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Post by picanto on May 10, 2017 15:58:27 GMT
Hi all!
I have a question about the selling behaviours of people that I have particularly noticed over the last couple of months and really can't comprehend. Why is it that people are desperate to sell some loans that have a good amount of positive days left and good interest rates (e.g. DFL004 Residential Development S****** F****** and PBL155 W******* Castle) which have hundreds of thousands of pounds available? Yet there are other loans which are in minus days (e.g PBL047 The Chase E****) and not many people are looking to sell their loan parts. Surely people would be looking to dump the loans in negative days or coming up to expected repayment date and these would be the ones I expect to have large sums of money available, rather than the ones that have lots of days in positive. I would really appreciate if somebody could explain what is going on or am I complete missing the point?
Thanks!
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acky
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Post by acky on May 10, 2017 20:07:29 GMT
I think it's more that: 1) Those of us who want to minimise risk and so sell out of loans before maturity are already long out of those loans in negative days, so those loans are being held by investors obviously more comfortable with taking the risk, and 2) Where there are currently long queues on some loans is due to some of the above risk averse investors (and I'm afraid I'm in that number) having been caught out by the sudden change in the liquidity of the SM and so are struggling to get out of the loans. 3) These risk averse investors will be monitoring the SM market and aren't concerned about selling loans where there is little or nothing for sale, as they'll know they can easily liquidate. But when the SM starts rising on a loan, panic is inclined to set in and loads of these investors then try to sell. And at the moment there are not enough buyers prepared to take on the risk near maturity.
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kulerucket
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Post by kulerucket on May 10, 2017 20:39:45 GMT
Also a factor is that even when the loan queue is small on the negative duration loans, the queue may shift very slowly so people may prefer to hold and hope interest is paid at the end rather than earning no interest indefinitely.
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GeorgeT
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Post by GeorgeT on May 10, 2017 21:33:18 GMT
Hi all! I have a question about the selling behaviours of people that I have particularly noticed over the last couple of months and really can't comprehend. Why is it that people are desperate to sell some loans that have a good amount of positive days left and good interest rates (e.g. DFL004 Residential Development S****** F****** and PBL155 W******* Castle) which have hundreds of thousands of pounds available? Yet there are other loans which are in minus days (e.g PBL047 The Chase E****) and not many people are looking to sell their loan parts. Surely people would be looking to dump the loans in negative days or coming up to expected repayment date and these would be the ones I expect to have large sums of money available, rather than the ones that have lots of days in positive. I would really appreciate if somebody could explain what is going on or am I complete missing the point? Thanks! Many invest with the SM in mind, and thus avoid large loans and lower rate loans, as those are harder to sell in the event you want to sell on the SM The other loans are smaller, easeier to seel so investor are happy to trade them Not recommended IMHO, but that is the current market place. There is also the case that some of the loans hold good security, and savvy investors are happy to hold them I have to disagree with most of this. I recommend avoiding the lower rate loans and the very large loans for the exact reason that they are much more likely to become illiquid and people are much more likely to have to hold them until the potentially bitter end. I would also say that nobody savvy would hold a defaulted loan by choice. The outcome is massively uncertain in that situation and of course there is no interest on account, if at all. My strategy is to sell out of anything well before it can default thereby eliminating a large amount of the risk. My strategy is also to target the smaller, sub £3 million pound loans that are paying 12%. There was a beauty today. Although I am also happy to hold larger loans provided they have a long unexpired terms and are paying 12% to compensate me for the risk. I would say the perfect loan is at 12%, has 200+ days to run and is for a loan total of less than £3 million pounds. Any loan that meets these criteria will sell on the secondary market in the blink of an eye.
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fp
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Post by fp on May 10, 2017 21:55:12 GMT
How many loans are you invested in GeorgeT? |
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Liz
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Post by Liz on May 10, 2017 22:17:57 GMT
Many invest with the SM in mind, and thus avoid large loans and lower rate loans, as those are harder to sell in the event you want to sell on the SM The other loans are smaller, easeier to seel so investor are happy to trade them Not recommended IMHO, but that is the current market place. There is also the case that some of the loans hold good security, and savvy investors are happy to hold them I have to disagree with most of this. I recommend avoiding the lower rate loans and the very large loans for the exact reason that they are much more likely to become illiquid and people are much more likely to have to hold them until the potentially bitter end. I would also say that nobody savvy would hold a defaulted loan by choice. The outcome is massively uncertain in that situation and of course there is no interest on account, if at all. My strategy is to sell out of anything well before it can default thereby eliminating a large amount of the risk. My strategy is also to target the smaller, sub £3 million pound loans that are paying 12%. There was a beauty today. Although I am also happy to hold larger loans provided they have a long unexpired terms and are paying 12% to compensate me for the risk. I would say the perfect loan is at 12%, has 200+ days to run and is for a loan total of less than £3 million pounds. Any loan that meets these criteria will sell on the secondary market in the blink of an eye. How many loans would that narrow you down to? Is that good for diversity?
