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Post by Harland Kearney on Mar 18, 2021 2:13:59 GMT
The global stock markets could drop by 60% and I wouldn’t blink, but I don’t have the confidence to invest anything in P2P I feel exactly the same way. If you can't buy more of it when it's down, you shouldn't be holding it to begin with!
I remember flipping Lendy loans for 12% a year, which was highly lucrative but the house of cards was obvious from the start. Glad I got out of that with a very very small defaulted loan. The only viable platform for me is Loanpad, but it's more comparable to Junk Bonds. P2P will take up a small part of my portfolio for the foreseeable future, one that is always shrinking as it's impossible for me to find any other platforms I feel comfortable investing in currently.
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Post by Ace on Mar 18, 2021 11:10:17 GMT
By any sensible definition, P2P is not dead.
There are many platforms that are so popular that lenders are clambering over themselves to get funds deployed. Take CrowdProperty's loan this morning; it was 20 times oversubscribed. A platform that's strongly resisted the temptation to drop its standards to make a quick short-term profit, and is far from the only one.
We can, and frequently do, debate: whether P2P is a sensible option, how competent the regulator is, whether it should be open to all, etc. But one thing that can't be reasonably questioned is that it's very much alive and kicking.
PS: I hope this isn't prophetic, but my spellchecker insists on replacing 'clambering' with 'chlamydia' 😳
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r00lish67
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Post by r00lish67 on Mar 18, 2021 11:29:18 GMT
By any sensible definition, P2P is not dead. There are many platforms that are so popular that lenders are clambering over themselves to get funds deployed. Take CrowdProperty's loan this morning; it was 20 times oversubscribed. A platform that's strongly resisted the temptation to drop its standards to make a quick short-term profit, and is far from the only one. Given the past experiences of many of us here, is general popularity and loans being easily oversubscribed a good sign? I confess to knowing nothing of CP so I'm obviously not paying close attention, but has much DD been done on the platform/loans? The only recent discussion I've seen here of it are notes of excitement/disappointment of receiving more/less of a particular loan than the participant had hoped for.
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r00lish67
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Post by r00lish67 on Mar 18, 2021 11:37:51 GMT
Oh, and P2P dead? No.
P2P hugely diminished? Sure. A reasonable % of the UK population had at least heard of Funding Circle, Ratesetter and Zopa if just from the adverts. Have they heard of Loanpad/CP/others? I doubt it. It's much more niche, which isn't necessarily a bad thing.
Ok, yeah, there's a few devotees on this forum but frankly there are more people here interested in talking about COVID and politics than P2P, and for what is nominally a P2P forum that is rather telling.
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Post by Ace on Mar 18, 2021 11:53:26 GMT
By any sensible definition, P2P is not dead. There are many platforms that are so popular that lenders are clambering over themselves to get funds deployed. Take CrowdProperty's loan this morning; it was 20 times oversubscribed. A platform that's strongly resisted the temptation to drop its standards to make a quick short-term profit, and is far from the only one. Given the past experiences of many of us here, is general popularity and loans being easily oversubscribed a good sign? I confess to knowing nothing of CP so I'm obviously not paying close attention, but has much DD been done on the platform/loans? The only recent discussion I've seen here of it are notes of excitement/disappointment of receiving more/less of a particular loan than the participant had hoped for. Popularity probably is a good sign. It's certainly not sufficient by a very very long way, but I think it is a good sign. However, that wasn't my point. My point was that it's proof that P2P isn't dead. Given its popularity, one would hope and expect that considerable DD has been performed on CP and its loans. The fact that nothing negative has been reported on this forum about a platform that's been going strong for over 6 years has to be a good sign too. My own DD on the platform didn't unearth any concerns. The fact that most investors are prepared to continue to invest in a platform that gives them such a small allocation of what they wanted on each loan is also a good sign. I've said before that I've stopped bothering with anything more that a very cursory DD on CP for individual loans. I used to put more effort in, but always found that when I questioned them over any concerns I found they were already aware of the issue and had a satisfactory response. So, I concluded that their DD was better than mine (not a big surprise). And, given my diversity across the platform and relatively small amounts of cash in each loan, its just not worth my time doing individual loan DD on CP. It is possible to manually invest more in each loan, but your very much in to FFF territory to achieve it.
