happy
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Post by happy on Aug 5, 2016 10:26:09 GMT
I have a multiple 6 figure sum invested in 8 P2P platforms but each platform has no more than 5 figures invested and my loan sizes are typically low to mid 3 figures with a few low 4 figure loans, so you could say I am a diversification junkie! I have yet to invest in SS but have been monitoring the SS pages for over 6 months with a view to investing but I have decided it is not for me. Let me explain why......
When you are investing these relatively small amounts in each loan it is simply not feasible in time and cost terms to do in-depth due diligence or to continually monitor them. You need to rely more heavily on information provided by the platform and public information to make investment decisions. On this basis I would have to put SS in the high risk category for me but if it wasn't for this forum I would probably have invested by now.
I am super impressed with the efforts of CD etc. with the DD they undertake but my view is that SS is not really suitable for those who do not have the ability to do what you guys/girls do. Two examples recently are the Scottish Leisure Park and the potential Graveyard. These loans on the face of the initial information presented to investors looked OK but your DD exposed issues that resulted in them never coming to the market. Thank you!
So it is on this basis that despite the lure of 12%, Reluctantly for now, I'm Out!
Keep up the great work Forumites, total respect to you all. maybe one day I will succumb and join you on SS.
This is my personal view based on my own situation and experience and does not in any way constitute any advice to others or imply that SS is not a suitable investment platform for others to invest in.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Aug 5, 2016 10:52:52 GMT
I have a multiple 6 figure sum invested in 8 P2P platforms but each platform has no more than 5 figures invested and my loan sizes are typically low to mid 3 figures with a few low 4 figure loans, so you could say I am a diversification junkie! I have yet to invest in SS but have been monitoring the SS pages for over 6 months with a view to investing but I have decided it is not for me. Let me explain why...... When you are investing these relatively small amounts in each loan it is simply not feasible in time and cost terms to do in-depth due diligence or to continually monitor them. You need to rely more heavily on information provided by the platform and public information to make investment decisions. On this basis I would have to put SS in the high risk category for me but if it wasn't for this forum I would probably have invested by now. I am super impressed with the efforts of CD etc. with the DD they undertake but my view is that SS is not really suitable for those who do not have the ability to do what you guys/girls do. Two examples recently are the Scottish Leisure Park and the potential Graveyard. These loans on the face of the initial information presented to investors looked OK but your DD exposed issues that resulted in them never coming to the market. Thank you! So it is on this basis that despite the lure of 12%, Reluctantly for now, I'm Out! Keep up the great work Forumites, total respect to you all. maybe one day I will succumb and join you on SS. This is my personal view based on my own situation and experience and does not in any way constitute any advice to others or imply that SS is not a suitable investment platform for others to invest in.I completely share your preference to diversification over DD, but I fail to see why this excludes SS. With diversification you are increasing the probability of some losses but decreasing the amounts of losses, and relying on the high rate of interest to more than compensate for those. This forum is mostly populated by those who do not share our viewpoint, and think they can use DD to cherry pick safer loans. So it is full of speculative and often negative comments. Consequently reading it has likely put you off. It is true that this has sometimes stopped loans from launching in the first place but nobody knows how those loans would actually have performed if they had gone ahead. The loans that have gone sour did not AFAIK attract any warning comments when they were launched. So far I have seen nothing to persuade me that DD is more effective than diversification (most users of this forum will disagree and they are entitled to their opinion but since I already know what it is I do not need reminding  )
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happy
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Post by happy on Aug 5, 2016 11:03:13 GMT
Thank for your advice and solidarity littleoldlady. I did say "for now I'm out' so I will keep a watching brief over the coming months and maybe reconsider my position on SS soon. |
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merlin
Minor shareholder in Assetz and many other companies.
