Member Info for strictlybricks

Cos

PS I forgot to reply to your point about which shares...?

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I was all house builders until early 2024, shortly after when those b.stards at Barratt took Redrow out of the market and I'd faced up to the likely reality that the game of house builders might have been great for me for twenty years or so but that now it was most probably over....?

I may be proved wrong on that, of course, but a year and a half down the line so far it has proved to have been the right call so far...

Hence the game of Insurance boys now ~ that was an example of a bit of effort required to change course and if this game similarly lasts for twenty years then I imagine that by the end of it I'll either be pushing up daisies or, at the least, dribbling ~ so with a bit of luck I may not have to change course again with investments...?

But who knows...?

As John Lennon said: "Life is what happens when you've made other plans"

Anyway, the three insurance boys for me are LGEN, MNG & PHNX and I've recently made RIO an honorary insurance boy (I'll have to see how that works out as I go..?)

For a while, until early June, I was 100% in MNG as I considered it to be significantly underpriced relative to the others (and it's "relative to the others" that counts with me ~ I'm not too bovvered about the prices of themselves per se as I am not looking to go to cash any time soon so why fret about that..?), but I'm currently 40% LGEN, 40% PHNX and 20% RIO.

Strictly

"so you stopped working in your 30s?"

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Cos,

It wasn't quite as good as that... 😊

I sold my company at the age of 32, and left the business at the age of 33 (finding that corporate life, and being required to act according to the direction of others, was very much NOT for me..!).

In an extended hiatus, until the age of 48 when I started what was effectively a whole new "career" (for want of a less poncey word), I did do various things to earn a crust ~ but none amounted to anything like a full time, proper job and I was very fortunate during that long period to have more time with my kids and their friends when they were growing up than probably, I reckon, all the other dads put together...

At my core, I'm pretty laz, and, for the most part, energy expended is with the general aim of getting me back into that easy space if I drift away or life kicks me away from it...

Hence this investing malarkey ~ how wonderful is it to have all the information in our grasp at the click of a keyboard as we do these days that makes it all that much more do-able for outsider plebs like me (and maybe you too..?).

But good luck & best wishes to you if you're aiming to get somewhere similar in your life...?

Strictly

"But 5 years is a really long time, so you have cash for at least 5 years? That must be crazy amount of "dead" money"

......................

Cos,

You've referred to "if you get unemployed" which implies that you have a job....?

I haven't had one of those (in the sense of a proper one) for a very long time.... about forty years, in fact, since I sold my business (I am now in my seventies...).

So, I necessarily have to think differently about money compared to someone who earns an income in the usual sense of the word ~ and this investing malarkey has been pretty much my sole income for the past twenty five years and it has gone pretty well for me and that has allowed me to now more easily keep some of my resources out of the game...

We could probably head off down a potentially interesting rabbit hole here as it’s not ever really come up previously to have a discussion about whether to have an orthodox spread of safe investments which probably doesn’t perform that well or to just be in a few shares, or even just one from time to time, that make sense to me while always having a plan B in reserve with some of my money…

But you could perhaps take a view from the following?

In early 2000, the Sunday Times published a table that showed the performance of the top 20 funds out of a total of around 3,000 for the first twenty years of the millennium.

The best, Marlborough Special Situations, had turned £1,000 into £12,055 over that time….

But our game ~ and I’m saying “our” because I’m in a circle of family & friends that have acquired a convergingly similar approach & strategy to investing with similar outcomes, so it ain’t just me ~ has turned £1,000 into around £40,000 over the same time scale…

And I couldn’t have achieved that with a big spread of shares because I just ain’t clever enough to have had more than just a few good ideas about where to invest…

And in the middle of that twenty years, in the credit crunch, my lack of a sufficient plan B at that time was exposed.

But, having come through that, you can hopefully see that the ultimate overall significant outperformance we’ve achieved has provided for separating out a lump of what you consider to be dead money while allowing me (rightly or wrongly, and no doubt this would be a debatable point for some?) to now give myself and the rest of my crew enough of a comfort blanket to continue to invest across just two or three shares…

Of course, others here may not agree at all with this..?

