sl75
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Post by sl75 on Dec 17, 2015 10:29:20 GMT
Given the likely clearout over Christmas, I can't see discounts or cashbacks over 1% being necessary again any time soon, so if I were "shopping", those (and others offered at more than 1% discount) would be close to the front of my shopping list (even if they don't sell at par, a 1% or lower discount will probably be attractive immediately after the New Year). Agreed. I swept up £1000 of £20 parts in Harley St 2 yesterday that were generously priced at -1.5%, simply to get cash reinvested pre-Xmas in the absence of anything else worth buying. I could probably move them on at -0.8% today if I wanted (there's only 1 £20 part currently at -1%) but I think -0.5% should be enough by New Year. Personally I tended to avoid £20 parts when given the choice - too much clicking for too little reward. Various buyers (possibly including those using autobid with a half-decent portfolio size) seem to actively prefer larger loan parts when given a choice, and the market for £20 loan parts in large loans seems to me well and truly saturated.
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SteveT
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Post by SteveT on Dec 17, 2015 10:37:15 GMT
Agreed. I swept up £1000 of £20 parts in Harley St 2 yesterday that were generously priced at -1.5%, simply to get cash reinvested pre-Xmas in the absence of anything else worth buying. I could probably move them on at -0.8% today if I wanted (there's only 1 £20 part currently at -1%) but I think -0.5% should be enough by New Year. Personally I tended to avoid £20 parts when given the choice - too much clicking for too little reward. Various buyers (possibly including those using autobid with a half-decent portfolio size) seem to actively prefer larger loan parts when given a choice, and the market for £20 loan parts in large loans seems to me well and truly saturated. I usually only slow-flip the more attractive property CB loans at par (this particular purchase is a short-term Xmas special as I'd passed on it originally) so the clicking is less of an issue. I've tried in the past buying parts in multiple sizes but I always seem to get left with £40s / £60s / £100s after my £20s have all gone. I guess it's down to the difference between established manual bidders buying larger parts at "best available" and new autobiddies picking up £20 parts randomly to build their portfolio.
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nick
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Post by nick on Dec 17, 2015 11:18:03 GMT
I suspect the SM will pick-up markedly next week as the PM winds down for Xmas. I recall last year a similar lull in the SM due a PM push prior to Xmas with SM being very active over the festive period. I was caught out and oversold into the SM in Xmas week me with a large proportion of cash from late Dec until mid/late Jan when the PM picked up. I'm hoping to avoid the same issue this year by hoarding/less aggressive in selling on the SM from next week to help reduce cash drag this time round. This will be my first Xmas on FC, so that's useful feedback, nick, thanks. I am worried about overselling but have bought "long" in the lead-up to Xmas in the hope of dropping my overall investment on the platform back to where I want to be. Do you have any quantification of the effect of the SM sales surge last year, like was it double the normal level, treble or more? I haven't done any proper analysis, but I would estimate SM volume was maybe up at by a third and at higher rates. But probably the bigger issue was the lack of any real PM until mid-late Jan which mean't that the small volume of loans that were making it to market were bid on aggressively at much lower rates - less of an issue know that we have fixed rates. Normally I try to keep my cash balance below 20% of my account value but by mid Jan this year more than half by account value was cash and ended up buying on the SM which I never generally do! So this year I will be marking up my loan parts higher, earlier and will probably start reinvesting surplus cash in the SM over Xmas week/early new year to try to minimise cash drag.
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sl75
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Post by sl75 on Dec 17, 2015 11:43:27 GMT
I usually only slow-flip the more attractive property CB loans at par (this particular purchase is a short-term Xmas special as I'd passed on it originally) so the clicking is less of an issue. I've tried in the past buying parts in multiple sizes but I always seem to get left with £40s / £60s / £100s after my £20s have all gone. Rather than my subjective opinion, I thought I'd investigate some actual data. Below are plotted: 1. The total value of loan parts SOLD during my last 500 sales (i.e. since 3 Oct 2015), broken down by size category 2. The total value of loan parts I currently have on sale at this moment, broken down by the same size categories 3. The ratio between 1 and 2 (described as "relative selling speed"). Looking at this, I guess I can see why people who've never tried loan parts larger than £100 would believe the £20 loan parts to be the fastest selling... 
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SteveT
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Post by SteveT on Dec 17, 2015 11:56:38 GMT
sl75, that's very interesting and thanks for sharing the analysis. The "relative selling speed" trough in the £30 - £120 range accords with my own experience (about half the pace of £20 parts) but I've never experimented with anything bigger than £100. Out of interest, are your larger part sales mainly at par or at/close to "best available" (presumably involving a discount on the more recent CB property loans). Put another way, do you reckon your buyers are principally manual bidders or deep-pocketed autobiddies?
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bigfoot12
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Post by bigfoot12 on Dec 17, 2015 12:45:20 GMT
sl75 , I'd like to echo SteveT's thanks and would be interested to know the answer to his question. I also have a question (of anyone); do we think that the more loan parts I have on sale for a given loan the more likely I am to sell some? For example when Autobid decides to buy a loan part of a given size does me having two for sale at that size double my chance of selling one compared to if I had only one? Or does each person have the same chance. I'm guessing yes, or I (as a small seller) would be selling a larger proportion of my loans than I currently have been.
