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Post by martin44 on Aug 3, 2016 23:28:07 GMT
I wonder if we should draw any conclusions from the fact that the SM for PBL56 is largely non exisitent compared to PBL64 (and has been constantly since the storm broke max c1% on market v 6%). Is that because few on the forums still hold it, they havent twigged it is the same borrower as PBL64 or they are happier with the security and ethics be dammed? I think, maybe check out the security on pbl56.
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Post by geraldine1210 on Aug 4, 2016 6:01:10 GMT
I wonder if we should draw any conclusions from the fact that the SM for PBL56 is largely non exisitent compared to PBL64 (and has been constantly since the storm broke max c1% on market v 6%). Is that because few on the forums still hold it, they havent twigged it is the same borrower as PBL64 or they are happier with the security and ethics be dammed? I think, maybe check out the security on pbl56. I think people were so furious about pbl64, that pbl 56 was overlooked. As an aside, I wonder how long the farm has been in the owner's family. I wonder if it will be owned by him in the future.
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Post by moonshine on Aug 4, 2016 6:56:33 GMT
I don't think I am missing the point. In the case of SS / Lendy, it's clearly the directors who should exercise good judgement and " do the right thing", not a poll of lenders. Successful long term businesses are run by directors who have the ability to determine what is "right" most of the time. It doesn't mean they are immune to error but they do recognise when a mistake has been made, and learn from it. IMHO SS have, on occasion, shown the traits of being a relatively immature organisation. This need not be fatal as long as the learning loop is working, they are striving to build a business for the long term and do not let short term expediency damage the long term goal.
So you think that SS have not or are not "doing the right thing"? On what basis do you think that? Why is your "good judgement" better than theirs? Your idea seems to be that companies that "do the right thing" survive which seems to me to be a bit of a platitude.
I'm not here to teach or preach, if you can't tell the difference between simple right and wrong without getting overly philosophical and pondering 'who defines it' then I wish you the best of luck with everything, and I'm glad you're not looking after my money (and that I don't have the displeasure of an undefined sex life with you!). But I am here to make money, we all are. If I wanted an 'ethical' fund I would head right over there and choose one. But your idea of therefore every loan being 'unethical because it's 12%' is ridiculous (especially when in the same sentence you say 'how do you define ethical'?!) And as for my Casino example, if you do your DD you'll notice that I mentioned they would both pay back in full. I don't doubt how confused you are, so we'll stop this friendly banter here. Bottom line is this - we're all in this together. And this forum exists for us to discuss all of these loans and their surrounding issues (ethical or not, mostly financial), with the view to not losing our money and therefore choosing the ones that have the best chance of that; through local knowledge, cooling_dude DD, and general points of view. So it doesn't hurt to have different perspectives. The fact is that you have way more chance of a default from Dirty Den's Casino - not because he can't pay it back (he most certainly can), but rather because he may be the type of character that can wriggle out of paying you back and Do You Dirty like Dirty Den Does  And from that, purely financial, perspective you're better off steering clear. That's the point...
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Post by meledor on Aug 4, 2016 7:25:00 GMT
So you think that SS have not or are not "doing the right thing"? On what basis do you think that? Why is your "good judgement" better than theirs? Your idea seems to be that companies that "do the right thing" survive which seems to me to be a bit of a platitude.
I'm not here to teach or preach, if you can't tell the difference between simple right and wrong without getting overly philosophical and pondering 'who defines it' then I wish you the best of luck with everything, and I'm glad you're not looking after my money (and that I don't have the displeasure of an undefined sex life with you!). But I am here to make money, we all are. If I wanted an 'ethical' fund I would head right over there and choose one. But your idea of therefore every loan being 'unethical because it's 12%' is ridiculous (especially when in the same sentence you say 'how do you define ethical'?!) And as for my Casino example, if you do your DD you'll notice that I mentioned they would both pay back in full. I don't doubt how confused you are, so we'll stop this friendly banter here. Bottom line is this - we're all in this together. And this forum exists for us to discuss all of these loans and their surrounding issues (ethical or not, mostly financial), with the view to not losing our money and therefore choosing the ones that have the best chance of that; through local knowledge, cooling_dude DD, and general points of view. So it doesn't hurt to have different perspectives. The fact is that you have way more chance of a default from Dirty Den's Casino - not because he can't pay it back (he most certainly can), but rather because he may be the type of character that can wriggle out of paying you back and Do You Dirty like Dirty Den Does And from that, purely financial, perspective you're better off steering clear. That's the point...
