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Post by investigator on Jul 11, 2017 14:56:09 GMT
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Neil_P2PBlog
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Use @p2pblog to tag me :-)
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Post by Neil_P2PBlog on Jul 11, 2017 15:21:47 GMT
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macq
Member of DD Central
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Post by macq on Jul 11, 2017 21:32:27 GMT
Also think using secure and government in the same phrase is a bit of a giveaway at the moment
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rick24
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Post by rick24 on Jul 12, 2017 13:13:34 GMT
Also think using secure and government in the same phrase is a bit of a giveaway at the moment Would that be 'strong and stable'?
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macq
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Post by macq on Jul 12, 2017 16:34:00 GMT
Are we talking about the bonds or the government?
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am
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Post by am on Jul 13, 2017 21:37:11 GMT
There have been a couple of fairly recent highish profile mini-bond failures.
* Providence Bonds (nominally factoring in Brazil) * Secured Energy Bonds (nominally renewable energy)
I didn't get into either of these, because of liquidity and quantum, but otherwise I could have been inveigled into investing, particularly in the latter (I suspect that if I had looked further I would have been scared off the former by exchange rate risk), so I'm now a bit shy of mini-bonds.
See the press for the embarrassing details.
I looked into another proposed mini-bond issue recently. I thought that the company was severely undercapitalised. But I suspect that some people think that they can borrow money at x%, invest it at y%, pay the relatively small running costs of the business from the difference, and make a handsome profit as well. If they're right the lenders get their interest and their capital. If they're wrong the lenders probably get their interest, but at the end of the term the company is insolvent and the lenders don't get all their capital back. All the risk is borne by the lenders - there's no equity in the company for the shareholders to lose, the directors get their salaries and other emoluments, and even dividends if the company was profitable in the earlier years. So I suggest that what a lender wants is a company with a significant equity injection, which allows it to survive fluctuations in returns on investments. I note that cash drag, especially in the early months, means that the margin between x and y has to be higher than one would first think.
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am
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Post by am on Jul 13, 2017 21:50:45 GMT
The same name and quotation turn up for www.cantrells.com (via a 3rd part review site) www.alternativebonds.co.uk/venture/The former seems to be a mini-bond broker, so at first sight not that much different from the P2P equity sites discussed on this forum on the one hand; the latter is selling a 5 year 12% coupon bond in a gold mining company. You could research the gold mining company, but at 12% there must be significant risk to your capital. (Gold and silver prices are volatile, and predicted returns are sensitive to those prices.) I'd be more tempted to buy shares in Sirius Minerals.
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macq
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Post by macq on Jul 13, 2017 22:36:21 GMT
There are a few companies that offer mini bonds when you do a goggle search for bonds in general and there are adverts on money pages & web sites yet strangely these bonds never make the best buy lists on investing sites(i would guess either from being dodgy or very high risk) and like you say there has been bad press on a couple of offerings. If looking outside of P2P for income i would still prefer income funds or investment trusts with dividends.There are also strategic bond funds to consider,which according to Citywire charts there were at least 16 funds making a gain in the last year of 10% - 17% plus there is a yield all for less risk then a gold mine (i would hope) One only has to look at the Alan Shearer court case this year where it was claimed that he lost millions investing in an off shore fund,that then bought up life insurance policies in America that would pay out when people died that if it looks to good to be true it probably is or else needs a lot of DD
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