Vero
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Post by Vero on Nov 22, 2014 2:17:23 GMT
£10.76 still awaiting investment... I'll keep you posted!
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niceguy37
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Post by niceguy37 on Nov 22, 2014 9:18:21 GMT
and the sagas continue, mikes1531... I put £100 into GEIA 12 minutes ago, and here is what GEIA decided to do with it:
I'm concerned that AC are advertising 7% for the GEIA, but this cannot be achieved with the current algorithm, and I can see false advertising complaints looming. Which is why I bothered deriving the formula shown here: p2pindependentforum.com/post/29966Basically find the qualifying green loans with loan units available. Then find out how much you have already of each of these loans. Then top them up so that you have a reasonably even amount of each at the end.
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bugs4me
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Post by bugs4me on Nov 22, 2014 9:55:44 GMT
I think we need some clarification regarding the GEIA. Point taken niceguy37 but they do state both a 'target rate' of 7% and 'current rate' of 7% which is not being achieved. So maybe this needs addressing. My thoughts would always revolve around an exit strategy if the worst came to the worst. Simply joining a queue where there was already substantial sums being offered on the AM for the same loan would be a big turn off. If this was the case, then I may as well manage my own GEIA and spread the investment over the several WT's currently on offer. On the plus side my returns would be higher than that currently on offer with the GEIA. On the negative side it would involve more time on my part plus there would not be the PF protection. I'm interested though in how long an expected sale would take. Do those GEIA units simply join the back of the queue or are they allowed to go to the front. If it's the former then it appears that whoever is trying to exit could be in for a long wait judging by the amount available on the AM ATM. Maybe Vero or mikes1531 would care to do a test. On second thoughts, maybe no one is wishing to purchase any WT's on the AM ATM so that wouldn't be very scientific. Perhaps that clarification from AC as to where these units would sit in the AM would be easier. |
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sand2880
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Post by sand2880 on Nov 22, 2014 10:48:10 GMT
An interesting idea would be to allow the provision fund to buy the assets on sale within the GEIA where no buyers were present to ensure a liquid market and allow investors to exit quickly. This would need a larger provision fund but it is expected that the provision fund will increase so should be possible. This would appeal to traditional savers who this account seems to be marketed and improve the flow of new funds to the platform and allow the sale of these back to investors when demand appeared again.
As manual investors make their own investment decisions, they should be aware of the liquidity risks and this would be a normal risk within investments, unlike the passive investor who are not making investment decisions on a loan by loan basis.
The risk appears to be if the inflow of new funds to the GEIA is substantial then the availability and diversification of new monies may be restricted once the surplus units that are currently available is reduced, meaning that a higher amount of funds would not be invested at 7% and this would be an issue for new investors.
With the income guarantee reducing over time, it would be interesting to know what the pipeline looks like for new qualifying investments to show that this tranche has some longevity or is it an exercise in absorbing the surplus units available before closing this tranche and then launching a new investment account type or tranche 2 when sufficient new investments are brought onto the platform?
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Vero
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Post by Vero on Nov 22, 2014 16:27:58 GMT
update after 15:45 hours:
£10.76 still awaiting investment...
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Bagman
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Post by Bagman on Nov 22, 2014 18:42:36 GMT
A few days ago I put £11 pounds in, it bought £10 worth of loans and then stopped, so I withdrew the odd £1 , leaving £10 ..
and then this morning for no reason I can see £0.03 was sold , very odd behaviour.
22nd Nov 2014 at 09:33 Sale of loan part 2084272 (new id 2085530) for 0.03 GBP with a fee of 0 GBP - principal 0.03, annualised rate 9.750, loan: Carmarthenshire Wind Turbine Loan (125)
£0.03
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bigfoot12
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Post by bigfoot12 on Nov 22, 2014 19:51:12 GMT
A few days ago I put £11 pounds in, it bought £10 worth of loans and then stopped, so I withdrew the odd £1 , leaving £10 ..
and then this morning for no reason I can see £0.03 was sold , very odd behaviour.
22nd Nov 2014 at 09:33 Sale of loan part 2084272 (new id 2085530) for 0.03 GBP with a fee of 0 GBP - principal 0.03, annualised rate 9.750, loan: Carmarthenshire Wind Turbine Loan (125)
£0.03
Did it have more than £2 in one loan? My guess is that the first investment was £2.20 into one of the loans. After you removed the £1, you would have had more than 20% in that loan so it would try to sell part of it to bring it back to 20%. As I say just a guess.
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niceguy37
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Post by niceguy37 on Nov 22, 2014 20:12:27 GMT
A few days ago I put £11 pounds in, it bought £10 worth of loans and then stopped, so I withdrew the odd £1 , leaving £10 ..
and then this morning for no reason I can see £0.03 was sold , very odd behaviour.
22nd Nov 2014 at 09:33 Sale of loan part 2084272 (new id 2085530) for 0.03 GBP with a fee of 0 GBP - principal 0.03, annualised rate 9.750, loan: Carmarthenshire Wind Turbine Loan (125)
£0.03
Did it have more than £2 in one loan? My guess is that the first investment was £2.20 into one of the loans. After you removed the £1, you would have had more than 20% in that loan so it would try to sell part of it to bring it back to 20%. As I say just a guess. I think the kind of retail lender I would guess the GEIA is aimed at will be expecting an algorithm that easier to understand and explain.