But then I’m not asking anyone to follow suit, I’m just giving some back story in case it’s of any use or interest…?

And even though it can be a bit visceral from time to time, for a lazy git like me, it’s still way better than working… 😊

Strictly

"And the 9% in 2022 are really impressive btw. "

Cos, unfortunately, I think you might have misread my comment ~ I didn't make 9% in 2022, I lost 37%...?!

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"I used leverage like 50% of the invested capital"

And it was leverage that brought about the necessity for my family to move in 2008.... at the start of investing, I'd had a fully paid for and sizeable property.... but a couple of years into managing my own investments, and finding I was doing well, brought me to borrow a significant sum against the house to add to my capital invested in shares to make all the effort of the research, etc., that much more worthwhile...

And, even though, from the start of that borrowing up to date, it has proved well worthwhile overall, I hadn't bargained for the worst event for investors in eighty years in the form of the credit crunch coming down the pike when it did...

And so I acquired a rule for investing which I very much had to learn the hard way... and that was to organise my finances such that if the investing music stopped at any time I could get by for five years without touching shares or even relying upon dividends.

Strictly

"I managed to get about 30-35% the last years"

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Cos,

If you're saying 30% a year average and if that extends back into 2022 then that's impressive...

For the three years from start of 2023 I've averaged 31%...

But I took an absolute kicking in 2022, losing 37%...

That wasn't the biggest percentage loss I've ever made ~ that was 62% in 2008....

I'd hardly forget that ~ I had to sell the house and relocate to a much smaller one rather than cash in shares to live (because the house builder dividends dried up completely back then) in the pit of the credit crunch ~ but it's been overall very good from the nadir of 2008...

But, getting back to it, for the four years from the start of 2022, I've only averaged 9%.

So if your 30% average includes 2022, well, chapeau to you sir...!

Strictly

"I tend to hold no more than few stocks, maximum 5 stocks"

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Divi,

You might just be the only other person whom I’ve come across here who has put their hand up and said that they invest in only a very few shares…?

That is very much my game too, though it doesn’t seem to go down so well with those here who have a more orthodox view of what one should be investing in and how one should spread it…

It’s worked well enough for me in just over a quarter of a century in this managing-my-own-investments malarkey though…

It’s been a bumpy ride ~ especially given that I spent around twenty of those years invested only in house builder shares and that certainly ain’t for the feint-hearted ~ but I’ve compounded overall at 18% a year…

And that’s the other thing….

Apart from one investor some years ago who used to comment here occasionally (can’t remember his moniker here, but he was Bogdan Branislov in the Telegraph comments), I’ve never come across anyone who was able to similarly give me a number for their average compounding rate…

Not one…

And that, surely would be a reasonable starting point forany comparison of ideas…?

I mean ~ anyone can talk a good game, but there’s nothing like an accurate & relevant number to cut the cr.p… 😊

For what it’s worth, for the past year and a half, I now have been invested only across the three insurance boys, LGEN, MNG & PHNX, though I have recently given RIO an upgrade and made it an “honorary insurance boy” so that it can fit into the share switching plan…

I guess time will tell on RIO, but I’m really not bovvered where the share prices go in absolute terms ~ only in how they move against each other…?

If it wasn’t for the opportunities occasionally created there ~ such as the recent relative uplift on MNG against the others that caused me to shift from being 100% in M&G to 0% in MNG ~ then there probably wouldn’t be so much reason to keep paying such close attention, as I do…

Strictly

Rob,

I will just pick you up on one thing, if I may...?

They are not mypredictions, but those of the scribblers...

I am merely translating them into forward returns on equity and price earnings ratios and making my investing decisions accordingly....

I would also echo what Fatherjack has just said about the dividend yield...

Outside of the past two years, and a brief moment in October 2020, the only time LGEN has even been in the 8% plus dividend yield zone was in early 2009 ~ in the aftermath of the credit crunch...!

So, in the world of likely opportunity, to my mind LGEN is still looking pretty good ~ otherwise I wouldn't still be there with around 40% on my prtfolio...!

