has never really gained traction. The split should work, but it never has.


I'm not sure the High Yield Shares & Strategies board should be described as being 'for those who would further modify the 'historic HYP strategy'' at all, because writing it like that sounds like it's trying to make things more complicated than they already are over on HYP Practical...

I'd simply see the High Yield Shares & Strategies board as a place where those HYP Practical 'rules' have been completely stripped back to focus on the underlying income-strategy aspect itself, without the need to worry if you're jumping through the right hoops or not whilst doing so....

Cheers,

Itsallaguess

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Re: HYP Concept waning?

#438562

Postby TUK020 » August 31st, 2021, 8:35 am

ReallyVeryFoolish wrote:
Wizard wrote:
DiamondEcho wrote:
Which is why (IIRC) the original HYP board split out into two. There was the original 'historic strategy' which suited plenty of people, but their single concise topic became swamped with busy people (ie not HYPers) assuming the approach needed tweaking, updating, 'correcting'.


...where's Mike4, he was usually in the middle of these kind of arguments (cough: productive developments) :lol:

What we have here is no board exclusively for "the original 'historic strategy'". Rather we have the HYP Practical board (as defined by TLF) which is almost exclusively for a small group who, in various ways, practice a modified form of the 'historic strategy'. But who having made their own modifications, primarily in relation to selling and / or rebalancing, resist other suggested modification, such as geographic scope. We have this board for those who would further modify the 'historic strategy', but for whatever reason it has never really gained traction. The split should work, but it never has.

Meantime over there, there's someone patting themselves on the back for a ten year return on their HYP which quite frankly is pathetic when you compare it to my ten year investment in Fundsmith.

I know, apples and bananas. But I have a lot more of them now.

RVF

Is this the evolution and emergence of a FruitCocktailFool?

Wizard
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Re: HYP Concept waning?

#438566

Postby Wizard » August 31st, 2021, 8:45 am

Itsallaguess wrote:
Wizard wrote:
What we have here is no board exclusively for "the original 'historic strategy''.

Rather we have the HYP Practical board (as defined by TLF) which is almost exclusively for a small group who, in various ways, practice a modified form of the 'historic strategy'. But who having made their own modifications, primarily in relation to selling and / or rebalancing, resist other suggested modification, such as geographic scope.

We have this board [High Yield Shares & Strategies] for those who would further modify the 'historic strategy', but for whatever reason it has never really gained traction. The split should work, but it never has.


I'm not sure the High Yield Shares & Strategies board should be described as being 'for those who would further modify the 'historic HYP strategy'' at all, because writing it like that sounds like it's trying to make things more complicated than they already are over on HYP Practical...

I'd simply see the High Yield Shares & Strategies board as a place where those HYP Practical 'rules' have been completely stripped back to focus on the underlying income-strategy aspect itself, without the need to worry if you're jumping through the right hoops or not whilst doing so....

Cheers,

Itsallaguess

My choice of words was in the context of this thread. I agree with you that this board is not specifically for that purpose. However, what I was trying to say is that an investor that wishes to apply the original historic HYP concept, but applied to global basket of shares can discuss that here. However, such a portfolio, though IMHO it would be closer to the original historic HYP concept than many approaches discussed on HYP Practical, could not be discussed on that board.

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Re: HYP Concept waning?

#438568

Postby Wizard » August 31st, 2021, 8:47 am

ReallyVeryFoolish wrote:
Wizard wrote:
DiamondEcho wrote:
Which is why (IIRC) the original HYP board split out into two. There was the original 'historic strategy' which suited plenty of people, but their single concise topic became swamped with busy people (ie not HYPers) assuming the approach needed tweaking, updating, 'correcting'.


...where's Mike4, he was usually in the middle of these kind of arguments (cough: productive developments) :lol:

What we have here is no board exclusively for "the original 'historic strategy'". Rather we have the HYP Practical board (as defined by TLF) which is almost exclusively for a small group who, in various ways, practice a modified form of the 'historic strategy'. But who having made their own modifications, primarily in relation to selling and / or rebalancing, resist other suggested modification, such as geographic scope. We have this board for those who would further modify the 'historic strategy', but for whatever reason it has never really gained traction. The split should work, but it never has.

