Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Aug 20, 2018 1:14:45 GMT
It amazes me why people put large sums of money that represents large percentages of their available capital into individual loans.
There is no downside in restricting investment to say Max 1% of capital and a huge upside that if there is a loss. I mean a real loss not all the mystic meg predicted losses then even if 10% of the loans were to suffer 100% loss you would still make a profit way in excess of a bank. Even FC had an actual loss rate of 8% of their very risky non asset backed loans in the days you could self invest so my 10% example is highly unlikely.
By doing your DD you should only be investing in moderate risk loans.
Lots of sites that operate an automatic investment strategy do not allow a greater than 1% of portfolio to be invested in any one loan and can guarantee nobody will make a loss.
Asset backed sites have had very few if any 100% losses in loans over which they hold a first charge or have the asset secured by them. Unless there is fraud it is practically impossible for 100% loss.
Although this is mainly aimed at FS investors it applies to all P2P sites as far as I’m aware FS has only one unsecured loan. It does have a few loans where property assets are not covered by a first charge .
So if you invest large percentages of your available capital into a few loans please enlighten us as to why ?.
thanks
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cwah
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Post by cwah on Aug 20, 2018 2:21:29 GMT
As Warren Buffett Saïd...
"Risks comes from not understanding what you are doing"
When he started he bought 100% of his capital into 1 stock: coca cola!
And he did well.
Maximum diversification is for the ones who don't want to spend time analysing (that's why he advise on index fund for the average Joe). But he only buy a few stock he knows well.
Same principle in my opinion goes into loan. Do thorough due diligence on good loans, then invest in it
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bg
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Post by bg on Aug 20, 2018 6:04:35 GMT
Personally I regularly invest more than 1% in an individual loan (often up to 7-8% of my P2P capital).
If I see a loan that I consider to be very low risk I would rather have a bigger piece of that rather than spread lots of smaller sums across loans I would rather not touch. Generally these loans are by consequence the most liquid loans. I take full responsibility if a loan I have invested in runs into diffficulty and do not bleat about it being impossible to lose money on property lending as that simply is not the case.
It's up to others to run whatever strategy they see fit but I see the downsides of not doing so as increased default risk and much higher cash drag (if I only out 1% in the very best loans). Warren Buffett also said, "Diversification is protection against ignorance. It makes little sense if you know what you are doing" so I would rather have £100k in the likes of Isle of Weight or Scraborough than 100 x £1k in the likes of Knaresborough. Hopefully I know what I'm doing!
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Post by brightspark on Aug 20, 2018 6:49:28 GMT
Normal people do not take unnecessary risks. They take calculated risks. When p to p lending emerged it was "sold" as an opportunity for inexperienced investors to earn more from the savings than the large institutions offered albeit with a slightly increased risk mitigated by diversification. Platforms sort of hinted in a circumlocutory way that they were providing due diligence without actually stating it. T&C's of all the platforms can be convoluted and are probably not studied. Platforms vary in the amount of risk to which they wish their lenders to be exposed with FS being amongst the less cautious in some of its lending offerings. Yes the behaviour of some lenders was not rational but it has been driven by desperation caused by the small returns available to them from the traditional savings institutions reinforced by a modern culture that individuals rather than the State should become more responsible for their own financial well-being and planning. whether FS is acting morally, ethically or with due humanity others must judge. I suspect if FS disappeared tomorrow some other such business would rapidly emerge to take its place.
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adrian77
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Post by adrian77 on Aug 20, 2018 7:06:53 GMT
totally agree but I would say a problem we have is that FS clearly often don't do nearly enough DD on our behalf so it can be very difficult for investors to actually know what they are buying into even if they do their own DD e.g. what on earth is happening with the Landrover and the artwork which may have been illegally pawned!
Or to put another way we lenders need to trust FS and how much they have our trust is down to them.
