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Post by GSV3MIaC on Dec 28, 2014 10:15:17 GMT
Well FC had a claim on their forum that autobid users did better than non autobid users, but no hard data to back it up was ever produced. It may be true, if non autobid users went heavily into the wrong loans.
SL75 .. Yes, you can set it to 15%, then you will not get invested in your lifetime.
.. Given it'll only invest 1% at a time. It will still buy cr&p from the SM, albeit only 15% cr&p. It will still buy just one, maybe large, loan part at auction, and will preferentially bid on auctions nobody else wanted to bid on.
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blender
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Post by blender on Dec 28, 2014 10:21:54 GMT
Autobid is there not just to create a portfolio but also to sell a portfolio working with Autosale - and so it is not quite right to consider that it should be optimised for the purchaser and to judge it that way. It is there for the consumer lender to build up a portfolio quickly without requiring time or skill. This is not a description of the typical forum member. Those who are happy with it are not those who post here.
There have been times when I would have liked to use Autobid, but the over riding problem has been that with a large account it bids too much money. I started with it and it did what it said on the tin - but that was not good enough for me, and never has been since for buying.
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sl75
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Post by sl75 on Dec 28, 2014 13:05:19 GMT
SL75 .. Yes, you can set it to 15%, then you will not get invested in your lifetime. It'll get invested just as quick as a manual bidder who bids at 15%... and possibly quicker, as the autobid user is more likely to participate in an auction that is live for only a few hours. Again, that's the rates causing the problem, not the specific tool. It will still buy just one, maybe large, loan part at auction, and will preferentially bid on auctions nobody else wanted to bid on. Until the initial lump sum is invested, it bids on every possible auction, regardless of whether anyone else wanted to bid on it. When the autobid rate is properly matched to the level of funds being repaid, it will continue to bid on every possible auction in the pipeline. Preferential bidding on auctions "nobody else" wanted to bid on seems primarily to affect those whose autobid rates are set too low such that they are only able to bid on a small fraction of potential opportunities that match their rates, and in any case, it seems that in many cases the apparent popularity of a loan is based primarily on size rather than risk. An autobid user also won't get swayed by a carefully written "pitch" designed to persuade manual bidders to bid against their better judgement.
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Post by GSV3MIaC on Dec 28, 2014 20:07:06 GMT
SL75 .. Yes, you can set it to 15%, then you will not get invested in your lifetime. It'll get invested just as quick as a manual bidder who bids at 15%... and possibly quicker, as the autobid user is more likely to participate in an auction that is live for only a few hours. Again, that's the rates causing the problem, not the specific tool. >> True, but not useful - NEITHER will ever get fully invested at a 15% rate, there are just not enough loans which close with any parts at that marginal rate. Maybe one a week? Maybe not even that. It will still buy just one, maybe large, loan part at auction, and will preferentially bid on auctions nobody else wanted to bid on. Until the initial lump sum is invested, it bids on every possible auction, regardless of whether anyone else wanted to bid on it. >> True, if you have 10k sitting there it will try to bid £100 on every auction that comes up. If it ever got invested (which it won't, at 15%, but might at a lower figure) it'd put its single £100 bid on the =least % funded= auction. When the autobid rate is properly matched to the level of funds being repaid, it will continue to bid on every possible auction in the pipeline. >> Which obviously isn't 15% .. in fact it can only be determined after the fact. Preferential bidding on auctions "nobody else" wanted to bid on seems primarily to affect those whose autobid rates are set too low such that they are only able to bid on a small fraction of potential opportunities that match their rates, and in any case, it seems that in many cases the apparent popularity of a loan is based primarily on size rather than risk. An autobid user also won't get swayed by a carefully written "pitch" designed to persuade manual bidders to bid against their better judgement. You kind of skipped over the fact it only bids one (often too large) part, that it buys rubbish on the SM. Give up, you are trying to dfefend the indefensible (yes, I know you rely on it to soak up rubbish from the SM, and to drop the average rate on auctions so they get accepted with high marginal rate). Automated 'buy £400 in £40 parts", "start at 15% and bid down to 10.7% if necessary", "don't buy anything on the SM" or "don't buy a par part on the SM if you can get a higher yielding one at a discount", are all eminently possible .. just not made it to the top of FCs priority stack yet.