Meantime over there, there's someone patting themselves on the back for a ten year return on their HYP which quite frankly is pathetic when you compare it to my ten year investment in Fundsmith.

I know, apples and bananas. But I have a lot more of them now.

RVF

I agree with your substantive point, but in defence of the OP in that thread I do not think their post was intended to be self congratulatory. Rather the congratulations came in one of the replies.

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Re: HYP Concept waning?

#438575

Postby Arborbridge » August 31st, 2021, 9:08 am

1nvest wrote:Just a non-specific/arbitrary/random choice


This isn't to dispute what you are arguing, but I just wonder whether MRC is a suitable choice to prove your point. I believe MRC isn't typical of an actively managed IT but has a "process" which is semi-mechanical. One poster recommended MRC in particular for that very reason, preferring a good process to a good manager - this ensures continuity compared with star managers coming and going, is the argument.

From a few dozen IT.s I'm not sure why you chose this one, but perhaps one could pick another "at random" to prove the opposite.

Arb.

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Re: HYP Concept waning?

#438579

Postby Arborbridge » August 31st, 2021, 9:21 am

ReallyVeryFoolish wrote:Meantime over there, there's someone patting themselves on the back for a ten year return on their HYP which quite frankly is pathetic when you compare it to my ten year investment in Fundsmith.

I know, apples and bananas. But I have a lot more of them now.

RVF


I know the discussion you mean - I comtributed ;) I think the point is the HYP is for a certain kind of individual and folk around here do not fit into that category, or believe they don't. This is where we often go awry in our conversation about HYP - so many posters deliberately or otherwise misunderstand who it was designed for and what "success" looks like.

I have quite a number of acquaintances getting on in years who would be really very sceptical that one could achieve returns of 5% a year or more from a simple stock market system which (in the case you mention) has been left to simmer for several years without attention though all the various traumsa we've had. They would regard the stock makret as highly risky and not to be touched unless you are some financial whizz - HYP shows that is not the case.

5% is indeed pathetic compared with my investment in Fundsmith (and did we put all our capital in Fundsmith ten years ago? - and how long can his magic go of for? and will we recognise another Fundsmith if we need it? - I doubt it) and also pathetic compared with the expectations of people who write on TLF - but such a return is surprising to people who believe they have to put up with building society returns. So it's all relative.

Arb.

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Re: HYP Concept waning?

#438580

Postby Arborbridge » August 31st, 2021, 9:28 am

Itsallaguess wrote:I'm not sure the High Yield Shares & Strategies board should be described as being 'for those who would further modify the 'historic HYP strategy'' at all, because writing it like that sounds like it's trying to make things more complicated than they already are over on HYP Practical...

I'd simply see the High Yield Shares & Strategies board as a place where those HYP Practical 'rules' have been completely stripped back to focus on the underlying income-strategy aspect itself, without the need to worry if you're jumping through the right hoops or not whilst doing so....

Cheers,

Itsallaguess


I found that wording at odds, too, with what I thought the HYSS board was all about. It is simply a forum for discuss alternative HY strategies and that could exist if the HYP practical board had never been thought of. Indeed it's interesting that "HYP" is still a central line of discussion on a board which could be much more wide ranging,

Arb.

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Re: HYP Concept waning?

#438581

Postby Arborbridge » August 31st, 2021, 9:31 am

ReallyVeryFoolish wrote:Thanks. That's not quite how I read it but it's of little consequence. The number of bananas I now have is terrific.

RVF


I have several different fruits too - but beware of bananas. I've found they ripen fast and can go past their best quickly, so eat up and move on or end up with a soggy mess :lol:

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Re: HYP Concept waning?

#438582

Postby onthemove » August 31st, 2021, 9:32 am

Wizard wrote: We have this board for those who would further modify the 'historic strategy', but for whatever reason it has never really gained traction. The split should work, but it never has.


