High dividend yield stocks

[asxiq]

FYI - TEN & BTT have about 5.43 % and 4.69 % div yield which are going ex-dividend this month

 

[Ves]

When I first looked at this thread I took it to mean a passive investment in a share that paid a good dividend that represented a high yield on the investment. Something like a low entry on Telstra at present levels of $2.65 ish with a annual dividend (at present) of $0.28 representing a yield of over 10% (fully franked makes it an even higher yield).

Then I read So_Cynicals post above and recognised that rolling over the trade profits into the same share achieved the same outcome (whether or not you held for dividends).

Since the global financial crisis bottomed we have taken this approach accross the board. Going in on the lows and out on the highs, then re-entering when/if it comes back down. If you limit your targets to those shares in the top 200 that have recurring highs and lows with good liquidity (daily turnover volumes) you can build on your portfolio fairly reliably.

Since July this year we have built our holding in some stocks up by over 20% simply by going in low and out higher and churning any gains on divs/trades back into the same stock. 20% gain in 4 months is nothing to sneeze at.

I realise that this thread is older, but a lot has happened in the last year.

How did the "flash crash" of the last few months affect your thoughts on this strategy? Did it, in fact, make it more profitable?

Do you only churn profits in shares that you would be willing to hold onto in the long term? ie buy-in at a reasonable price and ride out any market fluctuations against you if need be and only sell when it starts showing a profit again. A good example of what I mean by holding through the lower periods would have been buying Westpac around $21 in June or July anticipating a bounce. However, as you know it went under $18 before it got back to the mid $23 range. Would you have held without a stop?

Brokerage is obviously significant on smaller parcels, therefore I assume that you are putting at least $5k into each buy. Do you have a minimum profit target of 5-10%?

Do you plan to continue this strategy or is it a bridge to growing the base for a long-term portfolio?

 

[So_Cynical]

I realise that this thread is older, but a lot has happened in the last year.

How did the "flash crash" of the last few months affect your thoughts on this strategy? Did it, in fact, make it more profitable?

Do you only churn profits in shares that you would be willing to hold onto in the long term? ie buy-in at a reasonable price and ride out any market fluctuations against you if need be and only sell when it starts showing a profit again. A good example of what I mean by holding through the lower periods would have been buying Westpac around $21 in June or July anticipating a bounce. However, as you know it went under $18 before it got back to the mid $23 range. Would you have held without a stop?

Brokerage is obviously significant on smaller parcels, therefore I assume that you are putting at least $5k into each buy. Do you have a minimum profit target of 5-10%?

Do you plan to continue this strategy or is it a bridge to growing the base for a long-term portfolio?

I got caught buying into the early fall, CPU for example was a stock that unfortunately i didn't get to buy at the bottom but i did buy 2 parcels on the way to the bottom, $9 something and 8.36...so there i was sitting on a rather large paper loss and now with yesterdays run up in CPU my 8.40 parcel is back to break even and my whole CPU position is only 11% or so in the red.

CPU is a good stock, ill hold till my $9> parcel is in profit (5%) and then ill sell the whole parcel leaving my cheaper 8.40 shares as a hold...i did manage to get some stocks at the bottom (new positions) IIN and SGH and small parcels of CLV, APN and ABC, still overall i know i missed some great buys and that annoys me.

But im just a low cost averager, doing the best i can in an imperfect world with my limited funds...big picture all i need to stay on target is to sell just 4 positions for a profit of at-least 15% over the next 8 months...this will achieve overall dividend growth of 20%+ YOY and portfolio growth of 12%+ YOY.

I don't use stops, never have and still don't see the need for them....time is my greatest asset, and that's pretty much to opposite of the average stop user who sees time as the enemy.

 

[Julia]

i did manage to get some stocks at the bottom (new positions) IIN and SGH and small parcels of CLV, APN and ABC,

How do you you bought at the bottom? If the gathering storm in Europe is any indication (and obviously it has to be) we will be in for further very significant falls.

 

[So_Cynical]

How do you you bought at the bottom? If the gathering storm in Europe is any indication (and obviously it has to be) we will be in for further very significant falls.

Bottom so far since we only have 3 or 4 months of hindsight available so far...the Euro storm is pretty much over as far as i can see, everything is a known unknown.

One of my stocks released a quarterly report today, it contains an interesting over view of the Euro and Greek situation... apparently Greece has defaulted 5 times in its long history.

Here's a snippet that puts things in perspective.

http://www.asx.com.au/asxpdf/20111108/pdf/422cy3cz844y3v.pdf
~

 

[Julia]

the Euro storm is pretty much over as far as i can see,

Good luck if you actually believe this.