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SteveT
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Post by SteveT on Dec 17, 2015 12:56:30 GMT
sl75 , I'd like to echo SteveT 's thanks and would be interested to know the answer to his question. I also have a question (of anyone); do we think that the more loan parts I have on sale for a given loan the more likely I am to sell some? For example when Autobid decides to buy a loan part of a given size does me having two for sale at that size double my chance of selling one compared to if I had only one? Or does each person have the same chance. I'm guessing yes, or I (as a small seller) would be selling a larger proportion of my loans than I currently have been. Yes, Autobodge is blind to who owns a part so, when choosing from, say, 1000 "eligible" parts (at par or lower), if yours are 10% of them then you've 10x more chance of being chosen than if yours are 1% of them.
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adrianc
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Post by adrianc on Dec 17, 2015 13:19:02 GMT
I also have a question (of anyone); do we think that the more loan parts I have on sale for a given loan the more likely I am to sell some? For example when Autobid decides to buy a loan part of a given size does me having two for sale at that size double my chance of selling one compared to if I had only one? Or does each person have the same chance. I'm guessing yes, or I (as a small seller) would be selling a larger proportion of my loans than I currently have been. If there's 200 £20 parts in a specific loan on the SM, and AutoBodge decides to tuck some fresh meat up with buy some for a new investor, then if you have one part on sale, you have 0.5% chance of it being you. If you have two on sale, you have 1% chance. If you have 10 on sale, you have 5% chance. Or am I misunderstanding your query? Are you thinking that somebody with 10 on might somehow be favoured by AutoBodge, so their parts would be twice as likely to be picked, giving them a 10% chance? I don't think it's anywhere NEAR that smart... I'd have thought that favouring discounted/better value parts would be a higher priority...
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sl75
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Post by sl75 on Dec 17, 2015 13:50:48 GMT
Out of interest, are your larger part sales mainly at par or at/close to "best available" (presumably involving a discount on the more recent CB property loans). Put another way, do you reckon your buyers are principally manual bidders or deep-pocketed autobiddies? My general impression is that there's a mix of both. Of the two largest buyers from this "last 500" list, one is clearly a manual buyer (taking multiple parts per loan), and the other seems certain to be a deep-pocketed autobid user (taking exactly one part per loan, and also making one bid of £2k per new loan on the PM). I've only VERY rarely offered loan parts at a discount... I used to regularly purchase discounted loan parts, and didn't really want to have to keep track of what discounts I'd received on each when I tried to sell, and historically I'd found that pretty much everything would (eventually) sell at par (or get repaid by the borrower at par, or indeed sometimes go to RBR / Late / Default). Doing a little more analysis, almost 90% of my last 500 sales, and nearly 98% of my loan parts currently on sale (both % by value) are at par. The portion of my portfolio (originally almost all of it) that I was willing to sell at a modest premium has been decimated by the actions of various buyers as the general rates in the marketplace fell below my personal minimum, leaving me primarily with only two groups of loan parts - those I'm unwilling to sell even at a 3% premium, and those I immediately want to sell at par (having previously purchased them at a discount or with cashback). Historically, a far higher proportion of my sales were at a premium, and loan parts of all sizes have "gone".
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jamesc
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Post by jamesc on Dec 17, 2015 16:18:44 GMT
I wonder if there will not be such a dip in PM loans as we suspect over Christmas. GSV mentioned a couple of days ago that FC maybe pushing for the magic £1BLN before year end. Now with only £9MLN to go it must be in their sights, after all a great marketing tool. Depending how they count them there is £2-3MLN on the PM at the moment plus whole loans I think they will do everything they can to get there. (Even take on some less than A1 borrowers but I did not say that) !
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acky
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Post by acky on Dec 17, 2015 16:23:57 GMT
I wonder if there will not be such a dip in PM loans as we suspect over Christmas. GSV mentioned a couple of days ago that FC maybe pushing for the magic £1BLN before year end. Now with only £9MLN to go it must be in their sights, after all a great marketing tool. Depending how they count them there is £2-3MLN on the PM at the moment plus whole loans I think they will do everything they can to get there. (Even take on some less than A1 borrowers but I did not say that) ! But it wouldn't be beyond the wit of Faulty Calendars to extend the number of days in December to hit the figure!
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jonah
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Post by jonah on Dec 17, 2015 16:27:29 GMT
Several pm loans opened today.
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bigfoot12
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Post by bigfoot12 on Dec 17, 2015 16:34:53 GMT
...I think they will do everything they can to get there. I'm happy to help them if they bring some nice property loans with 4% cashback!
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ablender
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Post by ablender on Dec 17, 2015 17:25:24 GMT
...I think they will do everything they can to get there. I'm happy to help them if they bring some nice property loans with 4% cashback! I am ready to eat my words and transfer money back to FC if they offer 4% cashback. Obviously not at the expense of a lower interest rate.
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acky
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Post by acky on Dec 17, 2015 17:50:35 GMT
I'm happy to help them if they bring some nice property loans with 4% cashback! I am ready to eat my words and transfer money back to FC if they offer 4% cashback. Obviously not at the expense of a lower interest rate. You should change your user name to "adreamer"!
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