fasty
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Post by fasty on Aug 28, 2015 8:25:01 GMT
Timmy, that really is nasty. Ok, now that E has had a chance to settle down, how do you make money at it? I can't see how anyone really knows how to get the best out of them until we have had enough time to assess the true failure rate. They don't flip at a high enough premium to yield a useful net profit - So the main question would seem to be how long anyone would dare to keep them for.
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Post by GSV3MIaC on Aug 28, 2015 8:35:44 GMT
There is also the issue of how many get taken up .. I had at least two yesterday which lingered for over a week after my bids were in, and then got rejected, and if 50% do that even holding the rest for 3 or 4 weeks and selling would not yield a useful rate of return, although getting rid of them at par or even +0.2 or +0.3 is not currently a problem... it might be in future. Who knows, we might, eventually, even see one manage to close above MBR, that's be a turn up!
So perhaps G*ldpers*n, or others, could tell us what their plan is, since they're still active in all the auctions (when fast enough!). I think my plan will have to be 'buy £20 or £40, hold for a month or two, unload at best possible premium (expecting par, or not much better), rinse and repeat. Frankly 10% property loans at 2% cashback, unload (eventually) at par, seems to make more sense, better XIRR, less risk (apart from property bubble bursting).
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fasty
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Post by fasty on Aug 28, 2015 8:44:23 GMT
Well GSV3MIaC, we already did see just ONE close above MBR, but then the band between min and max is relatively small so it may not impact much in the great plan. I'm presently limiting my exposure to individual E loans to 0.3% of my total and planning to hold each for about 4 payments until failure statistics start to guide me otherwise.
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Post by goldservice on Aug 28, 2015 10:40:51 GMT
... So perhaps G*ldpers*n, or others, could tell us what their plan is ... I thought I had a plan but it's falling apart and if it continues like this then you have my copper-bottomed guarantee that I'll tell you what the plan used to be ...
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Post by GSV3MIaC on Aug 28, 2015 10:53:21 GMT
Not a copper-load-of-this-bottomed guarantee, surely?! I'm crushed!! 8>.
The buy, hold-for-a-bit, sell was a good plan, assuming a) loans would get taken up quickly after the were fully funded, and b) most loans would get accepted, since the borrowers would not be upside-surprised when they got a fairly fixed 18.2% rate. However, as I used to say (to avoid appearing to argue) 'That appears not to be the case'.
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Post by betterthanworking on Aug 28, 2015 11:55:31 GMT
Since there are usually 'nearly new' Es on the secondary market at par or near-as-damit, buying there (after relaxed inspection of loan details, and no deadtime before a drawdown) seems like a good option. Then keep for x days/months depending on risk assessment. The big unknown is whether they remain saleable once aged. Buying new turns one into a leg-jiggling goggle-eyed psycho after a while.
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Post by nickthefool on Aug 28, 2015 13:31:59 GMT
15373E on the market now, (only) 40% full after nearly half an hour. It's a £103k loan.
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Post by GSV3MIaC on Aug 28, 2015 13:45:09 GMT
Yep, but it's a 6-monther which makes it pretty much un-flippable at a profit, even if you could buy it above the 18.2% level. We can debate about whether 6 month E is more or less likely to go mammaries skyward than a 60 month E, but personally I am firmly in the 'hands in pockets' brigade for this one (not that my £100, or even £600, would make a big difference). I suspect the big flippers feel the same.
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Post by nickthefool on Aug 28, 2015 14:02:51 GMT
Looks like the usual suspects put in about £8-10k between them early on. Which is often most/all of the loan for Es. Baz not involved that I saw though.
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mightyoak
"Always a chance of rain at times"
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Post by mightyoak on Aug 28, 2015 15:45:40 GMT
It's still there. Not even 100% at 1645hrs. Maybe the profit is in the interest rate? One worth keeping for 6 months? OK - I'll go and rinse my mouth out.
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Post by goldservice on Aug 29, 2015 13:54:29 GMT
Not a copper-load-of-this-bottomed guarantee, surely?! I'm crushed!! 8>. The buy, hold-for-a-bit, sell was a good plan, assuming a) loans would get taken up quickly after the were fully funded, and b) most loans would get accepted, since the borrowers would not be upside-surprised when they got a fairly fixed 18.2% rate. However, as I used to say (to avoid appearing to argue) 'That appears not to be the case'. I wonder if your a) and b) could be quantified? For example, are you saying that there is a threshold value of X, where X is the average (across many E loans including both accepted and rejected) of the number of days without interest accruing between 1) the launch date of the loan (= the bidding date if you are buying an E loan) and 2) the date when either interest starts accruing (which is often earlier than the acceptance date) or the loan is rejected such that above that threshold value the ‘buy, hold-for-a-bit, sell’ plan is not a good plan? If so, what do you think that threshold value of X should be?
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Post by GSV3MIaC on Aug 29, 2015 18:03:00 GMT
I'm sure there is, but I'm not sure exactly how to calculate it (monte carlo simulation maybe?) and there is another variable, Y, which is how long you plan to (or rather 'actually do') hold them (at 18.2%) before you unload them on the next lucky owner. My brainz hurts. 8>.
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Post by goldservice on Aug 30, 2015 8:42:36 GMT
Suppose Y = 28 days (+/- 1 depending on the size of the loan which affects how many parts others are selling ) - this allows 2-3 days to sell before the first repayment date.
We also need Z = target return. Z is the % return after deduction of the sale fee of 0.25% of the part value. Correct me if I am wrong but there will be no handling charge (that will be taken by FC from the buyer’s first interest payment received.) Suppose Z = 12%.
I calculate that X will then be 7 days.
The actual value of X on the basis of my E loans so far is quite different from that.
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fasty
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Post by fasty on Aug 31, 2015 21:38:41 GMT
Surprised to see a new E (15399) listed today, Bank Holiday. Is this a cast-off from the Whole Loans marketplace?
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arbster
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Post by arbster on Sept 1, 2015 6:23:33 GMT
Approx 50% of the new E loan is still above 18.2% after nearly 18 hours on the market. It is quite a large loan, by E standards, and not a terribly attractive proposition, I suppose.
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