But, as ever, your call, of course....

Strictly

Rob,

Yes, you are correct that I pulled out of house builder shares early last year after having invested in them pretty much exclusively for more than twenty years…

Apart from Redrow, while they were under the sage leadership of Steve Morgan who had a great track record of accurately indicating in his typically low key way what he anticipated the next set of figures, I have always relied upon the scribblers for forecast earnings on the basis that they surely know the numbers better than me…?

And that still remains the case ~ for the house builders as well as for the insurance boys…. and for RIO now that I have made them an “honorary insurance boy” for the purposes of trading and for my next post for the eponymous Strictly Bricks blog..

But anyway, the scribblers’ EPS forecasts make for the next three years’ forecast returns on equity & P/Es for Bellway & Taylor Wimps ~ the only two house builders I still track closely ~ as follows:

2025 BWY 5.6% & 15.8 TW. 6.9% & 13.1

2026 BWY 6.4% & 13.4 TW. 8.2% & 11.1

2027 BWY 7.5% & 11.0 TW. 9.7% & 9.3

So, given such p.ss poor performance, both recent past and forecast, I don’t think it’s so helpful now to rate house builders primarily on their price to book value ~ to which my investing group added our own confection which was a book value weighting for each so as to best appraise value of one house builder against another, and which was what underpinned all our trading within the sector to good effect.

In their pomp, i.e. until a few years ago, Bellway were making an average ROE of 16% ~ which was pretty awesome for a share you could often buy at not much above book value…

But I fear those days may be very much gone, and we don’t even know how much damage the lovely Ange may do to the sector yet…?

Everything has its price, though, I guess, but I want to have Warren Buffett’s “margin of safety” on my side before I consider going back into house builders ~ and we haven’t even got back to what I perceive to be fair value against the insurance boys yet, let alone any margin of error…

We have a concept on the blog of “The Battle of Bellway”.

This measures my progress, or otherwise, against Bellway…

I’m happy to own up to you that I was playing catchup with Bellway from 2000 when I started right up to 2013 ~ which was the year I finally overhauled them…

As of now, though, I’m just under 200% ahead overall…. But, within that, since I dropped house builders early 2024, I’ve had two cracking years in the Battle of Bellway ~ beating them by 23.5% in 2024 and by 25.7% thus far this year…

So, what you probably want to know is: will I continue to beat them from here…?

Well, I’d like to know the answer to that one too…! 😊

Anyway, hope that helps..?

Strictly

I've just posted this on the LGEN board as part of a discussion with Alas there, and it would have perhaps been more appropriate to have written it here instead ~ so I've simply copied & pasted it below in case anyone wants to express a view on it..?

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Alas,

You say "Not an exciting sector", but maybe that's been influenced by when you bought...?

If you play with the dividend details from RIO’s website alongside the graphing tool from Stock Exchange, I think it provides for an interesting potential scenario…?

While RIO’s dividend payments became a bit excitable for the years between 2015 and 2021, there’s also a steadier underlying base line (that’s perhaps initially masked by the period of exuberance) of dividend amounts going from 2003 at 37p through to 2024 at 310p.

This gives an annual average underlying dividend growth of 10.5%, which I’d say was pretty exciting ~ though perhaps I need to get out more….?

And, in 2016, that average dividend progress would give 135p whereas the actual dividend was 134p ~ so that was spot on, give or take…

If one had been fortunate enough to buy RIO in early 2016, at around 1,560p at the time, that would have given an annual average total return of 18% a year ~ which is also quite exciting…! 😊

This matches my long term, twenty five year average gain a year, but it well beats my significantly poorer result within that since the start of 2016, which is only 13.5%.

The interesting bit to me is that, at the low price point in 2016, a 134p dividend on a share purchase price right at the bottom then of 1,560p gives a dividend yield of 8.5%.