You're right, the split should work but it never has.

But the reason is quite simple. Those who you say apparently want to modify the strategy aren't actually satisfied with modifying the strategy - if that was their interest, like you say, this board (strategies) is perfectly fine for them.

The reason it doesn't work is because those 'who want to modify the historic strategy' as you call it, seem more interested in arguing with those who do want to run the historic strategy and seem unable to live and let live.

When they find that those who do want to run the strategy don't pop over here to have the arguments with those who don't run the strategy, those who don't run the strategy feel a bit lonely and so they can't help themselves and take the argument over to those who do run the strategy.

I'm pretty sure that if it weren't for one or two people who were determined to argue with people on the HYP Practical board that their approach is wrong, the HYP practical board could be a little more relaxed and tolerate more flexibility as long as it kept to the spirit of the original concept.

The issue is that just one or two unfortunately very persistent and vocal posters, seem to want to vary it far beyond what most people would still consider in line with the original spirit, and then they try to argue around that.

It then ends up with their posts being pulled, at which point they then spit their dummy out of the pram and start playing games with the moderators demanding to know what they can and can't post, which then forces the moderators to put in narrow, prescriptive guidelines that then enforce a very narrow scope (because the moderators don't (yet) have the power to bar individuals from just specific boards).

To be clear - when I talk of tolerating flexibility, scope, etc, I very much mean mean just that - but it still has to be something recognisable as the core concept.

I mean, I personally can't see why high yield foreign shares couldn't be accepted ... not necessarily used by all, but I don't see why some people on the board couldn't use them in their HYP and still be considered part of the family... as long as they don't try to tell those who are happy sticking with UK only shares that they are wrong not to use foreign shares - all provided the foreign shares would be HYPable if they were in the UK.

And I also don't see why using high yield ETFs as a convenient way of achieving a diversified portfolio couldn't be permitted either... I mean, it would be reasonable to point out the advantages (trade like a share, and you get many in one) and disadvantages (they have an ongoing cost)... but surely they are still in the spirit of both diversification and keeping it simple for Doris - the original HYP concept was about having a portfolio of high yield shares, so I'm not sure why buying a pre-packaged version with IUKD or an equivalent foreign ETF, shouldn't also be within the spirit.

But I think they key guide should be that any variation should still be close enough to the original HYP concept that someone choosing to use the variation, shouldn't consider that it makes the original wrong, or is so far different that the variation can be considered 'good' and the original 'wrong'.

If the variation is so far different that an advocate for the differences could claim theirs to be a 'good' strategy while the original is 'wrong', then that's probably an indication that it's too far from cricket to still be considered cricket.

In other words, there shouldn't be any grounds for argument as a result of the variation. Discussion, yes, but they should not be so far different that the discussion should become argument over which is right.

I use high yield ETFs, not because I think it will give a better total return (I don't think they will); I use them because with a larger portfolio I just feel a lot more comfortable now with more diversification, and ETFs give that in a convenient package where I don't need to track 50, 100, 1500+ additional stocks and have the individual costs associated with them.

I use foreign high yield ETFs not because I think there's anything inherently different in terms of total return (I don't think there will be), but again just because I want the country diversification because of the size my portfolio has got to. I still consider it an HYP in the spirit of the original ... based on high yield, long term buy and hold and diversification. I don't think my modifications make it any better or worse in terms of total return, etc.

My modifications are solely to lessen the risk of individual catastrophes - and lets be clear, the original HYP advocated holding a reasonable number of shares just for that reason - it clearly distinguished itself from e.g. value investing, where an investor might focus on fewer stocks - so I still believe my portfolio is absolutely in the spirit of the original. I certainly don't feel any grounds to argue against the original or claim it has failed or whatever, and that somehow my modifications are better. I don't think they are 'better' in terms of total return or characteristic, etc

Crucially, I still think it's an HYP, and wouldn't think to argue that it's any better than an HYP... how could it be better than an HYP, when to me it is just an HYP!

