ecdub
New Member
Posts: 5 
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Post by ecdub on Mar 4, 2015 16:39:40 GMT
Hi all,
I am brand new to exploring FC (no funds handed over yet!), and have about 6 months behind me on FK… so very much a rookie here..
It feels like almost everything I read about FC falls in to 1 of two categories.
1) Moaning about auto-bid, going in too low, and giving them a poor LT return.
2) That everyone (slight exaggeration) in the market is a flipper and this is affecting the auctions (I’m not sure I understand how). I can see that plenty of users make 10 £20 bids, rather than 1 £200 bid for example.
Can anyone give me some pointers here, on these topics (or any other!) – I am keen to learn, but there is plenty for me to understand about the site before getting heavily involved.
Many thanks,
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Post by yorkshireman on Mar 4, 2015 16:47:53 GMT
Hi all, I am brand new to exploring FC (no funds handed over yet!), and have about 6 months behind me on FK… so very much a rookie here.. It feels like almost everything I read about FC falls in to 1 of two categories. 1) Moaning about auto-bid, going in too low, and giving them a poor LT return. 2) That everyone (slight exaggeration) in the market is a flipper and this is affecting the auctions (I’m not sure I understand how). I can see that plenty of users make 10 £20 bids, rather than 1 £200 bid for example. Can anyone give me some pointers here, on these topics (or any other!) – I am keen to learn, but there is plenty for me to understand about the site before getting heavily involved. Many thanks, Don't go there!!
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oldgrumpy
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Post by oldgrumpy on Mar 4, 2015 16:55:26 GMT
Rates are generally lower than FK especially when the 1% fee is subtracted. I only bid on larger loans these days, where rates are higher (totally unfair to borrowers, but that's how it works!) and I stick to A+ and A loans, and just a select few others. This is to rechurn payments rather than put more money in. I avoid auto bid, and don't bid on until the last couple of days. I don't bid at 14-15% on day one hoping the borrower will accept immediately - if they're that desperate, I'm not!! I spend a lot less time than I used to - set a fairly high bid, then hope for the best, though if I'm online for other purposes I do bid in the last ten minutes to get a good rate. Don't leave it until the last two minutes; the Fragile Crusty website crashes regularly and although Futile Cobblers say they are fixing it, they don't. Oh, and on this forum you are expected to refer to the platform by inane and often euphemistic pairs of words .... as I have done thrice.  Don't worry about whether your chosen duo phrase has been done before. I'm not even sure Fishnet Cabbages read our comments any more. PS yorkshireman has good advice if you value your time above fiddling around with £20 bids all day.  |
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Post by GSV3MIaC on Mar 4, 2015 16:59:06 GMT
#1 .. don't use autobid .. it's almost impossible to stop it buying rubbish on the secondary market, it'll only bid 0.5% or 1% of your funds (in a single bid), it is tuned to fund auctions nobody else wants, and is all-in-all a dreadful idea (until they fix it, which they are threatening to). The uninitiated using autobid typically bid too low, and lower the avg rate on auctions which other people bid much higher on just before they close. Good for the borrower, good for the late bidder, not so good for Granny-auto-bidder.
#2 .. yes, people buy small parts (£100 or less) because those are easier to resell if you want/need to (at par, i.e. no markup, someone's autobid is almost sure to buy them .. eventually).
#3 C- loans are currently poor value (even at 15%) compared to the other risk bands.
#4 'secured on property' (or a specific asset) is reasonably secure (but not bullet proof). Secured by some director's guarantee is basically not secured, unless the director is a good chap, rich, and preferably not a lawyer.
#5 FC can be fun, but it can take a lot of time, if you want a reasonable return. There are some very big players who will buy (or at least bid) 80% of some of the popular auctions, with some significant disruption to rates in some cases. There are some even bigger players who get first refusal on over half the auctions before you even see them. Of course XYZ bank have probably had first-est refusal even earlier, but that's not quite the same.
#6 The FC website is prone to collapse at the most inopportune times (i.e. end of popular auctions). Can be very frustrating. 8<.
