SteveT
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Post by SteveT on Dec 9, 2015 15:37:27 GMT
Today's pre-fund has resulted in 90% allocation... and the SM is nowhere near as hectic as it was yesterday. Bits are almost waiting to be purchased... ... And that's only a £2m loan. Just wait until the £5.2m and £4.6m loans launch (Dec 24th would give everyone something to chew on over Xmas and New Year!)
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kaya
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Post by kaya on Dec 9, 2015 16:36:11 GMT
I am struggling to know what the issue is, other than excessive demand, and a sense of outrage at people 'gaming' the system. There were circa 1200 investors in yesterday's loans, for the smaller loan that averages at c £350, so worst case scenario we all game the system with £250k pre-funds and get a prorated £350 each (and if you want less, sell the surplus). If the current system doesn't bother SS it doesn't bother me. I'm not sure (but stand to be corrected) that I've seen many people complain they haven't got what they wanted. I have seen people on AC complain at the small allocations they've received as a result of the pro-rated allocation on small popular loans there. I've even seen people complain they haven't got anything on MT with it's pre-announced 24hr % caps 'cause they didn't get home fast enough and the loans have sold out (sometimes even in minutes for very small ones). More loans of all sizes to match or outpace investor growth, and barring bad news, I think this will settle. I'm hoping SS are on the way to deliver this. Few systems are neutral to all, and a lot of systems can be abused, some people will still game with loan caps it will just lower the 'magnification', restrictions based on holdings / cash balance will be gamed by deep pockets, not allowing sales of allocated amounts will cause other problems, over complicating it will put a lot of people off. I'm trusting SS to sort out the extreme serial abusers trying to bid for what they can't possibly fund or garner unfunded interest. The current system suits me fine, and I feel it will settle with greater deal flow, but I'm also assuming SS know their investor base so if they feel a change is needed they come up with something as equitable to all as possible, and as simple as possible; but P.S don't forget to tell us beforehand.Well maybe I was one of the few people (on this forum anyway) not gaming the system and so ending up with shrapnel. If SS is happy for us all to prefund far more than we want, and to sell or fail to fund (if it won't sell) what we don't want, then fine, though it may not be so fair on humble folks that are not 'in the know' and who just ask for what they really want. Must say though, all this buying and selling is quite good fun, and it is certainly a lively set-up when the loans come up. Can't help thinking it will all go horribly wrong some day.
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TitoPuente
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Post by TitoPuente on Dec 9, 2015 16:58:34 GMT
I am struggling to know what the issue is, other than excessive demand, and a sense of outrage at people 'gaming' the system. There were circa 1200 investors in yesterday's loans, for the smaller loan that averages at c £350, so worst case scenario we all game the system with £250k pre-funds and get a prorated £350 each (and if you want less, sell the surplus). If the current system doesn't bother SS it doesn't bother me. I'm not sure (but stand to be corrected) that I've seen many people complain they haven't got what they wanted. I have seen people on AC complain at the small allocations they've received as a result of the pro-rated allocation on small popular loans there. I've even seen people complain they haven't got anything on MT with it's pre-announced 24hr % caps 'cause they didn't get home fast enough and the loans have sold out (sometimes even in minutes for very small ones). More loans of all sizes to match or outpace investor growth, and barring bad news, I think this will settle. I'm hoping SS are on the way to deliver this. Few systems are neutral to all, and a lot of systems can be abused, some people will still game with loan caps it will just lower the 'magnification', restrictions based on holdings / cash balance will be gamed by deep pockets, not allowing sales of allocated amounts will cause other problems, over complicating it will put a lot of people off. I'm trusting SS to sort out the extreme serial abusers trying to bid for what they can't possibly fund or garner unfunded interest. The current system suits me fine, and I feel it will settle with greater deal flow, but I'm also assuming SS know their investor base so if they feel a change is needed they come up with something as equitable to all as possible, and as simple as possible; but P.S don't forget to tell us beforehand.Not changing the system would result in one dominant strategy for all investors consisting in pre-funding 250K for any loan lower than 1m. I am ok with that, but it makes no sense.
