locutus
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Post by locutus on Aug 7, 2018 11:54:56 GMT
Presumably all the people whinging about liquidity recognise that this is a flaw of their own investment strategy rather than anything else. Did you really think you were the only people to come up with the idea of investing and flipping before term to reduce risk? Flipping has always relied on liquidity and having a greater fool to sell to and you must have realised that this strategy would not last forever. I suggest investing for the term of the loan and on the merits of the underlying asset and then liquidity becomes a non-issue.
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aligibbs
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Post by aligibbs on Aug 7, 2018 11:56:08 GMT
Presumably all the people whinging about liquidity recognise that this is a flaw of their own investment strategy rather than anything else. Did you really think you were the only people to come up with the idea of investing and flipping before term to reduce risk? Flipping has always relied on liquidity and having a greater fool to sell to and you must have realised that this strategy would not last forever. I suggest investing for the term of the loan and on the merits of the underlying asset and then liquidity becomes a non-issue. Agreed- can't imagine this worked for long term? Unless they were sold for a discount each time...
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Post by boudicca on Aug 7, 2018 12:01:01 GMT
Presumably all the people whinging about liquidity recognise that this is a flaw of their own investment strategy rather than anything else. Did you really think you were the only people to come up with the idea of investing and flipping before term to reduce risk? Flipping has always relied on liquidity and having a greater fool to sell to and you must have realised that this strategy would not last forever. I suggest investing for the term of the loan and on the merits of the underlying asset and then liquidity becomes a non-issue. As a retired person, in a low tax band, I often buy on the secondary market, are you suggesting I'm a fool ? Although, I do only invest in loans that I wish to hold till the end.
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Post by boudicca on Aug 7, 2018 12:34:43 GMT
I think Lendy just stopped issuing new loans at one point, to make sure that their development loans got funded. Maybe FundingSecure will have to take a similar approach.
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locutus
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Post by locutus on Aug 7, 2018 12:57:06 GMT
boudicca the greater fool theory is quite well known. As you're buying for underlying value, then the term doesn't apply to you. The theory applies to those who invest in loans without looking at the asset in the hopes of selling onto someone else at a later date because they think liquidity will save them.
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Post by boudicca on Aug 7, 2018 13:00:18 GMT
Just noticed cashback has been applied to another loan, perhaps they are reading this thread. Will need a few more of those to get things moving.
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Post by boudicca on Aug 7, 2018 13:06:34 GMT
boudicca the greater fool theory is quite well known. As you're buying for underlying value, then the term doesn't apply to you. The theory applies to those who invest in loans without looking at the asset in the hopes of selling onto someone else at a later date because they think liquidity will save them. Ok, thanks. I wouldn't buy a loan that I wasn't happy to hold for a while.
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Post by df on Aug 7, 2018 14:19:30 GMT
Notice there are quite a few new loans in the list.
How long are new borrowers prepared to wait for their loan, perhaps some will get canceled if they have to wait too long.
Yes, good point, it happened with some loans in the past. Looking at current "available loans" list - some of them have been sitting there for very long time and hardly moved forward.
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michaelc
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Say No To T.D.S.
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Post by michaelc on Aug 7, 2018 14:42:58 GMT
Only one genuinely new loan in the pipeline which is lower than normal (five or six plus being typical?) so hopefully they are moving resources around to deal with the backlog rather than new loans.
Their next newsletter will be interesting. The last one was abysmal IMO since it was 100% focused on trumpeting turnover. The one before that was a bit more balanced to the needs of both of their customer types.
Hopefully now they will realise the lenders are every bit their customer as the brokers and borrowers are.
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Imothep
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Post by Imothep on Aug 7, 2018 14:52:43 GMT
clearly there needs to be some sizeable repayments and liquidity , it’s not just the lenders that need this , the development loan tranches do as well, if you have developers that can’t draw down against agreed facilities it stops projects , potetially causes defaults and the vicious circle continues . ok , have a moan about the platform by all means but realise that none of the negativity helps , borrowers need lenders and vice versa ...
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Post by df on Aug 7, 2018 15:00:35 GMT
I'm not too hopeful. I think FS got into a similar situation as Lendy. Too many loans in default results in investors don't have enough returns to reinvest and many are panicking and want to withdraw all their funds from platform. I'm not panicking yet because some of them are likely to renew and all my property loans are set on "orange", but for now I paused any further investments in property loans. I have not started to panic to the extent of selling up everything at -1% and getting out either. However I am getting a little anxious. To date I have not had a loan to term, as I don't fell comfortable with the risk attached to it. I have always manged to sell the loan on the SM before the 30 day cut off. At the moment I am 69 days away from being stuck in one and if that doesn't sell, that will be the point for me where I move leave FS I think. Looking on how it currently stands, you will probably end up with holding most of them to term. The comforting thing is that many of these loans are likely to be renewed before defaulting. During the last "feast" (end of financial year) I was left with one unsold and it was renewed. It would be nice if the same happens again, but I fear that this time the 'feast" is more serious. Even if SM will go back to "normal", I will be amending my FS strategy by lowering the amount I allow for each loan and not investing in those that have been already renewed several times. This will reduce my exposure to FS, I shouldn't really have 11% of my p2p pot in such risky platform.
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Post by boudicca on Aug 7, 2018 16:04:46 GMT
Just noticed cashback has been applied to another loan, perhaps they are reading this thread. Will need a few more of those to get things moving. Three hours after cashback was introduced and amount filled (53%) has not moved, so much for the power of cashback.
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aligibbs
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Post by aligibbs on Aug 7, 2018 16:24:00 GMT
I have a number of loans that have been sitting with at more than 50 days in "awaiting activation". I'm assuming I get interest on these? Yet, the loan-ee won't have received the amount until it's filled right? Little bit worrying.
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paulb
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Post by paulb on Aug 7, 2018 16:37:24 GMT
I have a number of loans that have been sitting with at more than 50 days in "awaiting activation". I'm assuming I get interest on these? Yet, the loan-ee won't have received the amount until it's filled right? Little bit worrying. I'm in the same situation, and I believe interest is earned from when you invest - I'm not sure who pays that interest though, as I doubt the borrower would want to before they get the money. If you check the "Investments awaiting activation" tab on "My Investments" page, you should see the accrued interest. I'm not sure what happens if the loan is cancelled by the borrower if it doesn't fill quickly enough for them - I'd hope the interest would still be paid.
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aligibbs
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Post by aligibbs on Aug 7, 2018 16:40:16 GMT
I have a number of loans that have been sitting with at more than 50 days in "awaiting activation". I'm assuming I get interest on these? Yet, the loan-ee won't have received the amount until it's filled right? Little bit worrying. I'm in the same situation, and I believe interest is earned from when you invest - I'm not sure who pays that interest though, as I doubt the borrower would want to before they get the money. If you check the "Investments awaiting activation" tab on "My Investments" page, you should see the accrued interest. I'm not sure what happens if the loan is cancelled by the borrower if it doesn't fill quickly enough for them - I'd hope the interest would still be paid. Yeap, can see interest accrued, so I'm less worried- but I am concerned at the number of these tbh.
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