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Post by df on Aug 9, 2017 23:50:33 GMT
My strategy with FC was to invest small sums of say £20 into a highly diversified portfolio of some 650 loans. Like everyone here I have taken some losses, in my case generally under £20 per bad loan. My overall return is 7% & I am reasonably happy. However, I have been drawing down on FC & will not be investing new money. I believe that loans need to be asset backed, DD rigerous, default & loan recovery aggressive. Loans defaulting after just one or two payments shows a huge faling in DD! I feel that FC fall short on all counts & could learn from platforms like AC. It's worth remembering that P2P is not without risk & I believe platform diversification is as important as loan diversification. Exactly, it would be very immature to assume that there is no risk in any p2p platform. In case of FC, I expected many defaults when I signed up so I don't get upset when it happens. Diversification (both, loan and platform) is the key strategy to minimise this risk. It is great when loans are secured on assets and a proper DD is in place. AC is very good at it, but still have defaults. FC is failing on many points, but it's strength is the mass production of loans, which gives the opportunity to diversify. If you have initial £20 in 650 loans you would probably be at around 0.2% diversification. Can't think of any other platform that can offer the same  Some of SME loans annoyingly collapsing after one or two repayments, I bought one on LC that collapsed before the first repayment, but if your losses are very small part of your portfolio you are still earning a decent interest.
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Post by spiker on Aug 10, 2017 7:31:10 GMT
From the FC official pages. Bad debt: £51,808,506 Recoveries: £13,731,683 This means 26% official FC recovery rate, as stated by FC as of today. All that betting is getting to your head!!!! Abandon FC before it is too late. You can bet you will have better returns with lower effort elsewhere.... You're using the stats that suit your agenda, not those that accurately represent this discussion. i.e. your bad debt figures include loans that defaulted recently (So obviously there won't have been recoveries on those yet) As stated on the official FC page: "45% Recovered on defaults from 2010 to 2014 (inclusive). Data correct as of 1st April 2017" Obviously recoveries take time, and your figure doesn't build in ample time (hence the reduced percentage) Facts are clear, that given time, historically recovery rates are 40% plus
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m2btj
Member of DD Central
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Post by m2btj on Aug 10, 2017 9:05:43 GMT
My strategy with FC was to invest small sums of say £20 into a highly diversified portfolio of some 650 loans. Like everyone here I have taken some losses, in my case generally under £20 per bad loan. My overall return is 7% & I am reasonably happy. However, I have been drawing down on FC & will not be investing new money. I believe that loans need to be asset backed, DD rigerous, default & loan recovery aggressive. Loans defaulting after just one or two payments shows a huge faling in DD! I feel that FC fall short on all counts & could learn from platforms like AC. It's worth remembering that P2P is not without risk & I believe platform diversification is as important as loan diversification. Exactly, it would be very immature to assume that there is no risk in any p2p platform. In case of FC, I expected many defaults when I signed up so I don't get upset when it happens. Diversification (both, loan and platform) is the key strategy to minimise this risk. It is great when loans are secured on assets and a proper DD is in place. AC is very good at it, but still have defaults. FC is failing on many points, but it's strength is the mass production of loans, which gives the opportunity to diversify. If you have initial £20 in 650 loans you would probably be at around 0.2% diversification. Can't think of any other platform that can offer the same Some of SME loans annoyingly collapsing after one or two repayments, I bought one on LC that collapsed before the first repayment, but if your losses are very small part of your portfolio you are still earning a decent interest. FC was my first P2P experience & I must say it was a good point of entry. You are correct regarding diversification, I am now at; You are currently lending to 619 businesses (660 loan parts) totalling £*****.**. Your maximum exposure to any one business is 1.7% of your current amount lent.It is easy to try & chase big returns but I try to resist the extra risk that can be involved. That is not to say I don't have any 12% loans with another platform. I do, but they are just a small part of a balanced platform portfolio. I continually battle the investors Achilles heel....greed! It was greed that allowed Bernard Madoff to pull off one of the biggest financial frauds in history. I sometimes think the the whole P2P industry is like one huge Ponzi scheme waiting to collapse at the first sign of a financial crisis....only time will tell how robust the P2P industry will prove to be! The odd loan failure is nothing compared to a complete platform failure. In the meantime, it's down to caveat emptor.... & the good fortunes of the UK & global economies.