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macq
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Post by macq on Mar 18, 2021 11:53:59 GMT
By any sensible definition, P2P is not dead. There are many platforms that are so popular that lenders are clambering over themselves to get funds deployed. Take CrowdProperty's loan this morning; it was 20 times oversubscribed. A platform that's strongly resisted the temptation to drop its standards to make a quick short-term profit, and is far from the only one. We can, and frequently do, debate: whether P2P is a sensible option, how competent the regulator is, whether it should be open to all, etc. But one thing that can't be reasonably questioned is that it's very much alive and kicking. PS: I hope this isn't prophetic, but my spellchecker insists on replacing 'clambering' with 'chlamydia' 😳 I know you are a strong supporter of p2p but i would tend to look at it another way rather then saying its dead or not dead i would say its not growing and returning to its roots of what it was before the regulations to encourage p2p some 10 years back came to pass. Lets be fair and say there is nothing really new about the business of p2p there have always been people especially in property who have "offered" the chance for others of HNW to help them with projects by either cutting them in on the deal or borrowing the money but then the rules were relaxed to allow small investors in via a "regulated" product You can even see the roots of p2p in things like racing clubs where you shared the cost of something you could not buy with others and which seem very much like the shared property platforms swapping winnings for rent but finding there are extra costs and possible liquidity issues. I can see no market for Black box products marketed to the mass public with the news of RS and issues with the likes of LW as was the dream.Maybe there will be a market for HNW or very savvy investors who have been in at the ground floor but like i said that just feels like the old days.But is there really a strong flow of totally new investors coming into the product i have my doubts?
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Post by indexfund on Mar 21, 2021 9:37:28 GMT
Some fascinating comments. P2P if not dead, is in a state of collapse...will it rise again phoenix-like? well I hope so, but I won't be holding my breath. The main issue now is the lack of products, platforms and confidence. The market has shrunk so massively....the big banks get their way in the end hey?
All asset classes and investments have their problems, but P2P has been a far riskier proposition than perhaps many of us realised.
Stocks and funds have been my mainstay over several decades but even there things can get 'interesting', however in the medium to long term it does beat everything else.
Seasoned fund investors ride through cyclical changes and use them as opportunities. Right now is a very good example, with rotation in full flight, value is finally beating growth. I too got caught out with the green energy growth funds but even there I was up 44% at one point but sold 80% @ 23% up. My portfolio issue right now is that so many funds have elements of growth stocks dragging them down so the overall total is down over the last quarter, but then so is just about everyone's. We all have to zoom out abit and look at the medium/long term gains. I'm using this rotation period to re-balance things alittle, nothing drastic just into some value until the bond/rate issues subside or become dialled-in.
Then there is the property bubble, being actively supported by the government throughout, in fact it is booming right now. It is frankly crazy. Will the bubble pop? It should but I'm not betting on it!
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michaelc
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Post by michaelc on Mar 21, 2021 16:30:32 GMT
<snip>
- The P2P companies need to stop being so greedy and tighten up their lending criteria. Quality NOT Quantity.
Why would they do that? Its not their cash. Low quality drives quantity which drives turnover. More cash today and who cares about 2, 3 years down the line.
- The P2P companies need to cut the marketing hype and be much more honest with lenders about risk and not just take on anybody who can tick a few boxes and provide a small deposit. It should not be the case that any Tom, Dick or Harry can put money into junk loans.
Of course they should be able to. They can gamble it and give it away so they should be able to chuck it at anything they see fit. Its not just a playground for the super rich and super knowledgeable.
- The P2P companies need to treat lender's money with more respect. "Always easier with someone else's money" as they say. Just because punters with no knowledge of risk are willing to give you money for junk loans doesn't mean you should get involved in that sort of business.
Oh yes but that would never happen unless they are forced to align with lenders interests and the only way to do that is to ensure minimum contributions from the platform to each loan. The FCA could help with that if they were any good...
- The FCA needs to grow a pair and properly regulate P2P ... none of this wishy-washy arms-length light-touch nonsense.
Oh yes. But if by that you _only_ mean preventing folk chucking their cash away then I would disagree. If you mean other regulatory ideas such as forcing minimum levels of information transparency and frequency then I would agree.
Basically there are problems on all three corners of P2P. Borrowers, Lenders and Platforms. All three need to be addressed. Frankly there's no sign of that happening any time soon.
So for the moment better to be out of P2P than in it !
And agree with that wholeheartedly
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Greenwood2
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Post by Greenwood2 on Mar 21, 2021 19:40:29 GMT
<snip>
- The P2P companies need to stop being so greedy and tighten up their lending criteria. Quality NOT Quantity.
Why would they do that? Its not their cash. Low quality drives quantity which drives turnover. More cash today and who cares about 2, 3 years down the line.
- The P2P companies need to cut the marketing hype and be much more honest with lenders about risk and not just take on anybody who can tick a few boxes and provide a small deposit. It should not be the case that any Tom, Dick or Harry can put money into junk loans.
Of course they should be able to. They can gamble it and give it away so they should be able to chuck it at anything they see fit. Its not just a playground for the super rich and super knowledgeable.
- The P2P companies need to treat lender's money with more respect. "Always easier with someone else's money" as they say. Just because punters with no knowledge of risk are willing to give you money for junk loans doesn't mean you should get involved in that sort of business.
