Lootman wrote:
You know, these days I usually avoid these "is HYP great or crap?" debates because of their endless tediousness.
But since this was on the Investment Strategies board I had hoped for a broader and more mature debate.
Great or crap based on what metric though Lootman?
Those who suggest it's 'crap' often want to frame that discussion around total return, pointing out that there are 'better' ways to achieve improved results in that specific area using different investment strategies..
Those who suggest it's 'great' often want to frame that discussion around more personal reasons that apply to them as personal investors, and never claim that total return
is a primary driver...
The two will never meet Lootman, because the question is being framed in two completely different ways for both sets of parties, with the 'total return' party often sticking their fingers in their ears and not really listening to what they're being told...
Put it this way -
Which is the greatest car?If we consider that the 'total return' of a car journey is the overall cost and efficiency with which it can get someone from A to B, then you'd think that we'd all be driving the same car by now, as we'd all have quickly found which one does that the most efficiently...
But we don't...
We all drive different cars....
Why is that, do you think?
I think one of the primary reasons that we drive different cars is that the 'total return' efficiency of a car is clearly not the
only driver when someone buys one...
Car drivers might consider
other things to be important too, and sometimes even *more* important than the 'total return' efficiency of it...
They'll perhaps consider how big it is, or what colour it is, or the shape of the bodywork, or how it drives, or where it was made, or what types of wheels it's got, or what it feels like when they're sat inside, or how much room the boot has got, or even whether it's got a boot at all...
Many, many things might be more important when buying a car than the 'total return' efficiency of it...
There is little outcry that this is the case, because people seem to simply accept that these are sometimes important to people buying cars. We don't see endless threads on this car-buying aspect being raised on these boards, because it's broadly accepted that for the purchase decision of a car, there are many different reasons why we might,
as individuals, prefer one particular car to another....
Why does that not also apply to investment strategies Lootman?
Why are people 'allowed' to choose a car that's 'great' for
themselves, when based against reasons that are important to
them, and not
just the primary 'total return' efficiency of the vehicle, and yet when it comes to investment strategies, people are forced to
justify their decisions against a single 'total return' metric, which they
repeatedly say is not a primary driver in their choice of investment strategy in the first place, and which they
never claim is better than any other strategy anyway?
They might often choose an income-investment approach in the same way that we all choose our cars Lootman - for
personal reasons above '
total return' reasons...
So when you're looking for a 'broader and more mature debate' on this subject, I'd perhaps start with the people with the 'total return' obsession first, because that's about as useful to me as a starting point for that debate as someone persistently insisting that I'm 'driving the wrong car', just because they can point at a
different car and tell me that it does 5 miles-per-gallon more than the one I'm driving...
It might do - but I don't like that car, and much prefer the one I'm driving, thanks....
Cheers,
Itsallaguess