And that ain’t a million miles away from the 7% yield that RIO currently offers… 😊

And that 8.5% yield was right at the sweet spot, remember ~ right at the bottom in 2016… and while you could have bought cheaper just after the credit crunch at the end of 2008, that would have only given half the average total return for the next seven years up to 2015…

So, for my money, early 2016 would have been the best time to buy RIO, ever (forget pre-credit crunch) ~ but I don’t happen to have a time machine so I’ll just have to settle for having bought in now, this week…

……………………

Sorry about all the numbers ~ but that’s the sort of stuff I do when coming to (hopefully) objective decisions about buying shares… 😊

That’s maybe enough about RIO from me on the LGEN board..?

Strictly

Alas,

You say "Not an exciting sector", but maybe that's been influenced by when you bought...?

If you play with the dividend details from RIO’s website alongside the graphing tool from Stock Exchange, I think it provides for an interesting potential scenario…?

While RIO’s dividend payments became a bit excitable for the years between 2015 and 2021, there’s also a steadier underlying base line (that’s perhaps initially masked by the period of exuberance) of dividend amounts going from 2003 at 37p through to 2024 at 310p.

This gives an annual average underlying dividend growth of 10.5%, which I’d say was pretty exciting ~ though perhaps I need to get out more….?

And, in 2016, that average dividend progress would give 135p whereas the actual dividend was 134p ~ so that was spot on, give or take…

If one had been fortunate enough to buy RIO in early 2016, at around 1,560p at the time, that would have given an annual average total return of 18% a year ~ which is also quite exciting…! 😊

This matches my long term, twenty five year average gain a year, but it well beats my significantly poorer result within that since the start of 2016, which is only 13.5%.

The interesting bit to me is that, at the low price point in 2016, a 134p dividend on a share purchase price right at the bottom then of 1,560p gives a dividend yield of 8.5%.

And that ain’t a million miles away from the 7% yield that RIO currently offers… 😊

And that 8.5% yield was right at the sweet spot, remember ~ right at the bottom in 2016… and while you could have bought cheaper just after the credit crunch at the end of 2008, that would have only given half the average total return for the next seven years up to 2015…

So, for my money, early 2016 would have been the best time to buy RIO, ever (forget pre-credit crunch) ~ but I don’t happen to have a time machine so I’ll just have to settle for having bought in now, this week…

……………………

Sorry about all the numbers ~ but that’s the sort of stuff I do when coming to (hopefully) objective decisions about buying shares… 😊

That’s maybe enough about RIO from me on the LGEN board..?

Strictly

Alas,

As mentioned in my previous comment here, I have this week moved some funds across to RIO, 20% in total now, so I am currently in the heady situation of being across three shares in two different sectors…

I notice that you have also commented recently on RIO share chat ~ so perhaps you are also invested there too..?

I reckon that being in RIO provides me with a couple of options….

Firstly, as a plan B in a different sector….

But also, in the event that I’ve hopefully called the trade to RIO more or less right and if the market subsequently makes me an offer I can’t refuse in taking RIO significantly up against the insurance boys (and RIO’s price of itself could still drop within that scenario ~ it’s what it does against the insurance boys that matters…), then I’d likely move back again…?

But not for just the 5% or so net gain that I’m generally happy to trade for between shares of the same sector ~ previously house builders but now insurance boys…

This approach is not for everyone ~ as I think we agree upon? ~ but we can all have different notions about this and, anyway, it takes a buyer AND a seller to make a market…! 😊

Strictly

Nolo,

As it happens, my portfolio became wildly diversified (by my standards, at least…) this morning as I sold some PHNX and took a 10% of holding in RIO ~ which leaves me currently across three shares being LGEN, PHNX and RIO…

The relative value gap that has been opening up between the insurance boys and RIO since the start of 2024 (I only shifted across to LGEN & co in early 2024 after more than twenty years just investing in house builders) has been huge.

Taking the gap between PHNX & RIO ~ including dividends re-invested on the day received ~ it has opened up by 73% since the start of 2024, of which 42% is this year….