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bigfoot12
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Post by bigfoot12 on Nov 23, 2014 0:30:40 GMT
I think the kind of retail lender I would guess the GEIA is aimed at will be expecting an algorithm that easier to understand and explain. This account has a limit of 20% in any one position, if you reduce the amount in your account some positions might be put up for sale. I think that the previous sentence is easy to understand.
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mikes1531
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Post by mikes1531 on Nov 23, 2014 0:46:20 GMT
I think the kind of retail lender I would guess the GEIA is aimed at will be expecting an algorithm that easier to understand and explain. This account has a limit of 20% in any one position, if you reduce the amount in your account some positions might be put up for sale. I think that the previous sentence is easy to understand. Yes, it is. But how do you explain to someone who invests £10 the long series of purchases I reported, with the end result that I had more than 20% in one loan and less than 10% in another? Would the 20% limit mean that some of my holding of the 20+% loan actually was up for sale as soon as that happened?
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niceguy37
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Post by niceguy37 on Nov 23, 2014 9:42:35 GMT
I think the kind of retail lender I would guess the GEIA is aimed at will be expecting an algorithm that easier to understand and explain. This account has a limit of 20% in any one position, if you reduce the amount in your account some positions might be put up for sale. I think that the previous sentence is easy to understand. With respect, I think a novice GEIA investor will not understand why his or her investment is not simply spread evenly amongst the available loans. They will not unreasonably expect the system to be able to tell how many loans are available, and divide up the investment between them, subject to the 20% limit and loan availability.
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Nov 23, 2014 12:57:13 GMT
With respect, I think a novice GEIA investor will not understand why his or her investment is not simply spread evenly amongst the available loans. They will not unreasonably expect the system to be able to tell how many loans are available, and divide up the investment between them, subject to the 20% limit and loan availability. Even as a not-novice investor, who has a sound grasp of both maths and logic, neither do I understand the former, and I would also expect the latter. The ever-decreasing loop of investment of 20% of whatever is in the account at the time was surely always going to lead to the situation we've got which is: 1) never getting 100% invested and 2) ending up with greater than 20% overall in some loans. I'm sure this wasn't the intended outcome of all the code. I'm not normally one on the bandwagon that cries 'lack of testing' at every fault, because with the best will in the world testing rarely catches everything unless you apply the expensive procedures relating to safety critical systems, but in this case I really do think almost any level of sensible test would have flagged this situation up. It's not the worst problem in the world, but it is fairly daft.
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mikes1531
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Post by mikes1531 on Nov 23, 2014 13:55:19 GMT
This account has a limit of 20% in any one position, if you reduce the amount in your account some positions might be put up for sale. I think that the previous sentence is easy to understand. With respect, I think a novice GEIA investor will not understand why his or her investment is not simply spread evenly amongst the available loans. They will not unreasonably expect the system to be able to tell how many loans are available, and divide up the investment between them, subject to the 20% limit and loan availability. Another thing a GEIA investor -- novice or veteran -- might reasonably expect is to be able to see a table showing which loans their money is invested in without having to trawl through their GEIA statement adding and subtracting the various bits bought and sold. Since this table is available for the MLIA, I'd be quite surprised if a similar table for the GEIA couldn't be enabled pretty easily.
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Post by mrclondon on Nov 23, 2014 15:01:38 GMT
Another thing a GEIA investor -- novice or veteran -- might reasonably expect is to be able to see a table showing which loans their money is invested in without having to trawl through their GEIA statement adding and subtracting the various bits bought and sold. Since this table is available for the MLIA, I'd be quite surprised if a similar table for the GEIA couldn't be enabled pretty easily. Agreed. And without such a table the opt-out [of a given loan] functionality will be missed by most GEIA only lenders.
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niceguy37
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Post by niceguy37 on Nov 23, 2014 15:56:48 GMT
With respect, I think a novice GEIA investor will not understand why his or her investment is not simply spread evenly amongst the available loans. They will not unreasonably expect the system to be able to tell how many loans are available, and divide up the investment between them, subject to the 20% limit and loan availability. Even as a not-novice investor, who has a sound grasp of both maths and logic, neither do I understand the former, and I would also expect the latter. The ever-decreasing loop of investment of 20% of whatever is in the account at the time was surely always going to lead to the situation we've got which is: 1) never getting 100% invested and 2) ending up with greater than 20% overall in some loans. I'm sure this wasn't the intended outcome of all the code. I'm not normally one on the bandwagon that cries 'lack of testing' at every fault, because with the best will in the world testing rarely catches everything unless you apply the expensive procedures relating to safety critical systems, but in this case I really do think almost any level of sensible test would have flagged this situation up. It's not the worst problem in the world, but it is fairly daft. I agree with you entirely about the problem Rose. But I think it's a design failure (although testing should have found it too). IIRC Chris mentioned something about it being hard for the database to know how many loans were eligible for the investment. I'm guessing he meant that it's hard to ask for GEIA-qualifying loans with availability above £X, when you haven't calculated X yet, where X is the investment divided by the number of loans available. But it's easy enough to just retrieve a list of GEIA-eligible loans that have some availability, and then just work through the list spending 5% of the initial investment on each loan in turn (as long as holdings in that loan are under 20%), and going around a second or third time, until it was all invested.
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