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Post by Badly Drawn Stickman on Jan 17, 2019 23:24:11 GMT
I think I just like the constant battle with FC. In truth I am probably making a fairly good return but it is by no means easy (Or hands off).
Personally I have found the recoveries do eventually start to appear, apart from a few outstanding property loans (totally self inflicted) I really don't have many anyway. I also have the comfortable position of only currently investing past interest so it feels a bit like a 'free hit'.
Probably not the best place for anybody who just wants to invest and forget, despite its black box appearance it really is out to get you.
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corto
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Post by corto on Jan 17, 2019 23:34:44 GMT
Thanks.
If rates go down even further they will have to compete with various sorts of funds and shares which may not be less save and easier to get rid of if need be.
As blender's comment a little above indicates: they have been loosing trust quite quickly.
Can't see them adapting to the challenge.
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Post by Ace on Jan 17, 2019 23:37:30 GMT
I think I just like the constant battle with FC. In truth I am probably making a fairly good return but it is by no means easy (Or hands off).Personally I have found the recoveries do eventually start to appear, apart from a few outstanding property loans (totally self inflicted) I really don't have many anyway. I also have the comfortable position of only currently investing past interest so it feels a bit like a 'free hit'. Probably not the best place for anybody who just wants to invest and forget, despite its black box appearance it really is out to get you. Is there some way to influence ones rate of return? I'm on the fence as to how long I might stay with FC, but genuinely thought that "hands off" was my only choice.
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Post by Badly Drawn Stickman on Jan 17, 2019 23:58:19 GMT
I think I just like the constant battle with FC. In truth I am probably making a fairly good return but it is by no means easy (Or hands off).Personally I have found the recoveries do eventually start to appear, apart from a few outstanding property loans (totally self inflicted) I really don't have many anyway. I also have the comfortable position of only currently investing past interest so it feels a bit like a 'free hit'. Probably not the best place for anybody who just wants to invest and forget, despite its black box appearance it really is out to get you. Is there some way to influence ones rate of return? I'm on the fence as to how long I might stay with FC, but genuinely thought that "hands off" was my only choice. You will have to forgive me for not wanting to share my approach on a public forum, but yes you can minimize your losses. FC move the goalpost regularly, so you need to constantly adapt. I would suggest experimenting a bit. Scale is probably the key if you invest large sums in one account you will have little or no sensible control. For me it is more just the challenge, for most it would just be far to much trouble and as I said before not the best place to invest.
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Post by Ace on Jan 18, 2019 0:42:41 GMT
Is there some way to influence ones rate of return? I'm on the fence as to how long I might stay with FC, but genuinely thought that "hands off" was my only choice. You will have to forgive me for not wanting to share my approach on a public forum, but yes you can minimize your losses. FC move the goalpost regularly, so you need to constantly adapt. I would suggest experimenting a bit. Scale is probably the key if you invest large sums in one account you will have little or no sensible control. For me it is more just the challenge, for most it would just be far to much trouble and as I said before not the best place to invest. Not sure that I have to forgive you, but I do anyway. It would be a much duller place on here without your dry wit. Good luck with trying to game FC.
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Post by nooneere on Jan 18, 2019 18:41:14 GMT
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blender
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Post by blender on Jan 18, 2019 21:20:57 GMT
Now there's a surprise. And the rule of announcing delays or forecasting the extent of problems, is that you start by announcing half of the delay really expected, and then so on with the next announcement always announcing half the remaining expected delay. Same with expected defaults. Nice picture of Samir. I remember when he would chat with the lenders on the first FC forum after work, sharing his hopes and dreams. Now we cannot even see the loan book, to do any sort of check on their projections. What they miss in the projections is the positive feedback in the default loop. In that as defaults rise, more borrowers will see that repayment is optional and it will be harder to resource the collections/recoveries.
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corto
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Post by corto on Jan 18, 2019 23:03:53 GMT
The "Lifetime default rate" on FC's statistics page for the 2016 loans (green) looks like a strong trend. 5% already and a good chance it's not even at deflection point. The 2017 loans (orange), short as their lifetime stands, outperform it on the first 12 months.