I am struggling to relate any of your comments to anything I 've written! Just one example - "And as for my Casino example, if you do your DD...". If you read what I've written you will notice I've not referred to your casino example - I only referred to the proposed Hull loan that involved a casino. There are others as well - happy to have a debate on the topic but you really need to read what people actually post not imagine it.
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Post by moonshine on Aug 4, 2016 7:42:55 GMT
Apologies meledor - that particular sentence wasn't necessarily aimed at you, I had just quoted your post previously. There were too many of you piling in at once! |
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Post by Deleted on Aug 4, 2016 8:00:47 GMT
I'm not here to teach or preach, if you can't tell the difference between simple right and wrong without getting overly philosophical and pondering 'who defines it' then I wish you the best of luck with everything, and I'm glad you're not looking after my money (and that I don't have the displeasure of an undefined sex life with you!). But I am here to make money, we all are. If I wanted an 'ethical' fund I would head right over there and choose one. But your idea of therefore every loan being 'unethical because it's 12%' is ridiculous (especially when in the same sentence you say 'how do you define ethical'?!) And as for my Casino example, if you do your DD you'll notice that I mentioned they would both pay back in full. I don't doubt how confused you are, so we'll stop this friendly banter here. Bottom line is this - we're all in this together. And this forum exists for us to discuss all of these loans and their surrounding issues (ethical or not, mostly financial), with the view to not losing our money and therefore choosing the ones that have the best chance of that; through local knowledge, cooling_dude DD, and general points of view. So it doesn't hurt to have different perspectives. The fact is that you have way more chance of a default from Dirty Den's Casino - not because he can't pay it back (he most certainly can), but rather because he may be the type of character that can wriggle out of paying you back and Do You Dirty like Dirty Den Does And from that, purely financial, perspective you're better off steering clear. That's the point... Personally I don't take ethics as a parameter in my valuations. The probability of repayment of the loan based on borrower's history might be a good parameter but that is in my view totally disconnected to an ethical considerations. To me the borrower might have stolen land, put farmers out of their homes etc, but if he honours his debt with me, I am not bothered with his previous/personal life. Some of you imply that a non-ethical behaviour in previous dealings (where he was the lender though) might have an effect on his willingness of behave well in repaying our loans. I think this is totally false. A person like this simply takes the most convenient route for himself, all the time. So if a sale/redevelopment etc. is convenient for him, he will sell and repay us. If he makes up that the sums lent by us more than cover anything he might ever get from the market, then he will not repay. He will make an economic analysis as we all do (probably with less affection than a family owner for multiple generations). SO, as usual, at the end of the day we have to rely on the valuations of the security, which is the key in the bridging loan. Ethics honestly don't play a part in this.
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Post by Deleted on Aug 4, 2016 8:13:56 GMT
I spoke to Terry Smith about his ethical view point for Fundsmith when he was just starting the fund, and he chatted about one of his major investors (now another friend's employer), these are a south Sudan family and in this case Muslim. Their money comes from selling tobacco to the Japanese and were very worried about Terry investing in alcohol. His explained that for Fundsmith he was unable to set an ethical standard. Fundsmith also invests in tobacco, a product that I feel should be washed off the face of the planet.
So, while I am happy to invest with Terry (who does not lack a moral compass himself), I would struggle to invest with someone who bends the rules.
What does that mean, I think it means that one relationship is "in my face" while another is at "arms length". Does it distort my moral compass? I think it does and I suggest that is part of the human condition.
So maybe my moral compass is not the issue and this is more about, lack of trust.
