yangmills
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Post by yangmills on Oct 29, 2017 12:59:23 GMT
Don't you have any conscience about exploiting the less well informed? No. Everybody here is an adult. My aim is to maximise profit and minimise risk. I make the effort to think about what is the optimal strategy on every platform. The important word there is "effort". On some platforms we make considerable effort at doing in-depth DD. On other platforms we put our efforts into building the quant analytics and on some we just passively take exposure to a diversified basket of loans. Against us there is a segment of lenders who think they can rock up, do no DD, in fact do nothing at all and still think they can earn 40x+ the risk-free rate. These are often the same people who think 12% on a loan makes it terrible but 13% a great buy, who worry about a few days dead time of their cash, or who see 99.5 on a loan as cheap as chips on the SM but 100.5 as too expensive. If that is their investment strategy then that is fine for them. They are happy to buy at 99.75 and I am happy to get out at 99.75. Perhaps it redeems at par and perhaps it defaults and recovers at 50. We all own our investment decisions; there can never be anyone else to blame.
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bg
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Post by bg on Oct 29, 2017 13:26:59 GMT
Don't you have any conscience about exploiting the less well informed? No. Everybody here is an adult. My aim is to maximise profit and minimise risk. I make the effort to think about what is the optimal strategy on every platform. The important word there is "effort". On some platforms we make considerable effort at doing in-depth DD. On other platforms we put our efforts into building the quant analytics and on some we just passively take exposure to a diversified basket of loans. Against us there is a segment of lenders who think they can rock up, do no DD, in fact do nothing at all and still think they can earn 40x+ the risk-free rate. These are often the same people who think 12% on a loan makes it terrible but 13% a great buy, who worry about a few days dead time of their cash, or who see 99.5 on a loan as cheap as chips on the SM but 100.5 as too expensive. If that is their investment strategy then that is fine for them. They are happy to buy at 99.75 and I am happy to get out at 99.75. Perhaps it redeems at par and perhaps it defaults and recovers at 50. We all own our investment decisions; there can never be anyone else to blame. In my mind this argument runs entirely counter to the capital market ethos (I think) most of us adhere to (else we wouldn't be investing in such markets). Taken to extremes this logic means no-one would ever buy or sell anything. Take an example.....I was just reading Ian Cowie in the Sunday Times saying he has sold a chunk of his Fever Tree shares as he thinks after a tenfold rise they are looking a bit toppy. He is an experienced investor and someone out there, quite possibly less experienced than him has bought them off him at what he thinks is an inflated price. Should he refrain from doing so to protect the unknown investor from buying at a price he thinks is over valued? I would say not. I agree with yangmills, everyone is an adult making their own investment decisions for profit. I actually think not having variable priced SM's leads to more people being exploited. Selling a loan with known issues to someone at par is selling something at the wrong price (plenty of people will rock up and buy it, looking for their 'risk free' 12%). I say it is far fairer to let the market determine the price which offers some protection to the less well informed as opposed to lumbering them with the loan at an arbitrarily fixed inflated price.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Oct 29, 2017 13:59:02 GMT
Don't you have any conscience about exploiting the less well informed? No. Everybody here is an adult. My aim is to maximise profit and minimise risk. I make the effort to think about what is the optimal strategy on every platform. The important word there is "effort". On some platforms we make considerable effort at doing in-depth DD. On other platforms we put our efforts into building the quant analytics and on some we just passively take exposure to a diversified basket of loans. Against us there is a segment of lenders who think they can rock up, do no DD, in fact do nothing at all and still think they can earn 40x+ the risk-free rate. These are often the same people who think 12% on a loan makes it terrible but 13% a great buy, who worry about a few days dead time of their cash, or who see 99.5 on a loan as cheap as chips on the SM but 100.5 as too expensive. If that is their investment strategy then that is fine for them. They are happy to buy at 99.75 and I am happy to get out at 99.75. Perhaps it redeems at par and perhaps it defaults and recovers at 50. We all own our investment decisions; there can never be anyone else to blame. You are clearly very clever but I find it shocking that you brag about exploiting (your word) people less clever. By your logic there is nothing wrong with a Ponzi scheme. We are all adults and nobody is forced to invest. The clever ones make a killing and get out before the bubble bursts and as for those caught at the end, well it serves them right for not being smarter. I prefer loans where the borrower creates value and I get a share of it and there are no losers.
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Post by Deleted on Oct 29, 2017 14:19:35 GMT
Well one thing is for sure...
... theres nothing quite like the lure of a variable price roller coaster coupled with a pricing advantage over the average investor to attract the spivs like flies to faecal matter...
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r00lish67
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Post by r00lish67 on Oct 29, 2017 14:55:34 GMT
Well one thing is for sure... ... theres nothing quite like the lure of a variable price roller coaster coupled with a pricing advantage over the average investor to attract the spivs like flies to faecal matter... Having returned from my walk, suitably refreshed.... You are right @eurasian69 , the idea does attract a certain section of investors, although I think 'spivs' is a little harsh. We all employ our own strategies to some extent, but some are more sophisticated than others. As yangmills has already pointed out, just don't think you're not already being taken advantage of by playing in a par-only marketplace. Better informed investors are going to be first in, first out in a marketplace like MT. At least with discounting you'd have a chance to escape if you want to, whilst now you're potentially screwed unless you're lucky. archie , although by the principle of 1 person, 1 vote you're right that 'the people have spoken' ,but SteveT 's point is valid. If the Medium/Big Hitter 5% (?) of the electorate vote with their feet, this isn't a democracy. MT have historically made a play of treating all lenders pretty much equally whatever their contribution, more so than others and that's to be applauded, but IMV the model is now broken and they won't be able to keep up with loan origination scale because of investors (of all scales) reluctance to be locked in. A variable SM is still fairer and better than the alternatives to resolve that and IMV fairer and better than the status quo.