And I certainly don't feel any need to convince others that they need to have these modifications - on the contrary, I see these modifications as just being to suit my own individual circumstances and personality. If the 25yr old me still wanted to have a 15 share portfolio, limited to direct holdings in the UK, I wouldn't try to convince my 25yr old me to do what I'm doing now.

As long as the 25yr old me respects that now with a bigger portfolio and more career behind rather than in front of me that the present day me needs to be a bit more cautious against large individual failures... then the present day me can respect that the 25yr old me is fine to take the (slightly) higher risks while their portfolio is smaller and they have more career opportunity to rebuild after an individual catastrophe.

But I think both the 25yr old me and the present day me, could both sit side by side on the same board without either of us claiming the other is wrong, or their approach flawed. We can both recognise that we are both investing on the same high yield, diversification and long term buy and hold principles that identify us as HYPers.

The present day me doesn't feel like I've abandoned HYP or changed my mind in relation to HYP ... I still feel that my portfolio is as much an HYP as it's always been... I've just extended some of the core principles (diversification) a bit further to suit my attitude towards (taking even less) risk.

And that's the key thing... to me my portfolio is an HYP just like the rest ... so I don't feel the need to go onto the HYP practical board and tell them their strategy is wrong and that there are better ways, or that they should be looking at total return or whatever.

To me, I am just running a HYP, and the HYP practical board feels like it should still be my spiritual home

That's if it weren't for the narrowly prescribed rules that have been forced upon that board by one or two people who tried to push the envelope too far by constantly arguing with HYPers telling them that their approach is flawed or failed, etc, and complaining about it having a poor total return or whatever.

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Re: HYP Concept waning?

#438600

Postby 88V8 » August 31st, 2021, 10:38 am

onthemove wrote:You're right, the split should work but it never has.
But the reason is quite simple. Those who you say apparently want to modify the strategy aren't actually satisfied with modifying the strategy - if that was their interest, like you say, this board (strategies) is perfectly fine for them.
The reason it doesn't work is because those 'who want to modify the historic strategy' as you call it, seem more interested in arguing with those who do want to run the historic strategy and seem unable to live and let live....

....To me, I am just running a HYP, and the HYP practical board feels like it should still be my spiritual home
That's if it weren't for the narrowly prescribed rules that have been forced upon that board by one or two people who tried to push the envelope too far by constantly arguing with HYPers telling them that their approach is flawed or failed, etc, and complaining about it having a poor total return or whatever.

Hear hear.

My HYP has evolved to include Prefs and bonds and ITs, but I don't find it necessary to argue on HYPP that they should be a staple HYP component. I might mention them in passing, but that's it.

So while I'm happy that certain posters illustrate their intellectual prowess over here, I do wish they wouldn't do it on HYPP.
After all, I don't feel the need to post on the Cars board about the idiocy of owning a modern car and the superiority of classics, even though it is self-evident to anyone with half a brain.

Waning.... yes... the board traffic on TMF .... Luni with his very sensible Zones that some people never could get their heads around.
His regular model HYPs.
His backtests that promoted such squawking.
HYPP is the poorer for the lack of ensuing debates.

Johnnysomeone with his regular scraped HYPs that led to much discussion.

Gen's crowd-sourced portfolio.

IanHugh who was such a pain on TMF, and IanH on TLF, who both made the effort even though we sometimes wished they hadn't.

Fewer portfolios, perhaps because they lack purity or perhaps because it simply takes a lot of effort [that I don't make].

And because for the UK-focused fings ain't wot they used to be:
No more 10% CAGRs.
A dearth of five-year rising divi histories.
No more 2x cover, or in the case of Carillion ostensible cover.
Repeat cutters such as Aviva could be dumped and easily replaced.
There simply was more low-hanging fruit.

I don't doubt that HYP in more or less its original form can still work, just not as easily, not as well. Those who wish to persist should be left to do so in peace.

V8

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Re: HYP Concept waning?

