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Post by multiaccountmanager on Jul 2, 2020 16:58:50 GMT
Hi,
Just to note the SM now has only 17,500 available, steadily down from 215,000 at 31 March
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michaelc
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Post by michaelc on Jul 2, 2020 22:59:46 GMT
Hi, Just to note the SM now has only 17,500 available, steadily down from 215,000 at 31 March Now only £12,500 and good news but what is the purpose of the thread? I mean if back in March, I'd started a new thread which said something like "Just to let everyone know the sm has 215K across 30 odd loans that nobody is buying" I imagine it might upset one or two.
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Greenwood2
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Post by Greenwood2 on Jul 3, 2020 11:03:57 GMT
Hi, Just to note the SM now has only 17,500 available, steadily down from 215,000 at 31 March Now only £12,500 and good news but what is the purpose of the thread? I mean if back in March, I'd started a new thread which said something like "Just to let everyone know the sm has 215K across 30 odd loans that nobody is buying" I imagine it might upset one or two. It was certainly discussed somewhere, not to mention that there was up to 5% discount on some loans at that time.
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aj
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Post by aj on Jul 3, 2020 11:12:10 GMT
Now down to £2500 on the SM. I think it is pretty telling in a time when other platforms have a months long queue to exit or worse, that if I wanted to sell out, I could.
I think the near empty secondary market is an important milestone and probably is noteworthy on a messageboard dedicated to a platform.
In other news, I'm pleased that one of my most worrisome overdues just made another 10%ish capital repayment. (Security still intact)
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Post by Ace on Jan 17, 2021 17:20:20 GMT
Do SoMo charge a fee for secondary market sales? I couldn't find a definitive answer in the Ts&Cs.
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criston
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Post by criston on Jan 17, 2021 17:39:57 GMT
Do SoMo charge a fee for secondary market sales? I couldn't find a definitive answer in the Ts&Cs. No, but you stop getting interest on it while it's sitting there.
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Greenwood2
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Post by Greenwood2 on Jan 18, 2021 8:04:50 GMT
Do SoMo charge a fee for secondary market sales? I couldn't find a definitive answer in the Ts&Cs. No, but you stop getting interest on it while it's sitting there. Which is probably not too much of a problem at the minute. Nothing at all on the SM this morning.
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Post by multiaccountmanager on Mar 23, 2021 12:55:54 GMT
Now in the unique situation (in my experience) of:-
All primary market loans at or below 55% LTV (bar one at 59%) and interest rates at or below 7.8%.
Whereas the secondary market has more risk/more reward on offer.
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michaelc
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Post by michaelc on Mar 23, 2021 22:41:18 GMT
Now in the unique situation (in my experience) of:- All primary market loans at or below 55% LTV (bar one at 59%) and interest rates at or below 7.8%. Whereas the secondary market has more risk/more reward on offer. Yes and at the time of looking 60% of them expire within the next 3 months. Also whilst there are many reasons for folk listing on the SM, at least one of them has to be bad for people buying there. Namely offloading loans where you know earlier than someone else there is a problem with them. I'm nearly out now but when I was active I would always prefer to buy from the primary market in times gone past as I felt there was less chance of the loans there being problematic.
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Post by multiaccountmanager on Mar 24, 2021 10:21:05 GMT
Now in the unique situation (in my experience) of:- All primary market loans at or below 55% LTV (bar one at 59%) and interest rates at or below 7.8%. Whereas the secondary market has more risk/more reward on offer. Yes and at the time of looking 60% of them expire within the next 3 months. Also whilst there are many reasons for folk listing on the SM, at least one of them has to be bad for people buying there. Namely offloading loans where you know earlier than someone else there is a problem with them. I'm nearly out now but when I was active I would always prefer to buy from the primary market in times gone past as I felt there was less chance of the loans there being problematic. Yes that is a theoretical risk. In practice since there has always been 100% recovery, it seems better to get 13.2% after the default for a while. (optimistic view of course). If so no advantage to theoretical insider knowledge. May be good risk reward to buying short remaining term loans which might default soon. I did notice that Somo seemed to unload a fair amount of some loans when COVID was coming/rife, on primary market (mostly if not exclusively) I think... Secondary market often gives ability to invest when primary market is empty as well, I have found.
