bugs4me
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Post by bugs4me on Feb 1, 2018 18:58:52 GMT
<snip> Fair enough to introduce it on new loans, but for existing loans it does look like significant movement of the goal posts. No, it doesn't look like - it is.
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Post by charlata on Feb 1, 2018 19:46:47 GMT
Any poll on here is predominantly a poll of the people who already invest on the platform, as opposed those who might invest on the platform in the future. Thus far MT has pandered to the sort of investors who will do without a functioning SM if this also reduces the scope for active investors to get better returns.
The more interesting question is whether this business model is viable. A few thousand investors putting in 3 and 4 figure sums only gets you so far. If they want to expand, sooner or later, MT is going to have to make some unpopular decisions.
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Post by df on Feb 1, 2018 21:06:49 GMT
It's a YES from me It would help those who want to reduce or exit, those who prefer higher risk/return and to fund new loans. The same goes for Col and Ly.
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empirica
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Post by empirica on Feb 1, 2018 22:11:29 GMT
Forgive what seems to me like a simple question, as I'm sure the answer is anything but, however - What would the tax implications be for both buyer and seller if a loan were traded at a discount, please?
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SteveT
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Post by SteveT on Feb 1, 2018 22:21:04 GMT
Forgive what seems to me like a simple question, as I'm sure the answer is anything but, however - What would the tax implications be for both buyer and seller if a loan were traded at a discount, please? As per most other platforms that permit trading at a discount (or premium, which is not really at issue here), one party to the trade makes a small capital gain (if/when the loan repays in full) and the other a small capital loss on their original purchase. Whether or not this results in more or less tax being paid depends whether they are an individual or company lender. If an individual, the next question is whether they have other capital gains that exceed the annual capital gains allowance. If a company, all gains / losses affect the taxable trading profit. (NB. FS is an exception to this, since they're adamant their loans are simple debts. More to be found on the FS board)
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pom
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Post by pom on Feb 2, 2018 18:32:42 GMT
I guess I shall probably end up clicking on don't care...if I can be bothered. So the SM is a bit bunged up....ugh and am getting a bit confused now as I could have sworn I saw something earlier along the lines of someone saying that being paid interest whilst on sale doesn't help but can't now find it (tho if I wasn't completely imagining that, my view would be so what? Nobody's going to put stuff up for sale unless they want to, and even if they are perhaps grabbing a slot just in case, then if they end up replacing their stake the queue still moves forwards. And it sure as heck doesn't stop people listing loans for sale on L & COL). Anyway, where was I? Oh yeah so some people who previously were apparently quite happy with selling at par now want to be able to jump the queue slightly and let someone else take the risk because they've suddenly realised they are going to lose money somewhere along the line. Too many people generally RELYING on there being an SM to bail themselves out in my view...perhaps platforms need to start pushing that an SM is a privilege and not a right. Or something.
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r00lish67
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Post by r00lish67 on Feb 3, 2018 9:10:26 GMT
I've held back from commenting until now (made more than my fair share of comments last time around ). I obviously still support the idea, it is a good thing IMV, and I'm pleased to see that it seems its gained a bit more support. However, I do tend to agree that with previous posts to the effect that it's no substitute for improved loan quality. It feels like every recent loan has required a big leap of faith in one way or another, and unless I'm to be offered big rewards for such a leap, then I just haven't been able to build enthusiasm. Meanwhile, the existing loanbook has quite a few notable long silences hanging around it, which given MT's erstwhile active participation on the forum doesn't seem to bode well. Nonetheless, for their own viability if nothing else, it's worth doing as MT are really struggling to fill loans and this will help. As Steve has mentioned, it works very well for Assetz, and meanwhile despite swathes of negative press, FS clear massive loans much more quickly in part due to this (with the exception of one very pungent loan still hanging around, but I digress).
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jlend
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Post by jlend on Feb 3, 2018 10:04:28 GMT
Out of interest I am curious to know if many posters on here would buy the Bol and Liverpool loans at a discount?
I wouldn't but I may be in the minority
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boundah
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Post by boundah on Feb 3, 2018 10:21:05 GMT
I like the Ablrate model (able to offer/bid in the secondary market at any rate you like, higher or lower than par). Some people seem to find it complicated but for me it works well.
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SteveT
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Post by SteveT on Feb 3, 2018 11:15:15 GMT
Out of interest I am curious to know if many posters on here would buy the Bol and Liverpool loans at a discount? I wouldn't but I may be in the minority I'd likely buy more of the Liverpool loan at a decent discount (2% perhaps). Demolition has been completed since the loan drew down, commensurately reducing the remaining project costs and improving our security. £8k per planning-approved unit is about as low as any comparable loan I've seen. Looked at another way, at 0.29 hectares, the VR figure of £4m equates to £13.8m per hectare. Certainly considerable, but much less than the £20-30m per hectare the student accommodation block loans on Lendy run at.