#7 Rates are currently rather low (compared to pre Xmas), but rather higher than early 2014. This is not completely unrelated to item 5, IMO. Do not attempt to get a lot of money in too quickly - drip feed it.
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Post by davee39 on Mar 4, 2015 17:35:02 GMT
I have only bid towards the end of auctions to get close to the highest rate. These parts are then more easily sold on after 3 or 4 months.
If you cannot bid at the end make a note of a few auctions you are interested in. Within a week of the auction closing these will be top rate parts on the secondary market at 0.3 to 0.5% premium. Paying this premium might still give you a better deal than bidding too low through autobid or in advance of the auction finishing.
Deal flow has been appalling over the last few weeks as FC stuff the listings with property. Yorkshireman and others have some good advice - if you want to invest do it slowly. The good news it that well priced £20 parts almost always sell quickly to autobidders so it is easy to get out.
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Post by ranjeb on Mar 4, 2015 18:17:26 GMT
Just wanted to add, not everyone on here is a flipper They quite annoy me tbh, so much so if I miss an auction closing I'll spite myself and avoid buying a part of it at premium if it can be helped. |
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Grezza
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Post by Grezza on Mar 4, 2015 18:29:21 GMT
You may detect some cynicism in the replies you have received, which imho are well founded. Sometimes I think it would have been worth dabbling anyway, just to be privy to Furrowed Countenances little ways, and the wicked banter on this forum! Personally, I am prepared to remain invested with Frozen Canapés, if only to spread my money over different P2P platforms.
Seriously, my advice if you do take the plunge with Fondue Cheese, is don't rush it (already mentioned), and understand the security offered, there have been many posts on this forum discussing the value (or not) of guarantees....personal or directors. If used properly, Fossilized Computers can give you many hours of enjoyment and frustration. (But that of course, is only my opinion!!!)
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Post by GSV3MIaC on Mar 4, 2015 18:31:38 GMT
I've suggested on the FC forum that the secondary market should show you WHO currently owns the parts, so you can pick and choose who you buy from, but of course that would not be popular with the big flippers, who basically provide 'underwriting ' for FC loans (i.e. guarantee they will fill, and guarantee to drive the rate down, at least a bit).
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Post by longjohn on Mar 4, 2015 19:25:14 GMT
On the account management side of things you should download your statement and loans frequently as Fumbling Coins sometimes has a wonky calculator. Overnight payment runs sometimes stall and at the moment they seem surprised that February only has 28 days. They do fix things eventually but it appears to be a manual process.
All in all I'm happy with my account. With not too much effort I earn way above Flawed Compromises average interest and I have fun finding and lending to local companies. Mind you, I do swear at the one 5 miles away that defaulted.
John
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blender
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Post by blender on Mar 4, 2015 19:49:54 GMT
Hi ecdub,
The assumption seems to be that you plan to spend time on FC to optimise your returns, but you have not said so. Of course people who use Autobid, in the set-and-forget manner, do not spend their time on this forum, and so you are getting the views of rather an extreme bunch. There are two approaches. You can just use Autobid and use your time in some other way, and maybe you will get 6% and not worry that some of the purchase will be 'not so good'. Or you can spend a deal of time, choose your own loans, get the best rates, sell to avoid defaults and make a small amount from trading. I do not think there is a middle way, so you need to ask whether you are happy with 6% before tax (and at present you pay tax effectively on the losses also). Or do you want to get involved and maybe get 9 or 10%. If your time spent is more valuable to you doing other things, then I suggest Autobid or nothing. It's an enjoyable hobby for some of us - and cheaper than drinking.
One thing to be careful of is to maintain your portfolio liquidity, because for me it is the good mix of rates and liquidity which makes FC worth doing. That means, do not buy loan parts of more than £100 (or do not allow Autobid to do that), and do not set your rates too low. If you buy quickly you sell slowly.
Fried Chicken is my only P2P - and hopefully the new short term property loans will mean that I do not have to spend time on other platforms.
