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Post by Harland Kearney on May 3, 2020 12:25:09 GMT
I do wounder if the first wave of panic sellers will set the trend for the discount. AA holders may be under the impression that they will have to sell that low or it might go lower! That sort of knee jerk reaction isn't unfounded on a product with no valuation history yet. Unlike on a share where there is a general consesus of hold on open ended funds ect.
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victors
Member of DD Central
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Post by victors on May 3, 2020 12:36:17 GMT
Do we have any indication of when this trading application is to be introduced?
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iRobot
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Post by iRobot on May 3, 2020 12:44:32 GMT
Do we have any indication of when this trading application is to be introduced? I believe there's nothing more indicative than the following from AC's email on Fri 1st, May ( link) " ... we hope to provide you with a marketplace trading facility in the Access Accounts shortly."
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dead-money
Rocket to the Moon
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Post by dead-money on May 3, 2020 14:24:58 GMT
Do we have any indication of when this trading application is to be introduced?
I've already pinged the question directly at stuartassetzcapital and highlighted the need for advance notice.
I've got cash on deposit I'll happily buy up 50% discounted Access Accounts with, but it's flexible notice not instant.
Just like any stockmarket the first few hours of trading following a circuit breaker should be 'interesting' 
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SteveT
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Post by SteveT on May 3, 2020 14:51:51 GMT
Do we have any indication of when this trading application is to be introduced?
I've already pinged the question directly at stuartassetzcapital and highlighted the need for advance notice.
I've got cash on deposit I'll happily buy up 50% discounted Access Accounts with, but it's flexible notice not instant.
Just like any stockmarket the first few hours of trading following a circuit breaker should be 'interesting' Well, the poll is currently suggesting half of those potentially interested in buying the QAA at a discount would do so at -20% or less, and almost a quarter at -5% or less. So anyone starting by offering -50% needs their head examining. I’ll tentatively suggest the market will open with best offers around the -10-15% range and settle somewhere in the -5-10% range. But time will tell! Ps. I won’t be buying, if that’s the case.
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dead-money
Rocket to the Moon
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Post by dead-money on May 3, 2020 18:01:51 GMT
I've already pinged the question directly at stuartassetzcapital and highlighted the need for advance notice.
I've got cash on deposit I'll happily buy up 50% discounted Access Accounts with, but it's flexible notice not instant.
Just like any stockmarket the first few hours of trading following a circuit breaker should be 'interesting' Well, the poll is currently suggesting half of those potentially interested in buying the QAA at a discount would do so at -20% or less, and almost a quarter at -5% or less. So anyone starting by offering -50% needs their head examining. I’ll tentatively suggest the market will open with best offers around the -10-15% range and settle somewhere in the -5-10% range. But time will tell! Ps. I won’t be buying, if that’s the case.
SteveT As 19% of the AA loan holdings are in Default or Suspended, I won't be buying in below -20%.
NB There's obviously a certain amount of troll baiting going on in this forum.
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ceejay
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Post by ceejay on May 3, 2020 18:16:53 GMT
Well, the poll is currently suggesting half of those potentially interested in buying the QAA at a discount would do so at -20% or less, and almost a quarter at -5% or less. So anyone starting by offering -50% needs their head examining. I’ll tentatively suggest the market will open with best offers around the -10-15% range and settle somewhere in the -5-10% range. But time will tell! Ps. I won’t be buying, if that’s the case.
SteveT As 19% of the AA loan holdings are in Default or Suspended, I won't be buying in below -20%.
NB There's obviously a certain amount of troll baiting going on in this forum.
I don't think that mathematics, simple though it seems, is necessarily correct. First of all, you should reasonably expect at least some recovery from some of the defaulted loans, and rather better than that from the suspended ones (on average). You also should take into account that, while "normal conditions" still applied, there was sufficient PF to cover the expected losses from all of these loans. Now, of course, things have changed and it would be a very optimistic person who assumed we'll return to the old normal any time soon. But writing off the entire value of the default or suspended loans is erring very much on the cautious side - nothing wrong with that, you might say, but fortune will be favouring those a little braver than that.
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dead-money
Rocket to the Moon
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Post by dead-money on May 3, 2020 19:03:21 GMT
Indeed, The secondary market will determine whether fear or greed wins out.
Defaults 53 Loans. Many written down to zero, but PF hasn't paid out. Recoveries to date Unknown.
Suspended 27 Loans. Most not revalued. Recoverable value Unknown. Cash in Access accounts required for future loan tranches for seeable future. So no PF fund? 'Good' 490 loans, no write downs so far... |
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Post by df on May 3, 2020 19:07:58 GMT
I have just downloaded my loanbook. A small number of loans have had their valuation reduced below 100%, although most defaults remain fully valued, showing some indication that most of the value is recoverable. The net reduction in value is about 1.3%. This ignores any effect from provision fund or 'ring fence cash' since I have no idea how they work, or if these funds will ever be applied. I will be watching closely. , not because I suspect anything underhand but simply because I don't think that the future value of some of these loans is knowable with any degree of accuracy. I think that the value will also vary hugely depending on how much patience is available. Consider a half-built housing development, of which there are several on the books. How much is that worth? If the development stops, for any of several possible reasons, then the value is small, regardless of timescale. But if it can be completed, albeit late, then the recovery looks a lot better. But only if the housing market gets going again before AC and/or its investors run out of patience. So the value of one of these loans could legitimately be anything from 10% to 100%, and I'm sure that in the end there will be examples across the whole range, though I wouldn't like to say what the mix will be. My conclusion is that, although it would be great to do an analytical calculation of the fair value of the AA portfolio, the going rate on the market will in practice be driven almost entirely by emotions. Both greed and fear can be very powerful! Yes, most of them are LGDV, which means an estimated value of the asset if the project is completed. Although AC's DD is more robust than some other platforms, I don't have confidence in LTV/GDV figures. If the project fails, the usual outcome is a substantial loss of capital.
