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Post by tybalt on Jan 16, 2015 8:23:27 GMT
Relatively small number of loans, tendency for all or nothing on defaults, rather then a pattern of small defaults on a large number of loans. If you have a look at the Secondary Market at the foot of the folder in the drop box you can see the loan by loan pattern if you download to Excel.
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pikestaff
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Post by pikestaff on Jan 16, 2015 15:27:35 GMT
Tybalt's explanation is correct. I would add that I'm not entirely sure of the basis of preparation of the statistics, because the notes are unclear whether they refer to the number of loans (which the majority of the text implies) or value (which the second sentence of note 2 suggests). I think its probably value. Some additional information is on the public pages of the site - see www.thincats.com/Apps/WebObjects/thincats-pfp.woa/ra/Website/14624/14652/statistics.html. It is perhaps worth highlighting the number of loans made each year which goes a long way to explaining the lumpiness in the early years: 2010 1 [this is not published there but I don't think it's a secret] 2011 20 2012 65 2013 115 2014 142
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Post by captainconfident on Jan 16, 2015 19:15:27 GMT
I will also come out as a habitual TLC investor. But I too wish to understand the mystic secondary market. I have tried every permutation I can think of to put a dynamic bid on loan #25 H**. As a mere mortal with naught but common sense to apply, I have been defeated by the 'bid exceeds maximum allowed' riddle.
I have heard tell of a race of priests who can understand the mind of God who wrote that software, and their prophet is Pikestaff. Hail pikestaff!
Edit Tried several more permutations, no success. Would sacrificing a goat help?
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pikestaff
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Post by pikestaff on Jan 17, 2015 8:30:33 GMT
I will also come out as a habitual TLC investor. But I too wish to understand the mystic secondary market. I have tried every permutation I can think of to put a dynamic bid on loan #25 H**. As a mere mortal with naught but common sense to apply, I have been defeated by the 'bid exceeds maximum allowed' riddle. I have heard tell of a race of priests who can understand the mind of God who wrote that software, and their prophet is Pikestaff. Hail pikestaff! Edit Tried several more permutations, no success. Would sacrificing a goat help? The target rate for this auction is 11% and the max rate per the DO Auctions tab under DO Details is 11.25%. The bid decrement is 0.1% so in all probability the max bid that the system will actually accept is 11.2%. When you open the dynamic bid window you have the option to choose your bid amount which should be a whole number of thousands. Enter your bid rate at a multiple of 0.1% and not more than 11.2%. Enter your minimum rate at a multiple of 0.1% but not absurdly low (I seem to recall there is a lower limit but it is very low). I just tried this and I think it should work, because the only error message I got was "not enough funds" and I think the hierarchy of error messages is such that this rules out the other error. If it does not work for you, which screen are you bidding from? I think there have been more bug reports when bidding directly from the DO Auction Summary tab. Try going in via the Bid Listing, which you access either from the grey button on that tab or via the tabs DO Details > DO Auctions then the View button. The latter route is closest to how the original TC software handled it (before the Dec 13 "upgrade") and is least likely to be buggy IMO. Do report back with your results!
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Post by captainconfident on Jan 17, 2015 10:55:12 GMT
Error! Bid rate is not a multiple of bid decrement
Pikestaff, you're right on all counts. In the case of this auction, inspite of two instances where it states 'Max rate 12.5%', the key indicator is in DO Auctions 'Max rate allowed 11.25%', however the Max rate that the system will accept is 11.2%.
At last I have managed to place a bid on a variable rate auction on the Thin Cats Secondary Market. That has brought back my confidence and self esteem. After this i feel that a full understanding of Quantum Theory should be easy.
I noticed that on a particular instance of using the obligatory TC back button in the SM pages, that it took me back to a subtly new screen with tabs which allowed me to see my own loan holdings, amount invested etc. This was detail that I've always struggled to find on TC before. However, having seen this page once, now I can't find it again. It is not obviously accessible from the initial Secondary Market page. Any idea how I can find it again?
Having written that it strikes me how tolerant we all are of TC and their terrible site. When is the new version due?
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pikestaff
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Post by pikestaff on Jan 17, 2015 12:31:57 GMT
...At last I have managed to place a bid on a variable rate auction on the Thin Cats Secondary Market. That has brought back my confidence and self esteem. After this i feel that a full understanding of Quantum Theory should be easy. I noticed that on a particular instance of using the obligatory TC back button in the SM pages, that it took me back to a subtly new screen with tabs which allowed me to see my own loan holdings, amount invested etc. This was detail that I've always struggled to find on TC before. However, having seen this page once, now I can't find it again. It is not obviously accessible from the initial Secondary Market page. Any idea how I can find it again? Having written that it strikes me how tolerant we all are of TC and their terrible site. When is the new version due? Details of loan holdings are on the Debt Obligation List tab of the Dashboard. This list can also be accessed directly from the Sell button in the menu or on the Home screen. There are some issues with the list that you will see discussed on the forums. No date that I know of for the new version.