So, having been continuously monitoring relative progress of these shares on my spreadsheet, and recently dithering more & more about whether to make a move (it’s much easier making a shift between the three different insurance boys, whereas jumping sector requires more of a judgment call ~ and of course I may get it wrong..?) I’ve just been tempted to do so this morning…

As you’ve said, such a narrow portfolio ain’t for everyone…. the reaction I’ve generally had over the years when I’ve told anyone who has had an orthodox training in investment that I was only across one or two house builders was to retreat slowly away from me, making the sign of the cross with their fingers…

Metaphorically speaking, of course… 😊

Out of interest, I have looked at RR as a prospective share to hold but, for a wussy, rear view mirror investor like me it’s too much based on looking out of the windscreen at future potential ~ and I don’t have the cojones for it even though it’s had a pretty awesome two year run…

Mind you, the insurance boys have given me a 35% gain to date this year following on from 20% last year and this has well outperformed Bellway, my benchmark share, over that time ~ so I certainly ain’t complaining…!

Strictly

Alas,

Your post caught my eye ~ and I so just did a quick check on the numbers as I didn’t know them off the top of my head but was interested enough to find out…?

Starting at the beginning of 1984 @ 1,000, the FTSE 100 has compounded at 5.3% to get up to its current 8,823, and the overall yield is currently 3.4%.

7.2% compounding a year is required to double over ten years, so this has at least been achieved overall with divs reinvested…

LGEN’s share price has more or less moved sideways for around twelve years…

Given that the dividend has been increasing over that time, this has taken the yield from typically ranging between 4% and 5% twelve years ago to between 8% and 9% now.

Allowing for ceteris paribus, the proposed ongoing 2% annual increase in the amount of dividend, to my mind, adds that to the return, so I’m budgeting for 10% to 11% a year from underlying performance…

As is implied by the moniker, until early last year, my game was entirely house builder shares….

Since then, it has been entirely across LGEN, MNG & PHNX….

So, Strictly Insurance Boys, rather than Strictly Bricks, these days, if you like…?

And the Game of Strictly Bricks, from which I took the moniker, was all about trading between the house builders (mainly Bellway and Redrow) to pursue perceived best value and, in an average normal year, we (that is, me and my investing circle…) could reasonably look to make an extra5% to 6% a year or so from trading thus….

Twelve years ago, the insurance boys wouldn’t have been of interest even at their current yields as the house builders were very much in their pomp then…

However, for a number of reasons, I think those days have probably gone….?

And what I am now most interested to find out is whether the insurance boys will provide the same amount of trading opportunities between them, or maybe even more so…?

This is not a game I read about here at all ~ so either folk aren’t doing it or they’re not discussing it here….?

It does require being comfortable to commit the entire amount of one’s insurance boy sector capital to just the one share when it comes to it ~ in my case, that’s 100% of my entire portfolio ~ and so I appreciate that it’s probably a minority sport, but I spent more than twenty years doing so while invested the house builders and that sector, to say the least, was rather more volatile than the market for LGEN & crew…!

Strictly

I'm surprised that there wasn't a peep on here yesterday about Bellway's trading update ~ especially given the very positive market reaction.....

My sense of it was that the tone was pretty upbeat but that it is maybe only confirming that Bellway are on track and so are likely to be ending up at around the scribblers' forecasts for them....

And the 162.75p forecast EPS for 2025 ~ if that, indeed, is about where they end up ~ gives a return on equity by my reckoning of 5.6%, which is only around a third of the long term average for Bellway for the past more than forty years, and also gives a price earnings ratio, after yesterday's bounce, of 17.7....

Which is blo.dy expensive for Bellway in historical terms.....

So, having been a long term fan boy of Bellway in the past ~ I mean, for around twenty years or so ~ they are still not in the frame for me currently as an investing prospect whereas, at times in the past, I have had 100% of portfolio just in Bellway....

But what do I know...?

You might have thought that the builders had had enough headwinds to deal with over recent past years ~ covid, cladding, inflation, Gove ~ and now they've got our new national house building strategist, Ange, to cope with....

One thing I find that not many people seem to realise is that, if you take a look at the Nationwide's stats on house prices, then (taken nationally as a whole nationlly and obviously regions can differ...), when adjusted for inflation, they haven't gone up in the past twenty two years....

If that seems surprising, incorrect even, go on the Nationwide's website https://www.nationwidemediacentre.co.uk/ and check it out....