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ianj
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Post by ianj on Mar 5, 2015 9:57:20 GMT
Fabled Chimera was one of my first ventures into the exciting new world of P2P, but I sold up after 6 months. . I very much resented that I was apparently disadvantaged by 'Bot' bidding. . Being able to achieve 10-12% on secured loans elsewhere, compared to 7-9% on loans with only potentially worthless PGs, was a persuasive factor. . My return achieved on time invested, compared to the ten other P2P platforms I had invested in by then, didn't represent good value. I'm with yorkshireman unless you have both time and inclination to bid very late on the auctions which interest you, ie normal working hours Mon-fri. Personally, I would rather go fishing!  |
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ahowlin
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Post by ahowlin on Mar 5, 2015 10:27:26 GMT
1. Don't use Autobid it is fundamentally flawed.
2. If you are bidding manually then it is important to have some understanding of how to read accounts, failing that restrict yourself to A+/A rated deals, even somoe of those look a bit dodgy.
3. Expect some bad debt sooner or later.
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Post by Deleted on Mar 5, 2015 10:29:09 GMT
Great stuff above. My views 1) there is a great little tool on FC called "statistics". I monitor the A and A+ max 20 bid figure on a weekly basis. When that figure begins to move above my target figure (basically to achieve 9.5% net) I get interested and start investing manually in multiple bids (to allow resale, but seldom used, I'm not a flipper) to look for early finishes. As others said Oct/Nov was a golden period, right now the deals are s@ t. 2) If you want to use autobidder, have a read of a recent thread on the subject (I dug deep) and you will realise it is a poor tool, but it consumes none of your time. Set your bid high and limit how much money you have in the system in at a time so that the 1% / 0.5% parameters hit your £ investment figure. 3) Look on this as a slow investment. I set myself a 6 month target to invest £60k over 4 P2P portals (still on target to hit 9.5% net over all) with a variety of risk management tools. Don't look on this as a building soc investment, it is not "fire and forget" it requires time and a learning attitude. You do need to budget for defaults one way or another. 4) If you decide to be a flipper workout the details before you start. Others speak highly of this but it looks time consuming to me. Good luck and welcome aboard, you will find this forum is very generous with their time and advice. |
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ecdub
New Member
Posts: 5
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Post by ecdub on Mar 5, 2015 10:29:37 GMT
Hi all,
Many thanks for your replies.
In response to a few of the points, based on my Fat Kestrel experience, I probably will spend more time viewing each auction individually, to pick and choose, and increase my chances of a higher ROI than using autobid... whether the time spent / increase return is weighted in my favour is doubtful, but I do quite enjoy reading about the companies and looking at their books.
I quite like that you can bid late and get a better rate, one issue I have with Floppy KitKat is that you can guarentee the loan will go within 0.05% of the reserve rate. Obviously this is good if rates are deemed higher than Flavourful Crisps, but potentially less fun.
Auctions with anything other than a Director's Guarentee are fairly rare at Furiously Knitting, so I will look into the property loans on here. Are there any cases, where the repayment of capital at the end of the loan is delayed while it is refinanced, or awaiting a sale?
One additional question - how reliable are the estimated default rates for each risk band?
Many thanks everyone
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Grezza
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Post by Grezza on Mar 5, 2015 10:41:42 GMT
Your last question ecdub is very interesting......do any Foggy Cloud members know if the default rates we are going to see in Fibs Collective future statistics will include the privileged cherry picked whole loans, which would impact the average default rate figure, and part loan investors true default rate would (probably) be higher?
fyi, I have had one small defaulted loan part in 6 months, out of 400 currently held. I acquired it on the SM, and did not check the repayments history, so I could easily have avoided it. One thing to remember, is that the defaults are less likely in the first few months of a loan (try telling tell that to the Edit AC investors) and will kick in further down the line, which is why some people will sell on SM to reduce that risk. You may also have picked up on the fact that Four Candles record on default recoveries is not anything to write home about.
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Don't worry about whether your chosen duo phrase has been done before. I'm not even sure Fishnet Cabbages read our comments any more.