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gustapher
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Post by gustapher on May 10, 2017 22:20:56 GMT
georget, the thing to remember about your strategy is that it pits you against other investors. I have no problem with this at all but posting about it on a public forum makes no sense.
Given it is based on 'greater fool' theory then why would you sit there trying to convince others of the merit? If successful and you convince enough people then it will cease to work and you could end up holding the baby.
I think way more Lendy investors read this forum than people realise.
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stevio
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Post by stevio on May 10, 2017 22:25:35 GMT
Many invest with the SM in mind, and thus avoid large loans and lower rate loans, as those are harder to sell in the event you want to sell on the SM The other loans are smaller, easeier to seel so investor are happy to trade them Not recommended IMHO, but that is the current market place. There is also the case that some of the loans hold good security, and savvy investors are happy to hold them I have to disagree with most of this. I recommend avoiding the lower rate loans and the very large loans for the exact reason that they are much more likely to become illiquid and people are much more likely to have to hold them until the potentially bitter end. I would also say that nobody savvy would hold a defaulted loan by choice. The outcome is massively uncertain in that situation and of course there is no interest on account, if at all. My strategy is to sell out of anything well before it can default thereby eliminating a large amount of the risk. My strategy is also to target the smaller, sub £3 million pound loans that are paying 12%. There was a beauty today. Although I am also happy to hold larger loans provided they have a long unexpired terms and are paying 12% to compensate me for the risk. I would say the perfect loan is at 12%, has 200+ days to run and is for a loan total of less than £3 million pounds. Any loan that meets these criteria will sell on the secondary market in the blink of an eye. You have disagreed with what CD said, but then restated exactly the same things he said and then claimed it as your own idea! It's an interesting point to discuss, but come on, play the game properly
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mikes1531
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Post by mikes1531 on May 10, 2017 22:31:08 GMT
Many invest with the SM in mind, and thus avoid large loans and lower rate loans, as those are harder to sell in the event you want to sell on the SM I have to disagree with most of this. I recommend avoiding the lower rate loans and the very large loans for the exact reason that they are much more likely to become illiquid and people are much more likely to have to hold them until the potentially bitter end. : I think I'm missing something here. You wrote that you disagreed with what cooling_dude said, but ISTM that you're both saying the same thing. What's the difference between... and... ? ? ?  EDIT: Beaten to it by stevio!
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ablender
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Post by ablender on May 10, 2017 22:35:00 GMT
I have to disagree with most of this. I recommend avoiding the lower rate loans and the very large loans for the exact reason that they are much more likely to become illiquid and people are much more likely to have to hold them until the potentially bitter end. : I think I'm missing something here. You wrote that you disagreed with what cooling_dude said, but ISTM that you're both saying the same thing. What's the difference between... and... ? ? ? EDIT: Beaten to it by stevio ! Perhaps the order  !!! 
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GeorgeT
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Post by GeorgeT on May 11, 2017 2:21:18 GMT
I thought C-D was saying the opposite to me.
He wrote - "Many invest with the SM in mind, and thus avoid large loans and lower rate loans, as those are harder to sell in the event you want to sell on the SM
The other loans are smaller, easeier to seel so investor are happy to trade them
Not recommended IMHO"
I took it that he didn't recommend this approach, which is my approach, hence why I stated what I thought was the opposite. Sorry if I misunderstood.
I could be wrong but I sense that the majority operate like me but don't want to say it on the forum because they don't want others picking up on this winning strategy?
I try and approach the forum by trying to be helpful and sharing good information and advice. Have I got it all wrong? Is the name of the game to publically recommend the bad loans and tell people to avoid the good ones -so there is more for the forum posters. And to recommend risky strategies as being the best. I hope not, but I have questioned the motives of some posters and wonder if some peoples' posts are self serving.
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Post by jackpease on May 11, 2017 7:18:29 GMT
I sense that the majority operate like me but don't want to say it on the forum because they don't want others picking up on this winning strategy? Indeed - I think that for some reason, a couple of months ago the 'crowd' had a lightbulb moment and decided dump at 100 days rather than 30/40 before - the problem is that there are way too few 12% loan days (12% loans x (loan term less 100 days)) to go round. There's not enough space in that small gap for everyone, and the Moneything 'Lendy ovesrpill' lifeboat is full up. Jack P
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Post by Duane Dibley on May 11, 2017 9:00:36 GMT
You have disagreed with what CD said, but then restated exactly the same things he said and then claimed it as your own idea! It's an interesting point to discuss, but come on, play the game properly You wouldn't have thought Theresa May had time to read P2P forums would you? Then again some people will nick anything these days.
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mikes1531
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Post by mikes1531 on May 11, 2017 10:40:48 GMT
There's not enough space in that small gap for everyone, and the Moneything 'Lendy ovesrpill' lifeboat is full up. The FS lifeboat seems to be approaching capacity as well -- the list of available loans there has shrunk noticeably since PBL088 repaid. (The fact that Lendy SM availability has dropped only by about £1.2M after the £3.1M repayment suggests to me that a lot of that repaid money has left the platform, though a lot of the 'missing' £1.9M could have been put into the new loans/tranches that went live yesterday.)
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!!! 