But, from a house builder's perspective, trying to earn an honest crust, it hardly helps, does it..?

Strictly

"I am also of the belief that house builders are a good option, I'm currently in TW & looking closely at PSN. I'd be grateful what others thoughts are on HB's & who to take a look at"

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Gary,

You and I may well have discussed this here before? (I'm working with a seventy three year old bit of kit here... my memory, I mean...) but, after more than twenty years only investing in house builder shares (hence the legacy moniker) I now longer hold any shares in any of them whatsoever...

Look no further than the scribblers as for the why....

The forecast EPS for the house builders ~ and these forecasts are hardly shifting and I'm very mindful of that because I check them from time to time and keep a record ~ and they provide for low future returns on equity that frankly are pants compared to the long term average past...

And that shows through in the resultant forecast price earnings ratios...

If the house builders were selling for about half book, or thereabouts, I'd probaby be interested once more...?

But they are way above that, and the insurance boys seems like an easier game as things stand ~ and especially if we are going to get more events like last Friday (with M&G) coming up again from time to time...!

Strictly

I have to say that I agree with what Meco is saying on this...

……………………..

It might be helpful to separate out “dividend yield”, which is the dividend amount expressed as a percentage of the share price at any time and “return on capital” which involves the dividend against the price paid…

If one is rather single-mindedly pursuing dividend ~ as is the case with me ~ then it matters not what I originally paid for any share, only which one is offering the best yield at any time…?

If I trade a share for a different share paying a higher dividend yield (notwithstanding any consideration for being caught between respective ex-div dates) then I am due to receive more dividend in cash terms in due course…

And this is what happened for me this morning…

Before kick-off today, I was 100% invested just in M&G and now I am roughly a third across each of the insurance boys I’m interested in ~ namely LGEN, M&G and PHNX.

I only gained a scintilla of future forecast extra dividend ~ the main driver for me this morning was that it allowed me to be spread across the three insurance boys instead of all in just the one that, until this morning, had been such perceived outstandingly better relative value than the other two (IMO, obviously) that I had felt compelled to be all that share, i.e. in M&G…

Being across all three, now, I await with some interest to see what Mr Market does from here..? 😊

Strictly

"Good to see you here, I greatly appreciated your previous singular focus on housebuilders...."

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Damo,

Thank you for your kind words...

If you've been reading my comments recently here, on LGEN, PHNX and on MNG (I can't remember which of these I've said what on...?), then you'll no doubt understand that your expression "singular focus" pretty much hits the nail on the head ~ in that, right now, I'm 100% just in MNG....

I guess you can't really get more focused than that...? 😊

I am currently "willing on" the further opening up of a very recent developing gap in the share price progess of MNG against the other two....

But I've been around in this investing malarky too long to be holding my breath on that...!

Strictly

"Strictly, you get an average of 17% return from your insurer investments, from dealing after charges tax etc. You must be very clever being able to predict the bottom and top price consistently, do you have a crystal ball ?"

..........

Rob,

I think you may have not quite understood what I was saying…?

The last thing I have is a crystal ball, quite the opposite, in fact, as I am very much a rear view mirror investor…

What I was saying is that if I have bought at a yield of 10%, and if the insurance boys do what it says on the tin and increase dividends by 2% a year, and if the market responds to that pro rata ~ I mean, without getting either excited on the one hand or depressed on the other ~ then one could surely reasonably anticipate that that would even out over the long term at around 12% a year…?

Would you agree so far…?

If not, my argument is obviously sunk..! ☹

If you do agree, then, based on the past twenty years of investing in house builder shares, and providing there remains a similar level of relative volatility between the insurance boys’ share prices (like the share price bounce for PHNX on 17th March that Couerdelion highlighted…), then maybe I’ll get to continue to add 5% or 6% a year on top of the underlying gains…?

But, I ain’t holding my breath on that ~ it may well not happen ~ which is why I’m only passage planning at 12% a year…

There is absolutely no prediction involved in this process, so it might be worth pausing to consider that…?

