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Post by samford71 on Mar 28, 2017 13:46:06 GMT
I've never done a poll but this forum has been around 3.5 years and P2P has grown exponentially. We are being deluged by new platforms: take a look at the plethora on the "More P2X sites" board. Further growth is guaranteed with FCA authorizations in full swing and IFISAs being launched daily. Against that there are complaints about falling yields, higher risk loans, the inability to deploy funds, poor quality valuations and weaker customer service. Platforms like to say P2P is a new asset class. Well, new asset classes often end up in asset bubbles. So study the diagram in this Wikipedia link and please vote where you think P2P is in the typical life-cycle of an asset bubble. Note that you can think of the y-axis "valuation" as the inverse of yield (adjusted for risk i.e losses given default). The lower the risk-adjusted yield, the higher the price and valuation. Let's see where the consensus stands. Cheers samford71 |
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hazellend
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Post by hazellend on Mar 29, 2017 13:56:00 GMT
I've never done a poll but this forum has been around 3.5 years and P2P has grown exponentially. We are being deluged by new platforms: take a look at the plethora on the "More P2X sites" board. Further growth is guaranteed with FCA authorizations in full swing and IFISAs being launched daily. Against that there are complaints about falling yields, higher risk loans, the inability to deploy funds, poor quality valuations and weaker customer service. Platforms like to say P2P is a new asset class. Well, new asset classes often end up in asset bubbles. So study the diagram in this Wikipedia link and please vote where you think P2P is in the typical life-cycle of an asset bubble. Note that you can think of the y-axis "valuation" as the inverse of yield (adjusted for risk i.e losses given default). The lower the risk-adjusted yield, the higher the price and valuation. Let's see where the consensus stands. Cheers samford71 Quite small numbers of members of even the biggest sites so I'd say stealth phase. When it's bubbly you won't get anything better than 8% for a highish risk loan.
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pikestaff
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Post by pikestaff on Mar 29, 2017 14:49:23 GMT
Quite small numbers of members of even the biggest sites so I'd say stealth phase. When it's bubbly you won't get anything better than 8% for a highish risk loan. I think we're past stealth, but I'm amazed by the number of votes for mania. It won't be mania until mainstream ISA investors pile in big time. Property lending might be a bubble but that's nothing to do with p2p per se.
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cooling_dude
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Post by cooling_dude on Mar 29, 2017 14:51:29 GMT
I've never done a poll but this forum has been around 3.5 years and P2P has grown exponentially. We are being deluged by new platforms: take a look at the plethora on the "More P2X sites" board. Further growth is guaranteed with FCA authorizations in full swing and IFISAs being launched daily. Against that there are complaints about falling yields, higher risk loans, the inability to deploy funds, poor quality valuations and weaker customer service. Platforms like to say P2P is a new asset class. Well, new asset classes often end up in asset bubbles. So study the diagram in this Wikipedia link and please vote where you think P2P is in the typical life-cycle of an asset bubble. Note that you can think of the y-axis "valuation" as the inverse of yield (adjusted for risk i.e losses given default). The lower the risk-adjusted yield, the higher the price and valuation. Let's see where the consensus stands. Cheers samford71 Quite small numbers of members of even the biggest sites so I'd say stealth phase. When it's bubbly you won't get anything better than 8% for a highish risk loan. Later than the stealth phase IMO. P2P is in the news, open to the public (and easily assessable by the public) and money is now flooding the different markets that P2P service. I think each market is at different stages, but P2P as a whole is at the Early Mania Phase (I would say at the Enthusiasm stage approaching greed)
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hazellend
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Post by hazellend on Mar 29, 2017 14:56:09 GMT
Quite small numbers of members of even the biggest sites so I'd say stealth phase. When it's bubbly you won't get anything better than 8% for a highish risk loan. Later than the stealth phase IMO. P2P is in the news, open to the public (and easily assessable by the public) and money is now flooding the different markets that P2P service. I think each market is at different stages, but P2P as a whole is at the Early Mania Phase (I would say at the Enthusiasm stage approaching greed) Could be I suppose. I am a buy and hold passive index investor and think nobody can predict the stock market. Maybe it is the same for property and P2P, although self, active management does seem to outperform. P2P Investment trust is the only money I have lost on P2P, although not selling.
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Steerpike
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Post by Steerpike on Mar 29, 2017 15:05:08 GMT
Clearly past solely smart money/institutional, Jo Public is investing based on articles in the mainstream press, probably not reached the "heights" yet, but mania in my view, enthusiasm, greed, delusion, yes, whereas denial and real fear are mostly yet to come.
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Greenwood2
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Post by Greenwood2 on Mar 29, 2017 15:26:57 GMT
I would say each platform goes through a cycle like that and they are all at different points. There are always the 'new' great platforms in the honeymoon period fantastic returns, what could possibly go wrong? followed by the rest of the cycle. Zopa may have reached a later stage position of fairly main stream reasonable but not stellar returns.
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Post by wiseclerk on Mar 29, 2017 16:38:44 GMT
I have voted for late awareness phase. But I could see some arguments for early mania also fitting.
But that is solely in regards to the UK market.
P2P Lending on the continent is at late stealth at best (maybe with exceptions of France or Estonia).
