registerme
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Post by registerme on Oct 10, 2015 12:45:30 GMT
Yeah, that's my view too. Additionally you could look at the proposed investment trust / prospective ISA approach and argue that it meets their commitment to retail investors. Just not our kind of retail investor.
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arbster
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Post by arbster on Oct 10, 2015 13:00:00 GMT
Well, they did explicitly say they wanted active investors to continue to invest on the platform, but that doesn't necessarily mean they'll compromise enough to make it attractive for us.
Sadly, I think we all need to face up to the fact that the early adopter golden period is behind us (and I missed most of it!) and the sector has matured. While there may be other platforms that feel like FC of 2-3 years ago, with those we're being paid a premium out of the marketing money, and a great "platform risk premium". It's also likely that many of the borrowers on those platforms are the ones turned down by FC. I heard anecdotes at both investor evenings about some of the big defaults on similar platforms being rejects from FC - how much is real and how much is rhetoric is hard to know, but SMEs' introducers surely think of FC first these days?
For those who were ever in the blackjack or sports betting bonus scene you'll recall some heady days where money seemed to be thrown at us from every direction, which gradually declined as sites got wise, and then eventually the loopholes were completely closed. Nothing lasts forever when a small minority is able to benefit disproportionately.
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Post by GSV3MIaC on Oct 10, 2015 13:41:20 GMT
Looks like Autobid kicked in again an hour or so ago on 16308, which seems odd since it shut down 2 days ago, presumably on hitting the self-imposed 65% limit. Now, Fiddling Clauses wouldn't be bending their own rules, would they ....? If they've hit the 65% limit they're in trouble. But the rush of new loans on Wednesday would have pushed this one well down the Autobid filling queue, even though it was still the most desperately needy.
What we learn is that there isn't much manual bidding after the initial rush. Also, few Autobid users have enough money at any time to reach back to a loan that may be sitting 8th in the queue. Even though a couple of property tranches have been paid off.
AIUI autobid works to try to 'level' all the loans % funded number .. normally this does favour the newer (less funded) ones, unless manual bidders (notably tall manual bidders) have already filled them up a lot. However, subject to the 65% cap in any one loan (assuming FC actually abide by their own rules .. I wouldn't bet on it) it's quite possible for autobodge to fill dozens of loans up to 90%, and then stall. It's about the only protection autobiddies have left - if NO ONE in the manual crowd thinks the loan is worth funding at that rate, then the autobiiddies won't get stuck with it either .. until FCSL steps in, or the rules change.
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blender
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Post by blender on Oct 10, 2015 13:59:11 GMT
Yeah, that's my view too. Additionally you could look at the proposed investment trust / prospective ISA approach and argue that it meets their commitment to retail investors. Just not our kind of retail investor. These are important issues. FC's direction is clear but the trick for active lenders is to predict where we will be needed by FC and how we can benefit. For a start, they have not yet found a way of funding the property loans without us as effective underwriters. Perhaps a property investment trust is the plan, but they are not there yet. Secondly, there is a benefit from the ISA, which will be tuned to Autobidders, in that the SM is an essential feature for those wishing to transfer their ISA - so the SM is there to stay, and I think the 20% discount is really in preparation for ISA exits. But they will not want lenders selling their loans from outside of the ISA and buying inside - huge liquidity crisis. I think the ISA will favour Autobid lenders in some way which will give FC some control. We shall see. I have not reduce my holding yet. Adapt and survive, if not then leave.
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Post by GSV3MIaC on Oct 10, 2015 14:44:47 GMT
FC claim, and it's quite believable, that the 20% discount is there so idiots with 4% loan parts (which will be at least 18 months old now IIRC) can jack the buyer rate up to something approaching current MBR / fixed rate levels (else they'd be stranded by the new autobid rates). QUite why 'now' I dunno, except I guess they were fiddling with it anyway ..
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nick
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Post by nick on Oct 10, 2015 15:23:22 GMT
Well, they did explicitly say they wanted active investors to continue to invest on the platform, but that doesn't necessarily mean they'll compromise enough to make it attractive for us. Sadly, I think we all need to face up to the fact that the early adopter golden period is behind us (and I missed most of it!) and the sector has matured. While there may be other platforms that feel like FC of 2-3 years ago, with those we're being paid a premium out of the marketing money, and a great "platform risk premium". It's also likely that many of the borrowers on those platforms are the ones turned down by FC. I heard anecdotes at both investor evenings about some of the big defaults on similar platforms being rejects from FC - how much is real and how much is rhetoric is hard to know, but SMEs' introducers surely think of FC first these days? For those who were ever in the blackjack or sports betting bonus scene you'll recall some heady days where money seemed to be thrown at us from every direction, which gradually declined as sites got wise, and then eventually the loopholes were completely closed. Nothing lasts forever when a small minority is able to benefit disproportionately. So true
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oldgrumpy
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Post by oldgrumpy on Oct 10, 2015 15:35:18 GMT
Once again, they told me at the Investor Evening that they were committed to retail investors. They've also told us, repeatedly, that the change to fixed rates is a good thing, and that the guarantees they take from borrowers are adequate security for the loans.Pah!!! They really are stupid if they (or we are to) believe that! No personal/director guarantee is adequate security as the first thing many defaulters do is try their utmost get out of that guarantee by any method possible. I don't really know why platforms accept PGs at all. All we can do is attempt to make sure we back enough winners to cover the losers.
