ceejay
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Post by ceejay on Feb 1, 2018 14:28:22 GMT
As the title says.
When Failing Completely made their changes in August I wasn't impressed, because of the loss of personal control. However, I wanted to give them a little time to see how it went so I hedged my bets. I spent some time reorganising my portfolio before the shutters went down, since when I've been just withdrawing cash as it became available.
But the frustration of watching one loan after another go bad, combined with the dreadful level of communication, has been too much for me. The result of the latest defaults is that my XIRR dropped below 5.5%, which is absurdly low for this level of risk.
Last month I was getting a bit twitchy and cashed in just over half of my holding. Today, I've dumped the rest - excluding the rump of lates, downgradeds and defaults.
I am reminded of a principle from the world of the stock market: If you're worried about a holding, sell it and stop worrying.
When the dust finally settles from recoveries, I won't have made a loss, but I'm pretty sure I won't make a return anything like commensurate with the risk. Good riddance.
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ashtondav
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Post by ashtondav on Feb 1, 2018 17:05:35 GMT
Out of interest what level of diversification were you operating at? I'm interested to know just how many loans you need to hit the anticipated returns.
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ceejay
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Post by ceejay on Feb 1, 2018 17:19:08 GMT
Out of interest what level of diversification were you operating at? I'm interested to know just how many loans you need to hit the anticipated returns. When the shutters went down, I was lending to >300 businesses, though that number obviously tailed off a bit over the following months.
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Post by grahamreeds on Feb 2, 2018 7:01:24 GMT
Just had 5 defaults from my previous life which totals £90. If those defaults were of the modern variety then that would be £650.
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poppyland
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Post by poppyland on Feb 2, 2018 8:28:35 GMT
FC is getting out to the masses (with huge hidden risks) and is not anymore a valid product for people looking to maximise returns Dropped my husband off at Stansted the other day, and saw a huge billboard ad for Funding Circle as I drove away from the airport. Getting out to the masses is right!
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markr
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Post by markr on Feb 2, 2018 19:28:19 GMT
Just had 5 defaults from my previous life which totals £90. If those defaults were of the modern variety then that would be £650. To invest the same amount of money in your previous life would take 7.2 times as many loans as it takes in the modern variety, and therefore you'd see only 1/7.2th of the number of defaults. So, if all your loans were modern ones, you'd expect to have seen 0.7 defaults; in other words you might have losses of £130 so far, but there's a chance you'd have lost nothing.
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Post by grahamreeds on Feb 4, 2018 15:18:51 GMT
One of my main complaints about the modern FC is size of loan parts - a single default is one month's interest. A couple of defaults will drive people away as their experience will be less than if their investment was spread across 400 loans.
I was spread across 850 business with 1100 loan parts. I am now spread a lot less and the potential size of losses are worrying me.
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trevor
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Post by trevor on Feb 4, 2018 18:01:41 GMT
Their policy seems to be increasing the risk for the smaller investor. The only way to get good diversification is to invest circa £10k. When I started investing with fc 4 years ago I invested a few hundred at a time and was on the site daily investing £20 in multiple loans. I am thinking of opening an ISA in April but realise I will need to put in a large chunk from the start lto ensure good diversification.
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mikeb
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Post by mikeb on Feb 4, 2018 20:30:13 GMT
FC is getting out to the masses (with huge hidden risks) and is not anymore a valid product for people looking to maximise returns Dropped my husband off at Stansted the other day, and saw a huge billboard ad for Funding Circle as I drove away from the airport. Getting out to the masses is right! Seen the TV ads? I know someone who approached Funding Circle for a loan to buy a drum-kit. They were turned down because "we only lend to businesses with a strong credit record". www.youtube.com/watch?v=IQ2lnlj9WzQTotally misleading advertisements. 
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ashtondav
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Post by ashtondav on Feb 5, 2018 9:49:18 GMT
Dropped my husband off at Stansted the other day, and saw a huge billboard ad for Funding Circle as I drove away from the airport. Getting out to the masses is right! Seen the TV ads? I know someone who approached Funding Circle for a loan to buy a drum-kit. They were turned down because "we only lend to businesses with a strong credit record". www.youtube.com/watch?v=IQ2lnlj9WzQTotally misleading advertisements. Hang on, FC lend to businesses for business loans. Why would they lend for your mate to buy a drum kit? Wouldn’t Zopa be a better p2p lender for that purpose? Or am I being thick!
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cb25
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Post by cb25 on Feb 5, 2018 10:26:28 GMT
Seen the TV ads? I know someone who approached Funding Circle for a loan to buy a drum-kit. They were turned down because "we only lend to businesses with a strong credit record". www.youtube.com/watch?v=IQ2lnlj9WzQTotally misleading advertisements. Hang on, FC lend to businesses for business loans. Why would they lend for your mate to buy a drum kit? Wouldn’t Zopa be a better p2p lender for that purpose? Or am I being thick! I assume mikeb was making humourous reference to the TV ad, where somebody starts with a small drum kit, FC is mentioned, and then they're playing a larger drum kit
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ashtondav
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Post by ashtondav on Feb 5, 2018 10:55:06 GMT
Ah, not seen the ad. I am being thick!
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Post by p2plender on Feb 5, 2018 20:31:00 GMT
05 Feb 2018
The borrower has contacted us to advise that the business is experiencing temporary cash flow difficulties, therefore we have agreed a payment holiday for February, March & April 2018. We understand the borrower is reviewing their financial affairs at this time. Accordingly, we have taken the decision to temporarily downgrade this loan. We will continue to monitor the situation and will inform investors should there be any material developments.We thank investors for their patients.
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Feb 5, 2018 21:10:06 GMT
Out of interest what level of diversification were you operating at? I'm interested to know just how many loans you need to hit the anticipated returns. When the shutters went down, I was lending to >300 businesses, though that number obviously tailed off a bit over the This was my summary for >500 businesses £100K before i took what i could out most of losses £5000 was "A+" secured asset (my ass) All time earnings summary Earnings £6,937.47 Fees £787.4 Losses -£5,851.91 Net earnings £298.15
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Post by mikeyp on Feb 6, 2018 8:02:06 GMT
You seem to have been unlucky. Here's my current summary
You are currently lending to 473 businesses
Earnings £4,689.62
Fees £593.10
Losses -£197.00
Bad debt -£206.27
Recoveries +£9.27
Net earnings £3,899.52
When we could choose, I mainly went for property loans. Quite a few of those I still have are late but most are not too concerning. There is the odd one, like the Liverpool building, that I shall be relieved to see repaid.
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