Have i been gullible? Unlucky? An idiot?

Thank you Jack.

I still have 19k of loans in FC, biggest exposure 0.7 %, and wonder if its worth selling some/all of these loans.


I now use MT FS and Ly and use this forum to gage the opinion of the wise and wonderful. I'm trying to learn at the same time.

It depends how much gets reclaimed on the current losses, a decent recovery could easily take you average up to 7% which is not to bad, even a pretty bad recovery rate should add a little bit to current return. Maybe not great but better then a loss. 

What troubles me is the FC statement that 40% of the losses have been this year (2017?), although you have held an account since 2013. If that is £900 losses on £19k in 11 months, then that is a loss rate of about 5% of capital on an annualised basis. That looks high to me - even before recoveries. Presumably, a year ago you were happy?

gullible How much were you putting in per loan and how much were you bidding at "back in the day"?

I put in 50k over a good few months. As my balance got bigger obviously the size of each loan got bigger. If I remember correctly the minimum setting was 0.5% then it got reduced to 0.25%? I think that's right, somebody can probably say for sure. I was bidding at the top end of the rev counter guides if that makes sense lol

When you first started Autobid was a woeful tool. GSV3MIaC please correct me if I am wrong, but I think it bid at your chosen rate, so loans that were considered higher risk than your chosen rate you got at the wrong price, and loans that were priced at a better risk you missed out on. I have never seen an auction system so poor. (Not even thincats with its terrible software was this bad!). Almost every loan you bought at this time you paid the wrong price.

By September 2015, the auction model was abandoned and so Autobid simply became poor, rather than incompetent. However, at this point, despite being 'automatic' it was still much slower than most users, so any popular loan was sold out before autobid got a chance. So you mainly bought a mix of large or unpopular loans.

During these times you were probably also buying loans on the secondary market. I think all P2P platforms have a problem because those selling often have more information than those buying on secondary markets. (Many of my biggest regrets, within the P2P universe, are secondary market purchases.)  This is certainly true of FC. Many people often sell loans because the believe that they are more likely to default, perhaps because statistically they are more likely to default after a fixed period of time, or because they have been late making payments (but not late enough to be suspended). You would have bought some of these, and many people still are.

I think that the average return is about 7%, some of those putting effort in before Sep 2015 were making returns of 20%+, and from Sep 2015 until the recent change 10%+ wasn't hard to achieve. I assume that much of this was at the expense of those using autobid.

You however might not have done that badly, as ben points out, if your recovery rate improves with time (as it should) your rate will improve. (I hope that recoveries improve as my portfolio (almost all post August 2015) currently has a recovery rate of ~6%!)

Finally, I have no idea what percentage were using autobid and what percentage were putting in the effort. It isn't hard to imaging that if fewer than 10% of lenders were putting in effort whilst more than 50% were using autobid then the average impact on any one portfolio wouldn't be that high.

Edit: Changed the tense in the final paragraph to make it clear I was referring to the situation as it was a few months ago.