dandy
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Post by dandy on Jan 28, 2019 12:05:26 GMT
For what it's worth, you are talking sense in my view @wallstreet ,and dandy is being unnecessarily inflammatory as unfortunately he often is. Which is a shame, as he's a bright guy. I'm not going to start bickering on the matter, that's not why I raise it, but I would like to see you keep posting as I've found your views interesting. Re: the stock market, I agree equities are a far better proposition than P2P as long as we accept the caveats that we are talking about broad-based index tracking over the long term (5 years+) and not day-trading and/or investing in the latest 'hot shares'. I assume you were referring to the former sort of investing. Re: people's misconceptions of P2P. Absolutely. If I could be bothered, I could find countless references to people here who have said things like 'I'm using the QAA for my house deposit for a month or two' or "I use RS rolling for all of my spare cash as they've always given my money straight back before". If/when one of RS/LW/GS/AC QAA becomes locked in, there will be a tidal wave of people emerging from the cracks saying they were mis-sold etc etc. well thankfully for me you are not a member of the Judiciary - and thanks for the compliment btw 
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dandy
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Post by dandy on Jan 28, 2019 12:15:16 GMT
You need to get it into YOUR skull that NO ONE here thinks P2P is a bank account. You also need to get it into your skull that the points you make are utter nonsense. Most people know when they talk nonsense but you seem to believe it. Hypothesis: The stockmarket wins every time for a million and one reasons. 6 month Experiment: My Apple shares have declined by ~ 30%. My ratesetter portfolio has increased by ~ 3%. Result: The hypothesis is fundamentally false and misconceived and worthy of no further time wasting. Message to student: Try harder. F - Seeing as you go by the name of the street that brought the financial world to its knees, it is hardly surprising that you believe your own tosh
Yes, many people here think P2P is a bank account. I could point you to hundreds of posts that I've read over the time I've been here.
As for the rest of your post. Its not me talking nonsene, its you.
I'm not going to waste my time and energy explaining to you why your silly little '6 month experiment' is completely and utterly ludecrous and misguided.
There is no need for me to try harder. I've got the hard facts to prove it, if you want to do some willy-waving and throw around percentages then fine ... even my paltry little low-risk boring equities SIPP portfolio is up 50% in the last two years, and no it didn't go down anywhere near 30% in the last six months either (infact none of my porfolios did, not even the high-risk ones). I have consistently outperformed any benchmark index you care to mention by some margin.
The comment you made is false as I demonstrated - but I really do not care whether you acknowledge that or not. I made the post to set the record straight ... and that is what I have done. Good luck with your stocks but make sure you keep an eye out for us risk junkies in case we need another reminder that this is just gambling on horses
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dandy
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Post by dandy on Jan 28, 2019 12:49:19 GMT
The comment you made is false as I demonstrated
Your so-called demonstration is better described as a non-sensical rant.
The fact you can't be bothered to do a modicum of research and instead dump your funds into crowded, overbought trades such as Apple shares late in the game is not my problem.
That 30% loss of yours was easily avoidable. There was a time and a place to buy Apple shares, and that place was not when they were already trading at $200.
I chose to give you a very simple demo using what is probably the best known stock and p2p outfit. Over the last 6 months. Trying to keep it ever so simple 
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bigfoot12
Member of DD Central
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Post by bigfoot12 on Jan 28, 2019 13:04:05 GMT
You need to get it into YOUR skull that NO ONE here thinks P2P is a bank account. I think that you are wrong. I agree with r00lish67 and @wallstreet and others as I too have read no end of posts on this forum by the reckless or foolish. Do you think this affects a problem of systemic risk? One of the things which did for the world economy in 2008 was everyone pulling money out at the same time. Could the same thing happen to P2P... I think that within P2P this is very likely. I'm not sure exactly sure how it would fall withing the definition of systemic risk, and I don't think it is likely to have wider implications beyond P2P, but I think that there is a risk. If liquidity dries up on one of the bigger platforms it will impact liquidity on all platforms. We see many posts with investors moving between OC, AC, RS and others searching for an extra fraction of 1 percent. I would expect investors to remove cash from other platforms if one of these had problems. I certainly would remove any money I had in the QAA (by turning sweep to QAA off) if I saw liquidity drying up on this or another platform. ... the incredibly clever people with PhD's in nuclear physics and aeronautics who are employed in droves by the HFT brigade. Turns out that they weren't really that clever, just much closer to "front running" which is illegal in most other circumstances. Read Flash Boys, one of the many excellent books by Micheal Lewis.
