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Post by batchoy on Aug 16, 2014 13:42:41 GMT
I invested €50 in each of 9 loans in Slovakian, Estonian and Finnish markets........ I have no current plans for further investment on this platform. This is crazy. It's equivalent to tossing a coin 9 times and concluding it's fixed because you got 7 tails and 2 heads. You can't conclude anything from 9 loans over 2 months. I'm really impressed with the data and stats bondora supply. These give you a pretty fair ball park of the default rates to expect. Not too different to the guy who was on the BBC R4 You and Yours programme a few weeks back bemoaning FC. In the trailer I thought FC were going to get taken to task over their poor systems etc etc and get a real pasting, but as it turned out the guy was bemoaning the fact that he felt misled by FC's potential earnings figures since he had made a loss on his investment however through questioning it was revealed that he had invested a substantial amount on a handful of loans and one had gone sour with obvious results.
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Post by batchoy on Aug 16, 2014 14:09:52 GMT
To respond to Batchoy's query about B or B+ loans - I have no idea what these are! If you mean "Are they secondary market loans?" the answer is "No". Can you help me to understand what is meant by B/B+? Your approach of spreading the risk across many loans naturally makes sense -although that was my intention when I started making loans of only €50 each! I had originally intended to follow up with much higher numbers of €50 investments, if this "pilot investment" made sense. But with the current status of only 2 of 5 payments which fell due, actually having been made, and these all being the very first payments due, it doesn't look so good from where I'm sitting. I'm assuming that adding more loans, even if they are in smaller amounts, would simply produce more late payments or defaults at a similar rate of about 3 in 5 loans from the very start. Or have I just been extremely unlucky? - I don't think this is statistically likely. I think what's far more likely is that the credit checks are not effective. I thought my stock market investments were a bit risky, but than this crowd-funding stuff is like throwing  dice in Las Vegas! Bondora has a range of verification methods which has grown over the past few weeks but when the split originally occurred you had loans which were fully verified (income and expenses) which are known as Bondora (B) loans and loans which weren't fully verified and thus of higher risk which are Bondora+ (B+) loans and which require you to sign an additional disclaimer on your first purchase. Being lower risk, B loans rarely make it to the primary market since they are picked up by bidding profiles as soon as they are listed but if they do make it they have a little star against the shield in the verification column and due to their perceived lower risk command lower rates of interest 15%-30%. The B+ with less verification command a higher interest rate 30%+ due to their perceived higher risk. At the current time B+ loans have little or no statistical data behind them so regular investors are wary of them as a result there is a glut on the primary market, many aren't filling and people who do invest are investing small sums (€5-€10 which also used to readily sell on the SM). Previously I had been flipping B+ loans but recent changes to the platform have messed the SM so I have slowed my purchase of B+ loans to the minimum picking only what I see to be the select few. My suspicion is that you have bought relatively large chunks on a few B+ loans off of the primary market rather than B loans using profiles, as a result you have got very high (a opposed to high) risk loans that have had very little by way of verification of the borrowers ability to pay. 3 in 5 not making the first payment is high but not unusual if you happen to pick the wrong 5 B+ loans which is possible if you didn't refine your selection critera. How well did you filter your selection? When picking B+ loans I am looking at country (no Finnish loans and limited Spanish and Slovak loans), age range (old enough to have had some life experience and own some goods and chattels, but not so old that they are near retirement age), A1000 loans only, Debt to income ratio (low) etc. Bondora is a very high risk platform, the returns can be good but it is not a place to invest large amounts in small numbers of individual loans as they are unsecuritised personal loans for which borrowers are paying fairly high rates of interest.
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duck
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Post by duck on Aug 16, 2014 14:11:03 GMT
This is crazy. It's equivalent to tossing a coin 9 times and concluding it's fixed because you got 7 tails and 2 heads. You can't conclude anything from 9 loans over 2 months. I'm really impressed with the data and stats bondora supply. These give you a pretty fair ball park of the default rates to expect. Not too different to the guy who was on the BBC R4 You and Yours programme a few weeks back bemoaning FC. He was supposed to be an investment professional, I had head in hands!