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star dust
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Post by star dust on Dec 9, 2015 17:09:38 GMT
Well maybe I was one of the few people (on this forum anyway) not gaming the system and so ending up with shrapnel. If SS is happy for us all to prefund far more than we want, and to sell or fail to fund (if it won't sell)what we don't want, then fine, though it may not be so fair on humble folks that are not 'in the know' and who just ask for what they really want. Must say though, all this buying and selling is quite good fun, and it is certainly a lively set-up when the loans come up. Can't help thinking it will all go horribly wrong some day. I haven't always got what I've wanted either, but in most cases I've managed to pick up the extra on the SM either in the following 24 hrs or later. It's working far better for me (and I suspect quite a few others) than the previous fastest finger funding that actually caused server meltdown, and resulted in a batch of loans with very few investors, there are still some of those I wouldn't mind picking up!
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webwiz
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Post by webwiz on Dec 9, 2015 18:21:00 GMT
I cannot understand why invest first/pay tomorrow is considered such a sacred cow. True, it is an attractive gimmick and a USP for SS which may have helped their growth but how much value to an investor is it really? If 24 (preferably 48) hours notice of new loans was given what difference would it make to our cash flow? It would solve the problem of having to pre-fund a large multiple of what one actually wants. If it was scrapped compensation could be that interest was paid on loans on the SM. Not much value at present but I suspect it may be before too long, particularly on very large loans. The only snag I can see is that it would be more difficult to re-balance a portfolio by selling loans in order to pay for new ones, after the new ones have been acquired via pre-funding, but I wonder if people doing this realise the risk they are running in establishing a debt to SS before they know for certain that their sales will go through immediately, if they don't have the cash available.
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mikes1531
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Post by mikes1531 on Dec 9, 2015 19:26:12 GMT
I cannot understand why invest first/pay tomorrow is considered such a sacred cow. True, it is an attractive gimmick and a USP for SS which may have helped their growth but how much value to an investor is it really? If 24 (preferably 48) hours notice of new loans was given what difference would it make to our cash flow? It would solve the problem of having to pre-fund a large multiple of what one actually wants. The main problems pre-funding solves are... - You don't have to be on the website, finger at the ready, when a new loan is released in order to get anything. As has been shown at SS before and at other websites, the 'fastest finger' approach tends to cause webserver problems and not all lenders' internet connections are equal, so some are disadvantaged. And anyone who can't be logged in and ready at the appointed time is locked out completely.
- You don't have to produce your money until you know how much you owe. Insisting that people bring in funds before bidding might OK if there wasn't such a supply/demand imbalance, but lenders transferring in a collective £4M in order to fund a £300k loan -- and SS having to process £3.7M of withdrawals afterwards -- is a waste of resources.
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paulg
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Post by paulg on Dec 9, 2015 19:27:31 GMT
savingstream : I notice that in the Loan Particulars for PBL069 the Total Security is given as £1,850,000. How is that figure arrived at? But answer came there none.
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mikes1531
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Post by mikes1531 on Dec 9, 2015 19:39:40 GMT
Treat all buys as reservations until paid for. Which, of course, is what happens now. If somebody doesn't pay for their "reservation", it gets released back to the SM after 48hrs. I think the suggestion was that someone would have to pay for the whole reservation to avoid losing it all. This would prevent people for making a huge pre-bid, being allocated more than they wanted, and then immediately selling off what they didn't want without ever having had to pay for more than the part they actually kept.
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mikes1531
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Post by mikes1531 on Dec 9, 2015 19:52:43 GMT
At the moment there is only a £20k cap for loans up to £500k (assuming this still is being applied by savingstream at launch on the new website) and no cap at all above £500k, so some more sensible caps for loans up to £2m can only improve the situation! Do we have any evidence that this is being applied now? There's certainly nothing stopping me from entering a £250k pre-bid on the £252k Suffolk marina loan that's in the pipeline at the moment. Unless savingstream tell us what they're doing about this, the only way we'll find out would be if someone enters a very large pre-bid on a small loan and reports later whether their actually allocation was consistent with their large pre-bid or some smaller amount. Is anyone here willing to admit having placed a pre-bid of greater than £20k for PBL071? If so, were you allocated 10.5% of your pre-bid or 10.5% of a lower amount?