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Post by moonshine on Aug 4, 2016 8:44:43 GMT
Personally I don't take ethics as a parameter in my valuations. The probability of repayment of the loan based on borrower's history might be a good parameter but that is in my view totally disconnected to an ethical considerations. To me the borrower might have stolen land, put farmers out of their homes etc, but if he honours his debt with me, I am not bothered with his previous/personal life. Some of you imply that a non-ethical behaviour in previous dealings (where he was the lender though) might have an effect on his willingness of behave well in repaying our loans. I think this is totally false. A person like this simply takes the most convenient route for himself, all the time. So if a sale/redevelopment etc. is convenient for him, he will sell and repay us. If he makes up that the sums lent by us more than cover anything he might ever get from the market, then he will not repay. He will make an economic analysis as we all do (probably with less affection than a family owner for multiple generations). SO, as usual, at the end of the day we have to rely on the valuations of the security, which is the key in the bridging loan. Ethics honestly don't play a part in this. On the face of it, you're right: his ability to repay the loan is irrelevant to any ethical considerations. We agree there. Yet where we, respectfully, differ in view is that his ability and his likely intention based on his available options are also equally irrelevant to each other, and this is where you - the investor - need to be careful, and this is exactly where 'ethics' (however defined) DO play a part. His economical analysis will be just that - economical and nothing else. If it makes more economical sense not to pay back the investors, then let them be damned. Let them chase it. That includes you, by the way. Yet if it were me doing the same analysis, it wouldn't be the same analysis at all. I would consider the 'right thing' based upon the previously agreed to deal of paying the money back (assuming I had it). That was the deal I agreed to in the first place, and that's the way the game works. I either made money on my gamble or I didn't. Whilst you are reasonably comfortable with the security valuation (which is itself another hot potato of debate on here, with wildly fluctuating figures), and a nice shiny first charge on the asset, you should definitely not be comfortable with someone who has allegedly successfully revoked a first charge order. I don't know about you, but I would call that a very relevant previous history.
Now, coming back to your economics only view point; does it make economic sense to you (not him), through sheer probability, to invest in this dude based upon the above? Of course not. The ethics play their part in the background, influencing likely decisions, and they economically increase your chances of getting your money back. Everything is connected.
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goopy
Member of DD Central
Posts: 307 
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Post by goopy on Aug 4, 2016 8:45:44 GMT
I find the opprobrium being heaped on the borrower in question rather strange. Have you listened to the radio 4 interview? There are lots of very unhappy farmers who have taken out bridging loans and then found long term finance was not available and so had their security called. This is very close to savings streams own business model. Yes a refinancing take out is planned at the outset but lenders are mainly relying on the knowledge that the security is there. Lending rates are comparable. The man claims that all farmers were required to take independent financial advice before taking out the loan and all court cases over the repossession have found in his favour. he is not in prison though frankly I wouldn't want so many dispossessed farmers as my enemies for any money. It seems to me that both his and the ss model have a strong smell of distressed borrowing like wonga for property and our very own 18% suggests this. If you want to be on the moral high ground as a lender buy gilts at 0.5% I haven't heard the radio 4 interview so I can't comment. However for you to think that this borrowers 'business model' is very close to that of Saving Stream leads me to believe that you are not fully aware of his/their methods. There was a parliamentary debate about the 'business model' of this borrower which is very interesting reading. I think everyone should read this, if they haven't already, and if you still have no problems lending to this borrower then that's your prerogative. If anyone wants a link to the debate PM me and I will be happy to oblige.
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Post by dualinvestor on Aug 4, 2016 8:58:26 GMT
The probability of repayment of the loan based on borrower's history might be a good parameter but that is in my view totally disconnected to an ethical considerations. To me the borrower might have stolen land, put farmers out of their homes etc, but if he honours his debt with me, I am not bothered with his previous/personal life. Some of you imply that a non-ethical behaviour in previous dealings (where he was the lender though) might have an effect on his willingness of behave well in repaying our loans. I think this is totally false. A person like this simply takes the most convenient route for himself, all the time. So if a sale/redevelopment etc. is convenient for him, he will sell and repay us. If he makes up that the sums lent by us more than cover anything he might ever get from the market, then he will not repay. He will make an economic analysis as we all do (probably with less affection than a family owner for multiple generations). SO, as usual, at the end of the day we have to rely on the valuations of the security, which is the key in the bridging loan. Ethics honestly don't play a part in this. Whilst some of the talk on the thread has gravitated to the ethics of a particular borrower in other dealings, where he was indeed the lender, I doubt the original quote was anything to do with that. If we are talking about the west country offices, the principal has allegedly been bankrupt twice (admittedly i the dim and distant past of the 1970s and 80s) and subject to another insolvency proceding in 2010. I believe it is that kind of history to which the CEO of the Chartered Institute of Credit Management was referring and to which SS said background was not a consideration in the final paragrapph of this post p2pindependentforum.com/post/131348Edit, a further tweet from the originally quoted person "Agreed - history is important and can usefully inform future decisions" (this tweet seems to be in response to an article that Companies House is going to delete records after six years rather than twenty at present, as indeed the tweet at the head of the thread may be)
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And from that, purely financial, perspective you're better off steering clear. That's the point...