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Post by charlata on Feb 3, 2018 12:43:02 GMT
There's an SM with variable pricing for basically everything I own. I do rely on the fact that if the need arises I can sell my house or car or washing machine to raise funds, and I can't see any problem with this. In a capitalist society, it is more or less a fundamental right to be free to sell your belongings at a price the market will stand.
It's my view that people want to avoid discounting because it makes investing in P2P feel more like real investing, and less like a building society account. Seeing the market price of your investments decline from day to day is unsettling. Not seeing it decline, even though its value is dropping, is just hiding behind an illusion.
Bridging and development loans are very dangerous. I can not see how anyone who can't cope with SM discounting could possibly be meaningfully evaluating such loans.
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yangmills
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Post by yangmills on Feb 3, 2018 13:42:56 GMT
.... It's my view that people want to avoid discounting because it makes investing in P2P feel more like real investing, and less like a building society account. Seeing the market price of your investments decline from day to day is unsettling. Not seeing it decline, even though its value is dropping, is just hiding behind an illusion. Bridging and development loans are very dangerous. I can not see how anyone who can't cope with SM discounting could possibly be meaningfully evaluating such loans. Agreed. I've made a similar point before in the prior thread on this topic. You clearly need to evaluate default and recovery rates (plus how to discount cashflows based on those assumptions). To then argue that a loan should be at par over its whole lifetime makes no sense. Nonetheless, it was was very clear in the prior thread that the demand for "simplicity" trumped other factors. Many really do want to live under the illusion that this is a savings account rather than a highly speculative fixed income investment. Or they don't want to feel that someone else might have any competitive advantage from variable pricing, despite the fact that par-only pricing creates just as many exploits. It's rather similar to the whole issue around valuations not being accurate. In reality, if a loan was really sub 70% LTV with a modest margin of error, then the probability of loss would be very low. There would be no way a property developer would need to pay 20%+ (and no P2P lender would be getting 12%) for such a loan. Clearly, there is a market for 12% loans and there is a market for accurate sub 70% LTV loans but the intersection of those two markets is not hugely scaleable. It's a few edge-cases where cheaper lenders such as banks can't not provide finance. Nonetheless, lenders continue to want to live under the illusion that there exists a large addressable market for 12% loans, which in default will recover at par. P2P is somehow "special", allowing them to maintain such cognitive dissonances. Some platforms continue to exploit that illusion mercilessly.
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jo
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Post by jo on Feb 3, 2018 15:04:38 GMT
There's an SM with variable pricing for basically everything I own. I do rely on the fact that if the need arises I can sell my house or car or washing machine to raise funds, and I can't see any problem with this. In a capitalist society, it is more or less a fundamental right to be free to sell your belongings at a price the market will stand. It's my view that people want to avoid discounting because it makes investing in P2P feel more like real investing, and less like a building society account. Seeing the market price of your investments decline from day to day is unsettling. Not seeing it decline, even though its value is dropping, is just hiding behind an illusion. Bridging and development loans are very dangerous. I can not see how anyone who can't cope with SM discounting could possibly be meaningfully evaluating such loans. Amen, and well articulated. I don't just support being able to sell at whatever the hell I want to, I demand it.
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oik
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Post by oik on Feb 3, 2018 16:21:46 GMT
I don't just support being able to sell at whatever the hell I want to, I demand it. Or perhaps you might demand that platforms without any kind of SM should have one first? I really can't bring myself to get too obsessed about this either way. Some platforms have SMs; some don't. Some have SMs that allow discounting; some don't. Some allow premiums and some don't. Perhaps the simplest approach might be to choose the platforms that meets your preferences and to use those. Vive la différence and all that.
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johni
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Post by johni on Feb 3, 2018 17:46:52 GMT
There's an SM with variable pricing for basically everything I own. I do rely on the fact that if the need arises I can sell my house or car or washing machine to raise funds, and I can't see any problem with this. In a capitalist society, it is more or less a fundamental right to be free to sell your belongings at a price the market will stand. It's my view that people want to avoid discounting because it makes investing in P2P feel more like real investing, and less like a building society account. Seeing the market price of your investments decline from day to day is unsettling. Not seeing it decline, even though its value is dropping, is just hiding behind an illusion. Bridging and development loans are very dangerous. I can not see how anyone who can't cope with SM discounting could possibly be meaningfully evaluating such loans. Amen, and well articulated. I don't just support being able to sell at whatever the hell I want to, I demand it. So I take it you don't invest in Moneything. The model has been set up it works. I invest in the p2p if I dont like the model I move to 1 I do. In 3 months time when the pendulum has swung the other way do we swap to no discount because the majority vote for it a 3rd time.
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