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Post by batchoy on Aug 16, 2014 15:48:41 GMT
Not too different to the guy who was on the BBC R4 You and Yours programme a few weeks back bemoaning FC. He was supposed to be an investment professional, I had head in hands! I wanted his head or rather his neck in my hands, it was such a wasted opportunity which could have tackled some serious FC issues rather than highlighting the fact that some investment professionals are complete numpties.
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timbo
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Post by timbo on Aug 18, 2014 9:38:33 GMT
Of the 3 loans which are overdue, two are B and one is B+
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Post by brettb on Oct 31, 2014 12:13:49 GMT
I was talking to a friend about P2P and he warned me about it. Turned out a friend of his had lost a lot of money. I believe he was invoice trading, but maybe put all his money into a single loan . On Bondora I started off with just €5 per loan, but that's now increased to €10. I'll be putting a few 1000's of €'s in there - as the other poster says if you just have 9 loans then you're too reliant on the performance of one individual loan. I'm not too worried about credit ratings. Experience of Zopa has showed me that A+ borrowers are seemingly just as likely to default as the C's. My 5 year loans have also proven significantly more risky than 3 year loans. I guess a change in life circumstance is the most likely cause of a default, and that isn't easy for anyone to predict. |
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parisingoc
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Post by parisingoc on Nov 1, 2014 7:58:39 GMT
I have been into Bondora (there's a phrase!) since June 2013. I started with a trial £100 then ramped up to £10000 in from April this year. I too had a spread of amounts up to 50Euro/loan. This summer I have changed my strategy on the back of rising defults and overdues.
Like others, I manage the overdues hard - daily - and I now start any loan I wish to invest in with just 5Euro. I have a couple of automatic bidders running with just 10Euro but these rarely produce results so 99% of my re-investment is manual across almost all Countries - Estonia, Finland, Spain - as well as risk bands - A1000 down to C600 and B, B+ and unverified. My returns are nowhere near the Bondora headline figures but overall they are beating anything that I could earn in the UK by a large margin.
The thing that has really galvanised me this summer is putting the Bondora Loan Data (all 20290 applications as at last night) through a data mining regime and producing a decision tree for each country (including Slovakia). This is a tough process the first time round, but last night (the 4th iteration) took 30 minutes and is very revealing.
For instance, there was a comment further up the thread where someone mentioned they don't lend to retiree's. As far as I can see, out of 31 Retiree loans in Spain from 01/01/13 to 31/08/14, NONE have defaulted yet. Finland, out of 89, 6 defaults (3 under the age of 60), Estonia, 31 with 3 defaults.
What I find interesting about Bondora is that I am lending to real people. I look at just about every loan application that isn't snapped up by the automatic bidders and I offer to about 10% of those, aiming to keep my indicated risk (from the decision trees) to lower than 5%. I get between 4 to 10 per day actually making it to loans. On these that are B+, I top up my original 5Euro bid with another 5 Euro as they approach completion. This means I can just about keep on top of the 700 to 800 Euro/month re-investment needs.
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jo
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Post by jo on Nov 1, 2014 14:40:03 GMT
I have been into Bondora (there's a phrase!) since June 2013. I started with a trial £100 then ramped up to £10000 in from April this year. I too had a spread of amounts up to 50Euro/loan. This summer I have changed my strategy on the back of rising defults and overdues. Like others, I manage the overdues hard - daily - and I now start any loan I wish to invest in with just 5Euro. I have a couple of automatic bidders running with just 10Euro but these rarely produce results so 99% of my re-investment is manual across almost all Countries - Estonia, Finland, Spain - as well as risk bands - A1000 down to C600 and B, B+ and unverified. My returns are nowhere near the Bondora headline figures but overall they are beating anything that I could earn in the UK by a large margin. The thing that has really galvanised me this summer is putting the Bondora Loan Data (all 20290 applications as at last night) through a data mining regime and producing a decision tree for each country (including Slovakia). This is a tough process the first time round, but last night (the 4th iteration) took 30 minutes and is very revealing. For instance, there was a comment further up the thread where someone mentioned they don't lend to retiree's. As far as I can see, out of 31 Retiree loans in Spain from 01/01/13 to 31/08/14, NONE have defaulted yet. Finland, out of 89, 6 defaults (3 under the age of 60), Estonia, 31 with 3 defaults. What I find interesting about Bondora is that I am lending to real people. I look at just about every loan application that isn't snapped up by the automatic bidders and I offer to about 10% of those, aiming to keep my indicated risk (from the decision trees) to lower than 5%. I get between 4 to 10 per day actually making it to loans. On these that are B+, I top up my original 5Euro bid with another 5 Euro as they approach completion. This means I can just about keep on top of the 700 to 800 Euro/month re-investment needs. I started around the same time. The biggest issue for me has been the euro's fall against the pound - and I think it can probably fall further to around 0.75 (or 1.33ish if you do it that way). I hedged via a spreadbet.
