bg
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Post by bg on Jul 25, 2017 19:34:45 GMT
But it's not as you can't invest more than 20% in any loan. You can't put £6k in a £10k loan. You're also ignoring capital repayments and defaults. You also can't invest in whole loans (which most loans are these days). note: the 1077 C,D,E's in the last year is already ignoring Whole Loans On re-reading, What I think he meant, was how to earn a total of 1 million (Not how to earn 1 million interest) And he's saying is you start with 0 and invest 1000 a month, then at 15% interest after 18 years you'd have 1 million total. In reality in the final year you'd have to invest 766,000 which is easily achievable given the current loan volumes It's easy to invest it but where I disagree is to invest it and earn returns of over 15% net.
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bg
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Post by bg on Jul 25, 2017 19:33:16 GMT
Not necessarily many E's. The annualised rate of a 60m D is around 19.5%. Also large E's tend to hang around for several minutes these days. Judging by the profit he has made he must have had a significant amount of that £22,500 invested early into this 11 months. Judging by the 1.5 diversification he must be buying a fair chunk of C/D's that appear, therefore I'm suspecting some sort of bot automation strategy here to buy any C/D/E's, otherwise you'd be investing significant personal time in sitting waiting to buy these manually. Unless he just whacked it all in D and E's on the SM in one sitting.
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bg
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Post by bg on Jul 25, 2017 19:19:06 GMT
Trying to ramp it up to your £1m target is a completely different matter. There just aren't enough loans (at the moment). mmmmm, Not strictly true There were 1077 C,D,E's since September 2016 So you'd only have to invest on average £6000 in each to invest 6.6million therefore earning 1million from 15% interest Note: there wouldn't be the loan volume to support many participants in this million pound lunacy, but in theory its achievable But it's not as you can't invest more than 20% in any loan. You can't put £6k in a £10k loan. You're also ignoring capital repayments and defaults. You also can't invest in whole loans (which most loans are these days).
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bg
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Post by bg on Jul 25, 2017 18:40:45 GMT
Hi bg I take your point and I have worried about how to come across as credibly as possible. For transparency I've posted my entire Funding Circle summary on the about page. Obviously referrals are a legitimate way for anyone to make money on Funding Circle, but that being said, if you subtract the £100 referral from the earnings then you get a number that is 96% of the total. If you take 96% of my current annualised return you get 16.6% for the year. In terms of time invested, it's unlikely that I would have earned that much by investing in an E loan for a week (unless I was investing millions!) I have been investing since the 2. September. I'm not entirely sure how to prove that. Open to suggestions if you have any? The aim of the book and the blog is to help other people increase their returns by following my steps. I want to come across as credibly as transparently as possible as without that, you are right in that the returns are meaningless. You've made £2.5k net. It's not enough to prove a strategy. If it was £100k it would be more impressive. Your net annualised return is around 15% and is on a very immature portfolio. Less than a year is not long enough. Another issue is scalability. Doing it on small amounts is relatively easy (if you can invest the time). Trying to ramp it up to your £1m target is a completely different matter. There just aren't enough loans (at the moment). Nice try though.
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bg
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Post by bg on Jul 25, 2017 18:33:34 GMT
To get a gross yield of 19.7 you must be investing in only D,E's? How are you getting soo many E's by a manual strategy? Not necessarily many E's. The annualised rate of a 60m D is around 19.5%. Also large E's tend to hang around for several minutes these days.
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bg
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Post by bg on Jul 25, 2017 16:54:53 GMT
I would say that the annualised return numbers are meaningless without the actual total returns for comparison.
For example if you have £100 invested and get a £50 referral you will have a decent annualised return but its fairly meaningless. Likewise you could put £100 in an E for a week and sell out to cash and again your %'s would look amazing but again fairly meaningless.
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bg
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Post by bg on Jul 23, 2017 18:11:58 GMT
Yes they will. If you're not convinced, try it. You can move the money out and then back in for no loss of interest. You may be right, but that's not how the GBBA works! It took me ~9 months to totally get back all my investment, I did get 70% in a week and 90% in a month, but underlying defaulted loans had to wait until recovery. QAA is different though. That's why it pays only 3.75% v 7% for GBBA.
