Reply To: ITV vs WPP

Moderator

I don’t see them as in the same sector Jeff. I would not have chosen both for the current HYP if I did.

WPP is an ad agency meaning that principally, it earns income from creating ads for its customers. ITV earns income from selling advertising time, not creating the ads. Also differentiating the two, ITV is a producer of TV programmes, many of which it can then sell to others or have them sponsored as a further revenue source. I don’t think the business of a commercial television company and an ad agency are sufficiently close as to be in the same sector for our HYP purposes.

Sector classification is often a matter of opinion so yes, some may argue that these two are sufficiently similar to be in the same sector. However I don’t follow any official sectors or others’ views but make up my own mind on this. I appreciate that other people may see things differently but I just put forward my own views here.

As for SKY, if and when it eventually gets taken out I’ll give my views then on how to reinvest the proceeds in those portfolios which hold it but it’s far too early at present to consider that. The current bids are wholly for cash, no paper. Incidentally, SKY and ITV are in the same sector in my opinion.

Thanks for the nice comments. HYP investing is indeed mildly contrarian, which is the reason that portfolios may show capital growth long term even though that is not the purpose at all of the strategy.