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Post by goldservice on Apr 7, 2015 19:51:47 GMT
Well, just as bacteria were found in the acid habitat of our stomachs where experts said they could not survive, and various shrimps, worms etc were found thriving at enormous depths near sulphurous thermal vents where experts said that life would be impossible, perhaps profits live in the uncharted habitat of C- loans. A gold star to ratrace for the audacity, and another if his scheme reaches 6 months with AR GE 10%. Has anyone set aside a small sum to start trying out the idea? Go on, own up!
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Post by ratrace on Apr 23, 2015 1:05:09 GMT
Just a update on how my investment plan is going. l have been running it for around 3 months now and the results so far.
GY 11.6% AR 11.4% a Max holding of 1.7% with 2 downgrades. One due to the business been closed but at present the loan is still been paid off and the other due to the loan been paid off early. Happy with the way its going so far and will give a further update in a other month or two.
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chrisf
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Post by chrisf on Apr 23, 2015 7:44:11 GMT
Just a update on how my investment plan is going. l have been running it for around 3 months now and the results so far. GY 11.6% AR 11.4% a Max holding of 1.7% with 2 downgrades. One due to the business been closed but at present the loan is still been paid off and the other due to the loan been paid off early. Happy with the way its going so far and will give a further update in a other month or two. And your estimated fully diversified return?
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Post by ratrace on Apr 23, 2015 10:53:33 GMT
Just a update on how my investment plan is going. l have been running it for around 3 months now and the results so far. GY 11.6% AR 11.4% a Max holding of 1.7% with 2 downgrades. One due to the business been closed but at present the loan is still been paid off and the other due to the loan been paid off early. Happy with the way its going so far and will give a further update in a other month or two. And your estimated fully diversified return? That's at 6.5% at the moment, so l feel my idea is working so far. As its about getting much of the high return that C- loans offer at a level of risk am happy with.
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SteveT
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Post by SteveT on May 20, 2015 12:44:01 GMT
Apart from A+, which seems pretty much stuck, all the other risk bands are down ~0.4% on the *SM* over the last month (from a not very exciting starting position too) and 1% down on the year (looking at the price for the 500th part of £100 or less). A+ A B C C- 12/31/2014 9.9 10.8 11.8 13.4 13.6 31/01/2015 8.9 10.4 11.4 12.9 13.5 28/02/2015 9.1 10.2 11.1 12.9 13.7 31/03/2015 9.1 9.8 10.7 12.4 13.3 How low can it go? GSV3MIaC, are you possibly able to update your excellent statistics for benchmark SM rates by risk band, as at end April and/or currently? Feels like they're back up to the sort of levels they were in January at the moment.
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Post by GSV3MIaC on May 20, 2015 13:02:10 GMT
Flattery will get you anything ..
31/03/2015 9.10 9.80 10.70 12.40 13.30 9.10 9.90 10.80 12.50 13.40 9.40 10.70 11.60 13.50 13.70
30/04/2015 9.00 10.90 10.80 12.20 13.50 9.10 11.30 11.00 12.70 13.60 9.50 11.50 11.50 13.50 13.80
20/05/2015 9.60 11.10 11.00 12.20 13.50 9.70 11.10 11.20 12.40 13.60 10.00 11.80 11.80 13.30 13.90
As before this is A+ ... c-, only this time I've also shown the rate on offer for part #250 and also the very top part, as well as my normal benchmark part#500 (the first column, obviously).
As before, parts<=£100. Note the sneaky inversion of A parts selling at higehr rates than B parts, which is the flippers moving on the 11%/1% CB offering again.
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SteveT
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Post by SteveT on May 20, 2015 13:12:15 GMT
Very interesting, thanks. Looks like the rate movement has mainly been in the A+ and A loans, where the corrupting effects of CB are felt, although Bs have drifted up a bit too. Certainly I'm finding little take-up of A+ parts below 9% and A parts below about 9.8% currently.
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Post by GSV3MIaC on May 20, 2015 13:17:43 GMT
Bound to be some knock on effect .. why would people buy a B at 10.8% if they can get an A at 11% .. so the Bs get dragged up too. I used to actually record the rate for 'B or better' rather than just Bs alone (i.e. look at the top 500 A+/A/B) but that was just hiding this effect, where a 'really good deal' A+ being flipped actually overwhelms the market all the way down to B or even C.
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coop
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Post by coop on May 20, 2015 14:06:08 GMT
Excellent work as always!
FWIW when finding an appropriate buyer rate to aim for when selling on the SM I look at the best available rate under £50 for the twentieth highest priced loan.
The theory being a fully diversified holder would want to be invested in approx 20 loans in each risk band.
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Post by ratrace on Jun 21, 2015 13:35:58 GMT
As promised a update of my investment plan of buying C- loan parts on the SM.
After around 5 months the results are GY 12.2% AR 11.6% FDR 6.5% Max holding 5.2% with 1 downgrade. l have now also started buying C and C- loans on the PM to get my money lent out quicker and also to boost returns, with the new loans l will be looking to sell them after 3 to 5 months. The return am now aiming for is 11.5% to 12.5%.
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chrisf
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Post by chrisf on Jun 21, 2015 18:16:28 GMT
So you're aiming for 11.5-12.5% but FC is predicting (EFDR) 6.5%? Aren't the FC estimates usually on the optimistic side?
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blender
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Post by blender on Jun 21, 2015 18:32:35 GMT
I do not think that there is any evidence that C and D loans will have worse performance than the FC estimates. If they are disposed of after five months (ie before the fifth repayment) then that should help avoid losses, especially if that is combined with disposing of those which go late and come back. If an income tax payer then the new arrangement of allowing losses against interest will help with the riskier end.
However, ratrace's previous plan was to buy C- on the SM after a period of settling in - after which they would be safer. The new plan of buying on the PM and disposing earlier makes the opposite assumption, that they are safer earlier. Personally I rather agree with that and think the new plan a better one. What about the E loans? I would say flip before the second repayment.
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Post by ratrace on Jun 21, 2015 19:45:57 GMT
Hi blender
l will still be buying older C- loans on the SM, its just now that l will be mixing them with new C and C- loans in the PM. The reason for the change is the greater choice of loans to invest in and to use as a other way to boost returns at lower risk. So l will still be buying older C- loans on the SM as they offer a steady income stream at lower risk then holding on to the loans for there full term.
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blender
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Post by blender on Jun 21, 2015 21:38:54 GMT
One, wonders, ratrace, if you are happy to buy old C- loans, why you plan to sell the new ones after 3-5 months. But I hope you are successful in your lending.
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Post by ratrace on Jun 21, 2015 22:15:52 GMT
The reason for me wishing to sell new loans after 3 to 5 months is so l can lock into the higher returns that new loans offer while still been able to lower the risk am taking on. But buying and selling new loans does make the income stream more lumpy and involves much more effort on my part. While the good thing about investing in older 48 and 60 month loans is that it gives me the steady income stream that l would get if l was investing in loans for the full term, but at a lower risk then holding on to the loans for the full term.
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