#438602

Postby tjh290633 » August 31st, 2021, 10:46 am

onthemove wrote:I mean, I personally can't see why high yield foreign shares couldn't be accepted ... not necessarily used by all, but I don't see why some people on the board couldn't use them in their HYP and still be considered part of the family... as long as they don't try to tell those who are happy sticking with UK only shares that they are wrong not to use foreign shares - all provided the foreign shares would be HYPable if they were in the UK.

And I also don't see why using high yield ETFs as a convenient way of achieving a diversified portfolio couldn't be permitted either... I mean, it would be reasonable to point out the advantages (trade like a share, and you get many in one) and disadvantages (they have an ongoing cost)... but surely they are still in the spirit of both diversification and keeping it simple for Doris - the original HYP concept was about having a portfolio of high yield shares, so I'm not sure why buying a pre-packaged version with IUKD or an equivalent foreign ETF, shouldn't also be within the spirit.

High yield foreign shares can be accepted. Otherwise the likes of BHP would have to be removed from a lot of portfolios when they unify the two halves. They just have to have a London quote to make life simpler.

If you want to talk about a High Yield strategy with ETFs, you might find a better reception on a board dedicated to collective investments. You know full well that it is not a place where collective investments are admissable in a portfolio.

As has been said many times, you can use them as a comparison, to judge how your HYP is performing, just keep them separately.

TJH

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Re: HYP Concept waning?

#438606

Postby Vince » August 31st, 2021, 10:55 am

Considering the original post and the proposition that HYP concept is waning, I come from a position of joining the Motley Fool boards when PYAD was king, it seemed that the HYPers were doing very well, with the average rate of returns around 5% plus some capital growth thrown in, all in all, a very nice position to be in.

At the time, I'm guessing around 2004/5, I started reading everything I could about investing, being fortunate enough to have cash to spare, but with interest rates still paying about 5%, I took the view that leaving cash in the bank wasn't a bad idea. Fast forward to 2007, the cash was growing and again started looking at investing a portion of it, I remember some lively discussions from a guy called Jim, from Otley, who wrote beautifully about how Lloyds was the only investment he had or needed, the dividend had been payed religiously and was at a good level, the bank was a stalwart of HYPers too, so, I took my first tentative steps as an investor and bought Lloyds, and nothing else, 5 minutes after proudly becoming the proud owner of an investment that would provide a growing income for life, someone shot me in the head, or so it felt as such, Lehmans went bust, the world stood still, my investment was heading towards worthless, and that was the end of my short lived investing career.

However, rather than hiding myself in a cave to lick my wounds, I still followed the Motley Fool boards, learning and educating myself for a return to the table with a renewed stack of chips, and the poster who I veered towards more than any other was Luniversal, he was the champion of Investment Trusts, in my head, I wanted nothing more to do with analysis because I didn't have the intellect or the patience to try to understand balance sheets, earnings reports or the future of companies who often promised everything but delivered nothing, handing over investment money to what was regularly described as the best kept secret in the world of investing (Investment Trusts) appeared to offer someone like me the perfect choice of making money for doing very little.

So, come early 2015, I started transferring all the cash I had accumulated in by then, nil interest paying bank accounts into Investment Trusts, and Fundsmith, I still hold most of the initial Trusts I bought, rarely, until recently, have tinkered with them, and have come to the conclusion, that personally, they have provided an income stream and capital growth that I have found completely satisfactory, I never wanted to be involved in anything other than a plodding investment method, winning slowly is preferable to losing quickly, which is why I was first attracted to Investment Trusts rather than the HYP strategy admirably championed on the Motley Fool boards in the early 2000's, Luniversals writings made more sense to me than any other, to this day, I still appreciate the free education from many posters, but I feel I got a better understanding from Luniversal than any other, I won't invest in alternative investments, I'm happy paying managers to invest for me, being Trust Managers or Terry Smith, they have served me well, as has Luniversal.

Vince.

PS, my other favourite was Clitheroekid, his TMF post on Accident Exchange was the single greatest post I have ever read on any discussion board.

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Re: HYP Concept waning?