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dorset
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Post by dorset on Jan 19, 2019 10:08:57 GMT
Good point, the 2016 projection looks as if it could easily exceed an 8% default rate while the 2017 projection is taking off like a rocket! This matches my own results with heavy defaults incurred since spring 2018 but with good performance in the six years prior.
On a positive note my lifetime recovery stand at 32.6% on 275 defaults. Given that 102 of these took place in 2018 then overall recovery could achieve 50%
My view has always been that the FC DD team simply says yes to anything but the FC recovery team are making a decent fist out of a poor hand of cards.
Still happy to be gently running out since 9/2017 but due to recoveries expect to be with FC until 2024 or beyond. What a thought.
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blender
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Post by blender on Jan 19, 2019 12:02:02 GMT
Good point, the 2016 projection looks as if it could easily exceed an 8% default rate while the 2017 projection is taking off like a rocket! This matches my own results with heavy defaults incurred since spring 2018 but with good performance in the six years prior. On a positive note my lifetime recovery stand at 32.6% on 275 defaults. Given that 102 of these took place in 2018 then overall recovery could achieve 50% My view has always been that the FC DD team simply says yes to anything but the FC recovery team are making a decent fist out of a poor hand of cards. Still happy to be gently running out since 9/2017 but due to recoveries expect to be with FC until 2024 or beyond. What a thought. This is all good stuff, but my point is that there will be a squeeze on the overall costs of collections and recoveries which may stop the recoveries that you expect. The approach in 2018 seems to be just 'computer says yes', which will have costs further down the line. Looking at some of mine, they might as well market an FC loan as a CCJ protection product. The computer cannot find contingent liabilities that are not in the numbers given to it. If the chancers are not given a very tough time by collections and recoveries (in the absence of any proper security) then the number of chancers will increase, imo. After many years I am moving the rest to Assetz, because the loans are secured there.
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Stonk
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Post by Stonk on Jan 19, 2019 12:08:29 GMT
That seems to be a fairly significant change. Taking the midpoints, in 3 months, the expected amount of bad debt has increased by 13%. That must impact the expected returns: they surely cannot continue to claim a return of "6%-7%".
Roughly speaking, if a default expectation of 3.0% predicts a return of 6.5%, then when defaults rise to 3.4% the return drops to about 5.7%. I envisage FC's projected return claim being reduced to "5%-6%" soon.
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dorset
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Post by dorset on Jan 19, 2019 12:43:03 GMT
I suppose the cynics on the forum would suggest that FC gave up completely on DD in 2016 and 2017 as a way of boosting growth prior to the IPO. The cat is now out of the bag. Decent quality business loans are in general taken up by the banks which leaves the c**p to the P2P market.
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blender
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Post by blender on Jan 19, 2019 13:21:20 GMT
'Gave up completely' is too strong, rather, just that the venture capitalists, who funded the growth, would be keen to optimise the value of their interest at the planned time of the flotation. Nothing unusual about that. The size and projected growth of the loan book would be a key determinant of company value. Not really a cynical view - just normal business practice.
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coogaruk
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Post by coogaruk on Jan 21, 2019 13:06:40 GMT
Me too but at the moment it seems the more sensible option would have been to sell up and cash out.
My total earnings are below where they stood at September 2017 (several k left invested at that point)
Even my Premium Bonds are outperforming FC (which wouldn't be difficult, tbh).
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blender
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Post by blender on Jan 21, 2019 13:45:04 GMT
Me too but at the moment it seems the more sensible option would have been to sell up and cash out.
My total earnings are below where they stood at September 2017 (several k left invested at that point)
Even my Premium Bonds are outperforming FC (which wouldn't be difficult, tbh).
That's what I was trying to do when I told FC to sell 10k on Friday morning. They are still to start on it. But then I saw the gear train and realised that the selling machinery had been designed by the FCIT team. 
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