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Post by GSV3MIaC on Aug 10, 2017 9:36:38 GMT
You need a large number of defaults (and thus, hopefully, a VERY LARGE number of loans) to get a reliable answer, since the recovery is so spotty - ranging from 0% to 100%. And, has been mentioned, you need to wait a damn long time (5 years or more) for all the wheels to stop turning, before you have a final answer. I have to disagree with spiker re MT/ABL/CO/Ly though .. with patience (over maybe a year or so) it IS possible to achieve what I consider to be acceptable diversification (50-100 separate loans, on separate projects, to separate borrowers), although it is pretty tough to avoid being overweight in property (bridging, or development) since that's where most of the assets are. |
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Post by spiker on Aug 10, 2017 10:14:47 GMT
You need a large number of defaults (and thus, hopefully, a VERY LARGE number of loans) to get a reliable answer, since the recovery is so spotty - ranging from 0% to 100%. And, has been mentioned, you need to wait a damn long time (5 years or more) for all the wheels to stop turning, before you have a final answer. I have to disagree with spiker re MT/ABL/CO/Ly though .. with patience (over maybe a year or so) it IS possible to achieve what I consider to be acceptable diversification (50-100 separate loans, on separate projects, to separate borrowers), although it is pretty tough to avoid being overweight in property (bridging, or development) since that's where most of the. But assets are. My point wasn't that it couldn't be done. But the effort starts to increase when managing multiple platforms. This effort needs to be balanced against profit. Let says for example, If you're only making £5000 a year profit, is all the effort worthwhile? When you could maybe get £2500 by turning on autobid type system on a few platforms.
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Post by charliebrown on Aug 10, 2017 12:21:25 GMT
I'm not happy. I went for the non-diversified approach and put my money in just a few loans. I don't always believe diversification is the best approach, but with FC it seems I got really unlucky. I put money in 18946 (defaulted), 29514 (defaulted), 21802 (defaulted), 18602 (defaulted), 29700 (late and looks sure to default). The odds of almost every loan I touched defaulting must just make me very unlucky. I'm exiting FC with capital loss of around 6K pounds, it's been a truly terrible experience for me and I will never come back. That's just my experience, but good luck to all the other investors who enjoy great returns on FC, sadly I wasn't one of them. That is a very wide spread over very few loans. Out of curiosity when is diversification not the best approach? Let me clarify that. Diversification is a sensible strategy. My thought process was, yes, you can back every horse in the race and you'll always win. However, if you back 1 horse and it wins you win more. My experience shows that it's not a good strategy and one should always diversify as a sound investment strategy. What I did was a gamble and we shouldn't be gambling here, save that for the casino. Lesson learned, the hard way. However, I still won't be back to FC as I feel there are fishy looking loans made. Borrowers that borrow significant sums then make a few repayments and then default. Just my opinion. If I hadn't had such a bad experience I could easily be posting that I'm happy and a big FC fan.
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Post by GSV3MIaC on Aug 10, 2017 12:38:09 GMT
I have to disagree with spiker re MT/ABL/CO/Ly though .. with patience (over maybe a year or so) it IS possible to achieve what I consider to be acceptable diversification (50-100 separate loans, on separate projects, to separate borrowers), although it is pretty tough to avoid being overweight in property (bridging, or development) since that's where most of the. But assets are. My point wasn't that it couldn't be done. But the effort starts to increase when managing multiple platforms. This effort needs to be balanced against profit. Let says for example, If you're only making £5000 a year profit, is all the effort worthwhile? When you could maybe get £2500 by turning on autobid type system on a few platforms. Ah, it depends if you are doing it because you enjoy it, or as a way to make money. If the latter, you'd probably be better stacking shelves at Tesco, unless you are punting with 5-6-7 figure sums (in which case WTH are you trying to make money FOR?).
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Post by spiker on Aug 10, 2017 13:57:46 GMT
Each to their own
I am happy with my 15.5% interest on FC, in a highly liquid and well funded platform.
Just don't go crying on the forums when the inevitable property crash comes, and:
1) you're over exposed in property investment.
2) you're holding loans on new & poorly funded platforms that have a strong chance of going bust in a downturn.
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Post by GSV3MIaC on Aug 10, 2017 14:48:13 GMT
/mod hat on
Spouting rubbish has never been a banning offence on this forum .. if it was we'd be down lots of members.
However failure to abide by the 'be polite and constructive' forum rules will definitely get offenders banned .. that would appear to include a couple of folks on this thread so please TONE IT DOWN.
It is quite possible to disagree without being offensive about it.
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seabbs
P2P Blogger
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Post by seabbs on Aug 10, 2017 15:01:14 GMT
For someone to have been around as long as you claim, the ignorance of this statement is alarming... 1. Just because you haven't obtained it doesn't mean its not true 2. You do realise that FC openly publish their recovery stats? (Unless you are accusing them of lying) Dear FC fan, I only report data I am 100% sure of. And I am sure than my very large investments in FC had brought numerous defaults (nothwithstanding very careful selections based on the false data reported by FC and numerous frauds, even admitted by FC). Those defaults have historically had a limited recovery success. This percentage will not increase much as some of the loans are unrecoverable already (most via a series of lawyers frauds that hit FC 4 years ago). The same is happening to lots of people/friends that started with FC a long time ago. They all moved to better platforms 2-3 years ago. But with regards to your incorrect statements: 1. I can certainly tell you that the fact you obtained 40% recovery (if you obtained it) does not mean it is true for everyone..... On average it will be much lower.... 2. Yes I do realise it, but it seems you did not even bother to read them.... FC states that their official current recovery rate is 26% (and if you also add lates over 90 days late, this wonderful FC recovery rate drops to 22%) Who is lying here then? The person telling FC recovery is 40% and that is not me..... Most multi-year lenders know that recoveries are VERY VERY difficult against personal guarantees alone as smart borrowers simply default on you (including 4 large lawyers' studios with houses transferred to wifes and careers restarting after only a few months I know too well about...). Even if things go badly, a security is still something hard to rely on which is far better than the simple borrower promise. I recommend everyone to lend with security-backed assets. They give far better prospects anyway... Already posted this but I think it must have been missed... www.dropbox.com/s/xmcbnxj1jdkfbgn/Screenshot%202017-08-10%2015.56.50.png?dl=0Using this: www.seabbs.co.uk/shiny/fcdashboardSo that is 7.4% recovered from 2016, 14.5% in 2015, 25.7% in 2014, 40.1% in 2014, and 55.3% in 2013. So they are hitting their targets. Note this doesn't account for the date of default so a loan from 2013 may have defaulted at any time. Taking this into account they are actually doing very well! Looking into estimating date of default and then I will have a better estimate If you wanted to explore your defaults a bit you can upload your data and have an explore.