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Post by bracknellboy on Jan 17, 2015 14:45:10 GMT
At last I have managed to place a bid on a variable rate auction on the Thin Cats Secondary Market. That has brought back my confidence and self esteem. After this i feel that a full understanding of Quantum Theory should be easy. Forget Quantum Theory, I think you may be but a short step away from finalising the Grand Unified Theory. In my distant past I had a pretty good understanding of Quantum Theory, but that has not allowed me to ever grasp the workings of the TC SM. "This was detail that I've always struggled to find on TC before. However, having seen this page once, now I can't find it again. It is not obviously accessible from the initial Secondary Market page. Any idea how I can find it again?"
You are not alone as they say. Having once magically found this page - also by accident - I had to sacrifice a couple of goats a few months later in order for it to reveal itself to me again.
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Post by valueinvestor123 on Jan 20, 2015 15:08:21 GMT
Is it generally fairly 'safe' to buy loans up on secondary market? On Funding C for example, I would say it is less safe to buy on SM as people offload stuff they don't want (some of the time). Is it similar on thincats? I don't always read details but if a loan is starting to get fishy, are people still able to sell it on SM? Haven't quite worked out how this works. On Assetz, I think they pause an investment if something isn't right.
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Post by tybalt on Jan 20, 2015 15:50:36 GMT
I do not think the Secondary Market on ThinCats is any riskier than the Primary Market. Loans which have been rescheduled or are in arrears cannot be offered on the SM. Against this you are not going to receive the sort of interest rates paid on TC without some risk.
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pikestaff
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Post by pikestaff on Jan 20, 2015 19:52:36 GMT
I do not think the Secondary Market on ThinCats is any riskier than the Primary Market. Loans which have been rescheduled or are in arrears cannot be offered on the SM. Against this you are not going to receive the sort of interest rates paid on TC without some risk. I'm not sure I entirely agree with tybalt on this. It is true that known problem loans cannot be bought and sold. However: - There is always a small risk that somebody is trading on inside information, althopugh this is less likely if the same person has several loan parts for sale. - If there is a old loan that lots of people are selling, I'd wonder why. - IMO the risk on interest-only loans increases over time. Unless you are familiar with the loan in question then before buying a loan on the secondary market I would search the forums and do a check on duedil or similar, just in case something comes up.
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Post by tybalt on Jan 21, 2015 13:12:51 GMT
I do not think the Secondary Market on ThinCats is any riskier than the Primary Market. Loans which have been rescheduled or are in arrears cannot be offered on the SM. Against this you are not going to receive the sort of interest rates paid on TC without some risk. I'm not sure I entirely agree with tybalt on this. It is true that known problem loans cannot be bought and sold. However: - There is always a small risk that somebody is trading on inside information, althopugh this is less likely if the same person has several loan parts for sale. - If there is a old loan that lots of people are selling, I'd wonder why. - IMO the risk on interest-only loans increases over time. Unless you are familiar with the loan in question then before buying a loan on the secondary market I would search the forums and do a check on duedil or similar, just in case something comes up. I agree with you in theory. In practice most ThinCats defaults have been early in the loan and serious. I cannot recall a pattern of sales before a default.
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Post by valueinvestor123 on Jan 21, 2015 22:21:10 GMT
Thanks. Why are interest only loans considered more risky?
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Post by bracknellboy on Jan 21, 2015 22:50:56 GMT
A few reasons why they might be considered 'more risky'.
1. Since they don't amortise, your exposure stays the same over time. If you take the view that the further into a loan the higher the risk of default then that creates a higher risk. Offsetting that view is that loans that are in actuality being taken in order to cover for a dire cashflow position but perhaps dressed up as something else are most likely to fail early and in that case whether amortising or interest only will make little difference to your exposure weighted risk.
2. Short duration loans which are interest only generally make a lot of sense. However long duration loans which are i/o raise some rather pertinent questions: if the borrower can't fund capital repayment during the course of the loan, how steady is that ship ?
3. The loan needs refinance at the end rather than amortising over its lifetime. If its short duration, why can't they get the loan now at better rates from an alternative traditional finance provider (there may be many perfectly good reasons). If its long duration, how confident is one that the borrower will be able to raise that alternative finance in the future (much could happen between then and now, and bearing in mind that in the now they are 'here' because they can't get a better offer 'elsewhere').
4. Lack of warning signs. Payments are lower (no capital) but D-Day (potentially Default Day, but certainly Deferred repayment day) is postponed. The higher payments reqhired for same loan which is paying back over duration will put greater strain on cash flow and therefore you are more likely to see an early red flag if they are fundamentally struggling.
Against all of that. A business which genuinely make good use of the money provided may well prefer to have an i/o loan to minimise impact on cashflow and maximise the cash in the business it can use as investment. And for some types of business its a simply much better 'fit' for their business model. If you are a business that itself is in the business of lending, you want a loan to increase the capital available. If you are growing your loan book, handling a decrease in available cash on the other side of the equation is going to be a faff.
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Post by valueinvestor123 on Jan 22, 2015 1:26:12 GMT
That makes a lot of sense. How will I know if a payment is late or the loan is in default on Thincats? I see now a bunch of loans in dashboard but it's not very clear to me how I would know if anything is going wrong with any one loan. Apologies for many questions. But this is the only platform that seems counter-intuitive to me so far.
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walktall7
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Post by walktall7 on Jan 22, 2015 8:34:47 GMT
When you have invested your first £1000 you then will get access to the old forum which has lots of information about what is going on with the loans and they keep each other informed about alot of these things.
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