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Post by jonboy73 on Sept 22, 2016 14:28:29 GMT
it would be great if the new tranche could be restricted to those who don't already have some... but not sure if that is easy to do.. or in MT's interests.. Do we live in a workers' cooperative? When demand outstrips supply we are in competition with each other to get our funds invested. There will be winners and losers. It's in all our interests for demand to outstrip supply, could get a bit grim if supply outstripped demand. We need buoyant primary and secondary markets. who is suggesting a workers cooperative? they had limits on the first release, why just release it to the same people when the whole reason more is being released is down to demand being so high for it. the limits seem sensible to me and so does restricting the next lot to new punters initially if it maximises the number of engaged and happy customers.
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james
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Post by james on Sept 22, 2016 20:25:46 GMT
it would be great if the new tranche could be restricted to those who don't already have some... but not sure if that is easy to do.. or in MT's interests.. Views on fairness vary but I do think it's fairly clearly in MoneyThing's interest. That's because having as many different people involved as possible increases the breadth of lender money sources. That in turn makes it more dependable than relatively high reliance on larger sources of funding from relatively fewer individuals. It also should increase the potential size of deals that can be funded since more money is potentially available from the larger lender base. So far as fairness goes my view is that in general those with least money will benefit most from nice paying deals and are also more deserving of any distribution efforts simply because that's likely to achieve the greatest social good. This is unfair by another measure to those with more money who may understandably take the view that all should get say 5% of their investable assets invested. At the lower end of the asset spectrum there are those who are just saving month to month unused income potentially with quite small amounts if earning below median income. Even those on means tested benefits, perhaps. An incidental but useful benefit of lower limits and more lender breadth is that it will tend to push lenders towards greater diversification within the platform, both across loans and along time. That's good because both borrowers and MoneyThing's experience and ability to judge deals can improve over time, giving different risk profiles at different times as well as just things like possible misfortune if one or a few borrowers at a particular lending time happen not to work out well. Personally, since a rather nice deal ended back in the summer I am a good deal less invested here than I'd like. I still think the restricted deal sizes are the best way to go for MoneyThing and purely capitalist delivery of a social benefit. I'm patient and will eventually get as much invested as I'd like.
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james
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Post by james on Sept 22, 2016 20:32:14 GMT
Not everyone will have gone for the full amount in the first batch and a fair number of those that did won't actually want any more, so the second tranche may not go as quickly as you might think. I don't want any more anyway. Yes, I agree that it's necessary to allow for that but I tried. I do wish it wasn't a one day thing so it would be even safer to go too low on the allocation knowing that another day or two or three with the opportunity to bid extra each day could be used. Or something like six 12 hour bid windows over 12 hours each. Well, assuming something a bit more radical wasn't used, like the approach I mentioned a day or two ago, which would let all biding be done at once and fulfill evenly according to demand.
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littleoldlady
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Post by littleoldlady on Sept 22, 2016 21:07:12 GMT
At the lower end of the asset spectrum there are those who are just saving month to month unused income potentially with quite small amounts if earning below median income. Even those on means tested benefits, perhaps. . I sincerely hope that nobody on such a low income is investing in such a risky asset class.
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hazellend
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Post by hazellend on Sept 22, 2016 21:33:06 GMT
At the lower end of the asset spectrum there are those who are just saving month to month unused income potentially with quite small amounts if earning below median income. Even those on means tested benefits, perhaps. . I sincerely hope that nobody on such a low income is investing in such a risky asset class. Well if they don't invest their money they will never grow it. Could go for equities but they can drop 50% (much more for individual stock) in a market crash too. What do you suggest they do with their savings?
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littleoldlady
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Post by littleoldlady on Sept 22, 2016 21:38:06 GMT
I sincerely hope that nobody on such a low income is investing in such a risky asset class. Well if they don't invest their money they will never grow it. Could go for equities but they can drop 50% (much more for individual stock) in a market crash too. What do you suggest they do with their savings? IMO nobody should invest in p2p money that they simply cannot afford to lose. None of us like losing money but I would not invest a sum which would be life changing if I lost it. True there is next to no interest on safe accounts but inflation is also very low so money in these accounts is not losing purchasing value.
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james
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Post by james on Sept 23, 2016 0:32:12 GMT
I sincerely hope that nobody on such a low income is investing in such a risky asset class. Depends on their circumstances. Even on benefits it's useful and normally possible to save money, or was in the fortunately now distant times when I was doing it. Assorted benefits things have a 10% assumed income from capital so in that cases there's a 100% loss pending if that sort of money isn't being generated. At least P2P doesn't have an assurance of 100% capital loss over a few years on the part over savings caps! Beyond that and on from minimum wage to median wage there's more scope and the need for possibly quite long term accumulating for things like buying a home or just eventual retirement. Of course sensible mixtures are needed but it doesn't take much of a percentage in the higher paying parts of P2P to double or triple the overall returns available from current and savings accounts.