Oh yes but that would never happen unless they are forced to align with lenders interests and the only way to do that is to ensure minimum contributions from the platform to each loan. The FCA could help with that if they were any good...
- The FCA needs to grow a pair and properly regulate P2P ... none of this wishy-washy arms-length light-touch nonsense.
Oh yes. But if by that you _only_ mean preventing folk chucking their cash away then I would disagree. If you mean other regulatory ideas such as forcing minimum levels of information transparency and frequency then I would agree.
Basically there are problems on all three corners of P2P. Borrowers, Lenders and Platforms. All three need to be addressed. Frankly there's no sign of that happening any time soon.
So for the moment better to be out of P2P than in it !
And agree with that wholeheartedly Just pick your platforms and your loans carefully as usual, and do your DD. Not everything is awful.
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Post by indexfund on Mar 22, 2021 17:32:41 GMT
Just pick your platforms and your loans carefully as usual, and do your DD. Not everything is awful.
Maybe that's true but sadly there just aren't many credible platforms left!
Another point worth mentioning is share & fund dealing platforms such as HL have FSCS protection to £85k...sure it won't protect an investor from trading losses, but the
capital is. Also shares and funds can normally to sold off in a matter of minutes/hours so the investor has much more control than P2P can offer.
Essentially the risk/reward ratio with P2P is now horrendous.
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registerme
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Post by registerme on Mar 22, 2021 21:50:29 GMT
Its a case of banks having their fingers burnt over hundreds of years that they've learnt their lessons over who they'll take on as customers. I agree with all of your post apart from the quote above. Banks perennially get burnt, in no particular order by customers, by regulators, or by their own hubris. 2007/8 wasn't that long ago. It, or something like it, will happen again. In my relatively short career in banking I had a ringside seat for LTCM going pop, the internet bubble, the emerging markets crisis, and the GFC (to include the Euro nearly dissolving). A better question might be why be a shareholder in a (non-US) bank?
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macq
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Post by macq on Mar 22, 2021 22:05:06 GMT
Its a case of banks having their fingers burnt over hundreds of years that they've learnt their lessons over who they'll take on as customers. I agree with all of your post apart from the quote above. Banks perennially get burnt, in no particular order by customers, by regulators, or by their own hubris. 2007/8 wasn't that long ago. It, or something like it, will happen again. In my relatively short career in banking I had a ringside seat for LTCM going pop, the internet bubble, the emerging markets crisis, and the GFC (to include the Euro nearly dissolving). A better question might be why be a shareholder in a (non-US) bank? Oh fudge the only p2p i was still looking at is run by a bank 
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corto
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Post by corto on Mar 22, 2021 22:09:30 GMT
Just pick your platforms and your loans carefully as usual, and do your DD. Not everything is awful.Maybe that's true but sadly there just aren't many credible platforms left! Another point worth mentioning is share & fund dealing platforms such as HL have FSCS protection to £85k...sure it won't protect an investor from trading losses, but the capital is. Also shares and funds can normally to sold off in a matter of minutes/hours so the investor has much more control than P2P can offer. Essentially the risk/reward ratio with P2P is now horrendous. I think the claim that FSCS protects capital losses for investments at HL is quite wrong. It probably (I am not with them) only applies to cash that you keep with HL.
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michaelc
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Post by michaelc on Mar 22, 2021 23:27:01 GMT
Just pick your platforms and your loans carefully as usual, and do your DD. Not everything is awful.Maybe that's true but sadly there just aren't many credible platforms left! Another point worth mentioning is share & fund dealing platforms such as HL have FSCS protection to £85k...sure it won't protect an investor from trading losses, but the capital is. Also shares and funds can normally to sold off in a matter of minutes/hours so the investor has much more control than P2P can offer. Essentially the risk/reward ratio with P2P is now horrendous. I think the claim that FSCS protects capital losses for investments at HL is quite wrong. It probably (I am not with them) only applies to cash that you keep with HL. I think he meant cash in the client account. Unlike p2p where that cash is available for the directors of the platform to spend it how they see fit....
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ilmoro
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Post by ilmoro on Mar 22, 2021 23:51:05 GMT
Just pick your platforms and your loans carefully as usual, and do your DD. Not everything is awful.Maybe that's true but sadly there just aren't many credible platforms left! Another point worth mentioning is share & fund dealing platforms such as HL have FSCS protection to £85k...sure it won't protect an investor from trading losses, but the capital is. Also shares and funds can normally to sold off in a matter of minutes/hours so the investor has much more control than P2P can offer. Essentially the risk/reward ratio with P2P is now horrendous. I think the claim that FSCS protects capital losses for investments at HL is quite wrong. It probably (I am not with them) only applies to cash that you keep with HL. No it covers the investments as well but not any losses from performance. Your capital is protected in the case that there is a shortfall in assets/cash held or for any costs incurred from the collapse ie if the administrator has to impose fees on investors to cover costs.
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