At any time, the dividend yields will be what they are for each company ~ and I’m only reacting to what is, rather than what might be, having satisfied myself that these companies are close enough to each other in terms of underlying performance and prospects for me to feel safe enough in doing so…

Hopefully that makes sense..?

Strictly

“I think the different growth prospects is not fully reflecting in the DY-differential.”

…………………..

Couerdelion,

The scribblers’ figures they would seem to agree with you about differing rates of progress….?

MNG are forecast 7.8% then 6.6% EPS growth for 2026 and 2027.

Whereas, LGEN is higher, at 9.8% and 9.0%.

And PHNX higher still, at 19.3% and 12.3%.

However, that isn’t the whole picture and a couple of other elements, in my view, are more pertinent…

While, in the longer term, the greater rate of growth, ceteris paribus, triumphs, life changes and the further ahead you look the more likely that change happens…

And apart from a higher dividend yield right now ~ not a huge difference, but one in my view worth taking ~ MNG are also starting with a significantly lower P/E ratio.

Which means, even with the slightly lower forecast EPS growth, their projected P/E ratio in 2027 is 7.12 against PHNX’s 7.51 and LGEN’s 8.61.

And with dividends for MNG projected at the same growth as for LGEN, at 2%, and PHNX just slightly higher at 2.5%, this leaves the 2032, i.e. now eight years ahead, yields at:

LGEN 10.4%

MNG 11.1%

PHNX 10.8%

These are all close enough for me, rightly or wrongly, to be happy to rate the three insurance boys purely by dividend yield alone, given that I am comfortable that the other factors are close enough and the share prices have bobbed around against one another in the past to have made moving back and forth between them viable ~ as I’ve already experienced in the just over a year that I’ve been in this sector…

In the game of house builders, I only really had two equal players ~ which were Bellway and Redrow ~ and I can look back over the years and see that though I was tempted to stray away from working just between the two of them I’d possibly have been better off not doing so….

I’ve developed a rule of engagement for myself for this game over the years, which is “I’m more fearful of being in cash when I should be in shares than the other way around” which is why, barring the covid tsunami, I’m remained fully invested throughout the past twenty five years…

As things stand, the FTSE100 insurance boys have potentially given me the luxury of not two but three fairly equal players ~ it remains to be see how well they continue to dance around each other going forwards, but the past implies that the share movements are likely to trump relatively minor underlying performance differences…?

I guess we’ll see..?

Good to have the opportunity to discuss this here though… 😊

Strictly

“I hold your 4 insurers plus Chesnara who are a similar company to Phoenix. They also have a yield of over 9% ,worth a look.”

……………………

DCGC,

Thanks for the heads-up on that….

Chesnara hadn’t been on my radar, so I did take a look at it…

And then I found why it hadn’t been a company I’d noticed ~ which is that it is much smaller than the FTSE100 insurance boys, just a tenth of the size, and is therefore inevitably going to be a far less liquid share than those…

And I don’t know if there’s a technical term for it, but I have found that I seem to suffer with a kind of “investing claustrophobia” if I find myself stuck in a share I want to sell out of in a hurry…

This is, after all, my livelihood and my investment capital can, on occasion, all be in a single share ~ so I do feel the need to be able to get out quickly when there’s a perceived opportunity to do so, etc…

I appreciate that being prepared to commit so fully to just three, two or even just a single share isn’t for most people, but it’s how I’ve been doing this for the past twenty five years and, from start to now, it has served me well even though I have been through particularly bumpy periods with this approach.

The other aspect is that, if the three FTSE100 insurance boys ~ LGEN, MNG & PHNX ~ continue to dance around each other with their dividend yields then decades of investing in house builder shares suggests that three companies is sufficient to play between…

If they do drift apart, I guess it would be a matter of sticking with the best yielders, not being able to trade between them as I can at the moment, and accepting that I’m then in a game with an anticipated return of around 12% a year subject to these companies remaining on the Straight & Narrow in terms of underlying performance and dividend policies…?

Of course, nothing barring the two inevitabilities is certain in this world ~ and especially when it comes to investing..! 😊

Strictly