#438607

Postby vrdiver » August 31st, 2021, 11:04 am

tjh290633 wrote:If you want to talk about a High Yield strategy with ETFs, you might find a better reception on a board dedicated to collective investments. You know full well that it is not a place where collective investments are admissable in a portfolio.

And therein lies the problem with narrowly defined rules! I'm not arguing that you are wrong - far from it. But the consequences of such an inflexible rule result in exactly the dearth of discussion as this thread alludes to.

If I go to a board that talks about collective instruments (CIs), but specifically want to talk about high yielding CIs, I may not meet many like-minded people, because the thrust of that board is CIs, whereas the thrust of my post is HY.

If I go to the HYPP board to discuss my CIs in the context of yield, I get booted off for being outwith the guidelines. In summary, there is no natural home for the HYPer who wishes to fish outside the FTSE350...

As per OTM's post, I think it a shame that HYPers have allowed ourselves to become tied in knots about what we can talk about, rather than enjoy more of a pub chat about HYP. Perhaps the board rules could do with a revamp, just to see if opening up the fishing grounds to beyond the FTSE350 might be acceptable?

VRD

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Re: HYP Concept waning?

#438611

Postby onthemove » August 31st, 2021, 11:15 am

tjh290633 wrote:If you want to talk about a High Yield strategy with ETFs, you might find a better reception on a board dedicated to collective investments. You know full well that it is not a place where collective investments are admissable in a portfolio.

As has been said many times, you can use them as a comparison, to judge how your HYP is performing, just keep them separately.


I know what the rules are, that's in part why I don't post much on the HYP-P board (combined with the risk of snipers taking every opportunity to try to claim the approach has failed or is 'not the best approach' or whatever in response to anything positive anyone might constructively post), but I can't help feel those rules have crystalised to being as narrow as they are because of the previously mentioned reasons.

You refer to boards dedicated to "collective investments", but an HYP is itself a collective investment - an HYP with just a handful of shares wouldn't be accepted as an HYP.

When I buy ETFs, I'm specifically looking at the same things I look for in a HYP - higher than average yield, and diversification.

I view the ETFs that I purchase as just buying in a 'block' of HYP shares in a single transaction and potentially being able to do so in markets that I wouldn't easily have direct access to to buy individual shares in practice.

Look at it this way... the HYP approach doesn't specify whether you have to use an ISA, or a regular dealing account.

It also doesn't specify that you can't have your HYP split across multiple accounts.

So why should it matter if your higher-than-average-yield shares are incorporated into your overall HYP by means of a 'collective investment'?

While it does mean that you can't select the individual shares within the ETF, there are certainly ETF's nowadays that specifically do target 'higher yields', so they are certainly in the spirit of an HYP.

IMV, What should matter is the spirit in which you bought them.

If the ETF contains high yielding shares that are akin to an HYP, why shouldn't this be thought of as just another 'account' aggregating into your overall HYP, the same as ISA's and regular dealing accounts can count?

Anyway, I'm not going to push this too far... I thought this narrow restriction barring ETFs from HYP-P had come about because of the above mentioned reasons... namely one or two anti-HYPers keeping pushing the mods which forced a narrow crystalisation of the rules, instead of just allowing people to post in the 'spirit' of the board.

Perhaps I'm mistaken?

If so, then as mentioned on a pervious post on a different thread, I'm just happy getting on with managing my portfolio by myself, and while it would be nice to be able to have nice friendly constructive discussions with like minded people, if the moderators have more narrowly focused ideas for how they want to run their boards, then fair enough, it's their boards, and I'll stay out of the picture and just get on with running my portfolio myself.

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Re: HYP Concept waning?

#438621

Postby absolutezero » August 31st, 2021, 11:47 am

ReallyVeryFoolish wrote:
Wizard wrote:
ReallyVeryFoolish wrote:Meantime over there, there's someone patting themselves on the back for a ten year return on their HYP which quite frankly is pathetic when you compare it to my ten year investment in Fundsmith.

I know, apples and bananas. But I have a lot more of them now.

RVF

I agree with your substantive point, but in defence of the OP in that thread I do not think their post was intended to be self congratulatory. Rather the congratulations came in one of the replies.