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ceejay
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Post by ceejay on May 4, 2020 8:31:09 GMT
I'm more than a little sceptical about the % valuations provided by AC, not because I suspect anything underhand but simply because I don't think that the future value of some of these loans is knowable with any degree of accuracy. I think that the value will also vary hugely depending on how much patience is available. ... Yes, most of them are LGDV, which means an estimated value of the asset if the project is completed. Although AC's DD is more robust than some other platforms, I don't have confidence in LTV/GDV figures. If the project fails, the usual outcome is a substantial loss of capital. To be clear, I wasn't referring to the LTV/LTGDV but rather to the "Capital Valuation %" which in an ideal world would tell you what a distressed loan was really worth.
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pikestaff
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Post by pikestaff on May 4, 2020 8:39:39 GMT
I have around 40k in access accounts and could do with some liquid cash so will likely put my portfolios up for sale at around 15-20% discount in the new market place. Good to know that there appear to be buyers at this level. I suspect that sellers will outnumber buyers by a considerable margin, and your £40k will initially be vying for positin at the head of the queue, with several millions of other investors cash.
It will be interesting to see how many buyers are out there and how desperate sellers are to sell. Personally, I don't see a lot of point in offering a discount until the wave of panic stricken investors have dumped their holdings, and discount levels have stabilised.
I hope you are right. I'd be a keen buyer at that price.
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Post by jjogia on May 4, 2020 9:11:51 GMT
At this very early stage (and assuming people are being honest) looks like my planned 15-20% discount is on the upper end for both buyers and sellers. Sadly, given my personal situation, think I'll have to risk being one of the idiots who sells too cheaply, but entirely my fault for investing more than I could afford and hence requiring urgent liquidity. On that note, some of the relentless whinging in this forum is really grating - take some personal responsibility rather than looking for someone else to blame.
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gmitz
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Post by gmitz on May 4, 2020 13:39:30 GMT
At this very early stage (and assuming people are being honest) looks like my planned 15-20% discount is on the upper end for both buyers and sellers. Sadly, given my personal situation, think I'll have to risk being one of the idiots who sells too cheaply, but entirely my fault for investing more than I could afford and hence requiring urgent liquidity. On that note, some of the relentless whinging in this forum is really grating - take some personal responsibility rather than looking for someone else to blame. So, in your world it was the investors' responsibility to prepare for a doomsday scenario like this pandemic but not the people you intrusted you money with on promises that with every day come as more and more questionable? You think it's our fault because we were stupid enough invest in P2P in the first place?
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chris1200
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Post by chris1200 on May 4, 2020 13:45:00 GMT
At this very early stage (and assuming people are being honest) looks like my planned 15-20% discount is on the upper end for both buyers and sellers. Sadly, given my personal situation, think I'll have to risk being one of the idiots who sells too cheaply, but entirely my fault for investing more than I could afford and hence requiring urgent liquidity. On that note, some of the relentless whinging in this forum is really grating - take some personal responsibility rather than looking for someone else to blame. So, in your world it was the investors' responsibility to prepare for a doomsday scenario like this pandemic but not the people you intrusted you money with on promises that with every day come as more and more questionable? You think it's our fault because we were stupid enough invest in P2P in the first place? It's not about stupidity to invest ever, it's about prudent risk allocation. There are so many scenarios that could cause this sort of liquidity issue. If anything, it was highly likely that some form of economic crisis would happen sooner or later that would cause such problems - this is what has always happened. So you should always invest anywhere (P2P or otherwise) with the knowledge that, were that to happen, you would be okay. Otherwise you should be de-risking into safer asset classes. Unfortunately, it seems that too many retail customers with little or no understanding of any of this have gone into an asset class (P2P) which is actually quite risky, particularly in term of having your money tied up even if you haven't "lost" it per se.
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gmitz
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Post by gmitz on May 4, 2020 14:46:13 GMT
So, in your world it was the investors' responsibility to prepare for a doomsday scenario like this pandemic but not the people you intrusted you money with on promises that with every day come as more and more questionable? You think it's our fault because we were stupid enough invest in P2P in the first place? It's not about stupidity to invest ever, it's about prudent risk allocation. There are so many scenarios that could cause this sort of liquidity issue. If anything, it was highly likely that some form of economic crisis would happen sooner or later that would cause such problems - this is what has always happened. So you should always invest anywhere (P2P or otherwise) with the knowledge that, were that to happen, you would be okay. Otherwise you should be de-risking into safer asset classes. Unfortunately, it seems that too many retail customers with little or no understanding of any of this have gone into an asset class (P2P) which is actually quite risky, particularly in term of having your money tied up even if you haven't "lost" it per se. Risk management, that is so abstract matter. Today I need a pound, tomorrow a million, how much cash, laying around, uninvested one should have to be called a prudent one? You will have as many answers on that question as there are people on the planet. In any case, I can accept the average Joe Block investing everything he has in riskier than bank saving account product but I cannot accept financial experts with "so many years" of experience in the banking and insurance sectors not to be adequately prepare for some financial turmoil. If you have little or no understanding of something you relay on experts you trust, right? Your car needs new brakes, you know what brakes are but you have no understanding how to do it yourself. You go to your local garage which replaces them but do a sloppy job and you end in someone else's car because your brakes failed. Whose fault is it? Yours, trusting the "experts" or the "experts" for doing a sloppy job?
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