 

[snsdmonkey]

Bottom so far since we only have 3 or 4 months of hindsight available so far...the Euro storm is pretty much over as far as i can see, everything is a known unknown.

No concern for Italy?

 

[McCoy Pauley]

No concern for Italy?

Bunga bunga parties for all!

Silvio going will buy Italy some breathing space, but the bond markets reckon Italy is cactus and they have been a leading indicator of disaster on a sovereign level for two years, so I'm concerned.

 

[odds-on]

Bottom so far since we only have 3 or 4 months of hindsight available so far...the Euro storm is pretty much over as far as i can see, everything is a known unknown.

One of my stocks released a quarterly report today, it contains an interesting over view of the Euro and Greek situation... apparently Greece has defaulted 5 times in its long history.

Here's a snippet that puts things in perspective.

http://www.asx.com.au/asxpdf/20111108/pdf/422cy3cz844y3v.pdf
~

So_Cynical,

From your posts on this thread I have to say I like your investment style. After reading many investment books and doing an unhealthy amount of online research, I have over the last couple of years worked out an investment style that suits me. I have read books by Benjamin Graham, John Train, Mohnish Pabrai, Roger Montgomery and so on but the book that was the best was called Free Capital by Guy Thomas (see link below). It was very interesting to see what had worked for 12 UK investors over the years. I would be interested to know if there are investors with similar success here on Aussiestockforums.

http://www.amazon.co.uk/Free-Capital-investors-millions-ebook/dp/B004TLNNL4

Anyway, back to the high dividend yield shares, I use this as part of my strategy. If I can pick up shares in a business (reasonable ROE, low debt, significant management ownership, long operating history, revenue growth etc etc) that in my view will still be in business in 3 years time for a dividend yield a few percent greater than a 5 year term deposit at the bank, then the odds are going to be in my favour of a nice return in the next few years. It is a no brainer punt. I do not bother looking for extraordinary businesses with competitive advantages anymore as my initials are not WB, CM or RM ;-).

Interesting quotes about dividends from the book:-

“proprietorial” companies – those controlled by a family or families, who emphasise preserving the business rather than taking major risks, and where the presence of non-working family members who live on the income from their shareholding ensures a heavy emphasis on maintaining and increasing dividends.
Highlighted by 10 Kindle users

This is the sole reason behind my “Skin in the game” post. I need to increase my watchlist of “proprietorial” companies. COU was definitely one.

Best of luck.

Cheers

Oddson

 

[So_Cynical]

Good luck if you actually believe this.

You doubt i believe this?, think im just some nut that's having a 4 year lucky streak.

No concern for Italy?

Ok so Italy was a basket case 15 years ago, a basket case a decade ago and a basket case 5 years ago, its now a basket case will be a basket case in 5 years time and 10 and 15 years time from now.

So when should my concern for the Italian situation stop my investment activities.?

 

[So_Cynical]

Now back to the subject at hand...High dividend yield stocks.

I own a few CTN shares and know they are currently taking over another stock (CCQ) that gets a management fee from CTN and has a small portfolio of stocks.

Now CTN paid out 9.36 CPS gross over the last 12 months in FF dividends and CCQ paid out 7.15 CPS gross...so combined a return of 16.5 CPS.

CTN is currently trading at around the 0.95 CPS level so if the combined divi is maintained going forward a gross return of about 17.3% would be possible.

 

[Julia]

the Euro storm is pretty much over as far as i can see,

Good luck if you actually believe this.

You doubt i believe this?, think im just some nut that's having a 4 year lucky streak.

I have no idea whether you're lucky or not. To be honest, can't find it in me to care.
My comment above was clearly in response to your suggesting "the Euro storm is pretty much over", a remark of quite unbelievable naivete.

 

[richardgary]

I would like to say that high dividend stocks can help slow down the eroding effects of inflation. Lower returns are expected from the stock market as the global economy slowly recovers at a modest pace. As a result, more investors are taking a medium to long term view towards their investments and dividend stocks is one avenue through which they can grow their wealth slowly but steadily.

 

[seanious]

I would like to say that high dividend stocks can help slow down the eroding effects of inflation. Lower returns are expected from the stock market as the global economy slowly recovers at a modest pace. As a result, more investors are taking a medium to long term view towards their investments and dividend stocks is one avenue through which they can grow their wealth slowly but steadily.

Thanks for bumping this been a great read.

Also HDF closed at $2.54 today while JBH closed at $8.84. I like your investment style so cynical and hope to learn more from people like you on this forum

 

[So_Cynical]

Thanks for bumping this been a great read.

