j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Mar 28, 2014 20:09:00 GMT
I hope everyone else agrees, but I felt the upcoming auto-invest feature deserves a thread of its own to exchange views, positive & negative, once it's up & running & we've all had a go at it. For me personally, I think it's a very good idea in terms of bidding on live loans & once we get used to its parameters, it will save a lot of time. I will still research each request on an individual basis but, might find this tool helpful in distributing funds a bit more systematically & reduce the risk of being over weighed on any given loan(s) without realising. My main concern though is the AM. How will it work in a fair way. Say 10 units of £100 each of a loan came up for sale. There are 100 members who have set auto-invest that meet the criteria for those units, with a mixture of investing from just £100 to £500 for example. How will the system divide those units? Will it give one person £500 worth, another £300 & another £200? Will it divide between 10 lucky members @ £100 each. How does it pick which members get those units over the others? Is it alphabetical, random, done in turn? Either way, it doesn't sound fair to me. Whilst the current system isn't totally fair too & involves a bit of luck, at least it's still down to any individual catching it at the right time & place in terms of funds available. chris, Any chnace of more elaboration on the above in terms of the mechanism? |
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Post by chris on Mar 28, 2014 21:28:50 GMT
Hi j. Exhausted after a long week but I have bookmarked this thread and will give you a full reply tomorrow. |
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j
Member of DD Central
Penguins are very misunderstood!
Posts: 2,188
Likes: 540
|
Post by j on Mar 28, 2014 22:06:32 GMT
Hi j. Exhausted after a long week but I have bookmarked this thread and will give you a full reply tomorrow. Thank you chris, I await with great anticipation 
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Post by chris on Mar 29, 2014 9:27:23 GMT
I hope everyone else agrees, but I felt the upcoming auto-invest feature deserves a thread of its own to exchange views, positive & negative, once it's up & running & we've all had a go at it. For me personally, I think it's a very good idea in terms of bidding on live loans & once we get used to its parameters, it will save a lot of time. I will still research each request on an individual basis but, might find this tool helpful in distributing funds a bit more systematically & reduce the risk of being over weighed on any given loan(s) without realising. My main concern though is the AM. How will it work in a fair way. Say 10 units of £100 each of a loan came up for sale. There are 100 members who have set auto-invest that meet the criteria for those units, with a mixture of investing from just £100 to £500 for example. How will the system divide those units? Will it give one person £500 worth, another £300 & another £200? Will it divide between 10 lucky members @ £100 each. How does it pick which members get those units over the others? Is it alphabetical, random, done in turn? Either way, it doesn't sound fair to me. Whilst the current system isn't totally fair too & involves a bit of luck, at least it's still down to any individual catching it at the right time & place in terms of funds available. chris, Any chnace of more elaboration on the above in terms of the mechanism? It's a very good question and something we're still fine tuning over the weekend and discussing at director level. At the moment it distributes one loan unit at a time at random but we're discussing alternate strategies including giving priority to those who have the least invested in a given loan or the smallest loan portfolio as a whole or a weighted random strategy. I expect there will be a certain amount of suck it and see, and that it will be something we fine tune over time. It's relatively easy to change the algorithm used so we can be reactive if things aren't working as well as everyone would like. We do need to try and keep it fair with the problem being defining what fair is.
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Post by batchoy on Mar 29, 2014 11:20:45 GMT
I hope everyone else agrees, but I felt the upcoming auto-invest feature deserves a thread of its own to exchange views, positive & negative, once it's up & running & we've all had a go at it. For me personally, I think it's a very good idea in terms of bidding on live loans & once we get used to its parameters, it will save a lot of time. I will still research each request on an individual basis but, might find this tool helpful in distributing funds a bit more systematically & reduce the risk of being over weighed on any given loan(s) without realising. My main concern though is the AM. How will it work in a fair way. Say 10 units of £100 each of a loan came up for sale. There are 100 members who have set auto-invest that meet the criteria for those units, with a mixture of investing from just £100 to £500 for example. How will the system divide those units? Will it give one person £500 worth, another £300 & another £200? Will it divide between 10 lucky members @ £100 each. How does it pick which members get those units over the others? Is it alphabetical, random, done in turn? Either way, it doesn't sound fair to me. Whilst the current system isn't totally fair too & involves a bit of luck, at least it's still down to any individual catching it at the right time & place in terms of funds available. chris, Any chnace of more elaboration on the above in terms of the mechanism? It's a very good question and something we're still fine tuning over the weekend and discussing at director level. At the moment it distributes one loan unit at a time at random but we're discussing alternate strategies including giving priority to those who have the least invested in a given loan or the smallest loan portfolio as a whole or a weighted random strategy. I expect there will be a certain amount of suck it and see, and that it will be something we fine tune over time. It's relatively easy to change the algorithm used so we can be reactive if things aren't working as well as everyone would like. We do need to try and keep it fair with the problem being defining what fair is. In terms of fairness in an automated system it has to either be a random allocation or a time based queue, anything other than that which uses some form of weighting or priority becomes discriminatory and people will walk away if they think they are being discriminated against particularly when a system is perceived as being weighted in favour of new money/investors and against old money/hands - take the issue of the recent cash back offer.
