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Post by andrewholgate on Nov 27, 2013 9:32:11 GMT
Can you let me know your thoughts?
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JamesFrance
Member of DD Central
Port Grimaud 1974
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Post by JamesFrance on Nov 27, 2013 9:50:02 GMT
Voted No as I find flipping distasteful, you see the same people on many platforms distorting the bidding. However a small premium to cover costs would seem fair.
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Post by batchoy on Nov 27, 2013 9:54:37 GMT
As I mentioned in an another thread I am not against being able to give a discount or charge a premium on loan in the secondary market, there are times when people may need to rapidly liquidate their assets and are willing to take the hit in order to do so and no one is forced to pay the premium. However this needs to be predicated on two factors. - That access to the primary market is free and fair.
- That sales in the secondary market should not distort the operation of the primary market
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Post by jackpease on Nov 27, 2013 10:02:40 GMT
yes but capped to 1% to cover costs and effort but discourage flipping
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oldgrumpy
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Post by oldgrumpy on Nov 27, 2013 10:40:16 GMT
I do not want a £500K loan request filled in two minutes by a few multi thousand pound bidders who have their stakes conveniently bundled into £100 slices ready to sell on at a profit as soon as drawdown occurs. I believe this happens at another place. I would tend to allow a premium of up to 0.5% to cover sellers' expenses/dead money time pre-drawdown etc but no more than that. Discount for quick sale could be allowed.
Just my three bananas' worth.
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Post by oldnick on Nov 27, 2013 10:57:00 GMT
Can you let me go know your thoughts? I've voted no because the question was necessarily simple. I'm in agreement with others that a reasonable mark up to compensate for the initial costs us fine, but not a free for all that results in the whales eating the minnows. (or should that be krill?)
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jo
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Post by jo on Nov 27, 2013 11:00:18 GMT
No.
This would encourage a two-tier class of investor with gold members acting, in effect, as a barrier between non-gold lenders and the primary Assetz market.
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Post by chris on Nov 27, 2013 11:04:54 GMT
No. This would encourage a two-tier class of investor with gold members acting, in effect, as a barrier between non-gold lenders and the primary Assetz market. What if selling at a premium were limited to investments made after the public launch so that the pre-bidders didn't gain an advantage? Or if selling at a premium were limited for the first x months of the loan term? I'm keen to understand if there is a general objection to selling at a premium or if it is just because of some likely scenarios that have negatively affected other platforms. If it is the latter then there may be other ways to mitigate against that behaviour rather than restrict the market.
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Post by oldnick on Nov 27, 2013 11:41:22 GMT
Chris, even if resale at a premium is limited to post launch that doesn't prevent wealthy investors, who've managed to corner the market by pre-bidding, from drip feeding to hungry small investors. It rather reminds me of the way tickets get sold for entertainment events at inflated prices because ordinary punters are shouldered out of the queue by ticket agencies. It might guarantee that the product is shifted but it distorts the market nonetheless.
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Post by batchoy on Nov 27, 2013 11:56:01 GMT
No. This would encourage a two-tier class of investor with gold members acting, in effect, as a barrier between non-gold lenders and the primary Assetz market. What if selling at a premium were limited to investments made after the public launch so that the pre-bidders didn't gain an advantage? Or if selling at a premium were limited for the first x months of the loan term? I'm keen to understand if there is a general objection to selling at a premium or if it is just because of some likely scenarios that have negatively affected other platforms. If it is the latter then there may be other ways to mitigate against that behaviour rather than restrict the market. I think objectors fall into two camps, some who object on principle and others such as myself are not against it on principle but would like see that it is done in such a manner that is not detrimental. At the moment pre-filling and pre-bidding weights the current AC primary market against small investors and as others have pointed out being able to add a premium could result in privileged bidders cornering the primary market to the detriment of small investor giving them a lesser return on the secondary market. The second issue is the effect on the primary market of flippers driving down interest rates in order to acquire loan parts to sell at a premium on the secondary market with little regard to the risk/return ratio, this would not be an issue for AC if it stuck primarily to fixed rate rather than Dutch auctions.
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Post by chris on Nov 27, 2013 12:07:00 GMT
Chris, even if resale at a premium is limited to post launch that doesn't prevent wealthy investors, who've managed to corner the market by pre-bidding, from drip feeding to hungry small investors. It rather reminds me of the way tickets get sold for entertainment events at inflated prices because ordinary punters are shouldered out of the queue by ticket agencies. It might guarantee that the product is shifted but it distorts the market nonetheless. I think you misunderstand what I was trying to describe - I meant that only loan units bought after public launch could be resold at a premium. Those bought through pre-bidding could be restricted from selling above par value for the lifetime of that loan unit.
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mark
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Post by mark on Nov 27, 2013 12:07:27 GMT
Can you let me know your thoughts? You cant please all the people all of the time. Reading all the comments I fail to understand the demand from some lenders to bring in unnecessary restrictions. Its a free market to buy or not to buy. All petty demands to restrict, block, cap and limited lenders goes against what we are all trying to achieve in investing on p2p platforms.
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oldgrumpy
Member of DD Central
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Post by oldgrumpy on Nov 27, 2013 12:16:57 GMT
I meant that only loan units bought after public launch could be resold at a premium
So I leap in at public launch time and buy half the remaining loan to sell on later at a profit?
(edit: perhaps not leap .... at my age ...ahem!)
Its a free market to buy or not to buy ....
so I'd like the freedom to buy at public launch, not be pushed out within a minute by the rich boys who will sell to me later at a profit....
I fail to understand ....
We are trying to explain
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Post by jackpease on Nov 27, 2013 12:28:01 GMT
>>>>I think you misunderstand what I was trying to describe - I meant that only loan units bought after public launch could be resold at a premium. Those bought through pre-bidding could be restricted from selling above par value for the lifetime of that loan unit.
But if you look at the third of the bridging loans, people bid and got £10k leaving room fo just a handful of bids and little opportunity for the masses. It would not achieve its goal ie keep Assetz accessible to small investors.
Having no restrictions may theoretically create a 'free market' but in practice will concentrate the action amongst a few. The problem with that is not envy, rather that why would small players bother?
Why follow FC's mistakes much of which are caused by flipping?
J
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Post by oldnick on Nov 27, 2013 12:36:38 GMT
Chris, even if resale at a premium is limited to post launch that doesn't prevent wealthy investors... (Edited by me) I think you misunderstand what I was trying to describe - I meant that only loan units bought after public launch could be resold at a premium. Those bought through pre-bidding could be restricted from selling above par value for the lifetime of that loan unit. Yes I did misread your question but I still think the market will suffer from distortions. I know P2P/B isn't meant to be a socialist paradise and I don't think those of us against the proposal are aiming for that at all. It's more a case of giving smaller but more numerous investors a look in.
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