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Post by mrclondon on Apr 7, 2018 11:48:53 GMT
I really would not be surprised if this practice is curtailed in due course. Sorry, I must be a bit slow today.... What practice might (or might not) be curtailed? It's not obvious to me what's being referred to. Thanks! I believe that was referring to the practice of not paying interest on loan parts listed on SM. (e.g. by Lendy, and Collateral)
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Post by GSV3MIaC on Apr 7, 2018 15:57:54 GMT
Personally I cannot see any reason as to why both discounting and premiums should not be offered on the SM although I appreciate the 'premium' is a contentious subject .
If you allow premiums you have to have some mechanism to prevent people from buying way-way-way more than they actually want so they can sell it at a profit to people who actually only want a little bit to keep. Cashback (for instance) with no limits on purchases, on a FFF platform, is just a recipe for automated flipping. If nobody wants it, then letting someone 'market make' (aka underwrite) is fine .. IMO. The downside of allowing 'selling at a discount' is potential race to the bottom, and impact on floating new loans. Plus (Ed I believe said) there may be some legal/financial implications of profits from trading. Again, you might need some throttling on the system, such that if I list £1m at 5% discount, folks (who wanted some) don't feel aggrieved when Mr X buys the lot, and resells it for 4.95% discount the next instant.
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adrianc
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Post by adrianc on Apr 7, 2018 16:00:17 GMT
Cashback (for instance) with no limits on purchases, on a FFF platform, is just a recipe for automated flipping. ... Again, you might need some throttling on the system, such that if I list £1m at 5% discount, folks (who wanted some) don't feel aggrieved when Mr X buys the lot, and resells it for 4.95% discount the next instant. Ah, happy memories of the good ol' days of Flipping Cashback.
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alanp
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Post by alanp on Apr 7, 2018 20:14:25 GMT
I wish those who wanted to leave would put a few good loan parts up for sale on the SM for those of us who are sticking around. alanp . With over £4m on the SM and a choice of 16 loans (I counted Wigan only once) it should not be that difficult to invest new money. Most of those loans have forbidding queues but that may not necessarily indicate they are poor loans. It would be interesting to know the proportion of lenders in these queues who jumped in for the cashback but are frustrated flippers or those positioned in the queue merely hoping for potential liquidity at some stage. One way to find out would be for MT to stop paying interest for parts on the SM. Or how about a fee [1%?] charged by the platform for all successful sales. Lenders needing their cash urgently might agree. And the platform might welcome the additional income, particularly at a time when new loans are scarce. Did I put the cat amongst the pigeons? MoneyThing any thought on what measure would help dilute the queues? It was a slightly tongue in cheek comment. Property loans are the very, very last thing I want to buy as I have been avoiding them for the last 9 months or so. Too many across most of the platforms at subjective valuations.
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Post by Deleted on Apr 8, 2018 8:34:34 GMT
It is good to see this request for a discount on SM sales coming through again, on this occasion it is to "free up the SM". But in my case it is only a cause of amusement. There is loads of SM opportunity. Fantastic. However, once all that finally sells, there will be calls to allow sales in the SM at a premium, "to increase availability on the SM". There is always a danger in Operations to try and fight today's battles and kick the can down the road. I hope Ed holds out and focuses on 1) Getting the defaults sorted 2) Getting more good new loans Spending time on this nonsense is a miss-use of management time. If you invested in these deals because you wanted to get out quick then you are in the wrong industry. Who on earth thought investing, in property with assets backed by property, could cash up at a momements notice?