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coop
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Post by coop on Aug 20, 2018 9:46:42 GMT
It amazes me why people put large sums of money that represents large percentages of their available capital into individual loans. There is no downside in restricting investment to say Max 1% of capital and a huge upside that if there is a loss. I mean a real loss not all the mystic meg predicted losses then even if 10% of the loans were to suffer 100% loss you would still make a profit way in excess of a bank. Even FC had an actual loss rate of 8% of their very risky non asset backed loans in the days you could self invest so my 10% example is highly unlikely. By doing your DD you should only be investing in moderate risk loans. Lots of sites that operate an automatic investment strategy do not allow a greater than 1% of portfolio to be invested in any one loan and can guarantee nobody will make a loss. Asset backed sites have had very few if any 100% losses in loans over which they hold a first charge or have the asset secured by them. Unless there is fraud it is practically impossible for 100% loss. Although this is mainly aimed at FS investors it applies to all P2P sites as far as I’m aware FS has only one unsecured loan. It does have a few loans where property assets are not covered by a first charge . So if you invest large percentages of your available capital into a few loans please enlighten us as to why ?. thanks I feel sorry for your dead horse! In all seriousness what's the point of a thread like this when there's little to no possibility of a new investor to FS finding 100 decent available loans anyway...
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Aug 20, 2018 10:14:12 GMT
When a company has a portfolio showing you non-performing loans for 30+% of their portfolio, you can diversify as much as you can, but statistically one out of three of your loans will end up in default. This is staggering. Given the proven record of total inefficient FS control of lates and unredeemed loans, you can bet you will loose money! Don't believe a word of those who are suggesting you to put your money in FS: They have only one goal: get out with their own money! Lies dam lies and statistics all theoretical as for FS taking the money all investors money ranks before them as the loans in the investors names. FS Administrate And only get paid if investors get paid. NP is not non paying or non recoverable . You are only suggesting the possibility of non-payment there is the same possibility of full payment and recovery or partial recovery. The loans have a 30% chance of non-performing I suggest that it is a chance of under performing there will be returns . Taking every loan that has defaulted previously and taking this sums recovered if you had invested in all as part of a diversify portfolio you would still be making a decent return not everything has to be perfect to make acceptable gains. Like the Brexit vote in the Scottish referendum get over it and live with the consequences You however put yourself forward as the Messiah come to save us all from the evils of P2P. We should all listen to you and Jeremy Corbin And we will all be living in a fantastic fun filled utopia
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Aug 20, 2018 10:43:19 GMT
Normal people do not take unnecessary risks. They take calculated risks. When p to p lending emerged it was "sold" as an opportunity for inexperienced investors to earn more from the savings than the large institutions offered albeit with a slightly increased risk mitigated by diversification. Platforms sort of hinted in a circumlocutory way that they were providing due diligence without actually stating it. T&C's of all the platforms can be convoluted and are probably not studied. Platforms vary in the amount of risk to which they wish their lenders to be exposed with FS being amongst the less cautious in some of its lending offerings. Yes the behaviour of some lenders was not rational but it has been driven by desperation caused by the small returns available to them from the traditional savings institutions reinforced by a modern culture that individuals rather than the State should become more responsible for their own financial well-being and planning. whether FS is acting morally, ethically or with due humanity others must judge. I suspect if FS disappeared tomorrow some other such business would rapidly emerge to take its place. Hi you are correct a lot of Hype was made of P2P in the beginning most have cleaned Up their act so they can be FCA approved this roots out the more cavalier platforms. But for the very Small investor say with £100-£500 were they to attempt to invest in The stock market with any kind of diversification Would immediately lose 10% in dealing fees difficult to recover from that with the stock market averaging 10% rise over the last 20 years. They could easily put £25 into extremely low risk loans with Secured assets with a loan to value less than 40%. There are never any of these loans that don’t sell when offered at a moderate to large discount so they could always sell before the Loan reaches Maturity alleviating 90% of investment risk the returns would be slightly lower than the loan stated rate but still at least 10 times what the bank would be paying. I was just checking to see the current state of the SM There were three loans with parts selling at -1% that met that criteria I bought all parts for sale that were at -1% in two out of the 3 . I will be returning and looking at those with a LTV of 50% or below being offered at -1% and will probably buy most of that as the sums involved are not that big. hopefully when I buy all the small parts from small investors. I do not do this for philanthropic reasons I am here to make a profit but If I can do this and help the smaller guys then that is a bonus Unfortunately for those selling parts I bought they still had over 120 days to go so not a huge return for the seller but tax free and better than the bank. thanks for your comments