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jamesc
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Post by jamesc on Apr 2, 2017 13:03:55 GMT
I can see why a majority have voted for early mania phase. I sort of feel that way. With IFISAs coming and the FCA authorizations appearing fast, it feels that we could easily see more investors pile in, with yields collapsing. Greed and and a delusion of safety might not be that far away. Like some others have mentioned, however, the issue with that view is that P2P is still far too small and nowhere near-term mainstream enough. Most of us who have been on this forum for a few years are really just "early adopters", part of the stealth phase; mainstream retail investors are not really here yet. The institutions who are investing are similar early adopters. My thought is perhaps that we get a similar cyclical pattern within each phase ( self-similarity). So perhaps we are in the "mania phase" of a broader "awareness phase". There are going to be winners and losers from the IF-ISA battleground and there are so many platforms appearing now it's hard to feel that all can survive. Perhaps it ends with a "bear trap", that for many of us may well feel like a crash but mainstream investors won't even notice because they aren't be involved. Moreover, P2P is hardly a systemic risk to the system given how small it still is. Thanks to everyone who voted. It's difficult to determine where in the cycle P2P lending is, or where it will be, without reference to property prices, given that so many loans across the sector are secured to Property. I don't know the percentage but it might be as much as 40-50%. Therefore P2P lending maybe some way off a bubble, but if property crash tomorrow then its almost certain that a lot of P2P will crash with it.
Its a property price crash that caused the 2008 crash, yes poor lending decisions before which helped to fuel the US housing bubble but its only when property prices in the US started to decline and everyone went for the door at the same time and realised that there were no buyers that caused prices to then collapse and the crash happened.
The difference between then and now was that the poor lending decisions to the US sub prime property drove down yields and self perpetuated, but whilst property lending might dominate P2P lending, P2P only represent a fairly small percentage of property lending or more importantly Bridging finance. The P2P sector is not geared as in other asset bubbles, yes yields will fall as lending becomes more mainstream and there will be some fall out as some sites fail. But P2P needs to grow multi-fold before it becomes relevant in the mainstream.
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Post by mrclondon on Apr 2, 2017 13:56:15 GMT
My initial reaction was "early mania" but after reflecting, I've voted "early awareness" as I believe that we are still a long way from mass awareness of p2p and money piling in regardless of risk ("Greed" on the bubble curve). Each platform is in itself somewhere along that bubble curve, but few (with the possible exception of TC) have experienced an early stage loss of confidence sell off ("bear trap"). And currently no platform is able to fill poorer quality loans instantaneously (even much loved MT has struggled with B*** last year and Pu**** currently) even if some lender behaviour on the likes of MT/SS/FS has exhibited mania tendencies. FS generally has a constant supply of (PM) loans at 12 to 14% available, and there has been good SM availability on AC/SS/FS over recent months. Its certainly true that more and more companies think they can compete in the sector, but without a USP few will make it to the big time. The fact that 3 of the more popular platforms with forumites (ABL/MT/FS) are now firmly on the road to IFISA's (and I think we can probably assume SS is not too far behind) provides less incentive to try new platforms simply because they offer IFISAs. Its clear from previous polls that forumites tend to be investing significant blocks of money into p2p, and (by definition) are making the effort to do due diligence to at least some extent, soconsequently I think perhaps we might be closer to what that bubble model deems as "Institutional investors" than "public". Most of us who have been on this forum for a few years are really just "early adopters", part of the stealth phase; mainstream retail investors are not really here yet. The institutions who are investing are similar early adopters. My thought is perhaps that we get a similar cyclical pattern within each phase ( self-similarity). So perhaps we are in the "mania phase" of a broader "awareness phase". There are going to be winners and losers from the IF-ISA battleground and there are so many platforms appearing now it's hard to feel that all can survive. Perhaps it ends with a "bear trap", that for many of us may well feel like a crash but mainstream investors won't even notice because they aren't be involved. And that is, I think, a pretty fair conclusion. |
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Liz
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Post by Liz on Apr 2, 2017 15:45:13 GMT
I went for "late awarness" I don't think we are yet at "early mania" stage, that will come in maybe 12 months when all of the big sites launch an IFISA and the media coverage is ramped up.
i also agree that all sites are at different "bubble" stages. I have no idea which stage TC is at, i keep pondering it and coming up with different answers.
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Post by nellerdk on Jul 13, 2017 20:05:09 GMT
I try to have knowledge about P2P, but I honestly only found out about Mintos and Bondora a few months ago.
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Post by explorep2p on Jul 14, 2017 21:02:39 GMT
Current P2P volumes are like the snow flake on top of the iceberg.
In the eurozone,cumulative P2P lending is 0.07% of current banking assets. The UK is similar
Current P2P investors are the equivalent of the guys hanging out in the garage with Jobs and Wozniak
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Post by nellerdk on Jul 14, 2017 21:30:39 GMT
I hope the P2P sector stays and grows. I really love avoiding the frequent stock market rollercoasters.
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registerme
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Post by registerme on Jul 15, 2017 2:17:07 GMT
Current P2P volumes are like the snow flake on top of the iceberg. In the eurozone,cumulative P2P lending is 0.07% of current banking assets. The UK is similar Current P2P investors are the equivalent of the guys hanging out in the garage with Jobs and Wozniak I'm curious to understand your thinking here. Would you elaborate? I'm not taking the proverbial, I think different and / or contrary views are interesting, and contribute something, even if and when people disagree with them.... Cheers, RM
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