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Post by oktaeder on Jun 18, 2017 6:25:32 GMT
First: if you don't want to use PM you have to code an API using app yourself. Spend a lot of time and loose most of it functionality because bondora changes the rules every few months. But what happens if you use it? One of my boys did so and choosed  He sold all bad rating loans but in 3 days that was what he got:  Doesn't look so conservativ. |
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kulerucket
Member of DD Central
Posts: 336 
Likes: 93
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Post by kulerucket on Jun 18, 2017 8:47:37 GMT
I am not defending the way this thing works but at least can explain the behaviour based on watching it 6 months.
The PM takes your total to invest and finds loans matching a distribution fitting your risk. If it is trying to achieve a certain % HR, it will fill those up to the percentage of your total allocation not as a %age of what you have so far. Basically it takes longer for it to fill lower risk loans because there are less available. After all funds allocated you should get around 10-15% HR which is not conservative, but not as bad as the current picture.
If you keep selling the HR ones it will keep buying more as it needs to achieve the %age it's looking for. If you let things run their course, you will get a lot of defaulted HR loans which will still contribute to the %age distribution and block any more from being bought until the defaulted ones recover (which is rare). It is only then you really start seeing a real profit because up to then your interest is just covering defaults. This also explains why there are more HR available. If everyone runs a PM, the HR loans mostly default and then people are stuck with them and then their PM does not buy and more.
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Post by oktaeder on Jun 18, 2017 9:18:49 GMT
So everybody has to carry his package of defaulted loan? That's sick.
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