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sl75
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Post by sl75 on Dec 29, 2014 10:56:20 GMT
You kind of skipped over the fact it only bids one (often too large) part, that it buys rubbish on the SM. Give up, you are trying to dfefend the indefensible (yes, I know you rely on it to soak up rubbish from the SM, and to drop the average rate on auctions so they get accepted with high marginal rate). The secondary market parts it buys are necessarily at least as high a rate as on primary market loans of equivalent risk... for example, a user who had asked for loans with a 10% rate will get only that 10% rate in the primary market, but may find they get 11%, 12% or even higher on loan parts from the secondary market - hardly "rubbish". On another portfolio that I provide some assistance in helping the owner manage it, we use autobid as the main tool. The rates are currently set at around 11.x% in A* through to 14.x% in C - high enough to "beat" my manual bidding strategy (so that I've been seriously considering incorporating autobid on my own account), but low enough to get enough loans to keep the account ticking over. The overall portfolio yield is still a little lower as that account still has plenty of historic loan parts when generally-available yields were lower... and whenever it looks like it could do with more funds we can offer some of the older lower-yielding loans for sale... themselves ideal for a new investor seeking to an "instant" diverse portfolio (who themselves can similarly ramp up the rates as their portfolio matures and they switch to reinvestment-only mode). Just because something doesn't fit your own investment strategy doesn't make it "rubbish"...
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maxmarengo
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Post by maxmarengo on Dec 29, 2014 15:39:36 GMT
Good to hear some experience of using Autobid successfully. How long do funds take to invest at the rates you are talking about?
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Post by GSV3MIaC on Dec 29, 2014 15:40:28 GMT
A rubbish SM part, as you well know, is not judged by 'low rate'.
Feel free to use autobid, but personally, as currently configured, I wouldn't inflict it on anyone I cared about. The default rates are a lot lower than those you have set for your friend, and with a large portfolio it buys one too large a part, (not easy to resell), and it will buy rubbish on the SM ..rubbish being 'back from the dead, temporarily' type loans. It rarely, if ever, achieves the best rate for a loan at auction .. Yes, you can set 11.x% for A+, but you still miss out on the ones that do close with 14.9% still in. No reason, except FC failing to give you dynamic bidding.
It's nice that you like it, someone has to .. However I note that you still don't use it. Oh, and you have to switch it off when you want to sell anything, and then it comes back at the FC default rates, rather than where you left it.
Is junk.
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Post by GSV3MIaC on Dec 29, 2014 15:46:32 GMT
Would still like to hear from someone who feels they have used Autobid successfully, but then maybe they do not feel the need to use the forum Nobody computer literate would think autobid successful, I fear. I can find you a few who would tell you how they didn't do very well with it, but then I could find a couple who didn't do too well manually either! There was some truth in the comment that autobid is the way it is in order to make autosale workable, and give people an out. If you fixed autobid, you'd probably have to fix autosell too, to price parts according to their perceived crappiness.
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oldgrumpy
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Post by oldgrumpy on Dec 29, 2014 15:53:54 GMT
"...to price parts according to their perceived crappiness."
I recall a TV show which had something called a "Clapometer" when I was called younggrumpy. Maybe Footling Cringiness could develop a similarly named digital version. 
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Post by GSV3MIaC on Dec 29, 2014 17:11:00 GMT
You could probably do something based on loan comments / history .. every late payment (except the first) and every 'WACTB' comment should result in a 1% hike in the clappiness index, reflected in the buyer rate at which autobuy will mess with the part. For extra 'nanas you could throw in negative comments on the forums (except we can't name names so it's have to be by the numbers), and any sudden hikes in the number of parts hitting the market.
Or FC could adopt the simple policy that no 'damaged / rubbish parts' (as defined above) can be sold at par .. have to be offered at a discount or a premium, thus protecting John and Janet autobidder from the autobuy syndrome.With that done, maybe loans like 4907, which has been RBR since payment #2, if I have the right one, could be allowed back on the SM among consenting adults (although 3% discount wouldn't do it).
Right now there are several folks (and bots) who will buy 'any old rubbish' if it is offered at a large discount, on the basis that they can pass it on to Janet and John (at par, hence a profit) before it actually implodes. Usually works, too!