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bg
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Post by bg on Jul 23, 2017 13:24:53 GMT
I have noticed that a couple of my loans on the QAA have been suspendend trading if I sell out my QAA will these loans be sold off? Yes they will. If you're not convinced, try it. You can move the money out and then back in for no loss of interest.
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bg
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Post by bg on Jul 17, 2017 10:53:13 GMT
4) Renewals are partially ignored depending on LTV If the borrower pays the interest in cash out of their own resources to renew it actually gives me more confidence in the loan (ie they are meeting their obligations and are keen to keep hold of the asset). If however, the loan size is increased to pay the interest (therefore increasing the LTV) then I will generally avoid unless the LTV is very low (ie <50%).
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bg
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Post by bg on Jul 13, 2017 11:55:21 GMT
There is a different meaning for some of the pawn loans on FS, and perhaps elsewhere. Take for example 1081233053 which has just filled, it offers a relatively low rate of 9% but the info states "The watch has been fully underwritten for the full six month loan agreement." I take this to mean that in the event of default an underwriter will purchase the asset for the full loan amount plus accrued interest. This sounds like a good rate for relatively low risk, or am I missing something? I was more thinking about those occasional large property loans where they state that underwriters have been used, although no mention of underwriters purchasing the asset in the case of default (unfortunately, wouldn't that be good!) Edit: As an FS example - Property in Poole (5355230753) - "This loan is fully underwritten and will be drawn down shortly. The loan will stay open for funding to allow additional bids from new or repeat investors, with the underwritten amount being reduced as additional bids are made" It makes no difference to the security (ie you both rank the same) but different platforms give different prioroty to underwriter sales...ie some get to jump the queue ahead of retail investors while others put the underwriters at the back of the queue.
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bg
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Post by bg on Jul 5, 2017 6:53:34 GMT
thanks. if borrowers havent made payment for monthssss, how do lenders get their interests? They don't
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bg
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Post by bg on Jul 4, 2017 21:53:04 GMT
I think we will see by the change in total loan book over the next two months. I'm sure there will be a decrease in the recent rate of expansion over summer but also that FC will shift the ratio slightly more towards the retail sector to satisfy the (more flighty) retail demand.
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bg
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Post by bg on Jul 4, 2017 21:47:46 GMT
Hello gurus, I would like to invest more on AC, but still learning how to choose loans. i am rather cautious with loans on AC, as it seemed to have more defaults (least in my eyes). I occasionally went through defaulted loans and try to see what signs i could see from it, so as to learn from previous defaults. any words of wisdoms to pass to this newbie me? thanks. Yes. I would say that in terms of loan quality, handling of delinquent loans and communications AC is the best platform out there (although that's not to say there aren't things that could be done better). Dont be fooled by other platforms where everything looks like a bed of roses when in fact there are some loans that haven't made a payment in years. AC are very good at marking monitoring events at the first sign of trouble whereas other platforms try and kick the can down the road praying for a resolution. Lendy for example was lots of people's darling just a few months ago - how things change so quickly.
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bg
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Post by bg on Jul 4, 2017 21:41:35 GMT
Meanwhile, the loans keep repaying and the loan book declines for two months? That will not go down well with the backers. In the last two months the level of live PL's has increased from £549m to £579m while the level of live WL's has increased from £729m to £811m. So the loan book has increased by 8.8% in two months. I can't imagine the backers will have too many complaints.
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bg
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Post by bg on Jun 27, 2017 15:27:20 GMT
Yes... This is true of any investment, I'd go as far to say that this is a characteristic that should be ensured in any market. Sounds a bit like the deluded punter who spends hours pouring over the Sporting Life and thinks he can beat the bookies because he knows who the horse's trainer is,what the horse eats for breakfast and what sort of ground it prefers. Your statement is factually incorrect as evidenced by all sorts of investments and circumstances. Don't think the expert bankers did very well in 2007 and 2008 did they? Plenty of expert bankers did extremely well in 2007 and 2008. Don't think that having the interests of shareholders and staff misaligned (ie getting paid a big bonus for selling a duff loan you knew would go pop down the line) is the same thing as not knowing what you are doing.
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