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Godanubis
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Post by Godanubis on Aug 20, 2018 10:45:23 GMT
Lies dam lies and statistics all theoretical as for FS taking the money all investors money ranks before them as the loans in the investors names. FS Administrate And only get paid if investors get paid. NP is not non paying or non recoverable . You are only suggesting the possibility of non-payment there is the same possibility of full payment and recovery or partial recovery. The loans have a 30% chance of non-performing I suggest that it is a chance of under performing there will be returns . Taking every loan that has defaulted previously and taking this sums recovered if you had invested in all as part of a diversify portfolio you would still be making a decent return not everything has to be perfect to make acceptable gains. Like the Brexit vote in the Scottish referendum get over it and live with the consequences You however put yourself forward as the Messiah come to save us all from the evils of P2P. We should all listen to you and Jeremy Corbin And we will all be living in a fantastic fun filled utopia Strange that the whole world thinks like me. Give a look to any bank stock the day they announce they sold (at a loss!) a package of NPLs. The stock will go UP, UP, UP. This is because financial institutions cannot efficiently deal with this gigantic amount of NPLs. The exact same principle applies to FS. They have shown for years to be totally incapable to deal with NPL and continue accumulate them instead of dealing with the connected problems. So, unless and until that situation changes (and people start seeing money returned back in reasobale times with quick legal actions), FS is doomed for failure, however you try and sell it! Hello Jeremy Paxman here again Tell us your magic solution The silence is deafening
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Aug 20, 2018 11:02:26 GMT
Lies dam lies and statistics all theoretical as for FS taking the money all investors money ranks before them as the loans in the investors names. FS Administrate And only get paid if investors get paid. NP is not non paying or non recoverable . You are only suggesting the possibility of non-payment there is the same possibility of full payment and recovery or partial recovery. The loans have a 30% chance of non-performing I suggest that it is a chance of under performing there will be returns . Taking every loan that has defaulted previously and taking this sums recovered if you had invested in all as part of a diversify portfolio you would still be making a decent return not everything has to be perfect to make acceptable gains. Like the Brexit vote in the Scottish referendum get over it and live with the consequences You however put yourself forward as the Messiah come to save us all from the evils of P2P. We should all listen to you and Jeremy Corbin And we will all be living in a fantastic fun filled utopia Strange that the whole world thinks like me. Give a look to any bank stock the day they announce they sold (at a loss!) a package of NPLs. The stock will go UP, UP, UP. This is because financial institutions cannot efficiently deal with this gigantic amount of NPLs. The exact same principle applies to FS. They have shown for years to be totally incapable to deal with NPL and continue accumulate them instead of dealing with the connected problems. So, unless and until that situation changes (and people start seeing money returned back in reasobale times with quick legal actions), FS is doomed for failure, however you try and sell it! To give you a fair hearing I just looked at the banking sector down 400 points in the last six months and have never recovered from the 2009 crash good place to put your money not I am selling and buying ergo someone else is selling Jeremy Paxman here again give us your solution
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Aug 20, 2018 11:09:22 GMT
Hi you are correct a lot of Hype was made of P2P in the beginning most have cleaned Up their act so they can be FCA approved this roots out the more cavalier platforms. But for the very Small investor say with £100-£500 were they to attempt to invest in The stock market with any kind of diversification Would immediately lose 10% in dealing fees difficult to recover from that with the stock market averaging 10% rise over the last 20 years. This is another huge lie. You simply have ZERO idea of the stock market and its dealing costs (which in cases of serious people are negotiated well below 0,01% with also a fixed cap). You are out of order of magnitues from the truth, as with FS. Financial companies with NPLs of 30% cannot survive. So either FS radically changes tactics (and lenders will suffer a lot in the meantime, as is starting to happen with Lendy) or they are doomed. Another load of twaddle I was talking about small investors show me anywhere you can invest £100 without paying at least £10 trading fee it’s okay for the big boys and regular traders . I can negotiate small fees but I was talking about the smaller investors Jeremy Paxman here again with two questions this time Can I ask where you want us to put our money and tell me where I can find a broker that will invest £100 into four different shares at 0.1% commission and dealing fee PS Nobody is suffering another statement you can’t back up with identifiable demonstratable overall losses
