markr
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Post by markr on Jan 30, 2018 17:01:04 GMT
There appears to be graffiti on a wall towering above and behind the security, Maybe we can persuade Banksy to pop round and increase its value overnight.
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markr
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Post by markr on Jan 23, 2018 17:02:29 GMT
The best approximation to the algorithm I have deduced is that it will sell the least number of loan parts necessary to get as close as possible to, but not less than, your target amount.
So, I can reliably make it sell one of my £100 parts (bought post-September on the PM), by requesting to sell £99. I can't make it choose which loan part, although if I do it, cancel the sale and do it again, it will always choose the same part. If I own two £100 parts in the same loan, then sell one of them, if I request a £99 sale again it will sell the second part of that loan, even though I now own less of it than several other loans.
If I request to sell £101, it will ignore all my £100 parts and make a total slightly larger than £101 using several pieces of pre-September shrapnel parts (£20 parts that have made repayments). This is presumably because £100+£smallest shrapnel is bigger than the amount it can make by some combination of shrapnel parts.
It seems that the algorithm takes no account of the total amounts of any one loan you hold, only the sizes of parts considered independently. So for example, suppose you had 10 parts of £100 in different loans, and 100 parts of £20 all in the same loan. If you asked to sell £999, it would likely sell the 10 £100 parts even though this is the worst case for diversification.
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markr
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Post by markr on Jan 20, 2018 15:33:36 GMT
From FC's point of view, I think this was a deliberate choice, or at least a happy accident.
Remember, as FC has grown, their intention has always been to level the playing field, to remove the advantages that time-rich, interested investors (the sort that take the time to read and contribute to forums about P2P!) have over the autobidding majority. Being able to choose which loans to sell (either directly or by being able to predict and manipulate the selling algorithm) would be the last way to game the system, so having an opaque selling system that potentially disadvantages the seller is better for FC.
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markr
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Post by markr on Jan 18, 2018 15:59:08 GMT
Firstly, that was rather silly! When getting rid of your "Crypto Sofa" you should have done what I do which is cut the thing into bits to ensure there is nothing left in the bottom (Lets call this a back-up of the HDD!).
Well, quite, although the coins were pretty much worthless then, and to be fair even now wouldn't be much more than loose change. The PC was one I'd used for work, so it had to go in the WEEE bin with its disk properly destroyed, and perhaps it's telling that I didn't consider the Bitcoin wallet to be something useful enough to be copied off it before scrapping it! Maybe more irksome is that also used to put the PC into a web-based mining pool every so often, and I can't for the life of me remember my login, or even which website it was or if it still exists. Presumably these coins aren't lost forever though, as they were only allocated to me by the website rather than the blockchain. I recall being pleased when it ticked over to 0.01 BTC, so while not a fortune it's a tad annoying.
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markr
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Post by markr on Jan 16, 2018 14:49:57 GMT
Given that only a finite number of bitcoins can ever exist, and the blockchain is fixed forever, what happens when all the bitcoins are lost down the back of the crypto-sofa? As an example, ages ago I got some bitcoin from a faucet and put it in a wallet on a PC, but forgot about it and now the PC is long gone.
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markr
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Funding Circle (FC)
5.6% !!!
Jan 14, 2018 22:18:27 GMT
Post by markr on Jan 14, 2018 22:18:27 GMT
The problem is that negative events (losses) are rapid, but positive events (payment of interest and recoveries) are slow, often glacial in the case of recoveries. By chance, you've been hit with a few negative events early on, but you would reasonably expect over time, unless you have been jinxed, regression to the mean would bring your returns back towards the predicted result.
As an example of this, FC predict that annual losses after recoveries will be ~2%. They also predict that they can recover ~50% of losses. So a mature, "steady state" account will be losing about 4% per year, but offsetting that with 2% recoveries. But it can take years before a defaulted loan even begins to make recovery payments, so a new account will be losing the 4% but not making any recoveries.
Anyway, my conclusion would be that if you sold out and abandoned FC now, you'd very likely be "selling low", so your best option is to stick with it!
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markr
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Post by markr on Jan 10, 2018 13:48:24 GMT
My penny falls experiment (no new deposits, no withdrawals) is still ongoing. Over half my initial capital amount is now in defaulted or seriously late loans, but the rest is performing ok. Assuming no recoveries or further losses, I'm a little bit ahead at the moment, before tax.
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markr
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Post by markr on Jan 8, 2018 11:05:51 GMT
As it happens, I left lending on. Partly forgetfulness/apathy, partly a view that I shouldn't attempt to mess with the system if I want to get a true measure of FC's autolend performance. I didn't end up with any of your loans anyway.
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markr
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Post by markr on Jan 6, 2018 17:50:22 GMT
Bravely, and perhaps foolishly, I will be selling a near-death property portfolio on Monday and plan to try the 'balanced' portfolio for a few months.
Thanks for the warning, I'll be turning lending off until Tuesday!
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markr
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Post by markr on Dec 30, 2017 23:14:51 GMT
Personally I expect a rival platform in the North of England to go under in 2018 When I first read that, I thought you meant Assetz, but on second thoughts I take it you mean white rose rather than red.
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markr
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Post by markr on Dec 29, 2017 22:19:46 GMT
It's the classic false positive vs false negative problem. FC could do more to prevent bad borrowers getting through, but it would likely result in rejecting more of the good loans and result in increased fees to pay for the additional DD, neither of which is good for FC's business. Far easier to get early failures to as low as reasonably practicable, then price the rates good borrowers pay so as to achieve reasonable overall yield.
Human nature is to be loss averse, and we tend to take losses from dodgy borrowers personally, even though a well diversified lender is almost certainly earning a positive return, and most lenders will be earning at least the target return.
FC have likely improved their processes, but they are in an arms race, as their fraud detection improves, the dodgy borrowers invent new ways to circumvent them. Bear in mind FC have also introduced higher risk bands, with corresponding higher rates, since the early days.
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markr
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Post by markr on Dec 28, 2017 21:25:31 GMT
It is perhaps even more annoying for the whole loan lender who picked up loan 43239 to the same company, which was taken out in September, after the change of director but before CH were notified.
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markr
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Post by markr on Dec 25, 2017 16:19:06 GMT
Merry Christmas and a default free New Year to everyone! If you find the sixpence in the pudding, invest it wisely.
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markr
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Post by markr on Dec 21, 2017 13:39:51 GMT
I had one small bite from the SM today, but not enough to stop my unlent funds going over 2%. I'd just put it down to the Christmas slowdown and maybe an influx of ISA cash, but if sellers want to sell and can't that seems a bit odd.
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markr
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Post by markr on Dec 20, 2017 17:42:51 GMT
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