Also HDF closed at $2.54 today while JBH closed at $8.84. I like your investment style so cynical and hope to learn more from people like you on this forum

Thanks Sean, im glad you got something out of this thread...always interesting to look back.

---------------------------------

I noticed this little exchange between Julia and i back in late 2011 when the market was just starting to pull out of that awful patch.

(8th Nov 2011) i did manage to get some stocks at the bottom (new positions) IIN and SGH and small parcels of CLV, APN and ABC, still overall i know i missed some great buys and that annoys me.

How do you you bought at the bottom? If the gathering storm in Europe is any indication (and obviously it has to be) we will be in for further very significant falls.

While there were significant falls to come, most of the stocks i brought in mid 2011 didn't fall...other stocks did like miners and mining services stocks, anyway i though id bang up a chart of those 5 stocks of mine i quoted and see how things turned out for me.

I still Hold shares in all 5 stocks but have taken profits from stocks marked *() with open (trade/parcel) profit in Blue and losses in red.

• IIN * (14.0%) +45.6%
• SGH * (9.6%) +25.5%
• CLV * (21.8%) +31%
• APN -31%
• ABC * (0.6%) +43.5%

So did i buy bottom? 4 out of 5 anit bad. and the dividends keep rolling in.

YTD (not 100% accurate to entry) comparison chart below.
~

 

[shenemet]

• IIN * (14.0%) +45.6%
• SGH * (9.6%) +25.5%
• CLV * (21.8%) +31%
• APN -31%
• ABC * (0.6%) +43.5%

~

That's pretty impressive. I had actually thought of doing the same thing but I'm just a beginner and didn't really have that faith in myself.

I was wondering if you have a methodology or if you can recommend a good place to start for someone interested in learning about investing? I'm just starting out and am studying technical analysis but I'd also like to learn fundamental analysis for the longer term. It's very easy to get overwhelmed when researching these things on google or amazon and I think it's also important to be careful who you learn from.

Thanks in any case this thread has been a nice read.

PS. I tried to send you a msg but your inbox is full, just curious if that's on purpose, perhaps to protect yourself from questions like these? =)

 

[ROE]

No concern for Italy?

if you dig enough you already know the outcome for euro
basicly Italy will be save at the cost of other countries

German and France has a lot to lose if Italy go so they will Do deal with Italy
everyone else has no bargaining power, Italy hold the trump card if you know enough about Italian industries
and their finance....

 

[So_Cynical]

I was wondering if you have a methodology or if you can recommend a good place to start for someone interested in learning about investing?

I call the methodology i use, Low Cost Entry And Averaging (LCEAA) Low cost entry because im looking to enter at a low cost, a low point in the life of the Share Price...and Low cost Averaging is a variant of Zero cost averaging.

Zero cost averaging explained here http://www.thepatternsite.com/ZeroCostAverage.html

I'm just starting out and am studying technical analysis but I'd also like to learn fundamental analysis for the longer term. It's very easy to get overwhelmed when researching these things.

TA and FA for me are 2 very different beasts, some ASFer's claim to be comfortable doing both, good luck to em...i cant, i would think everyone would tend to be better and more comfortable with one or the other...find out what suits you and go forward with that.

Research? TA is a discipline that can be learned so requires no research just education...strict FA requires lots of research as does value investing...i find TA somewhat interesting but don't use it, FA is also interesting but has its limitations, VA is just rear view mirror analysis.

I like to take a more holistic approach, i buy into stocks/businesses that i like and make sense to me, buy them at a low point in there price cycle...and then manage the position often by doing nothing for very long lengths of time.

PS. I tried to send you a msg but your inbox is full, just curious if that's on purpose, perhaps to protect yourself from questions like these? =)

Didn't know it was full..thanks for letting me know.

 

[Muschu]

A friend mentioned RHG to me - A stock I do not hold and have never bothered considering. Commsec states it offers a 28% yield. If this is so then why so?
Any thoughts? I don't the company or its history, debt level or prospects.
Any thoughts on this from anyone?
Regards
Rick

 

[Ves]

A friend mentioned RHG to me - A stock I do not hold and have never bothered considering. Commsec states it offers a 28% yield. If this is so then why so?
Any thoughts? I don't the company or its history, debt level or prospects.
Any thoughts on this from anyone?
Regards
Rick

I believe they liquidated some really big loan books and returned a lot of capital to shareholders all at once as a fully-franked dividend. In fact they may have done this twice in two years, but I believe this is done and dusted. Yield obviously not maintainable for that reason. Lots of clever money could be made at the time, especially for SMSF holders, as I don't think the market completely understood the deal.