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coop
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Post by coop on Aug 20, 2018 11:20:45 GMT
mate you're boring us all just do one
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ilmoro
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Post by ilmoro on Aug 20, 2018 16:26:15 GMT
This is another huge lie. You simply have ZERO idea of the stock market and its dealing costs (which in cases of serious people are negotiated well below 0,01% with also a fixed cap). You are out of order of magnitues from the truth, as with FS. Financial companies with NPLs of 30% cannot survive. So either FS radically changes tactics (and lenders will suffer a lot in the meantime, as is starting to happen with Lendy) or they are doomed. Another load of twaddle I was talking about small investors show me anywhere you can invest £100 without paying at least £10 trading fee it’s okay for the big boys and regular traders . I can negotiate small fees but I was talking about the smaller investors Jeremy Paxman here again with two questions this time Can I ask where you want us to put our money and tell me where I can find a broker that will invest £100 into four different shares at 0.1% commission and dealing fee PS Nobody is suffering another statement you can’t back up with identifiable demonstratable overall losses Erm, you might want to do some research there as there are several platforms that charge less than £10 per trade & at least one that would allow you to do it free (with Free trade & Revolut to follow)
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Aug 20, 2018 23:44:52 GMT
Another load of twaddle I was talking about small investors show me anywhere you can invest £100 without paying at least £10 trading fee it’s okay for the big boys and regular traders . I can negotiate small fees but I was talking about the smaller investors Jeremy Paxman here again with two questions this time Can I ask where you want us to put our money and tell me where I can find a broker that will invest £100 into four different shares at 0.1% commission and dealing fee PS Nobody is suffering another statement you can’t back up with identifiable demonstratable overall losses Erm, you might want to do some research there as there are several platforms that charge less than £10 per trade & at least one that would allow you to do it free (with Free trade & Revolut to follow) Thanks for info I Stand corrected I have no problem listening to those in the know,there is still the trading tax to pay .At least you give a response. Trying to get a response from thegrumbler for weeks you provided pertinent answers. i looked at Freetrade when it launches it could be good. My point was that S&S have a greater chance of total loss unless you are well informed on what to buy you would be stuck with the 10% return.Asset secured P2P has very little chance of total loss. A small investor can make 9-12.7 minimum APR with no tax and no default risk. And can make 15-20% by putting a little effort in. thanks again
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Aug 21, 2018 8:27:27 GMT
Thanks for info I Stand corrected I have no problem listening to those in the know,there is still the trading tax to pay .At least you give a response. Trying to get a response from thegrumbler for weeks you provided pertinent answers. i looked at Freetrade when it launches it could be good. My point was that S&S have a greater chance of total loss unless you are well informed on what to buy you would be stuck with the 10% return.Asset secured P2P has very little chance of total loss. A small investor can make 9-12.7 minimum APR with no tax and no default risk. And can make 15-20% by putting a little effort in.
thanks againAs it is not true you need to pay a lot for share trading (and also you don't need to pay any trading tax if you are organised...), it is also not true your sentence that a small investor will make a 9-12.7 minimum profit with no tax and no default risk. Besides the fact that a minimum is the lower in a series of numbers and not an interval, your promised returns simply represent a FALSE financial advertising. A financial advisor could go to jail for such blatantly FALSE statements. FS is a risky Platform and with its heavy 30%+ of NPL will NOT guarantee anything at all. Given this incredible bad borrowers and loans and the difficulty the FS eam has to deal with them, the most likely outcome for any investor is a loss. Any small investor in FS That has bought loan parts that met the criteria i mentioned ie.£25 in < 40 % LTV loans free to contact me by PM And I will endeavour to buy your parts offered at the discount to give you a 10% return. As I would probably be buying it later in the day anyway I AM PREPAIRED TO PUT MY MONEY WHERE MY. MOUTH IS Jeremy Paxman again give us your solution Trading tax 0.5% to be paid all but funds.
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