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Post by merlin on Aug 5, 2016 11:21:54 GMT
I largely agree with the sentiments expressed by littleoldlady regarding diversification versus DD. I have been investing in P2P now for around five years, initially with FC where I carried out as much DD as I was able and kept my individual investments to the low hundreds. Eventually after about two years I had amassed around 200 loans with around 10 going bad and realisation that my DD was a waste of time and effort. This left me with a comfortable yield of about 6% after cost and losses. Then as FC grew so did my losses so I jumped ship primarily to AC, FS, SS, MT and a small amount into REBS. So far I have not lost a penny on AC but expect a few to "tuck-up" eventually but still leaving me with a net return of around 9%. No losses so far on SS or MT and am not expecting any in the near future and a net return currently of around 11%. FS (starting out as a Pawn Broker) several small losses as could be expected but still returning over 10% net. Finally REBS which has not had a happy history with me and a net return in the minus category unless they produce a miracle by way of recoveries. Without any doubt this Forum has saved me quite a lot of money due to the efforts of its members, too many to mention specifically but CD does stand out recently. Keep up the good work chaps and chapesses. |
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Post by dualinvestor on Aug 5, 2016 13:02:24 GMT
I largely agree with the sentiments expressed by littleoldlady regarding diversification versus DD. I have been investing in P2P now for around five years, initially with FC where I carried out as much DD as I was able and kept my individual investments to the low hundreds. Eventually after about two years I had amassed around 200 loans with around 10 going bad and realisation that my DD was a waste of time and effort. This left me with a comfortable yield of about 6% after cost and losses. Then as FC grew so did my losses so I jumped ship primarily to AC, FS, SS, MT and a small amount into REBS. So far I have not lost a penny on AC but expect a few to "tuck-up" eventually but still leaving me with a net return of around 9%. No losses so far on SS or MT and am not expecting any in the near future and a net return currently of around 11%. FS (starting out as a Pawn Broker) several small losses as could be expected but still returning over 10% net. Finally REBS which has not had a happy history with me and a net return in the minus category unless they produce a miracle by way of recoveries. Without any doubt this Forum has saved me quite a lot of money due to the efforts of its members, too many to mention specifically but CD does stand out recently. Keep up the good work chaps and chapesses. Whilst I am firmly of the opinion that diversification over a wide range of platforms and loans is a far more secure method of investing in P2P than concentrating on a small portfolio on which one has conducted, or relied upon others for, DD, it is not to say that there is not a place for DD. There are examples where the public information from the platforms simply does not add up and some proposals that can be, at best, described as speculative are highlighted by the forum, but some information is simply not known and/or not in the public domain, e.g. credit reference agency information on the borrower, and some that is not disclosed although perhaps should be. Therefore "DD" conducted by a potential lender (as oppossed to the platform) is always incomplete. Even if this were not the case and the most thorough DD was possible there will always be defaults and this has always been the case since lending began. It can therefore only reduce the risk never eliminate it. Therefore a diversified portfolio will limit the exposure to a managable level per loan and reduce the risk on a portfolio level but unless one is extremely "lucky" never bring it to zero.
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Post by reeknralf on Aug 5, 2016 14:31:37 GMT
I think our chums from the RICS are coming in for a bit more flak than they merit. Plenty of the valuations on SS are projected valuations not OMV and they state as much quite clearly. Things along the lines of if holiday chalets cost £50 to build and sell for £70, assuming a ROE of 8% this site would be worth £1000. If chalets end up costing £100 to build, and the site sells 12 months later for tuppence, that doesn't mean the valuation was wrong. The 15% figure being bandied about applies to OMV not projected valuations.
What I have less sympathy for, is that recent sale prices / asking prices are only sometimes included in these valuation reports. I'd like for SS to ask for them to be included systematically. And before someone says they are commercially sensitive, we have several recent examples of these figures being freely available on the web, but omitted from the valuations. These at least, should have been included in the valuation reports.
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registerme
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Post by registerme on Aug 5, 2016 21:26:03 GMT
Lots of well articulated, well reasoned, argument I agree completely. I'd go further. I'd like all platforms to converge on a standard approach, standard definitions, and standard usage.
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jonah
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Post by jonah on Aug 5, 2016 21:35:19 GMT
Lots of well articulated, well reasoned, argument I agree completely. I'd go further. I'd like all platforms to converge on a standard approach, standard definitions, and standard usage. Can they have a standard definition of default as well please?
