Post by ceejay on Aug 26, 2018 16:58:51 GMT
As an aside, however, the forum statistics (link) just published are possibly illuminating regarding the state of the forum. New threads for the quarter were down 32% vs. the prior seven quarter average. New posts were down 27% vs. the prior seven quarter average. There were some deleted posts in those numbers (but there were some deleted posts in prior quarters aswell), so the drop is probably not as large as the headline number suggests. Nonetheless, it would be easy to argue activity is falling.
What I think is more suspect is to extrapolate the impact of this forum to the wider P2P investor base. It's notable that of the 13k of posts made in the last quarter, almost 6k (47%) were in the Lendy/SS/Col sub-forums. Add in Abl and MT, and those posts account for 61% of total posts. These 5 platforms are a negligible percentage of the P2P industry (sub 4%) based on this years origination volumes. In fact the only market-relevant platform that gets a signficant percentage of posts is AC (9%). This is forum is squarely focussed on a minority interest in high-yield self-select platforms. This forum has little or no impact on the wider P2P lending base because this forum is in no way representative of the vast majority of P2P lending.
I'm thankful for that because based on some posts it's fairly clear some posters really have no idea of what they are investing in, how to evaluate risk-reward and how to manage concentration risks. To be honest, the wider P2P lending community is doing just fine without this forum, having earned a perfectly reasonable 6.3%/annum (source: Alt Fi P2P index) without any of the hassle, in "fire and forget" products. Perhaps we need to learn from them?
Can't argue with any of that ... except ... I do wonder if this argument suffers from the same problem as the Efficient Market Hypothesis... which is to say that markets don't really behave in the number-driven rational way that we might like to think.
I come here for a couple of reasons. One is to learn about the finer points of the various platforms in which I might invest; this has been very successful from my point of view. Yes, one does have to filter the fluff (this is the best platform ever) from the facts (this is how this feature works) but that's not usually too hard.
But the other reason is to take a thermometer to investor sentiment. Of course, this is not a huge sample and unlikely to be representative, but it's the best I can find and so I'm going with it. Why is this important?
Because the biggest risk in P2P investing, as far as I can see, is the rapid loss of investor confidence (probably but not necessarily in response to an external event). If and when there is a significant "run on the bank", I want to have the best chance possible of seeing it coming, and I think there are quite a few canaries in this particular coal mine.
Of course, both of my objectives here are made more difficult by poor signal-to-noise ratios, so I will join in everyone else in regretting the volumes of idle chatter in some places. Although, in the case of the COL forum, I think it has a particular value as a form of self-help therapy!