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mikes1531
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Post by mikes1531 on Dec 9, 2015 20:10:10 GMT
I've no need of lending more currently but I've been watching the Available Loans page this morning and I could have invested many thousands if I'd wanted. Some big chunks have been offered that took 30+ seconds to fill. : How did you determine how long it took for those parts to be sold completely? If you simply were watching the Available Loans page, I don't think you were getting the correct info. In my experience, that page updates from the 'All loans are fully funded' state to showing something available pretty promptly, but it doesn't seem to update very promptly once it is displaying something available. A little while ago, a part appeared on that page. Clicking through to the loan (on another tab) I found that the available part had been bought within a couple of seconds. However, when I went back to the tab showing the Available Loans, it continued to show the part as available for a number of minutes longer, before eventually updating and going back to reporting 'All loans are fully funded'. ps. Here's a hint for free: use PageMonitor (or similar) to scan every few seconds for change in the Available Loans page and "cuckoo" loudly when it does. I don't think this will work effectively for parts added to the SM while there already are parts available -- because the Available Loans page doesn't refresh promptly every time a new part is offered for sale.
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SteveT
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Post by SteveT on Dec 9, 2015 20:12:36 GMT
You were able to select up to £250k on small loans previously too, but SS were reducing higher pre-fund requests to £20k at point of launch. I agree it would be better for the cap to be clear in the drop-down menu but the relative size of the allocations in yesterday's 3 loans suggests it is still being applied.
Re your other question, I clicked on several that appeared and watched as people took successive bites out of them.
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adrianc
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Post by adrianc on Dec 9, 2015 20:21:10 GMT
...not all lenders' internet connections are equal, so some are disadvantaged. I'm in the middle of nowhere in the Welsh borders. A good day is 2.something Mbit. Fast? No. I still managed to snag quite a bit off the SM yesterday and today.
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jonah
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Post by jonah on Dec 9, 2015 20:41:26 GMT
I am struggling to know what the issue is, other than excessive demand, and a sense of outrage at people 'gaming' the system ... I'm personally not that bothered what SS do since it's only a small part of my buy-and-hold P2P portfolio. However, I can see why some people are pretty frustrated. SS are offering investors free leverage (borrowing at 0%) between drawdown time T and settlement T+2, with no stated repercussions if you fail to settle. It's currently a free option to put in a massive bid since you can effectively squeeze the other lenders into buying it from you on the SM. You can also exploit two days of free carry at almost zero risk; it's seems almost like an arbitrage. So it's currently pure greed and no fear and from SS's perspective this is creating fantastic (though illusory) demand. The solution is add back a modest amount of fear. So, as some have already proposed, prohibiting secondary market trading of the the new loan between drawdown at time T and settlement at T+2, is a pretty good start. You'd have to settle the full position you bid on. SS needs to start charging 12% on negative balances to negate the positive carry on portions of new loans that haven't been paid for. You can reserve a big position, but you get no return until you actually pay for it; seems fair. Finally, if you don't settle promptly there need to be punitive repercussions. So perhaps SS sells down the rest of your book to pay for the new loans (bad for that carefully built diversification) and then charges say 24% (or higher) on any residual balances left over if you can't sell the new loan down yourself. Note to self.... Never get into a position where I owe samford71 money. Being slightly more serious, I like that alternative ideas are being kicked around. Negative interest might require some form if additional licenses and would certainly put the cat amongst the Penguins I means pigeons. Personally another route might be to have zero interest paid on Prefunded parts for the first 24hrs, removing the free benefit there.
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Post by pepperpot on Dec 9, 2015 20:54:21 GMT
At the moment there is only a £20k cap for loans up to £500k (assuming this still is being applied by savingstream at launch on the new website) and no cap at all above £500k, so some more sensible caps for loans up to £2m can only improve the situation! Do we have any evidence that this is being applied now? There's certainly nothing stopping me from entering a £250k pre-bid on the £252k Suffolk marina loan that's in the pipeline at the moment. Unless savingstream tell us what they're doing about this, the only way we'll find out would be if someone enters a very large pre-bid on a small loan and reports later whether their actually allocation was consistent with their large pre-bid or some smaller amount. Is anyone here willing to admit having placed a pre-bid of greater than £20k for PBL071? If so, were you allocated 10.5% of your pre-bid or 10.5% of a lower amount? Purely in the interest of testing this theory out, you understand, my allocation was £3,139.00 (£30k) <blushes> In my defense m'laud, I set it in good time and was fully expecting it to be trimmed back. Ahem... I was furious when it wasn't!
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hazellend
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Post by hazellend on Dec 9, 2015 21:59:37 GMT
Personally, I think the sooner something defaults on SS the better. It should introduce some fear to combat the greed. But you will still recoup some or all of the loss when the asset is eventually sold. So not really scary compared to equities for example
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