markr
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Post by markr on Sept 4, 2018 11:59:37 GMT
I've noticed that since the introduction of the black box, there is more variability in the rates within a band, and more granularity, so two loans that would previously have been lumped together and given the, say, "60 Month C-Band" rate, can now be given different rates.
Now that FC fills loans for us, they really only need two bands - "Eligible for conservative" (previous A+ and A) and "Not eligible for conservative" (previous B to E) - so perhaps they are less bothered about the risk band now and are more focussed on assigning a rate that reflects the risk, at least according to their Risk-o-matic 3000 Risk Allocation Machine.
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markr
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Post by markr on Aug 16, 2018 12:48:17 GMT
Astronaut 1: Hi mate, i cant find any milk for my coffee.
Astronaut 2: In space, no one can. Here, use cream.
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markr
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Post by markr on Aug 14, 2018 21:09:15 GMT
Or, alternatively, since you posted on a Monday morning, it could be that the loan payments fell due over the weekend and are still in the banking system. Essentially, the status of every loan changes to processing at the start of the day that payment is due, and reverts to live when that payment is credited to lenders. The due date as seen by lenders is a couple of days after that seen by the borrower, so normally the payment is sat waiting in FC's system and so the processing status is very brief. Sometimes though, there are delays in the system and the payment isn't distributed in a timely manner. Often these delays are in FC's own system, so nothing to do with the borrower at all (if you're of a nervous disposition, never look at your loan book on the Tuesday after Easter Monday). To be honest, if your view is that any loan that shows "processing" is inevitably going to become bad debt and result in a loss, then FC, and P2P in general, is probably not for you!
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markr
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Post by markr on Aug 3, 2018 19:15:41 GMT
My ISA account seems to be keeping itself busy but my classic account has only been nibbling on the SM and so has accumulated uninvested funds up to about 4 loan parts worth. I've noticed I've had quite a few early repayments in the last few days, though, so that and the usual Summer lull are probably not helping.
I've also temporarily switched both accounts to conservative to try to build up a buffer of reasonable loans to help offset the, errm, less salubrious parts of my portfolio.
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markr
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Post by markr on Jul 6, 2018 21:21:37 GMT
Here's a plot of my recoveries as a percentage of bad debt plotted over time: What immediately stands out is the post-September cliff edge! The data shows that this is caused by a big uptick in the rate of new bad debt rather than a fall in recoveries. Proof positive that FC is now lending to any old bent lawyer, trumpet crusher or jeans importer and the loan book post-September has become a dog's breakfast? Well, maybe, except that not a single one of my post-September primary market loans has defaulted! One loan formed after September has defaulted, but it was bought for me on the SM and is only a relatively small part. I'm open to other theories, but I think this shows just how much our manual bidding strategies were shielding us from bad debt, and how quick the correction is when we are denied the strategy. For me, this reinforces the fact that us forumites, almost all of whom used some strategy, can't judge the state of the whole loan book based on our own subset of it. For the record, my strategy was a combination of property sold before the end and flipping any C, D and E loans I could get my hands on, reducing exposure over 6 months or so. I didn't add or remove funds over the period of the plot, just re-invested returns.
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markr
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Post by markr on Jul 2, 2018 8:03:25 GMT
2018 - 55 defaults (including 16 at A+ and A) 2017 - 23 defaults 2016 - 25 defaults 2015 - 25 defaults. I think for most of us here, comparing our pre- and post-September portfolios doesn't tell us an awful lot about the FC's loan book as a whole. When we could choose our own loans, we generally employed a number of strategies to attempt to reduce the number of defaults we were exposed to. Most of these strategies have been denied to us since the change to automatic accounts. From your figures, it could be an equally valid conclusion to say that your manual bidding strategy was successful in ridding you of about half the defaults that you should have seen. That doesn't mean the defaults didn't happen, just that you'd avoided those loans, or offloaded them to autobidders. Personally I think it's a combination. Defaults overall are probably up (hence the expected returns reduction), but not by as much as our own loan portfolios may suggest.