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dandy
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Post by dandy on Jan 28, 2019 13:14:04 GMT
You need to get it into YOUR skull that NO ONE here thinks P2P is a bank account. I think that you are wrong. I agree with r00lish67 and @wallstreet and others as I too have read no end of posts on this forum by the reckless or foolish. Still of the view that no one believes that despite what they may write on a forum. If you can find a "genuine" post/poster that proves your point then feel free .......................................................... although I definitely agree that risks should be highlighted/explained much more prominently
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macq
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Post by macq on Jan 28, 2019 13:20:43 GMT
I don't believe day trading is that hard as i have seen that new ITV money programme called Cleaning Up and the lady on there makes it look very easy (in fact it was so easy i could stop watching after 20 mins) |
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bg
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Post by bg on Jan 28, 2019 14:11:50 GMT
I have no doubt there is a great misconception of the risks of P2P by many (probably a majority) of the people that invest in it.
People seem to consider equities as risky simply because there is a real time mark to market. What they don't understand is that a big credit/macro event impacts P2P just the same as equities....they just don't see it immediately. It could take years to feed through in defaults.
I have recently been moving some of my money out of P2P and into UK commercial property closed end funds. I figure that why hold commercial property debt at par when I can buy a commercial property fund at a c30% discount? The risks are skewed, P2P is (pretty much) forced to trade/mark at par but I haven't seen the yields go up to compensate for the increased risks.
There's another risk I am not comfortable with, the redemption risk. For example, if we got a big credit event (no deal Brexit, Jeremy Corbyn as PM etc) then the bottom would fall out the commercial property market, there would be no bids anywhere. If a borrower could not refinance in this period (as is likely) then we would have a load of people hounding the platform to default and sell the asset into a non existent market that would lead to a catastrophic loss. Yes the closed end fund price would fall but there would be no forced selling, I could just ride the panic out until the shock passed (which I am confident they would). I would be in control.
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bg
Member of DD Central
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Post by bg on Jan 28, 2019 14:53:55 GMT
People seem to consider equities as risky simply because there is a real time mark to market. What they don't understand is that a big credit/macro event impacts P2P just the same as equities....they just don't see it immediately. It could take years to feed through in defaults.
I would perhaps go a step further than that and say that P2P could be affected in a more significant manner than equities.
If you think about it, P2P tends to attract borrowers who the banks and other "traditional" sources won't touch.
So the borrowers in their own right are risky, and then on top of that, if a macro event happens, the P2P borrowers will probably be the first to suffer and suffer to a greater extent.
Not necessarily more risky. A lot of people borrow from P2P platforms because banks are very bureaucratic and slow. Many P2P platforms are also competing with banks on price. Banks also have high capital requirements for some forms of lending that just do not make them attractive sectors to remain in anymore. There is a counter to this argument - that many P2P investors do not understand the risks and so it may give other investors the chance to exit at par when a macro event has happened (which I have benefited from in the past)
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angrysaveruk
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Say No To T.D.S
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Post by angrysaveruk on Jan 28, 2019 15:46:34 GMT
People seem to consider equities as risky simply because there is a real time mark to market. What they don't understand is that a big credit/macro event impacts P2P just the same as equities....they just don't see it immediately. It could take years to feed through in defaults.
I would perhaps go a step further than that and say that P2P could be affected in a more significant manner than equities.
If you think about it, P2P tends to attract borrowers who the banks and other "traditional" sources won't touch.
So the borrowers in their own right are risky, and then on top of that, if a macro event happens, the P2P borrowers will probably be the first to suffer and suffer to a greater extent.
I Although I agree with your sentiment there are economic benefits to p2p in that it by passes a lot of the overheads of the banking sector.
