johnfleet
Member of DD Central
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Post by johnfleet on Mar 15, 2018 15:55:05 GMT
Hard to say - I'll probably not be in a position to draw a conclusion for another couple of years - possibly more, whilst the Lendy and MT defaults play out. I have made tens of thousands in interest and as yet not suffered any significant capital losses (under round about £5K and that's from ReBS and ThinCats) but of course that's likely to change...
It's definitely a jungle and I realise that, like many others, I got suckered into thinking it was easy money and perhaps failed to do enough DD on Lendy loans. But that said, how do you legislate for a RICS valuer overvaluing a property by 300 per cent as in the case of the castle?
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ceejay
Posts: 971
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Post by ceejay on Apr 2, 2018 8:41:21 GMT
... It's definitely a jungle and I realise that, like many others, I got suckered into thinking it was easy money and perhaps failed to do enough DD on Lendy loans. But that said, how do you legislate for a RICS valuer overvaluing a property by 300 per cent as in the case of the castle? This raises a good question about how much DD an individual lender might be expected to do when evaluating a loan. It would be lovely if we could trust all the valuations we are given but that clearly isn't right. There have been a couple of loans I've seen recently where it all looked good on the surface but where applying my own knowledge/experience of the local market led me to say "not a chance". This makes me wonder whether it is ever right to speculate significant sums of money on an opportunity where one has no knowledge or experience to bring to the party. This would mean making investments only where 1 - its a very small proportion of your portfolio and you're happy to treat it as pure gamble or 2 - you have personal knowledge and/or experience and can make your own judgement or 3 - you're in a very well protected and liquid wrapper, so you don't care if the odd loan goes missing (eg AC 30DAA) Now, this plays right back to the original question in this poll: following rules like these is likely to mean a reduced total investment in P2P, which for some people might be a good thing.
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Post by df on Apr 13, 2018 19:19:40 GMT
... It's definitely a jungle and I realise that, like many others, I got suckered into thinking it was easy money and perhaps failed to do enough DD on Lendy loans. But that said, how do you legislate for a RICS valuer overvaluing a property by 300 per cent as in the case of the castle? This raises a good question about how much DD an individual lender might be expected to do when evaluating a loan. It would be lovely if we could trust all the valuations we are given but that clearly isn't right. There have been a couple of loans I've seen recently where it all looked good on the surface but where applying my own knowledge/experience of the local market led me to say "not a chance". This makes me wonder whether it is ever right to speculate significant sums of money on an opportunity where one has no knowledge or experience to bring to the party. This would mean making investments only where 1 - its a very small proportion of your portfolio and you're happy to treat it as pure gamble or 2 - you have personal knowledge and/or experience and can make your own judgement or 3 - you're in a very well protected and liquid wrapper, so you don't care if the odd loan goes missing (eg AC 30DAA) Now, this plays right back to the original question in this poll: following rules like these is likely to mean a reduced total investment in P2P, which for some people might be a good thing. Even if I had enough expertise, I wouldn't be able to do DD on every single loan. I'm in most AC, Ly, MT, COL ,ABL ,HC ,LC, Rebs, FS loans - I don't have enough spare time to analyse and monitor each of them (I didn't like the idea of FC going "compulsory auto", but now appreciate the fact that I don't spend any time on FC except login once a week to have a look at my annual return figure). I prefer to spread my funds across many loans and platforms instead of hunting for "perfect projects".
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ceejay
Posts: 971
Likes: 1,149
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Post by ceejay on Apr 13, 2018 19:57:03 GMT
... Even if I had enough expertise, I wouldn't be able to do DD on every single loan. I'm in most AC, Ly, MT, COL ,ABL ,HC ,LC, Rebs, FS loans - I don't have enough spare time to analyse and monitor each of them (I didn't like the idea of FC going "compulsory auto", but now appreciate the fact that I don't spend any time on FC except login once a week to have a look at my annual return figure). I prefer to spread my funds across many loans and platforms instead of hunting for "perfect projects". Which I guess is sort of what I had in mind with my option 1. Maybe put it another way: either do proper DD (perforce on a relatively small number of loans) where you have real knowledge or expertise to apply, OR don't even try to do DD and just play a diversification numbers game. These two strategies can of course be carried out simultaneously with different funds - but I think where we often go wrong (I know I have!) is to fall between the two stools and do a half-hearted or incomplete DD, which leads to a false sense of security.
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Post by Ace on Apr 13, 2018 22:10:14 GMT
...I think where we often go wrong (I know I have!) is to fall between the two stools and do a half-hearted or incomplete DD, which leads to a false sense of security. Darn it! Was hoping you were going to say that was a good idea
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Post by df on Apr 13, 2018 22:11:48 GMT
... Even if I had enough expertise, I wouldn't be able to do DD on every single loan. I'm in most AC, Ly, MT, COL ,ABL ,HC ,LC, Rebs, FS loans - I don't have enough spare time to analyse and monitor each of them (I didn't like the idea of FC going "compulsory auto", but now appreciate the fact that I don't spend any time on FC except login once a week to have a look at my annual return figure). I prefer to spread my funds across many loans and platforms instead of hunting for "perfect projects". Which I guess is sort of what I had in mind with my option 1. Maybe put it another way: either do proper DD (perforce on a relatively small number of loans) where you have real knowledge or expertise to apply, OR don't even try to do DD and just play a diversification numbers game. These two strategies can of course be carried out simultaneously with different funds - but I think where we often go wrong (I know I have!) is to fall between the two stools and do a half-hearted or incomplete DD, which leads to a false sense of security. I wish I had a good strategy in place when started p2p investing, but it is also good to learn from your own mistakes. The biggest mistake I made was investing in GBAA and GEIA... I absolutely agree, sitting on two stools is not the most comfortable position to be in.
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pom
Member of DD Central
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Post by pom on Apr 14, 2018 8:23:10 GMT
I do very little DD but I also have very little confidence in that which I do do Because we can never anticipate ALL the problems, so although I may avoid some obviously stinky ones I don't assume any will be dead-certs. So, far more of a numbers game for me and I have strict per-loan limits (they do vary a bit across platforms, as much dependent on loan flows on that platform as anything) that are numbers that I (theoretically...not been put to the test yet) won't bat an eyelid if they resulted in a 100% loss. Hence whilst I'm now in 4 defaults on MT with a total that would probably have horrified me 10years ago I'm very relaxed about it. I wouldn't recommend it as a strategy for everyone tho, I am fortunate enough that (theoretically again) I could lose my entire p2p pot with no medium term harm (hence fairly relaxed about COL, tho am also helped there that it was one of my smaller platforms), and probably not much long term impact either, or at least worst case scenario I'd have time to address it.
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angrysaveruk
Member of DD Central
Back and to the left..
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Post by angrysaveruk on Apr 14, 2018 9:24:18 GMT
I do very little DD but I also have very little confidence in that which I do do I have always taken the view that choosing the right platform is more important that choosing the right loans. On AC I glance at loans and see if they make sense but I aim to have about 0.5% to 1% per loan so there is no point spending too much time thinking about it
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