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archie
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Post by archie on Oct 29, 2017 15:06:57 GMT
archie , although by the principle of 1 person, 1 vote you're right that 'the people have spoken' , SteveT 's point is valid. If the Medium/Big Hitter 5% (?) of the electorate vote with their feet, this isn't a democracy. What about the MHs that might reduce their investment with discounting? I will.
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Post by Deleted on Oct 29, 2017 15:09:37 GMT
At least with discounting you'd have a chance to escape if you want to Or a chance to get fleeced on price by spivs with a pricing advantage who now have an extra variable to exploit...
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r00lish67
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Post by r00lish67 on Oct 29, 2017 15:12:49 GMT
archie , although by the principle of 1 person, 1 vote you're right that 'the people have spoken' , SteveT 's point is valid. If the Medium/Big Hitter 5% (?) of the electorate vote with their feet, this isn't a democracy. What about the MHs that might reduce their investment with discounting? I will. I'd do a new poll, but I'm not not sure if people's privacy could be protected plus some people might be encouraged to exaggerate for 'the right result' (of either persuasion ). To be honest, I think we'll find out anyway in the coming weeks/months whether this debate is really of significance to MT and the other par-only platforms, Collateral and Lendy (sort-of) being the other main ones that spring to mind.
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p2pmark
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Post by p2pmark on Oct 29, 2017 15:15:25 GMT
The thing that would help the SM (and the PM) the most is introducing an IFISA, MoneyThing. Currently, it's hard to see new loans getting funded.
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r00lish67
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Post by r00lish67 on Oct 29, 2017 15:28:22 GMT
The thing that would help the SM (and the PM) the most is introducing an IFISA, MoneyThing . Currently, it's hard to see new loans getting funded. It's a good point. With the sheen off MT's veneer this would at least kick the can down the road for a while. Its introduction brought FS's marketplace back to practically par (and above) for a little while whilst the tax-free cash was absorbed.
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Post by charlata on Oct 29, 2017 16:55:17 GMT
Yes, but charging a fee for not doing something is pretty unethical (especially when the platform can conspire to make sure it never happens). When did you last pay Amazon, Ebay, or your estate agent, for NOT selling something? What piffle! There are tons of examples of businesses who charge you to advertise things you want to sell. It's the standard model for classifieds.
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greeb
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Post by greeb on Oct 29, 2017 18:43:54 GMT
If variable pricing was confirmed to be going ahead I would reduce my investment here. Good that you would have the chance. try reducing deciding to reduce your investment in some the loans in your wonderful first come first served market (FFF) market for several loan right now. Are you in the £15 million of loans representing 50 % of outstandings on MT that are either in in default or with 10% plus and counting for sale in stalled queues ? I accept that there are a range of views on this and perhaps MT could dip a toe in the water as a trial to satisfy part of their customer base with variable Sm pricing on one or two loans where it could be most beneficial - Liverpool comes to mind. Experience and customer feedback would be valuable all round.
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Post by eascogo on Oct 29, 2017 18:55:35 GMT
Wasn't it suggested on another thread that, since lenders get interest on the loan parts they put up for sale, that it makes sense to keep the less liquid loans on sale all the time? As such, it's not clear to me that the market is illiquid at all. It could just be an example of smart people understanding the system and wanting to keep all their options as open as possible. Perhaps, MT should consider not paying interest while loan parts are up for sale instead before introducing tax headaches like discounting. This seems to me an interesting question not taken up in this thread. What do people here think would happen. At the moment £1.6m is available on the SM. At a guess availability would drop drastically by perhaps as much as a half or two thirds leaving only those seriously wanting/needing to sell. Looking ahead, what advantage would such a measure provide? Would it discourage flippers? Improve liquidity? Impair MT's attractiveness to investors?
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mary
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Post by mary on Oct 29, 2017 18:59:28 GMT
If variable pricing was confirmed to be going ahead I would reduce my investment here. I accept that there are a range of views on this and perhaps MT could dip a toe in the water as a trial to satisfy part of their customer base with variable Sm pricing on one or two loans where it could be most beneficial - Liverpool comes to mind. Experience and customer feedback would be valuable all round. Satisfy which part the customer base??? All 69 in favour of discounting, from over 4,000 registered users? If MT pandered to all the whining my respect for them would diminish considerably!
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Post by GSV3MIaC on Oct 29, 2017 19:03:36 GMT
Yes, but charging a fee for not doing something is pretty unethical (especially when the platform can conspire to make sure it never happens). When did you last pay Amazon, Ebay, or your estate agent, for NOT selling something? What piffle! There are tons of examples of businesses who charge you to advertise things you want to sell. It's the standard model for classifieds. No classified advertiser is actually in control of the selling process, as the platforms are, or can block it as effectively as Ly can (and do). Yes, if I placed an ad on an unassociated website I might expect to pay for advertising space, and I might even agree to a fixed fee, but not a fee which is effectively open ended. [Did you remember the 'polite and constructive' bit, by the way?]
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