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Post by lynnanthony on Sept 23, 2016 5:58:59 GMT
it would be great if the new tranche could be restricted to those who don't already have some... but not sure if that is easy to do.. or in MT's interests.. Views on fairness vary but I do think it's fairly clearly in MoneyThing's interest. That's because having as many different people involved as possible increases the breadth of lender money sources. That in turn makes it more dependable than relatively high reliance on larger sources of funding from relatively fewer individuals. It also should increase the potential size of deals that can be funded since more money is potentially available from the larger lender base. So far as fairness goes my view is that in general those with least money will benefit most from nice paying deals and are also more deserving of any distribution efforts simply because that's likely to achieve the greatest social good. This is unfair by another measure to those with more money who may understandably take the view that all should get say 5% of their investable assets invested. At the lower end of the asset spectrum there are those who are just saving month to month unused income potentially with quite small amounts if earning below median income. Even those on means tested benefits, perhaps. An incidental but useful benefit of lower limits and more lender breadth is that it will tend to push lenders towards greater diversification within the platform, both across loans and along time. That's good because both borrowers and MoneyThing's experience and ability to judge deals can improve over time, giving different risk profiles at different times as well as just things like possible misfortune if one or a few borrowers at a particular lending time happen not to work out well. Personally, since a rather nice deal ended back in the summer I am a good deal less invested here than I'd like. I still think the restricted deal sizes are the best way to go for MoneyThing and purely capitalist delivery of a social benefit. I'm patient and will eventually get as much invested as I'd like. Depth (as distinct from breadth) should not be sniffed at. Penny players (sorry guys) will only ever make up a tiny amount of the investment in p2p loans; it is important not to upset the larger players; if they cannot get invested they will go elsewhere and loans will not fill. Like it or not penny players are and always will be riding on the coat tails of the four-five-six figure investors. I'm sure on some sites when I've signed up I've had to declare myself to be a "sophisticated" investor. Not a bad description of those involved in P2P I feel. How many of those earning below median income would fit that description? P2P is fair in that everyone plays by the same rules. We don't need to introduce positive discrimination. That would be unfair. P2P isn't about delivering social benefit. It's about making money. (Oh dear, have I just sworn?)
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james
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Post by james on Sept 23, 2016 9:36:59 GMT
P2P isn't something that does or should require being a sophisticated investor in the regulatory sense: a company director, having worked in private equity, having invested in two or more unlisted companies or being in a network of business angels.
As a four-five-six figure investor I also want an even distribution because I recognise that seven-eight-nine-ten figure investors would take most of the opportunities I'm interested in if there were no limits. There's usually a bigger fish however big someone may seem.
Capitalism and social benefit aren't exclusive concepts and a social benefit - disintermediation to deliver improved results for lenders and borrowers - is one of the original key features of P2P.
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Post by GSV3MIaC on Sept 23, 2016 15:10:38 GMT
I think the total size of the BH is not really the issue, it is the distribution within the platform .. just like MT didn't want 80% of it's loan book with one borrower, most platforms do not want 80% of their funds coming from one lender (or related concert party) .. too much risk and leverage. Even the normal 'Pareto' 80/20 split leaves them a bit vulnerable to the top 1% playing hardball one day.
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stevio
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Post by stevio on Sept 26, 2016 19:36:46 GMT
Haven't had chance to read the details on MT, but how does the new tranches work with the currently available tranches?
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Post by bengilbert on Sept 26, 2016 21:34:48 GMT
Haven't had chance to read the details on MT, but how does the new tranches work with the currently available tranches? Maybe to avoid getting mixed up, let's call this a new drawdown, split into 2 tranches, like the first one. Tranche A on this drawdown is pari passu with tranche A on the first drawdown, and the same for tranche B. So both tranche As have the same LTV etc.
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stevio
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Post by stevio on Sept 27, 2016 6:49:37 GMT
Haven't had chance to read the details on MT, but how does the new tranches work with the currently available tranches? Maybe to avoid getting mixed up, let's call this a new drawdown, split into 2 tranches, like the first one. Tranche A on this drawdown is pari passu with tranche A on the first drawdown, and the same for tranche B. So both tranche As have the same LTV etc. Thanks bengilbert, so was the LTV a maximum LTV or has the LTV increased between drawdowns for the additional amount loaned?
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arbster
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Post by arbster on Sept 27, 2016 6:56:56 GMT
Maybe to avoid getting mixed up, let's call this a new drawdown, split into 2 tranches, like the first one. Tranche A on this drawdown is pari passu with tranche A on the first drawdown, and the same for tranche B. So both tranche As have the same LTV etc. Thanks bengilbert , so was the LTV a maximum LTV or has the LTV increased between drawdowns for the additional amount loaned? My understanding is that some of the non-MT loan has been re-allocated to MT, and the overall amount being advanced to the borrower remains the same at this time.
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jonah
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Post by jonah on Sept 27, 2016 7:06:16 GMT
Given that the first draw down went in just over 5 mins for the 13%, should the size of the percentage be reduced here Ed for this second set, as the total is only half as big?
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