Thanks. That's not quite how I read it but it's of little consequence. The number of bananas I now have is terrific.

RVF

BuT cApItAl Is OnLy sEcOnDaRy....

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Re: HYP Concept waning?

#438643

Postby daveh » August 31st, 2021, 12:48 pm

onthemove wrote:
I use high yield ETFs, not because I think it will give a better total return (I don't think they will); I use them because with a larger portfolio I just feel a lot more comfortable now with more diversification, and ETFs give that in a convenient package where I don't need to track 50, 100, 1500+ additional stocks and have the individual costs associated with them.

I use foreign high yield ETFs not because I think there's anything inherently different in terms of total return (I don't think there will be), but again just because I want the country diversification because of the size my portfolio has got to. I still consider it an HYP in the spirit of the original ... based on high yield, long term buy and hold and diversification. I don't think my modifications make it any better or worse in terms of total return, etc.

My modifications are solely to lessen the risk of individual catastrophes - and lets be clear, the original HYP advocated holding a reasonable number of shares just for that reason - it clearly distinguished itself from e.g. value investing, where an investor might focus on fewer stocks - so I still believe my portfolio is absolutely in the spirit of the original. I certainly don't feel any grounds to argue against the original or claim it has failed or whatever, and that somehow my modifications are better. I don't think they are 'better' in terms of total return or characteristic, etc

Crucially, I still think it's an HYP, and wouldn't think to argue that it's any better than an HYP... how could it be better than an HYP, when to me it is just an HYP!

And I certainly don't feel any need to convince others that they need to have these modifications - on the contrary, I see these modifications as just being to suit my own individual circumstances and personality. If the 25yr old me still wanted to have a 15 share portfolio, limited to direct holdings in the UK, I wouldn't try to convince my 25yr old me to do what I'm doing now.

To me, I am just running a HYP, and the HYP practical board feels like it should still be my spiritual home


Sounds very similar to myself. I started with typical HYP shares from the FTSE100/top of FTSE350. I have added high yield ETFs for foreign diversification (IAPD, EMDV, and IDVY plus some VWRL rather than the higher yield VHYL*1). I've also added a couple of income ITs also for foreign diversification (HFEL*2 and MCT) and a couple of pref shares (LLPC and AV.B) for the high but not rising dividend. I still consider I'm running a HYP, but tend to call it an IP (Income Portfolio).I'm very LTBH with little or no churn.

At the moment its doing satisfactorily and I'm still in the reinvesting the income stage plus adding some new money. It suits my mentality and I like the income visibility - I can see the income being produced and if required would just have to collect the income and spend it - no need to work out what to sell and when and worry that I'd sold the wrong share at the wrong time.

Performance wise its at the highest value its ever been in cash terms and in accumulation unit value (but not income units). I started unitising from September 03 and Accumulation units have risen from 1.00 to 4.04; Income units have gone from 1.0 to 1.72 though they actually peaked in May 2017 at 1.81. So I guess recently most of the performance has come from the dividends, with very little from capital appreciation. Overall since inception my IP has grown at 7.59% pa according to Excel's IRR calculation. I'm happy with that, though I'm sure other may have done better.

There was a big drop in income in 2020 (due to covid), but it looks like this years income will be back ahead of the income achieved in 2019 (not counting the PNN special - its already well ahead if I count the PNN special*3)

*1 I looked at both VWRL and VHYL as all world ETFs. I chose VWRL over the 'high' yield version as VHYLs yield wasn't actually that high (though about double VWRLs) and it had a much poorer TR.

*2 I've been buying some income ITs instead of ETFs for my recent foreign exposure. Just out of interest I've been tracking the (actual) HFEL purchases against IAPD and so far IAPD is outperforming on capital, but HFEL on income. I'll try and do a TR comparison at year end just to see which would have been better overall.

*3 generally in the past I've counted specials as part of the income, but PNN was a very significant % of the whole PNN holding. So from PNN on I'm treating specials with share consolidations separately from normal dividends


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