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Mike
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Post by Mike on Jan 28, 2019 15:54:58 GMT
Do you think this affects a problem of systemic risk? One of the things which did for the world economy in 2008 was everyone pulling money out at the same time. Could the same thing happen to P2P... I think that within P2P this is very likely. I'm not sure exactly sure how it would fall withing the definition of systemic risk, and I don't think it is likely to have wider implications beyond P2P, but I think that there is a risk. If liquidity dries up on one of the bigger platforms it will impact liquidity on all platforms. We see many posts with investors moving between OC, AC, RS and others searching for an extra fraction of 1 percent. I would expect investors to remove cash from other platforms if one of these had problems. I certainly would remove any money I had in the QAA (by turning sweep to QAA off) if I saw liquidity drying up on this or another platform. Personally I believe this is will happen in the near future, within a year or two (maybe 3). For this reason, and dancing to the tune of this thread title, I have exited P2P as much as I can - which had become almost entirely QAA. Once there is any sign of a crack in those AC products - which (perhaps rightly) enjoy a good reputation from a well-run platform - P2P will become a real, real, mess. A nasty unfortunate mess. Just look over at the Lendy board on this forum, which would be lollipops and rainbows by comparison to the time (if) the QAA has problems. For the difference in expected return (QAA versus Marcus, Masthaven, Investec, etc.) it's not worth the extra risk.
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cwah
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Post by cwah on Jan 28, 2019 18:48:46 GMT
What is QAA?5
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aju
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Post by aju on Jan 28, 2019 19:30:43 GMT
have a look here it would seem they could be talking about different prospects on Assetz capital I think!. If I am right then they are talking about Quick Access Account not sure what the ?5 is but perhaps its a 5% or 5 Year who knows.
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copacetic
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Post by copacetic on Jan 28, 2019 20:36:09 GMT
I have run down my P2P holdings for a while now and apart from some money held in Zopa under the safeguard at 5% and a few loans on AC I cant sell I am out now. My main decision was I can earn 2% on a one year bank desposit vs the 5% I earn in P2P (low risk end of P2P). In my opinion the extra 3% per year isnt worth the risk at the moment. It has certainly been profitable for me over the years, I might return in a couple of years after I see how P2P weathers the financial storm that seems to be coming on the horizon. Trouble is 2% loses you money after inflation. GUARANTEED. i feel quite confident that RS, AC and LW - for example - will deliver more than 2% over the next five years, on average. Also I’ve made 6%+ in p2p over the last 5 years when BS rates were more like 1%. Therefore over a 10 year cycle I expect p2p to thrash BS rates - even if we do so see one or two years where defaults cause achieved rates to slip to 1% or 2%. Just can’t see the point of leaving.  I would hazard a guess that not taking into account the left hand tails of these curves causes most of the anguish vented on these boards. For real returns just shift all the curves to the left by inflation %
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macq
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Post by macq on Jan 28, 2019 21:59:27 GMT
I would be weary of applying bond theory to P2P. That’s a shame, I was rather hoping for an XIRR of 007%. is that to the Q ratio?
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copacetic
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Post by copacetic on Jan 28, 2019 22:57:49 GMT
I would hazard a guess that not taking into account the left hand tails of these curves causes most of the anguish vented on these boards. For real returns just shift all the curves to the left by inflation %
I would be weary of applying bond theory to P2P. Different kettle of fish (in a negative sense !).
For a start P2P is unqoted and untradeable outside of the very limited bubble of a given platform's secondary market, i.e. much scope for a reality distortion field.
A fair point. I don't really have any formal bond theory education, just basic probability knowledge. I had in mind a "buy a diversified portfolio of loans and hold to completion" strategy when I drew those curves.
I'd imagine a secondary market allowing discounts and premiums could tend to shift the curve peaks and maximums to the right for a knowledgeable user i.e. exploiting fastest finger first to buy small oversubscribed loans and quickly sell at a premium. Other strategies such as buying at a discount to sell at a premium later I think could end up having mixed results though, depending on how well you anticipate supply and demand ... if there's bad news you might be stuck with it or have to sell at a loss.
The main point however was the disappearing tails of the curves to the left which reach -100% or possibly, in the case with one particular well discussed London based loan, < -100%!
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