bugs4me
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Post by bugs4me on Nov 27, 2013 22:47:33 GMT
Provided any premium is strictly limited I cannot see a problem.
But -
Without details my vote would be a no at this stage.
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mikes1531
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Post by mikes1531 on Nov 28, 2013 20:53:25 GMT
Just puzzled as to how you can vote against in principle, but nevertheless admit you would take advantage, given the opportunity. I suppose its all part of the general attitude these days - anything's ok provided it's legal. I'm not puzzled. If people want a level playing field, they vote against a tilted one -- on principle. But if the powers that be decide that the field is going to be tilted, most people wouldn't ignore the tilt, they'd take advantage of it if they could. If they don't, then they lose out to those who do take advantage of it. It's quite reasonable to play by the rules even if you don't like them and feel they're unfair to some players. And in a limited market, if you don't take advantage of the loopholes that exist, others will -- and you'll lose out.
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Post by gregorycarter on Dec 10, 2013 9:44:39 GMT
I voted yes, on principle  As I see it, premiums may legitimately exist in the secondary markets of all P2P platforms for at least three reasons: 1) New investors look to build a diversified portfolio quickly and the only place to do this at the moment is via secondary marketplaces. This means there is often more demand for loan parts than supply, hence the consistent premium. 2) Investors in the primary market face unknown drawdown delays (I once had cash tied up for about 3 months with Assetz before the loan was ultimately cancelled) which impacts overall return. Once loans are in the secondary marketplace and actively paying interest, this uncertainty is removed, hence they are able to trade at a premium. 3) All fixed income securities change in value over time due to changes in credit risk and interest rate risk. If market interest rates have fallen or the probability a loan will default has fallen, then the loan deserves to trade a lower interest rate. The only way to fair reflect the changes in value is by allowing loans to trade at a premium or discount to par. As Assetz and other platforms scale, I imagine the primary markets will have a more consistent flow, and so 1) may become a less significant force generating premiums. However, I believe investors in the primary market will always take on risk 2) and deserve to be rewarded for it. 3) is a risk that affects all investors. Fixing prices by banning loans trading at a premium or discount to par will simply lead to underpriced loans (bad for sellers, good for buyers) under current conditions and when interest rates rise, a completely illiquid marketplace. No one will buy overpriced loans on the secondary market if they get fairly priced ones on the primary. Flippers (and I am not one I might add) take on a significant amount of risk when they invest - eg drawdown delays. If we have a liquid and efficient marketplace, they will be rewarded appropriately for the risks they take. I believe that is perfectly fair. |
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j
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Post by j on Dec 23, 2013 17:53:31 GMT
There was & probably still is plenty of evidence on the likes of FC & RS where a loan if taken up by one or two large investors with deep pockets, then sell at a high premium within hours if not minutes of closing on the aftermarket. It has nothing to do with free markets but a lot to do with fairness & allowing smaller investors with limited means a bite of the apple at the same level too!!
My answer is a definite NO with the one condition of max 0.35% premium, if wished, to cover sale fees on the platform, but no more.
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spockie
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Post by spockie on Jan 18, 2014 17:11:19 GMT
No premium selling please. Not fair to the smaller investors.
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oldgrumpy
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Post by oldgrumpy on Jan 18, 2014 17:16:19 GMT
"My answer is a definite NO with the one condition of max 0.35% premium, if wished, to cover sale fees on the platform, but no more."
Irrelevant now. Selling fee has been removed. 
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Post by bengilbert on Jan 20, 2014 16:18:58 GMT
I think there is no doubt that the inability to sell at a premium makes the market somewhat inefficient, for the reasons samford71 points out. I also see that there can be advantages to keeping things as they are, including preventing flipping.
If Assetz ever do think of allowing sales at a premium, I wonder if one way of doing it, following on from the suggestion above, is to make all secondary market sales in the first 3/6 months after drawdown at par (or discount), and from then on allow sales at a premium.
I think a minimum holding period might put some people off, even if they aren't intending to sell quickly (a sense of flexibility is one of the things I like about p2p - compare the ease and speed in administrative terms of selling a loan part to, eg, selling a holding of a unit trust).
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