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Post by Deleted on Oct 10, 2015 15:53:45 GMT
It is clear that FC are transitioning away from retail investors to institutional money. This makes commercial sense for them given the much lower cost base to service dozens of institutional investors versus the tens of thousands of small retail customers and the stresses that creates on their IT and customer interface resources/staff. Also, the bottleneck in their growth is generally the supply of loans rather than lack of investor money, although the two are related with larger amounts of money on the platform allowing a more competitive rates to be offered to borrowers. This trend is only likely to continue as more P2P investment trusts are set-up and the likely flow of most ISA money through these collective investment vehicles, including FC's own investment trust (assuming they ever get round to launching it). It's unfortunate for us, but I understand why they have to go down this route - they are currently only just about break even after 5 years of operation. The thing I dread is the day FC announce that they are closing down the SM. I'm sure this somewhere down the pipeline as it solely benefits retail investor liquidity. When the day comes, I just hope we provided sufficient notice to manage the liquidity in our loan book, ie give us 12 months or more notice. Not likely to close the SM as they need this to allow the institutions to bail out when it all goes t@ts up.
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Post by GSV3MIaC on Oct 10, 2015 16:11:01 GMT
I think most of the institutions are stitched up with Whole Loans which are not saleable on the SM. I suspect they have radically different T&Cs from the rest of us in many other ways too (guaranteed deal flows, and maybe some reduction / kickback on the fees, for starters). It's the sort of level playing field you can see here |
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spyrogyra
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Post by spyrogyra on Oct 10, 2015 16:56:16 GMT
After the introduction of the fixed rate loans I decided to diversify putting small chunks in the more deserving propositions.The idea is to sell at 0 or small premium after a few months. Guess what, my holding account is growing because I sell more of the old ones than I put in into new good-looking loans. Now I face the dilemma should I review and "adjust" the selling of the old loans even though some are already a few months old. Or I should move more money out of Flaky Crusts. Some old website issues help push me to the exit.
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Post by GSV3MIaC on Oct 10, 2015 18:47:54 GMT
I considered that approach, but IMO only C/D/E and cashback, are worth investing in, and there have not been enough of those to soak up the requisite cash while maintaining a reasonable diversification. Plus there is the FUD (Fear, Uncertainty, Doubt) factor associated with 'what are Floating Cetaceans going to do to us next/'. The 'sell in a few months' is going to look sick if they come back next week with a 'oops, we got the fixed rates wrong, we're raising them all by 1%' scenario. Couldn't happen? Hmm, you believe what you want (even believe FC if you like) and I'll go with experience...
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spyrogyra
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Post by spyrogyra on Oct 10, 2015 20:51:27 GMT
I've had he same thought, the most troublesome being if they return to the auction model. But I am so heavy with all other platforms that I would prefer to keep some funds with FC for now. And if they decide to go back to the old auction model, then I may lose some but will be looking to employ a bot.
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Post by GSV3MIaC on Oct 10, 2015 21:25:29 GMT
I think there is zero chance they will go back - too much eggy-face, and besides they demonstrably couldn't/can't make the bid technology work. I expect they will fiddle about with adjusting the rates, cashbacks, and tweaking autobodge, in order to try to keep loans getting filled. As has been pointed out, 75% of the new auctions are going as whole loans, half the ones that aren't are being filled with autobid cash, so troublesome active lenders (as seen here) are something they have decided they can live without, whatever they publicly say.
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fasty
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Post by fasty on Oct 10, 2015 22:39:20 GMT
I would not be surprised to see autobid allowed to fill to 100% as a next step to further "simplify the process" and "help" investors
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Post by aloanatlast on Oct 11, 2015 6:49:37 GMT
AIUI autobid works to try to 'level' all the loans % funded number .. normally this does favour the newer (less funded) ones, unless manual bidders (notably tall manual bidders) have already filled them up a lot. However, subject to the 65% cap in any one loan (assuming FC actually abide by their own rules .. I wouldn't bet on it) it's quite possible for autobodge to fill dozens of loans up to 90%, and then stall. It's about the only protection autobiddies have left - if NO ONE in the manual crowd thinks the loan is worth funding at that rate, then the autobiiddies won't get stuck with it either .. until FCSL steps in, or the rules change. Theoretically. I don't suppose, when they set the 65% limit, the idea was to give the manual and bot bidders the power of life and death. They must have figured they could count on us for 40% of the biggest turkey. They might have underestimated the switch of flipper interest to smaller loans. It'll take a week or two for user behaviour to adjust. 1/6th of all the bids on 16308 were made in the first hour, for no particular good reason. We may move to a situation where manual bidders leave their bidding to day 7, knowing that the loan won't be going anywhere sooner, a self-fulfilling prophecy. Last night's repayments are in and Autobid doesn't seem to have spent them yet.
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