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Post by spiker on Aug 10, 2017 15:10:57 GMT
Seabbs
Be careful, He doesn't deal in factual information.
and he hasn't take up the offers to his bet, Of which there were several takers....
The facts are straightforward if you analyse the loanbook (which he hasn't done...)
He instead uses the following evidence:
- his own individual statistic as proof that the average isn't met (lol!!!)
- FC's statement on the statistics page which doesn't factor in timespan. (he ignores the stat that factors in some years for recoveries which clearly shows 45%)
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seabbs
P2P Blogger
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Post by seabbs on Aug 10, 2017 16:47:50 GMT
Haha, thanks for the heads up! So to get a better (best?) estimate of recoveries you can now look at recoveries by date of default [estimated as date of acceptance + month * no. of repayments made](https://www.dropbox.com/s/319ulrf85l2jfhu/Screenshot%202017-08-10%2017.41.52.png?dl=0) It looks to me like they are doing a pretty good job - 30% recovery on loans defaulted in 2015 seems good? Used www.seabbs.co.uk/shiny/fcdashboard as previously - as I was on the train I added settable reference dates. This means you can now look at the loan book by date of acceptance, estimated date of default, date of next repayment (interesting to see all the late loans) and date of final repayment (all the way into 2022!) |
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seabbs
P2P Blogger
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Post by seabbs on Aug 10, 2017 17:43:49 GMT
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Post by GSV3MIaC on Aug 10, 2017 18:06:39 GMT
Actually Lendy currently has 17 property loans 'in default' (status) .. all defaults which have been resolved so far (about 4 or 5 iirc) have recovered all capital. Two are still awaiting interest recovery (66/67?). FC's property team have been reluctant to actually default anything, so we are lacking comparable data on how the recovery goes.
FC's 'non asset backed' loans have a pretty good recovery rate compared to similar at LC/ReBS (both nudging along close to zero, last time I looked) .. I'm quite prepared to believe the 40%+ (eventually), assuming we are talking about capital recovery. Depends whether you include the 100% recovery on some of the loans which FC repaid themselves, whether you discount the repayment to allow for the fact it shows up God-Knows-when, etc. In fact my dashboard numbers show:
Losses -£572.22
Bad debt -£1,064.03
Recoveries +£491.81
And the fat lady has yet to sing on some of those loans (too many, really, but that's P2P for you) .. of course I rarely held a loan out past 6 months.
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bg
Member of DD Central
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Post by bg on Aug 10, 2017 18:08:11 GMT
You lost the plot totally. The initial discussion on which you wrongly commented was about a comparison between the potential recovery of an asset-backed loan against a personal guarantee loan. You can call whoever you want and read the FC recovery stats as you like: - recovery of 26% (only official FC overall number today) - recovery of 30% (filtering off some data) - recovery of 40% (filtering off some more data) The point you fail to understand and I repeat once again to advantage of poor potential new FC lenders (that should be warned) is: - 26% OR 30% OR even 40% ARE RUBBISH RECOVERY rates compared to 70+% MINIMUM RECOVERIES you are getting on secured backed assets (just as an example over 80% net on Lendy, over 85% on FS etc). You do seem to be very happy to regularly openly contradict yourself. Maybe you do not even realise you are doing it. If you want to say that FC only make 26% recovery on defaults how can you ignore the current defaulted loans on Lendy (as an example)? Lendy currently have £23m in loans that are defualted with zero recovery so far. You can't just take the loans where a recovery has occured but not do the same for FC. Thats £23m out of a total loan book of £186m and theres another £25m of that that has not yet been defaulted but is not paying any interest. It is also nonesense to say you get a minimum 70%+ recovery with a secured asset. There are plenty of people on FS and L who would snap your hand off for a 70% recovery on a number of loans they are holding. I personally have lost 50%+ on secured loans that have defaulted.
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Some of SME loans annoyingly collapsing after one or two repayments, I bought one on LC that collapsed before the first repayment, but if your losses are very small part of your portfolio you are still earning a decent interest. 