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markr
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Post by markr on Jun 9, 2018 19:18:53 GMT
When I was only making new investments in property and selling before the end (effectively a way of avoiding defaults), my recoveries got up to 43% on an increasing trend that I'm sure would have reached FCs figure of 48%. Since resuming SME lending, my recoveries have fallen again to 22%.
This is to be expected, as it reflects the fact that defaults happen quickly, but recoveries happen glacially slowly. A new account that sees its first default has a recovery rate of 0%, this will climb over about 3 years to reach a steady-state in the low 20s where it will remain until the investor stops re-investing returned funds. It will then climb again to reach the FC 48% estimate about 3 years after the last default. Assuming everything else remains constant, of course.
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markr
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Post by markr on Jun 8, 2018 11:58:16 GMT
I could be dreaming but was there not a discretionary refund for a loan that went pop before repaying a penny, or was that another platform? There have been a few cases where FC has refunded lenders for loans that have gone bad, I think I've been in three (Sh*t House, the jeans and another one I can't recall offhand).
I doubt that they'd do it now in the Autobid world, since we don't choose our own loans any more their argument presumably will be as long as the loan book overall reaches the predicted returns then FC has met their promises to investors.
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markr
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Chat
Jokes
May 13, 2018 10:49:06 GMT
Post by markr on May 13, 2018 10:49:06 GMT
There was a robbery at the Apple Store last night. Police are appealing for iWitnesses.
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markr
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Post by markr on May 12, 2018 13:24:06 GMT
I might need a lawyer or a doctor or a civil engineer at some time. Trouble is, when you do need one, you might find they've all given it up for music.
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markr
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Post by markr on May 12, 2018 12:52:01 GMT
My 0.5% is just over £200, so until recently it has been buying me 2x£100 (plus a little bit). When I could be bothered, I'd try to get the sellbot to sell one of them for me, to increase diversification, but now it seems I don't have to! I suspect that they may have reduced the threshold to 0.25% for fully-invested accounts.
Hmm, yesterday it bought me £180 of one loan, as a £100 and a £80 part, so less than 0.5% but more than 0.25%. Also, my available funds right now is £43.09, but the last transaction on my statement is an SM purchase of £21.16. Something has definitely changed recently!
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markr
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Post by markr on May 10, 2018 14:57:57 GMT
For some reason, in my old account, the bidbot is only buying me a single £100 part of new loans on the PM, even though this is less than 0.5% of my total, and it's buying up tiddly bits on the SM for me, so that for the last week or so my uninvested funds hasn't climbed much above £20 - just like the old days! Meanwhile, my ISA account which I've recently added to is busily buying 0.5% chunks.
I wonder if this is a new policy for fully invested accounts to pick stuff up as-and-when rather than waiting for there to be 0.5% funds available. If so, nice one FC, I like it, apart perhaps from the increase in SM purchases.
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markr
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Post by markr on May 4, 2018 13:36:59 GMT
Pre-September, many long-time FC users, especially those interested enough in P2P to use this forum, had developed strategies aimed at avoiding defaults although admittedly with varying degrees of success. Also, pre-September, unless you had a bot or fast fingers, you'd have had limited numbers of D and E loans, whereas now you get your fair share. Unless you avoided them, you'd have probably have had more property loans (which didn't fail before the last payment) in the past before FC began winding down that part of the business.
All this, wrapped up in a layer of random chance and confirmation bias, means it is nigh on impossible to judge whether there are more early failures now based on one person's account holdings.
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markr
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Post by markr on May 3, 2018 21:10:47 GMT
As an aside, just to be clear, I'm not suggesting FC's website code rummages in a spreadsheet to build the loan comments page, but rather that the spreadsheet is a reflection of the contents of the loan database!
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markr
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Post by markr on May 2, 2018 14:07:56 GMT
It's a quirk of FC's system that can be seen by downloading the loan book. Normally, when a loan payment comes in, the outstanding capital (column O) is reduced accordingly, and when it reaches zero, the loan is removed from your loan parts display and comments. When a loan is defaulted, though, the outstanding capital column is frozen and any payments instead increment the recoveries entry (column I). As a result, the loan is never removed from your loans and your outstanding capital (which is simply calculated as your share of column O) doesn't change.
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