eeyore
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Post by eeyore on Sept 29, 2021 15:35:14 GMT
Having now had a chance to read the full borrowing proposal, I share the scepticism of earlier posters. For 8%, I expect a more reliable security than the possibility of getting a slice of a company with only £10millions-worth of assets (and that's a figure, no doubt, based on the sort of accountancy used to attract investors and new participants). There are numerous opportunies to gain an 8% yield, all of which require the investor to assume a level of risk to the capital. From my brief examination of this ABL offer, I won't be going any further simply because I can get >7% yields from regulated investment trusts* on the LSE which I believe have lower risk levels that this loan. For example, I'm currently getting 9% from an easily-traded investment trust with £250million invested in corporate & commercial debt and £20million in revenue reserves alone; with numerous separate investments, the chances of default must be much lower than relying on a successful bond from a single entity. I'm sure there are other avenues which can offer similar or better levels of return with lower risk than this loan. I'd suggest that anyone who believes that the company will be successful and will redeem the loan, should consider whether there'd be a better return by investing in the shares of the company on the Frankfurt stock exchange - an equity investment will share similar risks and probably give an enhanced capital return if the company survives and prospers. * see the Association of Investment Companies web-site at www.theaic.co.uk and look for the "Debt-Direct Lending" sector.
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Balder
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Post by Balder on Sept 29, 2021 15:52:12 GMT
Totally agree. Poor security for 8% return, and too many moving parts! Too many moving parts sums it up for me as i got as far as - The borrower is a new SPV whose nature of business at companies house is given as - Management consultancy activities other then financial management?? The Trustee is in Singapore the compliance company is in London The overall UK company is listed on the Frankfurt exchange And the bond is listed on the Irish exchange Not sure this is the sort of product that you tick the box on when joining a p2p company as non sophisticated investor but there seem easier ways to invest in bonds (or even the parent company come to that) Agree 100% I'm surprised the FCA allow this type of investment in P2P. ablrate did you seek advice for the FCA on this?
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huxs
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Post by huxs on Sept 29, 2021 16:19:34 GMT
I want to like this loan but I just can't understand it enough to be comfortable investing my money. There must be a way for Ablrate to explain it in simple terms (I am thinking of a simple diagram) that will demystify it.
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agent69
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Post by agent69 on Sept 29, 2021 16:25:20 GMT
I want to like this loan but I just can't understand it enough to be comfortable investing my money. There must be a way for Ablrate to explain it in simple terms (I am thinking of a simple diagram) that will demystify it. Investment rule No 1:
Don't put money into something you don't understand
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Post by Badly Drawn Stickman on Sept 29, 2021 16:26:00 GMT
I want to like this loan but I just can't understand it enough to be comfortable investing my money. There must be a way for Ablrate to explain it in simple terms (I am thinking of a simple diagram) that will demystify it. Something along the lines of Ikea assembly instructions should do it.
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Steerpike
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Post by Steerpike on Sept 29, 2021 16:34:20 GMT
I want to like this loan but I just can't understand it enough to be comfortable investing my money. There must be a way for Ablrate to explain it in simple terms (I am thinking of a simple diagram) that will demystify it. Investment rule No 1:
Don't put money into something you don't understand
Does this apply to getting married?
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macq
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Post by macq on Sept 29, 2021 16:44:07 GMT
Investment rule No 1:
Don't put money into something you don't understand
Does this apply to getting married? You don't have to understand but just do as your told
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blender
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Post by blender on Sept 29, 2021 17:04:43 GMT
I want to like this loan but I just can't understand it enough to be comfortable investing my money. There must be a way for Ablrate to explain it in simple terms (I am thinking of a simple diagram) that will demystify it. Ablrate probably thought they had explained it in simple terms. The trouble is that the proposition is not simple. I have listened to people explaining quantum mechanics in simple terms and with analogies. I still don't understand it.
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criston
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Post by criston on Sept 29, 2021 17:33:20 GMT
Facts & Figures for my records.
Wait for the next loan.
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Post by df on Sept 29, 2021 18:38:02 GMT
I want to like this loan but I just can't understand it enough to be comfortable investing my money. There must be a way for Ablrate to explain it in simple terms (I am thinking of a simple diagram) that will demystify it. Investment rule No 1:
Don't put money into something you don't understand
This is exactly why I'm not investing in this one and not surprised that it is not flying off the shelves (£56,254 of 250k target invested so far). The other reason is I don't think it will be tradable on SM at par or small discount.
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dh1
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Post by dh1 on Sept 30, 2021 14:22:55 GMT
I've been wondering about what it actually is that we (and that specifically includes me!) don't understand about this proposition. There are possibly two separate points here.
Firstly, the actual "bond" part of this which is clearly a specialised area where risk isn't really assessable unless you are a specialist with time/due diligence capabilities. With physical property at least (and I mean that) you have valuers...
Second, I don't see why Ablrate is asking us to take a lower interest rate for something which isn't - at least to some extent - physical asset backed. What we're being asked to do is to accept the bona fides of a package we don't know much about and take the risk that one or more (foreign jurisdiction) Corporates (a) will pay; (b) will remain solvent; (c) whose guarantees, etc actually mean something. Most p2p lenders will have had experience of the sort of guarantees, etc being offered and consequently wouldn't touch them with a bargepole. I'm not saying that the guarantees, etc on offer are in anyway flawed; just that they look worryingly similar to others which have been unhelpful in other loans. The trust bar is therefore very high indeed; it would be lowered but probably not a lot, by a higher interest rate.
