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Post by dan1 on Jan 23, 2019 22:07:27 GMT
... Your dire predictions are just that a guess as current loss rate is 0.6% for defaults not actual compleated loans which would be lower.
... That's not correct GodanubisThe Capital lost through defaults of 0.60% (see here) is for completed loans + defaulted loans. Capital Lost % = Capital lost / (Loans Repaid + Loans Defaulted) = £1,334,741 / (£205,541,325 + £16,798,657) = 0.60%
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pip
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Post by pip on Jan 24, 2019 0:27:19 GMT
If you would be disappointed if your returns fell to 13% you: - Clearly have not been invested in Fundingsecure for long or are not taking into account expected losses from late loans which have not formally been defaulted. For the record I am anticipating a 75-90% loss on my outstanding FS loans after going through them. Maybe you have not invested in any of the near 90% of my remaining loans which are late with the vast majority having updates which clearly indicate full recovery is at best doubtful. - Not investing on most other mainstream platforms such as Funding Circle, Ratesetter or Zopa where the advertised rate of return is around 4-6%. If you genuinely are making 13% a year, firstly congratulations that's pretty remarkable. But how long have you achieved that for 1 year, 5 years, 20 years? The trouble with that high rate of return in inevitably it will involve a large dose of risk. Obtaining anywhere near consistent returns at that level is near impossible and I suspect long term reliant on a large dose of luck. Either than or you should get into fund management quick and be investing the countries pension pots! Whhich future loan are you expecting 70-90% losses? I went through my entire FS loans and based on comments predicted expected recovery. Some like powerboat and art and a few property loans with second charges with comments that valuation now is way less than original expect 100% loss. Other overdues based on failure of fs to recover other overdue loans and various other cockups such as the titles not been secured and wildly wrong ltv’s I think a 50-60% default is reasonable. Therefore as most of my loans are overdue a 70-90% default rate on my remaining loans seems a fair guess. Hope I am over pessimistic, time will tell.
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Godanubis
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Post by Godanubis on Jan 24, 2019 0:39:02 GMT
... Your dire predictions are just that a guess as current loss rate is 0.6% for defaults not actual compleated loans which would be lower.
... That's not correct Godanubis The Capital lost through defaults of 0.60% (see here) is for completed loans + defaulted loans. Capital Lost % = Capital lost / (Loans Repaid + Loans Defaulted) = £1,334,741 / (£205,541,325 + £16,798,657) = 0.60%You are correct I just put it badly I ment it includes defaults. Take them out and actual losses are smaller.
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Godanubis
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Post by Godanubis on Jan 24, 2019 0:47:06 GMT
Whhich future loan are you expecting 70-90% losses? I went through my entire FS loans and based on comments predicted expected recovery. Some like powerboat and art and a few property loans with second charges with comments that valuation now is way less than original expect 100% loss. Other overdues based on failure of fs to recover other overdue loans and various other cockups such as the titles not been secured and wildly wrong ltv’s I think a 50-60% default is reasonable. Therefore as most of my loans are overdue a 70-90% default rate on my remaining loans seems a fair guess. Hope I am over pessimistic, time will tell. DEFAULTS/LATE DOES NOT MEAN ULTIMATE LOSS. Simply dragging up the few larger losses means nothing. To have a 60% loss on a diversified portfolio would mean 60% of your loans would need to default at 100% On the other hand put all your money into 10-20 loans and you do stand to loose a substantial sum but that is your fault.