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sl75
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Post by sl75 on Dec 29, 2014 17:31:29 GMT
A rubbish SM part, as you well know, is not judged by 'low rate'. By some quite reasonable definitions, "rubbish" loan parts cannot be bought on the SM (whether by autobid or manually), as FC block them from sale. It is of course clear from various forum discussions that a proportion of "expert" investors believe they can better judge which loans are about to become "rubbish" - whether after an arbitrary number of months, from the relative priority the borrower gives to paying trade creditors on time or making loan repayments if they don't have enough cashflow to do both (personally, I'd rather a borrower pay a critical supplier on time if they're forced to choose between paying them late or paying me late...), or other measures. Yes, you can set 11.x% for A+, but you still miss out on the ones that do close with 14.9% still in. No reason, except FC failing to give you dynamic bidding. A manual bidder will also often miss out on them too - the ones that close with 14.9% still in would often be those which are closing very early, before many manual bidders will have seen them. Being "in" at 11.x% seems to me better than not being in at all. To my mind, as discussed previously, the issue isn't the lack of "dynamic bidding" (i.e. using a "uniform price auction"), but that other bidders bids are shown to you before the auction is over - as I understand it, a highly unusual situation for a discriminatory price auction (which would normally be "blind" in other contexts such as bond auctions), and a design decision that has led to the last-minute frenzy and to the development of bidding robots. It's nice that you like it, someone has to .. However I note that you still don't use it. Oh, and you have to switch it off when you want to sell anything, and then it comes back at the FC default rates, rather than where you left it. The former issue with having to switch it off in order to sell stuff is no longer the case. Autobid users are now free to list loan parts for sale without first disabling autobid - the page still warns that funds raised from selling loan parts may be immediately re-invested, but no longer insists on autobid being disabled first. The only reason I've not enabled it on my own account recently has been that non-invested funds have been quite tight recently. I prioritise auctions by end time when I don't have enough funds to make all "possible" bids. On reviewing my account this evening I see that conditions now appear right for re-enabling autobid on my own account, so as of a few moments ago, I am indeed using autobid again. I can't guarantee I'll continue to have it enabled for any particular time, as it will depend on cashflow within my FC account, but perhaps it will remain enabled indefinitely.
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Post by valueinvestor123 on Dec 30, 2014 0:10:42 GMT
Many thanks for informative replies. I understand the manual vs automatic bidding process much better now. I guess common issues apply across most p2p platforms where automatic bidding is involved.
I would like autobid tool to work well, simply because I just won't have the time to bid manually. It will take up too much time. However I see the potential disadvantages.
Have there been any statistics in terms of autobid users' return vs manual? It would be interesting if there was any data.
What rate of return should one expect from FC in general? It give an average rate of 6.4%, I think, but I presume manual bidders outperform it significantly?
I note that it is possible to get a consistently higher rate (closer to 10%) with many other p2p sites (such as thincats, assetz capital, rebuilding society etc). Why not just use those and save the headache of manual bidding on fc for potentially outperforming 6.4%?
Presumably when the p2p market matures, the rates will settle across most platforms eventually, at some similar number?
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Post by valueinvestor123 on Dec 30, 2014 0:20:39 GMT
"Right now there are several folks (and bots) who will buy 'any old rubbish' if it is offered at a large discount, on the basis that they can pass it on to Janet and John (at par, hence a profit) before it actually implodes. Usually works, too!"
This, above, to me, represents the biggest dilemma. If this does happen indeed and many manual bidders adopt this strategy and if rates move one way or another very suddenly, there may be a 'perfect storm' scenario where a lot of autobidders end up with duds. It seems to resemble a game of musical chairs.
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Post by goldservice on Dec 30, 2014 10:14:56 GMT
I think the flaw in that is that there is usually very little available at a discount, not even 'old rubbish', let alone a 'large discount'. I've checked that from time to time by checking Loan parts with Max premium set to each negative value. There is money to be made out of the disjunction between PM and SM rates but it takes capital and either time or a buy bot. So the game of musical chairs never really gets started.
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Post by GSV3MIaC on Dec 30, 2014 10:41:20 GMT
Anything offered at a significant discount (>1%) is snapped up by buybots long before most of us even see it, IME. Oh, apart from property loans where the market is/was saturated (i.e. you can't reliably sell them on to an autobideder at par, because almost all the autobidders already have them). There was a discussion in the other place (in which, unusually, SL75 and I were, IIRC, on the same side) about liquidity, in which is was pointed out that (almost) anything can still be sold if you stick a 3% discount on it (evidence - lack of 3% discounted parts hanging around). The reason being that SL75, or a bot, or even me, would likely buy it to resell at a lower discount, possibly to an autobidder.
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