Putting this in the context of Ablrate's record of bad debt management (AF loans not included here as they aren't bad debts...) it has to convince lenders that it has got its judgement right on 169 and that the borrower has first class, independently judged (if such is possible) credibility into the bargain. That trust bar is really getting high, not to say stratospheric.
If the Q & A deals with this lot, I will be impressed.
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eeyore
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Post by eeyore on Sept 30, 2021 15:46:23 GMT
I've been wondering about what it actually is that we (and that specifically includes me!) don't understand about this proposition. There are possibly two separate points here.
Firstly, the actual "bond" part of this which is clearly a specialised area where risk isn't really assessable unless you are a specialist with time/due diligence capabilities. With physical property at least (and I mean that) you have valuers...
Second, I don't see why Ablrate is asking us to take a lower interest rate for something which isn't - at least to some extent - physical asset backed. What we're being asked to do is to accept the bona fides of a package we don't know much about and take the risk that one or more (foreign jurisdiction) Corporates (a) will pay; (b) will remain solvent; (c) whose guarantees, etc actually mean something. Most p2p lenders will have had experience of the sort of guarantees, etc being offered and consequently wouldn't touch them with a bargepole. I'm not saying that the guarantees, etc on offer are in anyway flawed; just that they look worryingly similar to others which have been unhelpful in other loans. The trust bar is therefore very high indeed; it would be lowered but probably not a lot, by a higher interest rate.
Putting this in the context of Ablrate's record of bad debt management (AF loans not included here as they aren't bad debts...) it has to convince lenders that it has got its judgement right on 169 and that the borrower has first class, independently judged (if such is possible) credibility into the bargain. That trust bar is really getting high, not to say stratospheric.
If the Q & A deals with this lot, I will be impressed.
All true from my perspective, but isn't there another approach to deciding whether to invest in this or any other loan? Given that we all have finite resources with which to produce the funds to lend, the alternative approach would be to ask: "Is this the best offering I can obtain for my funds which matches my requirements for the return (ie interest) and the risks I'm prepared to accept?" If I can find another loan or investment which gives as good as or better return and with an equivalent or better risk assessment, then it matters naught whether I understand the nuances of this loan.
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Post by df on Sept 30, 2021 21:00:45 GMT
I've been wondering about what it actually is that we (and that specifically includes me!) don't understand about this proposition. There are possibly two separate points here.
Firstly, the actual "bond" part of this which is clearly a specialised area where risk isn't really assessable unless you are a specialist with time/due diligence capabilities. With physical property at least (and I mean that) you have valuers...
Second, I don't see why Ablrate is asking us to take a lower interest rate for something which isn't - at least to some extent - physical asset backed. What we're being asked to do is to accept the bona fides of a package we don't know much about and take the risk that one or more (foreign jurisdiction) Corporates (a) will pay; (b) will remain solvent; (c) whose guarantees, etc actually mean something. Most p2p lenders will have had experience of the sort of guarantees, etc being offered and consequently wouldn't touch them with a bargepole. I'm not saying that the guarantees, etc on offer are in anyway flawed; just that they look worryingly similar to others which have been unhelpful in other loans. The trust bar is therefore very high indeed; it would be lowered but probably not a lot, by a higher interest rate.
Putting this in the context of Ablrate's record of bad debt management (AF loans not included here as they aren't bad debts...) it has to convince lenders that it has got its judgement right on 169 and that the borrower has first class, independently judged (if such is possible) credibility into the bargain. That trust bar is really getting high, not to say stratospheric.
If the Q & A deals with this lot, I will be impressed.
All true from my perspective, but isn't there another approach to deciding whether to invest in this or any other loan? Given that we all have finite resources with which to produce the funds to lend, the alternative approach would be to ask: "Is this the best offering I can obtain for my funds which matches my requirements for the return (ie interest) and the risks I'm prepared to accept?" If I can find another loan or investment which gives as good as or better return and with an equivalent or better risk assessment, then it matters naught whether I understand the nuances of this loan. Yep, there were two loans on CL this morning (Rolex and Rolex+gold), both at 14%. Much better risk/return scenario than 169 offer...
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Balder
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Post by Balder on Oct 2, 2021 13:01:15 GMT
I was hoping to read some insight on here following Ablrate publishing the Q&A video. Does no response mean people generally don't understand/like the loan?
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dh1
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Post by dh1 on Oct 2, 2021 13:21:51 GMT
Well, Balder I watched the video and whilst I appreciate the time taken to discuss the offering, it didn't convince me to lend.
It was actually a great and I think honest demonstration of the fundamental logic; it's all about shuffling paper, £ and crucially, timing. It's all a bit too intangible for me and the risks seem to come down to whether or not you trust the the borrower; all the legal stuff behind the offering; and all the intermeshed corporates. Trust is a bit short in p2p - a large number of burned fingers, including mine - so really...
The proposed rate really doesn't encourage spending too much time on this offering, either.
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