blender
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Post by blender on Nov 2, 2014 15:19:38 GMT
I've never understood why the disparaging attitude to Autobid and those who use it. ... So, from a purely micro-economic point of view, we should celebrate Autobid I agree with you. Autobid is FC's strength. It is just that those of us who wish to or compulsively have to spend time to optimise, would not be happy to use it, and we know that it gives sub-optimum results. I have been trying to say that Autobid does what it says on FC's tin, and the tin description is fine for those who wish to use it and spend their time in other ways. FC needs manual bidders to fund the larger loans and property, and they therefore expect manual bidders to optimise their portfolios through trading. The people who worry about about a statistically few riskier loan parts being passed through the SM are those who do it and have an exaggerated sense of the effect of their few sales. Being worried about others using a sub-optimal Autobid and being worried about the effect of selling through Autobid are two sides of the same coin. Don't worry about it - it is clearly how FC wish the market to work. If you work at it you can do better, make the wheels go round, and have just a tiny effect on the averages. Best to get that badger off your shoulder, and learn to love Autobid.
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maxmarengo
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Post by maxmarengo on Nov 2, 2014 16:43:32 GMT
Which links neatly to an earlier thread on "How Much do You Pay Yourself..".
A little bit of tuning with Autobid could get you 6-8% which you might push to 8-12% by spending a lot more time on manual bidding and trading. Is the marginal increase worth the effort?
My latest experiment in trading loan parts probably has an APR in the high teens but there are so few opportunities that it probably doesn't cover the cost of the computer's electricity.
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blender
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Post by blender on Nov 2, 2014 17:30:56 GMT
To qualify for my main income I just have to stay alive, so time does not get valued, or even measured. Annualised return is a bit over 10% over 50 months and the account is large enough to make the sums reasonable. But the return above Autobid would not be sufficient to justify any time spent if the time was needed for something more interesting. Participating in this forum earns very little, but I know of worse hobbies that actually cost money - many people seem to value drinking alcohol. You takes your choice.
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Post by GSV3MIaC on Nov 2, 2014 19:20:49 GMT
Nowhere does FC point out that autobid will buy at par when same parts are available at a discount, or that dodgy parts are fair game. When I started I don't think I even realised it would buy on the SM. I agree Autobid is required, but see no reason it should be as stupid as it is.
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blender
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Post by blender on Nov 2, 2014 20:35:32 GMT
[Deleted as not adding anything] Oh dear, already quoted by BB who makes a valid point. GSV, I was taking the debate on too long - consider it gone please.
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Post by bracknellboy on Nov 2, 2014 20:46:30 GMT
You say stupid, I would say simple. Buying and selling other than at par adds complexity which has to be explained, justified and understood - how would Autobid balance buyer rate against discount? Loans are either tradeable or they are not - what, objectively, is a dodgy loan part? Perhaps one that someone has offered at a discount? KISS is the principle. It does the job required adequately, imo. It does not optimise. I remember in my early days looking at what FC said about how autobid operated. I clearly remember it made clear that autobid would not buy at either discount or premium, and the justification stated - as I recall - was that buying at other than par had tax/accounting implications for lenders who were lending via a company and autobid could not make an assumption on right/wrong strategy. So my recollection was that it was clear, and there were reasons for it (right or wrong).
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Post by GSV3MIaC on Nov 3, 2014 18:00:25 GMT
I can understand autobid (which should be called autoinvest!) not trying to trade off discounts vs buyer rates for different loans, but buying a £20 part at par when you could have the same fixed rate part at a discount is just dumb. Only defence is there were no fixed rate loans back then. Tax implications are no excuse, unless you believe in marginal rates > 100%.
As to what Is a dodgy loan part, I'd guess anything which ever missed a payment (except month 1) would be my definition (and zopas, although they don't even allow month 1). Saleable, but only among consenting adults. 8>.
