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Post by spaaps on Dec 28, 2018 17:55:44 GMT
Thanks, this is related to this thread topic since they have one of the highest rate. Forgot to mention that. I have invested to their loans but was afraid that too much. Do you trust this Peachy? Trust? Hm.... At least I do invest in their loans, although the "B" rating that Mintos is giving them seems a bit too friendly, given their financials. Why do I give them money:
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Post by tomas on Dec 30, 2018 9:58:05 GMT
To return to the thread title:
Actually interest rates on Mintos are at a high level again.
And I have been able to boost returns even further by my new strategy
I did not quite understand how do you make it. Is it like you are buying high interest 14% loans and then sell them with some margin say +1% for 13%? If this high interest loans disappear you lose in the long run. If this profits remain who will buy them on the secondary market with margin. Please elaborate your suggestion further, how it works.
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Post by wiseclerk on Dec 30, 2018 22:00:09 GMT
tomas, have a look at this linked article
If my secondary market autoinvest automatically buys a loan at say -0.6% discount and I then manage to resell it (often on same day) at -0.2% discount, I make a profit equal of 0.4% of the loan amount. Of course in absolute numbers this is a very tiny amount. If I would manage to do this continuosly (every day) then I would make 144% yield p.a (360*0.4%). Of course I don't manage to do this, as there is limited supply which causes cash drag, competition, and there might be a reason that this loan was sold at -0.6% discount, making it impossible to resell at a smaller discount. It is very hard to get the parameters right to buy only "attractive" loans that have a fast turn-around.
I do not want much undeployed cash on one hand, but I do not want ALL cash deployed either, as then I would miss out on buying opportunities. This is very hard to get right and requires sitting on cash which in return lowers returns a bit ( but not as much as the upside). I posted some graphs on the effort in October:
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Post by southseacompany on Dec 31, 2018 5:12:24 GMT
wiseclerk , Your results from trading are impressive. I wonder why this apparent opportunity exists. Why is the market so inefficient as to allow you to buy and sell at a significantly different discount so quickly? I can think of two reasons. First, the autoinvest in Mintos is poorly implemented and lets some people "front run" others consistently (so the latter have to settle with what they can get, even if suboptimal). Second, there is a lot of dumb money in the secondary market. What do you think? In normal circumstances you'd expect the advantage to disappear over time (and pretty quickly), but maybe Mintos is exempt from the normal rules of economics.
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Post by wiseclerk on Dec 31, 2018 5:49:50 GMT
The 0.4% difference above is just an illustrative example. In many cases the trades will have "only" 0.1% margin. Occasionaly on the other hand there are trades where the margin are 1%.
As far as I know the secondary market autoinvest is efficient and there is no front running. It seems to be implemented in the "correct" way, meaning if one investor sells any parts, then existing autoinvest of other investors are checked and matched BEFORE that part (if unmatched) is listed on the secondary market and could be bid on manually. There is one exception: Secondary market autoinvests have a minimum of 10 Euro per bid. So any part put on sale that is less than 10 Euro will be listed on the seondary market immediately and open for manual bidding.
Dumb money - that is a bit harsh. Picture an investor wanting to sell out on specific discounts and putting the loans up for sale at 0.5% discount, where 0.1% discount would have been sufficient for SOME of the loans is a regular occurance. Imagine you are this investor and hold 1000 different loan parts. Would you research/determine the ideal selling price for each of these 1000 loan prices? Now imagine your average loan part is 20 Euro , so you are selling loans for a total of 20000 Euro. if you are 0.2% off on the ideal price, that means 40 Euro less than the optimal price. Not an insignificant amount, but how many hours research would you have dedicated to get this ideal price? Also there is psychology (think individual user panic) and probably some misinterpretions on which effects which discounts have on YTM. If you have old loans 12% interest, with 4 months term remaining, how much do you need to discount them, if the "going" rate on the primary market would be 13% interest now?
It is shrinking fast, since the secondary market AI was introduced in early October. More competition, with supply of (attractive) loan parts staying about the same (or probably rising as overall loan volume is rising).
And last point: the market is mostly very efficient. But with around 195,000 loans on sale on the secondary market at any point in time, we are talking about getting the pieces that deviate from the norm. And the market is efficient in that these deviations are leveled out nearly immediately as these pieces are bought, repriced, and resold.
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0risk
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Post by 0risk on Jan 3, 2019 14:09:16 GMT
Mogo is offering many loans at 12%. They are going fast though.....
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Post by gmaxkenny on Jan 4, 2019 11:07:55 GMT
Mogo is offering many loans at 12%. They are going fast though..... And after 6 months they will buy back the preforming loans and leave investors with the non preforming ones as they have done recently. Dont be fooled.
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IFISAcava
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Post by IFISAcava on Jan 4, 2019 11:24:54 GMT
Mogo is offering many loans at 12%. They are going fast though..... And after 6 months they will buy back the preforming loans and leave investors with the non preforming ones as they have done recently. Dont be fooled. But don't the non-performing ones have buyback?
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Post by geldregiertdiewelt on Jan 5, 2019 18:47:10 GMT
I wonder what Mintos is planning to do about that. Of the 194.700 loans I see right now on the sec market (EUR, with buyback), almost 104.000 have an investable amount of <10 EUR. Not very useful IMHO. Nobody will buy those manually.
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toffeeboy
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Post by toffeeboy on Jan 8, 2019 13:35:03 GMT
I wonder what Mintos is planning to do about that. Of the 194.700 loans I see right now on the sec market (EUR, with buyback), almost 104.000 have an investable amount of <10 EUR. Not very useful IMHO. Nobody will buy those manually. Only Primary investments and secondary market auto investments have a minimum of €10, you can buy €0.01 on the secondary market manually still the same as you have always been able to.
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Post by geldregiertdiewelt on Jan 8, 2019 13:53:53 GMT
I wonder what Mintos is planning to do about that. Of the 194.700 loans I see right now on the sec market (EUR, with buyback), almost 104.000 have an investable amount of <10 EUR. Not very useful IMHO. Nobody will buy those manually. Only Primary investments and secondary market auto investments have a minimum of €10, you can buy €0.01 on the secondary market manually still the same as you have always been able to. <iframe width="34.180000000000064" height="5.159999999999997" style="position: absolute; width: 34.180000000000064px; height: 5.159999999999997px; z-index: -9999; border-style: none;left: 15px; top: -5px;" id="MoatPxIOPT0_81003050" scrolling="no"></iframe> <iframe width="34.180000000000064" height="5.159999999999997" style="position: absolute; width: 34.18px; height: 5.16px; z-index: -9999; border-style: none; left: 1638px; top: -5px;" id="MoatPxIOPT0_16229641" scrolling="no"></iframe> <iframe width="34.180000000000064" height="5.159999999999997" style="position: absolute; width: 34.18px; height: 5.16px; z-index: -9999; border-style: none; left: 15px; top: 196px;" id="MoatPxIOPT0_41603071" scrolling="no"></iframe> <iframe width="34.180000000000064" height="5.159999999999997" style="position: absolute; width: 34.18px; height: 5.16px; z-index: -9999; border-style: none; left: 1638px; top: 196px;" id="MoatPxIOPT0_18881588" scrolling="no"></iframe> That's exactly my point. Hardly anybody will do this manual investing and that's why ten thousands of loan parts <10 EUR are sitting in the sec market with little chance to be purchased anytime. And indication of available loans is slightly misleading. They are available, but most of them just for the manual peanuts investor. And this is why I think Mintos will need to change something.
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