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pip
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Post by pip on Jan 24, 2019 1:37:44 GMT
I went through my entire FS loans and based on comments predicted expected recovery. Some like powerboat and art and a few property loans with second charges with comments that valuation now is way less than original expect 100% loss. Other overdues based on failure of fs to recover other overdue loans and various other cockups such as the titles not been secured and wildly wrong ltv’s I think a 50-60% default is reasonable. Therefore as most of my loans are overdue a 70-90% default rate on my remaining loans seems a fair guess. Hope I am over pessimistic, time will tell. DEFAULTS/LATE DOES NOT MEAN ULTIMATE LOSS. Simply dragging up the few larger losses means nothing. To have a 60% loss on a diversified portfolio would mean 60% of your loans would need to default at 100% On the other hand put all your money into 10-20 loans and you do stand to loose a substantial sum but that is your fault. You can drop the I am smarter than you act, last post was a touch patronising I know perfectly well that an overdue or as FS say unredeemed loan may repay in part or full. My FS loan book is though almost all overdue and the comments so far from fundingsecure indicate that my chance of an eventual recovery is pretty slim. As I said I have been through my loan book and predicted expected eventual losses on my current portfolio. I readily admit that as I haven’t invested much for over a year by definition my remaining loans are old and a fair few good investments have already repaid. But for the remainder I predicted a 70-90% loss. I hope I am wrong and I get back more than this but this is what I predict. On the diversification point. I diversify across asset classes and within p2p both across and within 6 platforms with in each platform no more than 3% in each investment. This is more than enough diversification. Within a platform diversification helps to prevent divergences from the average return but does nothing to increase the average return. On your claim you make 13% p.a. Well if it’s true as I said good luck to you and you are a better investor than me. I can’t see though how this is in any way typical for p2p investments or quite frankly believe that it is achievable long term.
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Godanubis
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Post by Godanubis on Jan 24, 2019 1:47:47 GMT
DEFAULTS/LATE DOES NOT MEAN ULTIMATE LOSS. Simply dragging up the few larger losses means nothing. To have a 60% loss on a diversified portfolio would mean 60% of your loans would need to default at 100% On the other hand put all your money into 10-20 loans and you do stand to loose a substantial sum but that is your fault. You can drop the I am smarter than you act, last post was a touch patronising I know perfectly well that an overdue or as FS say unredeemed loan may repay in part or full. My FS loan book is though almost all overdue and the comments so far from fundingsecure indicate that my chance of an eventual recovery is pretty slim. As I said I have been through my loan book and predicted expected eventual losses on my current portfolio. I readily admit that as I haven’t invested much for over a year by definition my remaining loans are old and a fair few good investments have already repaid. But for the remainder I predicted a 70-90% loss. I hope I am wrong and I get back more than this but this is what I predict. On the diversification point. I diversify across asset classes and within p2p both across and within 6 platforms with in each platform no more than 3% in each investment. This is more than enough diversification. Within a platform diversification helps to prevent divergences from the average return but does nothing to increase the average return. On your claim you make 13% p.a. Well if it’s true as I said good luck to you and you are a better investor than me. I can’t see though how this is in any way typical for p2p investments or quite frankly believe that it is achievable long term. Well it depends on the effort and the funds available. 3% is way too much for 1 loan 3-4 100% losses and you have lost a years interest. Any managed P2P where returns are nearly guaranteed all say a maximum 1% should be invested in any loan.
I have over £200K for sale at a profit on any 1 day that gives 36% - 200% APR on loans sold if taken on daily basis. However that is obviously not sustainable on the full amount and results in my overall annual return in excess of 15% in FS
As you will know some platforms have loans that give returns after 3-5 years, I count all FS loans to be 2 years. Wait till that time before predicting (for which there is no demonstratable evidence) any specific outcome.
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pip
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Post by pip on Jan 24, 2019 3:20:38 GMT
You can drop the I am smarter than you act, last post was a touch patronising I know perfectly well that an overdue or as FS say unredeemed loan may repay in part or full. My FS loan book is though almost all overdue and the comments so far from fundingsecure indicate that my chance of an eventual recovery is pretty slim. As I said I have been through my loan book and predicted expected eventual losses on my current portfolio. I readily admit that as I haven’t invested much for over a year by definition my remaining loans are old and a fair few good investments have already repaid. But for the remainder I predicted a 70-90% loss. I hope I am wrong and I get back more than this but this is what I predict. On the diversification point. I diversify across asset classes and within p2p both across and within 6 platforms with in each platform no more than 3% in each investment. This is more than enough diversification. Within a platform diversification helps to prevent divergences from the average return but does nothing to increase the average return. On your claim you make 13% p.a. Well if it’s true as I said good luck to you and you are a better investor than me. I can’t see though how this is in any way typical for p2p investments or quite frankly believe that it is achievable long term. Well it depends on the effort and the funds available. 3% is way too much for 1 loan 3-4 100% losses and you have lost a years interest. Any managed P2P where returns are nearly guaranteed all say a maximum 1% should be invested in any loan.