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blender
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Post by blender on Nov 3, 2014 20:28:26 GMT
... As to what Is a dodgy loan part, I'd guess anything which ever missed a payment (except month 1) would be my definition (and zopas, although they don't even allow month 1). Saleable, but only among consenting adults. 8>. I hope FC do not read that. It's a sensible and dangerous idea. Fortunately there is no chance of them adopting three states - live, risk band removed and risk band tarnished, or tradeable, untradeable and untradeable through Autobid. Autobid is just an automated buyer with a particular behaviour - it cannot read the notes for each purchase.
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Post by jackpease on Nov 5, 2014 12:02:12 GMT
>>>>With FC you cannot sell a loan part with one repayment remaining from the term and so you cannot sell later than two months before the end. blender please could you clarify - i am looking at FC loan parts just now and loan #700 is up for sale with one month payment left?  thx, JP
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markr
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Post by markr on Nov 5, 2014 12:28:30 GMT
Loan 700 recently made a payment so it was probably listed while it still had 2 payments left.
However, it is possible to list loans with one payment remaining if you list them at a discount. I've just tested it with my part in Sw****me, listed it with a -3% markup, buyer rate 263%, luckily I managed to delist it again before it was noticed (I had expected a bot to swoop in on it). I'll do it again at a pre-arranged time if you want to see it but if any of you sneaky sods buys it I'll be wanting my 5p back!
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blender
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Post by blender on Nov 5, 2014 14:11:14 GMT
>>>>With FC you cannot sell a loan part with one repayment remaining from the term and so you cannot sell later than two months before the end. blender please could you clarify - i am looking at FC loan parts just now and loan #700 is up for sale with one month payment left? thx, JP Sorry, I mean one month before the end - a senior moment - thank you for pointing out. From the FAQs "There are some restrictions on loan parts you can sell. Unfortunately you cannot sell loan parts: Which have no risk band That are in arrears (have currently missed a repayment) or are in default If, after the application of any mark-up or mark-down, the simple interest rate the buyer would receive if they held the loan part to maturity, and the borrower continues to make all repayments on time ("Buyer Rate") is less than 4% per annum. With one repayment remaining" A while back I found that I could list parts with one payment remaining and sold one before reporting the problem. After the penultimate payment you should not be able to list a loan part for sale and those already listed should be removed. If it does not work like that then it is not because the rules have changed, but because there might be the tiniest lack of thoroughness in testing new software releases and patches, especially for unintended consequences.
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Post by GSV3MIaC on Nov 5, 2014 16:15:54 GMT
You can also list parts with buyer rate under 4%, if you bypass the web page and speak directly to the server/ajax. I did it once by accident when a bot test went pear shaped .. I expect I can do it again if required, although the page has changed some since then. The testing was all being done in java at your end, although the calculations are all done remotely at the server.
I also have noticed you can sell inside the one payment left window, even without tricking the server.
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baz657
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Post by baz657 on Dec 18, 2014 2:30:34 GMT
I might have to have a rethink. From everybody behaving and paying up (mostly) on time, I've now got 2 downgrades.
Fo****ll M******e Loan (7674) ... the borrower is commencing liquidation proceedings. After 2 payments out of 48.
And
U*****ing Cla*****ms (7712) ... we have received notification of a winding up petition filed against the business. We are in the process of contacting the borrower to determine their position. 2 paid out of 60.
I've been slowly reducing my cash in Fundamentally Catastrophic - I envisage that drip becoming a torrent now.
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blender
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Post by blender on Dec 18, 2014 8:05:58 GMT
7674 is very concerning for an A rated loan.
A bit early to worry about 7712 - but personally I would sell when (if) the risk band is restored.
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Post by davee39 on Dec 18, 2014 9:40:12 GMT
One problem with the early sale strategy is that you have sold on the good loans but can still get caught by some bad ones. I have been revising my strategy to maximize diversity, closely watching the % loaned to a single borrower.
With a gross yield of 12.5% and a small cushion from sales at a premium I am still satisfied with the returns but I am gradually reducing exposure where I have too many parts. Even selling a loan at par, before the first payment, is a fairly reliable way to generate a better income than available for short terms elsewhere.
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