r00lish67
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Post by r00lish67 on Nov 4, 2017 15:46:57 GMT
But it's important that people understand the weaknesses and limitations of the current approach. It's also important that people understand the weaknesses and limitations of the 'perfect market' approach. Assuming of course that some of the bragging on this thread about exploiting less sophisticated investors didn't give the agenda away. The fact that such markets are also highly prone to short-termism and herd behaviour, in addition to other problems such as spoofing, subpennying, layering, added tax complexity, etc etc, should give anyone pause. 'Perfect markets' simply don't exist. There is no utopia. There are, however, certainly models which are more favourable to sharks and spivs. Well said bruv, glad we're avoiding this here, otherwise I'd never have managed to wangle me a few hundred K of Liverpool.
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Post by Deleted on Nov 4, 2017 15:57:19 GMT
Well said bruv, glad we're avoiding this here, otherwise I'd never have managed to wangle me a few hundred K of Liverpool. Pity, in a 'perfect market', the panic sellers could have been spooked/spoofed into selling at a hefty discount as well
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Post by bracknellboy on Nov 4, 2017 17:40:30 GMT
I understand that the market does not currently allow the correct price to be found but at the same time, I'd actually rather the market stay broken rather than allow someone smarter or quicker than me take advantage of me financially. That's probably me being emotional or "cutting off my nose to spite my face" but there you go - real people, real opinions. By being "broken" the current system means that buyers in the secondary market are being taken advantage of as a result of the design / structure of the SM because they are forced to pay too high a price for anything they buy.But they are not. They are not forced to buy anything, so they certainly aren't forced to buy at a specific price, too high or too low. To be sure, they are potentially missing some fair price indicators that might arise from allowing differential pricing, but where P2P SM's have allowed, is that in practise been what happens (indicators to risk) ? Was FCs operating that way (discount / premiums reflecting risk). But then again, if one believes that in P2P risk is not really priced in properly in the first place, and its mostly down to supply / demand, then its all a bit academic isn't it ? Indeed, and IMHO the main one of not allowing discounting I think is preventing people to price in their appetite to 'liquidate' (whatever the reason).
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jlend
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Post by jlend on Nov 4, 2017 17:56:15 GMT
If you hold a fixed rate government bond, and interest rates rise, the value of that bond decreases, right? If you can't reflect that decrease in value with a change in price you have a dysfunctional market. It's no different with a fixed rate loan. Interest rates have recently risen, the value of all the loans we hold has dropped correspondingly. It is similarly no different when you have a fixed rate loan with a bullet repayment approaching the end of its term. You are left with fewer coupons and the same default risk. So as with the bond, if you can't reflect the fact that it is worth less with a change in price then you have dysfunctional market. You don't need to be a quant to understand this, and understanding this does not make a person a spiv. I agree there are bonds that are tradable where the price varies over time. I hold and trade many bonds on the London stock exchange ORB market. I also hold bonds issued by companies that I knowingly can't trade e.g. Warren Evans, John Lewis. The price of these bonds does not hence vary over time. Both types of bond are OK I think if you understand and accept how they work when you buy them.
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registerme
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Post by registerme on Nov 4, 2017 20:49:20 GMT
But we can trade these "bonds"....
More seriously, there's something about this discussion that I really don't understand. We applaud RICS surveyors, lawyers, engineers, locals who live down the road, IT security experts, borrowers, builders, loan introducers and anybody else who adds value to the discussion, but there's a slice of forumites who go "boo hiss" at people who know how to price a bond (in effect).
Even though everybody would be horrified if there were a platform that didn't understand this.
I don't get it.
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jlend
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Post by jlend on Nov 4, 2017 21:15:54 GMT
But we can trade these "bonds".... More seriously, there's something about this discussion that I really don't understand. We applaud RICS surveyors, lawyers, engineers, locals who live down the road, IT security experts, borrowers, builders, loan introducers and anybody else who adds value to the discussion, but there's a slice of forumites who go "boo hiss" at people who know how to price a bond (in effect). Even though everybody would be horrified if there were a platform that didn't understand this. I don't get it. P2p loans do have some advantages over listed tradeable bonds. Eg if I loose capItal on a lse listed bond I can't offset this against either interest or capital gains.
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Post by dan1 on Nov 4, 2017 21:23:52 GMT
But we can trade these "bonds".... More seriously, there's something about this discussion that I really don't understand. We applaud RICS surveyors, lawyers, engineers, locals who live down the road, IT security experts, borrowers, builders, loan introducers and anybody else who adds value to the discussion, but there's a slice of forumites who go "boo hiss" at people who know how to price a bond (in effect). Even though everybody would be horrified if there were a platform that didn't understand this. I don't get it. Worth remembering what P2P is; it's designed to cut out that traditional layer of financial services whose reputation still hasn't recovered since the GFC, where the developed world was almost brought to its knees (or threats to the effect). And of course, "Where are all the customers yachts", written in the aftermath of the great depression but still apt today. Cheap shots, admittedly but fundamentally it's a matter of trust. That's why I invest passively in the stock market. And this is from someone who believes in the variable pricing SM model, and I invest accordingly. But I do understand the other perspective, and have a great deal of sympathy for those who support it. Currently there's room for different models but whether they survive future recessions or mergers will be interesting to see.