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Post by oldnick on Mar 29, 2014 12:11:53 GMT
It's a very good question and something we're still fine tuning over the weekend and discussing at director level. At the moment it distributes one loan unit at a time at random but we're discussing alternate strategies including giving priority to those who have the least invested in a given loan or the smallest loan portfolio as a whole or a weighted random strategy. I expect there will be a certain amount of suck it and see, and that it will be something we fine tune over time. It's relatively easy to change the algorithm used so we can be reactive if things aren't working as well as everyone would like. We do need to try and keep it fair with the problem being defining what fair is. In terms of fairness in an automated system it has to either be a random allocation or a time based queue, anything other than that which uses some form of weighting or priority becomes discriminatory and people will walk away if they think they are being discriminated against particularly when a system is perceived as being weighted in favour of new money/investors and against old money/hands - take the issue of the recent cash back offer. Time based queue for me please - but would that be a seperate queue for access to each borrower's loan parts or just a general queue to buy any loan part. (Why join a long queue of lenders for loan x which is flavour of the month when all you want to do is buy some of unloved loan y?)
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Post by jevans4949 on Mar 29, 2014 12:26:32 GMT
chris: Are Assetz considering allowing a rule to not Auto-invest on any loan with a history of default (CCJ, IVA, Bankruptcy, etc)? Not saying that I wouldn't invest in one, but I would want to look at the whole case first.
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Post by chris on Mar 29, 2014 12:33:00 GMT
chris: Are Assetz considering allowing a rule to not Auto-invest on any loan with a history of default (CCJ, IVA, Bankruptcy, etc)? Not saying that I wouldn't invest in one, but I would want to look at the whole case first. Watch this space 
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Post by chris on Mar 29, 2014 12:53:11 GMT
In terms of fairness in an automated system it has to either be a random allocation or a time based queue, anything other than that which uses some form of weighting or priority becomes discriminatory and people will walk away if they think they are being discriminated against particularly when a system is perceived as being weighted in favour of new money/investors and against old money/hands - take the issue of the recent cash back offer. Time based queue for me please - but would that be a seperate queue for access to each borrower's loan parts or just a general queue to buy any loan part. (Why join a long queue of lenders for loan x which is flavour of the month when all you want to do is buy some of unloved loan y?) It's definitely not as straight forward as random - as you say if someone has been waiting for weeks to invest in a given loan only to be usurped by someone joining the queue a few seconds before a loan unit became available. But if it's time based then that has issues as well. If a HNW is at the front of the queue and wants to put £100k (or £1m or more) into a loan then does his full requirement get fulfilled before anyone else gets a shout? As a business we also have to keep both HNWs and small investors happy and they're going to have conflicting requirements. So whilst my gut instinct is that a time biased random solution is the least worst option it's certainly not clear cut and there's a lot of discussion and fine tuning to be had done over the coming weeks.
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Post by oldnick on Mar 29, 2014 14:04:16 GMT
Time based queue for me please - but would that be a seperate queue for access to each borrower's loan parts or just a general queue to buy any loan part. (Why join a long queue of lenders for loan x which is flavour of the month when all you want to do is buy some of unloved loan y?) It's definitely not as straight forward as random - as you say if someone has been waiting for weeks to invest in a given loan only to be usurped by someone joining the queue a few seconds before a loan unit became available. But if it's time based then that has issues as well. If a HNW is at the front of the queue and wants to put £100k (or £1m or more) into a loan then does his full requirement get fulfilled before anyone else gets a shout? As a business we also have to keep both HNWs and small investors happy and they're going to have conflicting requirements. So whilst my gut instinct is that a time biased random solution is the least worst option it's certainly not clear cut and there's a lot of discussion and fine tuning to be had done over the coming weeks. Surely a HNW could have been involved in underwriting and would already hold a large position in a loan or two? Isn't this facility going to be of more interest to retail investors?
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Post by chris on Mar 29, 2014 14:07:37 GMT
Not all HNWs are underwriters, and many underwriters are also investors that hold loan units for the full term. Our lender base will always be a blend of investors of many many different sizes and our platform needs to cater to all sizes of investor and help them lend their funds as efficiently as possible.
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Post by batchoy on Mar 29, 2014 16:24:57 GMT
Time based queue for me please - but would that be a seperate queue for access to each borrower's loan parts or just a general queue to buy any loan part. (Why join a long queue of lenders for loan x which is flavour of the month when all you want to do is buy some of unloved loan y?) It's definitely not as straight forward as random - as you say if someone has been waiting for weeks to invest in a given loan only to be usurped by someone joining the queue a few seconds before a loan unit became available. But if it's time based then that has issues as well. If a HNW is at the front of the queue and wants to put £100k (or £1m or more) into a loan then does his full requirement get fulfilled before anyone else gets a shout? As a business we also have to keep both HNWs and small investors happy and they're going to have conflicting requirements. So whilst my gut instinct is that a time biased random solution is the least worst option it's certainly not clear cut and there's a lot of discussion and fine tuning to be had done over the coming weeks. I have not problem with HNW individuals putting in an auto invest request for a significant sum on a time based queue, however if there is the feeling that there needs to be some form of fairness in order to prevent them cornering the market rather introducing some form randomisation why outside of underwriting why not introduce a limit to the proportion and one investor can own.
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Post by chris on Mar 29, 2014 16:48:03 GMT
Simply because that would be an ineffective approach in the face of changing liquidity. A value set one day may be inappropriate the next as lenders shift their priorities, and supply of loan units changes.
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j
Member of DD Central
Penguins are very misunderstood!
Posts: 2,188
Likes: 540
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Post by j on Mar 29, 2014 18:26:49 GMT
To add another layer of difficulty to the equation. Say I put an order of £3k to buy units, all that £3k became available on one loan but, as an investor I want to be diversified & do not want all that £3k buying one single loan. Is there a way of controlling that too? I know I'm sounding difficult chris but, honest I'm not. I'm just trying to explore all issues beforehand to see if a middle ground can be reached |
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Post by chris on Mar 29, 2014 18:37:33 GMT
Diversification will come with the next phase, but for this one if you transferred in £3k then it would do some balancing across the various loans you wish to invest in - trying to keep your investments in each broadly equal but dependent on your settings.
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