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Peer to Peer - experiences and risk?

Any other investment discussions eg. peer to peer lending
Sobraon
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Re: Peer to Peer - experiences and risk?

#166123

Postby Sobraon » September 13th, 2018, 5:10 pm

David Stein is an American who writes and narrates a podcast which I really enjoy called 'Money for the Rest of Us'*. Although very USA oriented David talked about P2P in episode 216. David's analysis found that some US P2P companies were "packag(ing) loans and sell(ing) them as asset-backed securities to institutional investors" and engineering 'credit enhancement' (where have we seen this process before?). He suggests that individual investors should probably now avoid P2P. I have no idea if this process is going on in the UK (yet) but the reduced interest rates available and this concern has meant that I have withdrawn from P2P

S
* Stein's Podcast is at https://moneyfortherestofus.com/. I really wish I could be as laid back as him!

Clitheroekid
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Re: Peer to Peer - experiences and risk?

#166124

Postby Clitheroekid » September 13th, 2018, 5:20 pm

Sobraon wrote:He suggests that individual investors should probably now avoid P2P.

I can't help wondering whether this is behind the decision to float Funding Circle. It seems to me that all too many IPO's take place when the owners of the company realise that the best years are behind them and that it's time to cash in.

Of course the punters will only see the historic figures and will assume that the company will continue in the same vein. They have none of the inside knowledge needed to realise that these figures are never likely to be reproduced once the company's gone public.

It's interesting that two US P2P lenders, OnDeck Capital and Lending Club IPO'd in 2014. Since doing so, shares in Lending Club have dropped by around 75%, and those in OnDeck are down 60%.

uspaul666
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Re: Peer to Peer - experiences and risk?

#166215

Postby uspaul666 » September 14th, 2018, 8:18 am

formoverfunction wrote:
uspaul666 wrote:“Rebs” is pretty much universally regarded as a running joke on the p2pif...
Mind you, there’s quite a seismic adjustment of attitude and expectation going on for p2p generally IMHO.


"there’s quite a seismic adjustment of attitude and expectation going on for p2p generally" would you explain what adjustment? Thanks.

Collateral’s demise, zopa’s flatlining, Lendy’s secondary market and refusal to be open. AC look like they have made some colossal mistakes with some loans and borrowers. Thincats has practically told retail investors to go elsewhere. Even MoneyThing doesn’t look as wonderful as it used to. The IFISA explosion has turned out to be a damp squib. The rise of direct lending (via an IT) rather than traditional P2P. Doesn’t seem to be any good news really.

formoverfunction
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Re: Peer to Peer - experiences and risk?

#166271

Postby formoverfunction » September 14th, 2018, 11:34 am

uspaul666 wrote:
formoverfunction wrote:
uspaul666 wrote:“Rebs” is pretty much universally regarded as a running joke on the p2pif...
Mind you, there’s quite a seismic adjustment of attitude and expectation going on for p2p generally IMHO.


"there’s quite a seismic adjustment of attitude and expectation going on for p2p generally" would you explain what adjustment? Thanks.

Collateral’s demise, zopa’s flatlining, Lendy’s secondary market and refusal to be open. AC look like they have made some colossal mistakes with some loans and borrowers. Thincats has practically told retail investors to go elsewhere. Even MoneyThing doesn’t look as wonderful as it used to. The IFISA explosion has turned out to be a damp squib. The rise of direct lending (via an IT) rather than traditional P2P. Doesn’t seem to be any good news really.


Aren't these just examples of failing platforms rather than a failing sector? I had to Google most of them, excluding Zopa, and Thincats, but I almost surprised that was around, given that it looked to have lost the race even a few years ago.

By AC, do you mean Assetz Capital? Haven't they just won an award for being amongst the UK's fastest growing companies. If it is Assets could you provide something to illustrate the news source for "look like they have made some colossal mistakes with some loans and borrowers". Is it just personal experience?

I haven't spent a lot ot time looking at Zopa, the last time they'd just opened their data to AltFi Data (that doesn't initially sound like a company trying to hide something) when you say they are "flatlining" do you mean in terms of loan book growth?

Here's the latest free stuff I could find from AltiFi:

https://www.altfidata.com/marketdata/

https://www.altfidata.com/commentary/si ... e-lending/

"via an IT" Investment Trust?

Sorry for so many questions, the sector interests me. I've had a Zopa account for over a decade, not much in it, just a couple of 000's.

Thanks.

formoverfunction
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Re: Peer to Peer - experiences and risk?

#166282

Postby formoverfunction » September 14th, 2018, 12:05 pm

I see from your previous posts AC does mean Assetz Capital.

uspaul666
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Re: Peer to Peer - experiences and risk?