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Post by Deleted on Nov 4, 2017 21:31:55 GMT
Cheap shots, admittedly but fundamentally it's a matter of trust. No cheaper than the shots directed by 'those who know how to price bonds' against the 'sheeple', a phrase which seems to have become increasingly popular on this forum recently when referring to less sophisticated investors. Of course, the Mods/Admins seem much more relaxed about those cheap shots than the ones that land a little closer to home...
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registerme
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Post by registerme on Nov 4, 2017 21:42:49 GMT
Cheap shots, admittedly but fundamentally it's a matter of trust. No cheaper than the shots directed by 'those who know how to price bonds' against the 'sheeple', a phrase which seems to have become increasingly popular on this forum recently when referring to less sophisticated investors. Of course, the Mods/Admins seem much more relaxed about those cheap shots than the ones that land a little closer to home... I don't think you will be able to find a quote by a staff member that uses "sheeple" as a dismissive term. At best you might find a staff member post that quotes somebody else using the term, or perhaps one that references somebody else using the term. To be honest, were it not for the subset of the forum population who coined the term, and who have popularised it, and the wider context in which that conversation has taken place, I think you'd find we'd be much less accommodating of it. As to the "ones that land a little closer to home...", would you like to clarify / expand / explain?
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Post by Deleted on Nov 4, 2017 21:42:58 GMT
Worth remembering what P2P is; it's designed to cut out that traditional layer of financial services whose reputation still hasn't recovered since the GFC, where the developed world was almost brought to its knees (or threats to the effect). And of course, "Where are all the customers yachts", written in the aftermath of the great depression but still apt today. Cheap shots, admittedly but fundamentally it's a matter of trust. That's why I invest passively in the stock market. And this is from someone who believes in the variable pricing SM model, and I invest accordingly. But I do understand the other perspective, and have a great deal of sympathy for those who support it. Currently there's room for different models but whether they survive future recessions or mergers will be interesting to see. In response to the rest of this post, yes I agree with the trust/reputation aspect, and we can see some fairly unpleasant attitudes towards exploiting less sophisticated investors voiced clearly by more sophisticated investors in this very thread. But its also a simple matter of not believing that 'free' or 'perfect' markets are a magic solution to everything. Markets with varying price are also heavily susceptible to some of the problems we are seeing - short-termism, flocking behaviour etc, and bring some additional problems of their own. More complex taxation, manipulation based on pricing rather than liquidity, etc... To me, its just a different system with a different set of advantages and disadvantages. I quite like having a variety of systems to choose from.
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Post by Deleted on Nov 4, 2017 21:49:58 GMT
As to the "ones that land a little closer to home...", would you like to clarify / expand / explain? The fact that you thought the term 'spiv' was being directed at you for simply being able to price a bond. Which is not the case. And yet you seemed to take exception to this term, but not the disparaging 'sheeple' being condescendingly directed at less sophisticated investors in numerous posts on this forum. It is this contrast which caused me to raise my eyebrows.
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registerme
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Post by registerme on Nov 4, 2017 22:15:01 GMT
As to the "ones that land a little closer to home...", would you like to clarify / expand / explain? The fact that you thought the term 'spiv' was being directed at you for simply being able to price a bond. Which is not the case. And yet you seemed to take exception to this term, but not the disparaging 'sheeple' being condescendingly directed at less sophisticated investors in numerous posts on this forum. Which is what caused me to raise my eyebrows. Well, funnily enough I can't price a bond. I think the people who can bring useful value to the conversation. For that reason I never thought the term "spiv" was being used about me or against me . I do object to the way it's been used by some, disparagingly, seemingly because some people understand things that others don't. We should welcome and applaud anybody who adds value to the conversation. As for the term "sheeple", well, I hate it. I would point out that it was coined and popularised by those at the core of this. Could we ban all of them? Yes. Could we ban all of them permanently? No, but we could we make life difficult for them. Should we ban any or all of them? Well, no, not unless they break the forum rules. Do I resent some of them and their behaviour? Yes. You only have to look at linked thread, and the bakelite thread, and the likes, quotes, mutual support, and collective disparagement of staff posts to get a feel for things. You do not need to be Sherlock Holmes. Unfortunately we, the staff, are under siege. We have to pick our fights. The above having been said, thank you @eurasian69, I completely agree that use of terms like "sheeple" is wrong.
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Post by Deleted on Nov 4, 2017 22:23:42 GMT
I am clear that I use 'spiv' to describe a pattern of behaviour, not simply knowledge. Whether people self-identify as such and take offence or not is often quite informative I'm not interested in seeing anyone banned for name-calling, but as its you Mod/Admin guys that make the rules, I just get curious when I can't figure out where the lines are drawn!
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Post by lusitania on Nov 5, 2017 10:04:09 GMT
SM reduced to 6K.... amazing!
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ped
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Post by ped on Nov 5, 2017 14:56:49 GMT
SM reduced to 6K.... amazing! So a BH found MT and the delights on offer. Happy days for all, whatever you identify with.
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