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Post by geoffrey on Jan 29, 2015 12:01:54 GMT
I started investing in the GEIA on 12th December, adding £560 every two weeks, with a total of £2,245 invested to date. I wanted to check the transactions on the account, and I find that there are a total of 2,547 entries, and it's impossible to make heads or tails of them. Just looking at the first page of transactions shown, there are some ridiculous ones such as:
21st Jan 2015 at 20:03 Purchase loan part 5277197 (old id 5276565) for 16.82 GBP - principal 16.82, annualised rate 9.750, loan: Aberdeenshire Wind Turbine (93)
£-16.82
21st Jan 2015 at 20:02 Sale of loan part 5275911 (new id 5276531) for 16.82 GBP with a fee of 0 GBP - principal 16.82, annualised rate 9.750, loan: Aberdeenshire Wind Turbine (93)
£16.82
21st Jan 2015 at 20:02 Purchase loan part 5275586 (old id 5274749) for 16.82 GBP - principal 16.82, annualised rate 9.750, loan: Aberdeenshire Wind Turbine (93)
£-16.82
It looks like it's got stuck in some silly loop. Why would it buy and sell the same loan for the same principal three times in the space of a minute? On top of that, I've got pages and pages of purchases of the same loan for amounts under 10p, and in one case a whole flurry of 1p purchases. What's the point of this? Has the algorithm gone mad? Also, with all the buying and selling, am I going to get the advertised interest rate? Today's investment seems to have got stuck, with £140 of the £560 I put in today remaining uninvested. I'm also worried that if everyone else's accounts are producing similar myriads of leger entries, there's going to come a time when the computers can't cope with so many transactions when it comes to reconciling them (we've seen other P2P/B platforms struggle with large repayment runs). Wouldn't it be sensible to impose a £10 minimum purchase system-wide, or even £50?
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j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Jan 29, 2015 12:40:41 GMT
Might be one for chris to have a look at. I personally find it easier to invest directly into the individual loans but, can understand other like the security of the provision fund or simply dripping money in & letting the system sort it out but, seems you're having problems with that anyway. Good luck, hope it gets sorted
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am
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Post by am on Jan 29, 2015 12:49:01 GMT
My guess is that they're trying too hard to balance the investment between the various projects. If they set it up so that it didn't trade if the allocations were within a certain percentage of the target allocations I expect that it would be less trigger happy. (I had a sequence of buy £0.02 loan A (reinvested income), sell £0.02 loan A, buy £0.02 loan B, sell £0.02 loan B, buy £0.02 loan C.)
There is also the possibility of selling down loan X without first checking that there is any of loan Y to replace it.
I was a little surprised to find that investors in the GEIA are directly assigned individual holdings in the various projects, rather than the GEIA collectively holding parts of the projects, and the investors holding parts of the GEIA. That latter would seem to be easier to administer, and as asset allocation is done globally I see no point to the former.
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Post by moto on Jan 29, 2015 22:26:19 GMT
I'm also worried that if everyone else's accounts are producing similar myriads of leger entries, there's going to come a time when the computers can't cope with so many transactions when it comes to reconciling them (we've seen other P2P/B platforms struggle with large repayment runs). Wouldn't it be sensible to impose a £10 minimum purchase system-wide, or even £50?
I agree the data volumes will build up quickly, I assume the system snapshots the aggregated position daily or at regular points in time to avoid having to process the whole transaction history.
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sl75
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Post by sl75 on Jan 29, 2015 22:52:42 GMT
One assumes that the point of these otherwise seemingly pointless sales and repurchases is so that Chris can report the total sales figures of the GEIA as evidence that it must be working...!
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bigfoot12
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Post by bigfoot12 on Jan 29, 2015 23:31:53 GMT
Wouldn't it be sensible to impose a £10 minimum purchase system-wide, or even £50? No I don't think so. In order to diversify some cash has to be held at some point; the larger the minimum size the more cash has to be held which reduces returns. The algorithm looks like it is unstable for some people and should be corrected.
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Post by geoffrey on Jan 30, 2015 17:37:11 GMT
Thanks for the replies, folks. Maybe chris will have time to comment at some point, when better. I think even a 50p minimum purchase/sale could prevent some of the worse excesses, but of course the real solution is to have a more stable, less trigger-happy algorithm. It needs some logic built in that avoids insignificant adjustments, with insignificant defined as a certain threshold of diversity adjustment and/or overall return (if that's what the algorithm is trying to adjust for).
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