I have over £200K for sale at a profit on any 1 day that gives 36% - 200% APR on loans sold if taken on daily basis. However that is obviously not sustainable on the full amount and results in my overall annual return in excess of 15% in FS
As you will know some platforms have loans that give returns after 3-5 years, I count all FS loans to be 2 years. Wait till that time before predicting (for which there is no demonstratable evidence) any specific outcome.
I disagree that 3% on a loan on one platform is too little diversification, over 6 platforms that’s like 0.5% of p2p balance. Diversification beyond this won’t bring me much closer to the average return. To be honest I don’t understand your paragraph with the 200% APR bit in it. I would disagree that there is no demonstrable evidence that FS loans which are late won’t default. For some FS has said that the asset wasn’t under their management and others that the loan has been passed to a receiver with the latest valuation way below the valuation when the loan was issued. Where my loan part has a second charge behind another this leaves me in a demonstrable sticky situation. With regard to your 13% claim, without sitting down and going through your workings and assumptions it’s hard for me to comment further. However if this doesn’t take into account any expected losses on overdue and unredeemed FS loans then I would have serious doubts. Good luck to you if you think you can consistently make a profit by reselling loans before completion on secondary market. This relies on there being a ready market for these loans. Based on the current outlook for FS investors holding loans to maturity, i wouldn’t bank on this continuing ad infinitum. That’s before I start on platform risk etc.
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09dolphin
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Post by 09dolphin on Jan 24, 2019 9:29:46 GMT
What I think may be happening is that people decide to invest perhaps £1000.00 and are anxious their money should work for them as soon as possible and these may be the investors that Grodanubis is selling loan parts to. Obviously these people will not continue investing in FS loans when they discover that the 6 month loan term is laughable as it is extended to 2 or even 3 years and then, when some loans default, they actually lose some of their capital. Not a good or positive experience for anyone.
Grodanubis suggests people should only invest 1% of their capital in any one loan so he is obviously suggesting that the minimum anyone should invest in FS is £2500.00. It is considerably more than I would consider investing in a platform with FS's record even if one person suggests you can make a return of 13 - 16% provided you are prepared to work on maximising that return for what - 14 hours a day or to have customised software.
People do learn by experience as I have done. Whilst I will have lost money in this loan (as I'm in the 2nd loan) the breaking point for me was the Whitehaven debacle and I have been withdrawing over the past year or so and, until I am convinced FS are placing realistic LTVs on the loans they offer, I will continue to abstain from FS's offerings.
Good luck to you Grodanubis but your scheme of buying and selling reminds me so much of the illegal pyramid schemes.
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bugs4me
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Post by bugs4me on Jan 24, 2019 10:30:24 GMT
What I think may be happening is that people decide to invest perhaps £1000.00 and are anxious their money should work for them as soon as possible and these may be the investors that Grodanubis is selling loan parts to. Obviously these people will not continue investing in FS loans when they discover that the 6 month loan term is laughable as it is extended to 2 or even 3 years and then, when some loans default, they actually lose some of their capital. Not a good or positive experience for anyone.
Grodanubis suggests people should only invest 1% of their capital in any one loan so he is obviously suggesting that the minimum anyone should invest in FS is £2500.00. It is considerably more than I would consider investing in a platform with FS's record even if one person suggests you can make a return of 13 - 16% provided you are prepared to work on maximising that return for what - 14 hours a day or to have customised software.
People do learn by experience as I have done. Whilst I will have lost money in this loan (as I'm in the 2nd loan) the breaking point for me was the Whitehaven debacle and I have been withdrawing over the past year or so and, until I am convinced FS are placing realistic LTVs on the loans they offer, I will continue to abstain from FS's offerings.
