freddy
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Post by freddy on Mar 21, 2017 1:47:35 GMT
I invest with SS and MT and although it fluctuates a little I have equal amounts invested in each platform. Rightly or wrongly I too pay far more attention to SS than to MT. I feel far more comfortable with MT whilst SS are making me increasingly more nervous. I firmly believe that the MT trust comes mainly from their communication but also they have made some decisions in the past that clearly demonstrate a sound business approach which protects the long term rather than the short. With SS I won't touch anything below 11% because I have no faith that the varying interest rates paid has anything whatsoever to do with the risk factor. I'm looking to sell at 100 days to go and be clear by 70 days to go. I see myself being completely out of SS within a year unless something changes. I also think it will be increasingly difficult to maintain the same amount of investment in MT moving forward although I would be more willing to invest with them at lower rates.
To date and after 2 yrs of investing with SS and MT I've avoided any defaults or losses. I suspect the coming 12 months will make that achievement more of a challenge if I want to keep the same amount invested.
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Post by peerlessperil on Mar 21, 2017 2:29:16 GMT
Given the immature nature of the industry I suspect platform risk is as much of a concern as the diversified default risk of the loans within each platform.
Platforms can fail for many reasons other than defaults - maturity mismatch (hello Ratesetter), operational cock-ups (hello SS deposits), IT outages (hello Collateral UK), fraud (Chinese ponzi p2p) - or simply the failure to gain the critical mass necessary for sustained profitability.
The more reputable platforms the better, even if it dents your returns. Look at how they communicate & manage defaults, look for participation in this forum, be aware not all platforms will survive.
Then within each platform you need to ensure you don't have a worse default experience than the platform average experience. One simple rule-of-thumb is to ensure that your max % exposure to any single borrower doesn't exceed the platform's anticipated default rate. Otherwise a single default can mean you underperform. This applies even to those platforms that offer a discretionary provision fund (although the socialised provision funds are different beasts).
It's nice to think you can be clever and choose the better loans (and if you spend the time you probably can improve your odds at the margin), but there is no way of predicting which development project will go bust next because the builder fell off his ladder. Nor when the next recession will arrive. Secured loans offer some risk mitigation, but at the cost of concentrated property exposure as the pawn model platforms can't source alternatives in sufficient volume to offset.
Take a look at the bond portfolios run by professional fund managers in the corporate bond and high yield markets. Count the number of holdings. Then remember that they hold very little that is risky enough to yield 12%, so you need to diversify even further. Then consider your exposure to borrowers with multiple loans (some across multiple platforms), regional property concentration (Liverpool!?) and fashionable sectors like student accommodation. Diversify some more.
The Andrew Carnegie approach of "put all your eggs in one basket, and watch it carefully" doesn't work here.
I have exposure across 10 platforms, with 700+ individual loans. I still feel quite uncomfortable with how much exposure I have to what I consider to be the "stronger" platforms.....
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pom
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Post by pom on Mar 21, 2017 8:31:15 GMT
... (I don't run spreadsheets or anything like that).... .... If I was in multiple platforms I would get in a muddle. This way I know in my head what I've got where and what portfolio management I need to do.... Which is what spreadsheets are for 
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Post by carol167 on Mar 21, 2017 13:04:49 GMT
I'm a believer in diversification rather than due diligence, as I suspect its hard to get a true position at one remove, and I'm no property developer. So 50 loans, with ideally no more than 2.5% of my SS investment in each. Same here... 52 loans currently, no more than 2.34% in each (according to my spreadsheet) with quite a few being less. None at negative term. I play the spread em wide and thin strategy.
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am
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Post by am on Mar 21, 2017 23:57:33 GMT
/mod hat off It's certainly a rather loose and flexible definition .. most people would say it's defaulted if the borrower has not been paying the interest due when they should have done so (or broken any of the other T&Cs on their loan agreements, which we are still waiting to see .. mystical how we can have a P2P agreement with a borrower without knowing what we've all agreed to). That's one of the things I don't understand about P2P. The loan agreement is between lenders (us) and borrowers, so how can the platform then arbitrarily decide what is a default & what is not. I can understand how they could write a default mechanism into a standard contract and then state that these were the terms both lender and borrower agree to, but what gives them the right to default an agreement at their own whim ? This applies to any platform, not just SS. One could argue that SavingStream (and other platforms) is (are) acting as our managing agent. Few P2P platforms give lenders input on the decision to take enforcement action on a loan.
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elliotn
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Post by elliotn on Mar 22, 2017 1:31:08 GMT
Given that SS have shown a historical reluctance to pull the plug on borrowers in difficulty I've bulked up on 12% / 240+ day loans in the face of diversity and more as a platform play, these remained highly liquid during the dfl17/19 launches.
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pom
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Post by pom on Mar 22, 2017 8:41:03 GMT
Given that SS have shown a historical reluctance to pull the plug on borrowers in difficulty I've bulked up on 12% / 240+ day loans in the face of diversity and more as a platform play, these remained highly liquid during the dfl17/19 launches. I've been considering that as a strategy, but with them being bigger loans I wonder if there is more of a risk of oversupply in the future. Also my p2p pot is already rather overflowing at the moment, at least until I inevitably decide to define it as bigger 
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Liz
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Post by Liz on May 2, 2017 23:32:57 GMT
Good topic that has prompted me to do some investigations into my own position. (I don't run spreadsheets or anything like that). I have money invested with 3 platforms - SS, AC and MT. As follows: SS - 55% AC - 24% MT - 21% The reason I stick to 3 is because I don't feel able to manage more than 3 platforms at once. If I was in multiple platforms I would get in a muddle. This way I know in my head what I've got where and what portfolio management I need to do. I feel that is safer than being in umpteen platforms and not having the time to keep a daily beady eye on them all, and the latest developments. I would like to up my % in MT and reduce my % in SS and get towards platform parity but owing to shortage of new opportunities on MT compared with SS, this is proving difficult. I am invested across 34 different loans on SS. As follows (sorry if this list makes for a very long post, mods feel free to delete my list of which loans I'm currently in): DFL001 DFL002 DFL003 DFL004 DFL005 DFL006 DFL007 DFL008 DFL009 DFL012 DFL013 (Selling down) DFL017 DFL019 PBL098 (Selling down) PBL103 (Selling down) PBL107 PBL108 PBL120 PBL122 PBL126 PBL130 PBL132 PBL133 PBL140 (Selling down) PBL142 (Selling down) PBL143 PBL147 (Selling down) PBL150 PBL151 PBL155 (Selling down) PBL156 PBL158 PBL160 PBL162 Some of those loan will be stuck in a big queue 
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