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bg
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Post by bg on Apr 8, 2018 9:43:31 GMT
It is good to see this request for a discount on SM sales coming through again, on this occasion it is to "free up the SM". But in my case it is only a cause of amusement. There is loads of SM opportunity. Fantastic. However, once all that finally sells, there will be calls to allow sales in the SM at a premium, "to increase availability on the SM". There is always a danger in Operations to try and fight today's battles and kick the can down the road. I hope Ed holds out and focuses on 1) Getting the defaults sorted 2) Getting more good new loans Spending time on this nonsense is a miss-use of management time. If you invested in these deals because you wanted to get out quick then you are in the wrong industry. Who on earth thought investing, in property with assets backed by property, could cash up at a momements notice? Couldn't disagree more. We are not investing in property, we are investing in loans (that happen to be backed by property and physical assets). The loans are tradeable so why shouldn't we be able to cash up at a moments notice? If I invest in a REIT I can sell at any moment even though the REIT owns property. If I buy shares in Coca Cola I can sell at any moment, even though Coca Cola owns factories and physical assets. If I buy a covered bond it is backed by an asset and there is a market for that. It's called investing and the market sets the price (unless you're on a platform like MT or Lendy). I invest heavily in P2P and I like having liquidity so I can move my cash into what I see as the best opportunity. I object to you saying I am in the wrong industry. If you want to invest directly in illiquid physical property then buy the property yourself or try one of the property crowdfunding platforms like Property Moose.
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Post by Deleted on Apr 8, 2018 11:00:24 GMT
It is good to see this request for a discount on SM sales coming through again, on this occasion it is to "free up the SM". But in my case it is only a cause of amusement. There is loads of SM opportunity. Fantastic. However, once all that finally sells, there will be calls to allow sales in the SM at a premium, "to increase availability on the SM". There is always a danger in Operations to try and fight today's battles and kick the can down the road. I hope Ed holds out and focuses on 1) Getting the defaults sorted 2) Getting more good new loans Spending time on this nonsense is a miss-use of management time. If you invested in these deals because you wanted to get out quick then you are in the wrong industry. Who on earth thought investing, in property with assets backed by property, could cash up at a momements notice? Couldn't disagree more. We are not investing in property, we are investing in loans (that happen to be backed by property and physical assets). The loans are tradeable so why shouldn't we be able to cash up at a moments notice? If I invest in a REIT I can sell at any moment even though the REIT owns property. If I buy shares in Coca Cola I can sell at any moment, even though Coca Cola owns factories and physical assets. If I buy a covered bond it is backed by an asset and there is a market for that. It's called investing and the market sets the price (unless you're on a platform like MT or Lendy). I invest heavily in P2P and I like having liquidity so I can move my cash into what I see as the best opportunity. I object to you saying I am in the wrong industry. If you want to invest directly in illiquid physical property then buy the property yourself or try one of the property crowdfunding platforms like Property Moose. I suspect "objection" is not the issue, we are all learning about what is a new industry, as are the portals. To hope that P2P is fully bedded in as say S&S is just that, a hope. I don't know if anyone individual is in the wrong industry, but surely hoping that you can cash in your chips quickly in this sort of market is just not backed up by historical evidence on this site or the advice offered by people who have been here any time. I hope you have not taken my comments personally, but look at the facts. Lending on stuff that takes time to sell when the borrower is in default or having interesing tiimes is a slow process, when everyone wants to get out of a loan then it slows down the sales process.
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bg
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Post by bg on Apr 8, 2018 11:28:54 GMT
I suspect "objection" is not the issue, we are all learning about what is a new industry, as are the portals. To hope that P2P is fully bedded in as say S&S is just that, a hope. I don't know if anyone individual is in the wrong industry, but surely hoping that you can cash in your chips quickly in this sort of market is just not backed up by historical evidence on this site or the advice offered by people who have been here any time. I hope you have not taken my comments personally, but look at the facts. Lending on stuff that takes time to sell when the borrower is in default or having interesing tiimes is a slow process. No offence taken! I am looking at the facts....lending on this stuff is not a slow process. I could lend £100k right now in a click of a button! I don't think we are still learning anything really about loans. Lending against assets has been going on for a long time and secondary markets on these loans have also been around for a long time. It's nothing new. Having hope you can sell out of a loan is not an issue as long as you invest fully aware that this may not be possible. Having said that I think there is always the right price for everything (even if that is zero), like I said loans have been traded for centuries, even distressed loans. I understand that you may invest happy to hold every loan to maturity. I don't have a