Good luck to you Grodanubis but your scheme of buying and selling reminds me so much of the illegal pyramid schemes. Depends on how you structure your IRR records. In my case, they are structured on actual returns and not those ‘promised’ by the platform. Going back to this loan in particular. If you had invested say 1k from day one, then according to FS currently you would be due the initial 1k plus £450 in interest. Realistically we all know there will be zero interest on this first tranche and the initial 1k will take a serious haircut. If though you relied upon the FS figures, which even though the loan has defaulted and the interest continues to accumulate then I believe it’s a fools paradise scenario to use those figures in your IRR calculations. The second tranche on this loan is looking like a total wipe out. Nonetheless FS continue to add interest. So if you take the FS figures, as presented by the platform then it’s a blinkered approach to say the least. It’s not about being positive or negative towards a loan and or platform. I prefer to live in reality.
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adrian77
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Post by adrian77 on Jan 24, 2019 12:17:16 GMT
I agree the below is possible but only on a daily basis
however as I see it if over 10% of loans go pectorals up big time (which is looking highly likely for my loan book) then I thought these high figures are going to be totally wiped out. I thought I had diversified my art loans but thanks to FS I did not know it was the same chap who may possibly be a bit dodgy... however can you give us an example (loan name not needed) of an item you have for sale which gives 200% apr - thanks a lot
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trium
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Post by trium on Jan 24, 2019 17:44:23 GMT
Currently available loans SM/PM = 145 (I know it's typically over 200). Remove multiple tranches etc leaves 82. Remove multiple exposures to same borrower (if known) leaves ?
A new investor will take some time (and accept a lot of rubbish loans) if he wants to diversify to 1%.
Perhaps a discussion of trading strategies needs its own thread as I've now seen several hijacked by this debate.
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Post by mrclondon on Mar 4, 2019 15:21:21 GMT
This sorry saga is reaching the end game - updates just made on the two loans.
2nd ranking loan - 0% capital recovery
1st ranking loan - 42% capital recovery, split over 3 payments (now, April & July 2019)
Full breakdown of proceeds and costs in a pdf on the files tab of both loans (c. 50% of proceeds spent on 3rd party costs)
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Post by bracknellboy on Mar 4, 2019 15:44:29 GMT
well at least their is a roadmap to remove one of the 3 loans I have left with FS. Based on quantum though, the one I really need a decent outcome on is a certain Powerboat. And I'm not terribly hopeful.
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bugs4me
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Post by bugs4me on Mar 4, 2019 16:15:26 GMT
This sorry saga is reaching the end game - updates just made on the two loans.
2nd ranking loan - 0% capital recovery
1st ranking loan - 42% capital recovery, split over 3 payments (now, April & July 2019)
Full breakdown of proceeds and costs in a pdf on the files tab of both loans (c. 50% of proceeds spent on 3rd party costs)
mrclondon - the word used 'sorry' is far more gentler than how I feel about this loan. Reading the goodness knows how many pages of supposedly accurate updates and the handling of this loan by FS is an absolute disgrace. Even their latest update states the value has deteriorated along with the property. Anyone with a single brain cell could have told them the property would devalue but such was their lacksidasical approach to this loan and probably several others that it simply confirmed in my view that they are out of their depth.
That being the case and even though some posters feel FS have turned over yet another new leaf, it will take more than 12% to get me involved with these amateurs again. Of course you can be ultra selective with their loan offerings but if/when the **** hits the fan, which can happen with even a 'cast iron guarantee loan', then they are what they are - numpties in my book.
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Post by banffy on Mar 4, 2019 17:03:17 GMT
This sorry saga is reaching the end game - updates just made on the two loans.
2nd ranking loan - 0% capital recovery
1st ranking loan - 42% capital recovery, split over 3 payments (now, April & July 2019)
Full breakdown of proceeds and costs in a pdf on the files tab of both loans (c. 50% of proceeds spent on 3rd party costs)
mrclondon - the word used 'sorry' is far more gentler than how I feel about this loan. Reading the goodness knows how many pages of supposedly accurate updates and the handling of this loan by FS is an absolute disgrace. Even their latest update states the value has deteriorated along with the property. Anyone with a single brain cell could have told them the property would devalue but such was their lacksidasical approach to this loan and probably several others that it simply confirmed in my view that they are out of their depth.
That being the case and even though some posters feel FS have turned over yet another new leaf, it will take more than 12% to get me involved with these amateurs again. Of course you can be ultra selective with their loan offerings but if/when the **** hits the fan, which can happen with even a 'cast iron guarantee loan', then they are what they are - numpties in my book.
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