#166511

Postby uspaul666 » September 15th, 2018, 8:24 am

Don’t really want to get in to a long conversation on a forum for equities but...
Re sector vs platforms yes I guess my experience is mostly from what i’ve been involved in but I’d say the whole feel of the P2P forum has changed over the last year as reality took over from youthful enthusiasm.
AC: AC’s automated accounts have been a bit of a disaster for some with 80% of some peoples “diversified” investments lent to one borrower that then went south. Plus all the usual cockups, with some of the blame on them, w.r.t. valuation, non-existing security, connected loans, etc.
Collateral: FCA looking awful on this administration. False details on FCA’s register on FCA website, FCA aware that they were operating illegally for ages yet did nothing. Realisations that people running p2p lending platforms and their borrowers often have backgrounds in sub-prime, failed ventures, etc. Collateral originally appointed administrators now under criminal investigation themselves and under administration.
Lendy: the only signs of any activity from lendy seems to be in removing critical angry reviews from trust pilot, drinking champagne at lendy cowes week and trying to get the rich to put money in the new lendywealth product. Meanwhile, some of my very few loans that I am allowed to sell have £700,000 worth of other people also trying to sell in front of me in the selling queue and to add insult to injury, lendy pocket all of the interest on those loans while we are selling them and carrying the risk that they will default before they do.
Zopa: I don’t lend here anymore but I hear that returns for some are around 2%

Lending via an IT:
the first point, for me, is that p2p can prevent you from getting access to your cash, any of it, for years or more. There is a lender on thincats where of four directors that gave a personal guarantee, one made a settlement for about 50%, one is going to pay a monthly amount over the next eleven years and the other two are still disputing three years later. This is not atypical. During this period, it’s not possible to sell at *any* kind of discount. as such I have considerable amounts stuck on TC, FC, AC, etc that are not going to clear for a very long time.
Secondly, most of the 12% platforms are going to return about 7%, 8%, 9% after cash drag, bad debt, etc. With a good direct lending IT 6% or 7% yield is typical so why put yourself through all that aggravation?
Thirdly, I have learned, the hard way, that I cannot pick the good loans, either because I am incompetent or because I don’t get enough information so I move towards automated accounts like Funding circle (which I quite like) that offers about 7.1% but then why not just buy their IT instead?
ITs like VSL, RDL, HONY, FCIF, SQN.

formoverfunction
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Re: Peer to Peer - experiences and risk?

#166832

Postby formoverfunction » September 17th, 2018, 9:06 am

uspaul666 wrote:Don’t really want to get in to a long conversation on a forum for equities but...
Re sector vs platforms yes I guess my experience is mostly from what i’ve been involved in but I’d say the whole feel of the P2P forum has changed over the last year as reality took over from youthful enthusiasm.
AC: AC’s automated accounts have been a bit of a disaster for some with 80% of some peoples “diversified” investments lent to one borrower that then went south. Plus all the usual cockups, with some of the blame on them, w.r.t. valuation, non-existing security, connected loans, etc.
Collateral: FCA looking awful on this administration. False details on FCA’s register on FCA website, FCA aware that they were operating illegally for ages yet did nothing. Realisations that people running p2p lending platforms and their borrowers often have backgrounds in sub-prime, failed ventures, etc. Collateral originally appointed administrators now under criminal investigation themselves and under administration.
Lendy: the only signs of any activity from lendy seems to be in removing critical angry reviews from trust pilot, drinking champagne at lendy cowes week and trying to get the rich to put money in the new lendywealth product. Meanwhile, some of my very few loans that I am allowed to sell have £700,000 worth of other people also trying to sell in front of me in the selling queue and to add insult to injury, lendy pocket all of the interest on those loans while we are selling them and carrying the risk that they will default before they do.
Zopa: I don’t lend here anymore but I hear that returns for some are around 2%

Lending via an IT:
the first point, for me, is that p2p can prevent you from getting access to your cash, any of it, for years or more. There is a lender on thincats where of four directors that gave a personal guarantee, one made a settlement for about 50%, one is going to pay a monthly amount over the next eleven years and the other two are still disputing three years later. This is not atypical. During this period, it’s not possible to sell at *any* kind of discount. as such I have considerable amounts stuck on TC, FC, AC, etc that are not going to clear for a very long time.
Secondly, most of the 12% platforms are going to return about 7%, 8%, 9% after cash drag, bad debt, etc. With a good direct lending IT 6% or 7% yield is typical so why put yourself through all that aggravation?
Thirdly, I have learned, the hard way, that I cannot pick the good loans, either because I am incompetent or because I don’t get enough information so I move towards automated accounts like Funding circle (which I quite like) that offers about 7.1% but then why not just buy their IT instead?
ITs like VSL, RDL, HONY, FCIF, SQN.


OK thanks. I get the picture. Cheers.

BrummieDave
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Re: Peer to Peer - experiences and risk?

#166858

Postby BrummieDave » September 17th, 2018, 10:16 am

Agree with the sentiment above.

I was previously on 5 platforms, now down to just 2 (FC and Zopa) and not reinvesting on FC, preferring to take my capital out when individual loans are repaid. The days of the headier returns were good, and I got all my money out without much delay, but reality has definitely set in. What I now have in the two remaining platforms is 'spare cash' and not anything that forms part of my core investments.

puffster
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Re: Peer to Peer - experiences and risk?

#166864

Postby puffster » September 17th, 2018, 10:27 am

uspaul666 wrote:ITs like VSL, RDL, HONY, FCIF, SQN.

SQN has been a rollercoaster of incompetence, I would suggest one avoids it.

Regards, Puffster

formoverfunction
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Re: Peer to Peer - experiences and risk?

#166870

Postby formoverfunction » September 17th, 2018, 10:37 am

VLS, they are the most exposed to P2P, that's what they invest in!


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