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Greenwood2
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Post by Greenwood2 on Mar 24, 2021 14:44:06 GMT
Now in the unique situation (in my experience) of:- All primary market loans at or below 55% LTV (bar one at 59%) and interest rates at or below 7.8%. Whereas the secondary market has more risk/more reward on offer. Yes and at the time of looking 60% of them expire within the next 3 months. Also whilst there are many reasons for folk listing on the SM, at least one of them has to be bad for people buying there. Namely offloading loans where you know earlier than someone else there is a problem with them. I'm nearly out now but when I was active I would always prefer to buy from the primary market in times gone past as I felt there was less chance of the loans there being problematic. Mainly I would think not because there is a known problem, but just offloading before expiry to make sure you're not stuck with one that doesn't pay back on time, particularly if it's a comparatively high LTV loan. I have bought on the SM but not often and not ones with only a couple of months to go, someone else has had most of the interest if it does pay back on time and you're holding the baby if it doesn't. I used to sell off everything before expiry on the late lamented Saving Stream (Lendy) not because I thought there was a particular problem, but it was easy to do (in the good old days) and in my mind reduced the risk. To me mostly it's not worth doing on BC because the loans are relatively short and you have to sell a couple of months before the end, selling is not as instant as it was and you lose interest while it's for sale, there may not be anything you want to buy on the PM with the funds released and there may be a delay in the new loan going live.
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Post by c64 on Mar 24, 2021 15:57:12 GMT
I'm offloading loans one by one in the final couple of months and replacing them with new ones. There's nothing wrong with them, it's just risk management: I am happy to have N loans awaiting recovery at 13.2%, but I am already at N. If one is recovered, I let one more other loan run to maturity with the possibility of default. Otherwise I keep selling. Occasionally I can't sell and get caught short, in which case N increases anyway (temporarily, so far - of course my "risk management" is a hostage to liquidity).
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michaelc
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Post by michaelc on Mar 30, 2021 14:08:56 GMT
I'm offloading loans one by one in the final couple of months and replacing them with new ones. There's nothing wrong with them, it's just risk management: I am happy to have N loans awaiting recovery at 13.2%, but I am already at N. If one is recovered, I let one more other loan run to maturity with the possibility of default. Otherwise I keep selling. Occasionally I can't sell and get caught short, in which case N increases anyway (temporarily, so far - of course my "risk management" is a hostage to liquidity). Sounds like a sensible strategy. If I ever go back in I think I'll do something like that. How do you mitigate platform risk ?
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Post by c64 on Mar 30, 2021 19:23:41 GMT
I've been luckier than I deserve on that: not been on any truly failed platforms, narrow escapes from large exposures with little or no eventual loss on LW and GS. Anyone small and new (<3-4 years) only gets <10% of my p2p allocation these days. Anyone even smaller and newer might get a few quid and a test drive if they have a bonus. Then I wait patiently for failure, or lack of it, before growing the position. In 2006 I was 1% of Zopa's meagre total loan capital, but that was OK: they were <1% of my assets. Now they are neither small nor new, and I don't think they are any more likely to fail than a middling stockbroker, so they have about 50% of my p2p (the early adopter bonus helps). The rest is split between many, with larger chunks in RS and FC now mainly depleted. I am waiting until the furlough and CBILS support stops and the consequences have shaken through before deciding which of the surviving platforms I deem to have passed the test Zopa passed in the GFC. I note that SoMo/BC already has quite a long track record with continuity of management, back to before my time when they operated by text message.
I consciously diversify by loan class before platform: personal, residential property, company loans. Having decided on those allocations, it is more about choosing a best platform to fulfil that role than it is about just spreading among platforms. Zopa (no more LW for me) ticks the unsecured personal debt box, although I am not actually reinvesting in that until furlough is gone, as above. BC is doing nicely for secured residential and a bit of commercial thank you. I am a bit unconvinced by some of the invoice/corporate overdraft variants after GS shot themselves in the foot with it, and my company loans allocation remains a disparate bunch with results from fantastic to dismal.
In terms of scrutiny, it is much easier when companies list and analysts are all over them working out what their forward P/E is likely to be. Maybe that would improve the likes of Zopa. But that has its own pitfalls: FC ramped their loan book and the founders sold up and ran away, and I can't see SoMo's cosy little club scaling up by 10 or 100 without losing valuable attention to detail and efficient recovery. They may ignore half their email but at least they don't reply with some content-free scripted cr@p about empowering the masses. I don't think they are fraudulent, and I do think they are competent. The platform risk is that I am wrong there, which of course is why I am not all-in BridgeCrowd @ ~10% p.a. and nil Zopa @ ~4% p.a.
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metoo
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Post by metoo on Mar 30, 2021 22:15:26 GMT
c64 may I ask your view on SoMo investments as unregulated loans to Social Money Ltd, which are said to be held in trust for individual lenders, rather than being regulated investments like P2P lending? I assume you feel comfortable with SoMo investments being unregulated (as Zopa was in the beginning, before P2P became a regulated activity in 2014). I appreciate platform risk and other issues have seen several P2P platforms fail.
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