problem with that at all but I don't understand why you don't want to allow people to trade out of an investment at the right (market set) price...it doesn't impact you, it doesn't change the risk of the loan, you can just stay in it to term. It may make people feel uncomfortable seeing a loan they hold trade at a 5% discount but I think it's important they have this visibility and understand why it is happening. My real objection is that a lot of people want to keep things simple because they think they are investing in a simple product. That is just not the case and I think it is wrong to give that illusion. Forcing something to trade at par does not mean it is worth par and I think platforms that do so are sending the wrong signal to investors and this leads to many people making very bad investments. If someone doesn't understand a 1% discount on a loan then they really shouldn't be investing in loans at all. Doing the DD on a loan and investing at the right price is way more complicated than understanding a percentage. People will never learn if the market is set at par...and you say "are all learning about what is a new industry". I say people are not. Let me give you a recent MT example..the Birkenhead loans. The project had gone into Administration, I knew that after the loan end date which was a few weeks away (interest was held on account until then) there was zero possibility of any more interest being paid on these loans and that any money invested would likely be tied up for years (in loans paying zero interest). What's more I knew there was a significant possibility of a capital loss for tranche B. I held both tranche A and B but because the market was forced trading at par I was able to sell many thousands of pounds of loans at face value. People were just looking at the LTV and the rate and thinking it's a safe investment. Is that fair? Is that simple? If there had been a true market, tranche B would have been trading at 80%, probably less (I would have sold at 80% for sure) providing significant protection for investors (who probably shouldn't be investing in such loans in the first place). Forcing something to trade at the wrong price is not simple, fair and it hides he risks. I would go so far as to say it should not be allowed at all and I think it's only a matter of time until MT realise this an implement a fully flexible market. When they do this I will consider investing again.
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dermot
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Post by dermot on Apr 8, 2018 14:44:11 GMT
I'm remaining in P2P at much the same level of total investment as before, though the platform split is changing a bit, at the moment.
My biggest concern remains the poor quality of valuations - or, perhaps, the willingness of platforms to accept poor quality valuations at face value.
I'm standing still with MT for now, pending outcome of a loan recovery or two to bring my confidence back up, but using a bit of excess cash to fill up an AC ISA this year; 4.25% on 30day notice tax free is a fairly decent deal to a high rate taxpayer!
Discounting seems to be a fair way of waking up the SM a bit, I've increased my holdings in a couple of AC loans that way; I would probably use it to both buy *and* sell on MT, as conditions warranted.
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jo
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Post by jo on Apr 8, 2018 14:49:20 GMT
Hear hear bg. I've argued until I'm blue in the face that you should be able to sell at whatever price take your fancy. Peoples' motivations for buying or selling are no concern of anyone else. Discount selling facilitated me to sell every single loan on Bondora, still have an overall positive XIRR, and (more importantly) get the hell out of Dodge. Without re-hashing old arguments, I'll simply say anyone who has had the misfortune to be an estate executor involving multiple p2p platforms (as I have) would greatly value the flexibility. Estate beneficiaries tend to be a smidge less sanguine than us upon hearing that the 'the borrower has informed us...[ insert reason for delay/non payment here]'.
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archie
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Post by archie on Apr 8, 2018 15:14:19 GMT
How will MT fill tranche 9 of a loan when the previous 8 are being discounted?
Similar situation on ABL at the moment.
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hazellend
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Post by hazellend on Apr 8, 2018 15:49:06 GMT
How will MT fill tranche 9 of a loan when the previous 8 are being discounted? Similar situation on ABL at the moment. Col filled them by offering a significantly higher interest rate or cash back.
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archie
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Post by archie on Apr 8, 2018 17:04:46 GMT
How will MT fill tranche 9 of a loan when the previous 8 are being discounted? Similar situation on ABL at the moment. Col filled them by offering a significantly higher interest rate or cash back. I'm not sure I'd use Col as a good example of how to run a platform.
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hazellend
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Post by hazellend on Apr 8, 2018 17:33:53 GMT
Col filled them by offering a significantly higher interest rate or cash back. I'm not sure I'd use Col as a good example of how to run a platform. Lol true! They were so good until the end though
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archie
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Post by archie on Apr 8, 2018 17:37:51 GMT
I'm not sure I'd use Col as a good example of how to run a platform. Lol true! They were so good until the end though My new platform ArchiesSureFireWinners will be good until the end too.
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