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duck
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Post by duck on Nov 1, 2014 17:31:43 GMT
too true. I actually run 2 'versions' of my spreadsheets one with the value of the pound when I converted pound to Euro and one simply running current value. This actually takes a turn for the worse (assuming reinvestment of interest) when you apply HMRC rules of converting Euro to Pound on a daily basis for tax calculations - the interest earned last year (subsequently taxed) is certainly not worth the same if repatriated now.
That said and in spite of my second worst month for +60 day defaults (down mainly to reschedules that I didn't manage to sell) I am still ahead of the Bondora declared figures and just into double figure return after everything is deducted - well not my time but that is another post!
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jo
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Post by jo on Nov 1, 2014 20:16:56 GMT
I've been a 'drip feed' investor so it will take some time before my returns creep up and compensate for time taken to invest. At present my sterling XIRR is 3.85% and in euro it's 11.87%. My hedge has compensated for most of the difference and fortunately spreadbetting is (as yet) tax free  |
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james
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Post by james on Nov 2, 2014 8:04:58 GMT
FWIW I started in late 2012 and my XIRRs are 17.2 in Euros and 13.3% in Pounds. Bondora's for me is 26%. Mine are lower because of lots of uninvested money at various times, notably most of the first year and for the last few months. My Euro return is a bit better than some VCTs, the Pound return is worse. I'm planning to put something like my total current amount invested at Bondora into VCTs this year.
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Post by coolrunning on Nov 2, 2014 17:06:38 GMT
FWIW I started in late 2012 and my XIRRs are 17.2 in Euros and 13.3% in Pounds. Bondora's for me is 26%. Mine are lower because of lots of uninvested money at various times, notably most of the first year and for the last few months. My Euro return is a bit better than some VCTs, the Pound return is worse. I'm planning to put something like my total current amount invested at Bondora into VCTs this year. I wish I started when you did. I started in March 2014 and my XIRR is 11.55 in Euros. Bondora's return for me is 15.5%. Sounds bad does it not? Not really. I dump anything that looks poor, even if I have to take a big loss. I prefer to take my hits early and reinvest the sales in new loans that will hopefully perform better. Also, I have invested heavily in the last 2 months, so a lot of loans before their first pay day. So I am reasonably confident that in a years time I can be up near your figures. Time will tell.
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jo
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Post by jo on Nov 3, 2014 18:45:31 GMT
Could I ask you guys what assumptions you make re bad debt in coming to your XIRRs? I assume total loss on 50% of the '60+ days overdue' number.
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duck
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Post by duck on Nov 4, 2014 4:49:35 GMT
I assume zero on all the platforms I invest through (obviously excluding those with funds). With Bondora my spreadsheet shows all +60s with the capital outstanding at the time +60 was reached. I then check this against the +60s each month to see payments made and then adjust accordingly.
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JamesFrance
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Post by JamesFrance on Nov 4, 2014 9:26:30 GMT
Until I see any recovery of my own defaulted loans I certainly assume 100% loss for those, as many of the less overdue ones will likely default soon anyway. I made a lot of 10€ loans to the Bondora+ borrowers and now wish I had not done so as there are too many of them to watch and manage, so my default rates have soared since they started in April.
My 60+ overdue totals at month end are as follows:
April 524
May 572
Jun 666
Jul 776
Aug 949
Sep 1260
Oct 1761
For 2 months now I have only reinvested repayments instead of adding more money and then only in the safest loans. I am hoping that this will lower the increase in the level of defaults so that it again is less than my interest payments. The Bondora return figure is still about 22% which seems less and less likely each month now.
Everything depends on the recovery success for the defaulted loans, which seems to have been excellent in the past in Estonia.
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dice in Las Vegas!