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registerme
Member of DD Central
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Post by registerme on Aug 5, 2016 21:41:35 GMT
Yeah, silly of me, one of my pet peeves. I shouldn't have left that out  . But perhaps we could make a new topic of this in General rather than derail this, specific to Saving Stream, thread? The list is, after all, long and inglorious..... |
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sam i am
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Post by sam i am on Aug 5, 2016 23:15:32 GMT
I have a multiple 6 figure sum invested in 8 P2P platforms but each platform has no more than 5 figures invested and my loan sizes are typically low to mid 3 figures with a few low 4 figure loans, so you could say I am a diversification junkie! I have yet to invest in SS but have been monitoring the SS pages for over 6 months with a view to investing but I have decided it is not for me. Let me explain why...... When you are investing these relatively small amounts in each loan it is simply not feasible in time and cost terms to do in-depth due diligence or to continually monitor them. You need to rely more heavily on information provided by the platform and public information to make investment decisions. On this basis I would have to put SS in the high risk category for me but if it wasn't for this forum I would probably have invested by now. I am super impressed with the efforts of CD etc. with the DD they undertake but my view is that SS is not really suitable for those who do not have the ability to do what you guys/girls do. Two examples recently are the Scottish Leisure Park and the potential Graveyard. These loans on the face of the initial information presented to investors looked OK but your DD exposed issues that resulted in them never coming to the market. Thank you! So it is on this basis that despite the lure of 12%, Reluctantly for now, I'm Out! Keep up the great work Forumites, total respect to you all. maybe one day I will succumb and join you on SS. This is my personal view based on my own situation and experience and does not in any way constitute any advice to others or imply that SS is not a suitable investment platform for others to invest in.I'm of the opposite view. I don't have the time to manage investments on multiple platforms so I got to know one well (and now to a lesser extent a second) and concentrate my efforts. For me a bit of hard work on two platforms is easier than trying to manage lots. I'm well diversified on SS and MT but accept that I'm at risk of platform failure. Vive la difference!
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Post by dualinvestor on Aug 6, 2016 6:04:04 GMT
I agree completely. I'd go further. I'd like all platforms to converge on a standard approach, standard definitions, and standard usage. Can they have a standard definition of default as well please? I think there is a standard definition on the "retail" platforms but as they deal in a much more commodosised product (lots of small loans) it is easy to operate and probably not feasible to do anything else; however I think there is a major problem with all the "property" sites in having the same, inflexible policy. There has been a lot of dicussion on this thread about the basis of valuation whether it should be OMV, as most loans seem to be calculated on, or Forced Sale, that would become the de facto starting point in the case of a default. I think we would all agree that it is in no-ones interest, the lenders, the borrowers or the platform to be starting from the lower figure. Therefore taking a fictional loan for £700,000 with an OMV of £1million due to be repaid on 1 September. Let us say the borrower cannot meet that, and the standard definition of default is when it is 60 days late. Come 31 October he still cannot meet that, but has an interested party for the property at OMV. If you apply your standard definition and place the loan into default as sure as eggs are eggs the interested purchaser will find out about it and lower theiir offer, matbe by as much as 50% smelling blood as one might say. The borrower refuses the new offer, the platform enforces its security and you still only achieve £500,000 but by now time has moved on, you have foregone more interest so your debt is £1.1million and you have £100,000 of Receivers and legal fees to pay. Not a good result to anyone. We all know defaulting debtors will say anything, not all of it true whilst trying to save their financial skin, but however unpalatable it might be better to give them leeway and try and let them realise the security for a better result all round rather than have standard definitions. You could say "well you can be flexible" but then you are really saying "we don't have a standard definition" as there will always be a reason not to enforce it. In the way of the world as SS said in a recent post commercial flexibility is often required to get the best result for everyone.
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Post by Deleted on Aug 6, 2016 8:15:08 GMT
The moment you have standards you get the following
atrophy
lack of competitive advantage
perfectly acceptable ideas being ruled out due to failure to achieve standard
belief in the standard as being acceptable even when, to the eyes of a child, they were not
Just think about jewelry, do you value it at "retail", "wholesale", "scrap" or what?
No keep the whole idea of standards out of the market, remember it was standards in 2005-2007 that got us in this mess in the first place.
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)
. But perhaps we could make a new topic of this in General rather than derail this, specific to Saving Stream, thread? The list is, after all, long and inglorious.....