michaelc
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Post by michaelc on Jul 7, 2023 21:57:36 GMT
No. Social money platforms is a good phrase. To my mind it means any of the platforms that could be listed in the main "P2x sites" section of this forum. They all have in common the fact that a loan is typically divided into small chunks that are then financed by the community - hence social. From a risk perspective, so many of them have crashed and burned but that isn't the only problem. The problem as I see it is that in a sense they are not merely brokers allowing us to make purchases of the underlying assets like with stocks for example. They create the assets, they manage them and if they go down, those assets are likely worth a fraction of what they were worth when they were managed by a functioning platform. They also can't be purchased on any other platform - they only exist within the realm of the platform that created them. I'm using the term "asset" here to mean the loan that you or I buy into. On some sites there is no underlying physical security such as property or jewellery etc. On most there is but in all cases what you or I buy is created by the platform, can only be resold on the same platform (if at all) and can't be bought on any other platform. If the platform goes down, you've nothing left. This is common regardless of whether the platform is true p2p or not. That is why I like the term "social money platform" as it is a term that in my view encompasses both. Finally, I've done quite well out of Somo - all capitol and interest 100% repaid. My arguments are general and perhaps its not fair to Somo to have this debate here. If you wish to continue to debate I suggest we carry on in a more "general" section of the forum. We've had this discussion before in some other thread. In the case of SoMo the underlying asset is a property. SoMo have proven over many hundreds of loans that their asset valuations are sound. The value of that asset won't change if the platform goes down. Yes there may be administration costs that lenders end up paying for due to FCA incompetence, but in Somo's case it should be a fairly simple loanbook runoff as they're simple bridging loans, with income from SoMo's share of the interest to cover costs. Take a look at the forums on this board for some of the platforms that have collapsed. It is _never_ a simple loanbook runoff. If the platform goes, so does your money as I have found out to my cost. On the other hand, if you own shares in Tescos and your broker goes bust, you still own shares in Tescos and you will get them back not least because they actually exist in a wider context than just your broker. In social money lending what you own is governed by the platform itself so if the platform goes so does what you own.
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Post by Ace on Jul 7, 2023 22:08:14 GMT
We've had this discussion before in some other thread. In the case of SoMo the underlying asset is a property. SoMo have proven over many hundreds of loans that their asset valuations are sound. The value of that asset won't change if the platform goes down. Yes there may be administration costs that lenders end up paying for due to FCA incompetence, but in Somo's case it should be a fairly simple loanbook runoff as they're simple bridging loans, with income from SoMo's share of the interest to cover costs. Take a look at the forums on this board for some of the platforms that have collapsed. It is _never_ a simple loanbook runoff. If the platform goes, so does your money as I have found out to my cost. On the other hand, if you own shares in Tescos and your broker goes bust, you still own shares in Tescos and you will get them back not least because they actually exist in a wider context than just your broker. In social money lending what you own is governed by the platform itself so if the platform goes so does what you own. Yes, there are examples of disastrous winddowns, but also plenty of examples of orderly winddowns. I would expect SoMo to be an orderly winddown for the reasons stated.
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Post by multiaccountmanager on Jul 18, 2023 11:49:50 GMT
Take a look at the forums on this board for some of the platforms that have collapsed. It is _never_ a simple loanbook runoff. If the platform goes, so does your money as I have found out to my cost. On the other hand, if you own shares in Tescos and your broker goes bust, you still own shares in Tescos and you will get them back not least because they actually exist in a wider context than just your broker. In social money lending what you own is governed by the platform itself so if the platform goes so does what you own. Yes, there are examples of disastrous winddowns, but also plenty of examples of orderly winddowns. I would expect SoMo to be an orderly winddown for the reasons stated. I agree with Ace's view of Somo - very good recovery - almost regarded as normal business if a loan defaults :-) - orderly rundown would be expected if it came to it. One point that doesn't appear to me to have been made very forcibly about the allegedly "dysfunctional" secondary market is that investors can sell at a discount if they need the money. The discount would reflect the lower interest receivable on loans made at lower interest rates pertaining prior to the recently changed financial climate - which is a parallel to gilts pricing or any other yield based stock.
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bababill
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Post by bababill on Jul 24, 2023 1:34:01 GMT
It is sort of akin to a WiseAlpha bond. On WiseAlpha one can not set a price to sell a bond, rather they have to use the "world price of a bond" and hope there is a buyer in the limited market. On Somo, though discounts are allowed they dictate who and when what can be sold. Somo has mentioned many times that they actively limit and close the market. Perhaps, the posts have already been deleted by Somo. I also have personal experience with this. Agreed 99% of the time the market is liquid but it is the 1 percent of the time when you want to sell and unable to at any discount is when the problem arises. Perhaps the counter argument is this is no different than circuit breakers which halts trading on stock market exchanges.
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Post by Ace on Jul 24, 2023 7:42:38 GMT
It is sort of akin to a WiseAlpha bond. On WiseAlpha one can not set a price to sell a bond, rather they have to use the "world price of a bond" and hope there is a buyer in the limited market. On Somo, though discounts are allowed they dictate who and when what can be sold. Somo has mentioned many times that they actively limit and close the market. Perhaps, the posts have already been deleted by Somo. I also have personal experience with this. Agreed 99% of the time the market is liquid but it is the 1 percent of the time when you want to sell and unable to at any discount is when the problem arises. Perhaps the counter argument is this is no different than circuit breakers which halts trading on stock market exchanges. Somo's explanation is here: p2pindependentforum.com/post/462652/thread
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bababill
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Post by bababill on Jul 24, 2023 11:13:44 GMT
No that is not the post. It was much earlier.
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Greenwood2
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Post by Greenwood2 on Jul 25, 2023 11:26:54 GMT
Three loans all short duration at 1% discount currently.
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michaelc
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Post by michaelc on Jul 25, 2023 12:35:32 GMT
Three loans all short duration at 1% discount currently. Quick snap 'em up !
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Greenwood2
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Post by Greenwood2 on Jul 25, 2023 13:21:28 GMT
Three loans all short duration at 1% discount currently. Quick snap 'em up ! Always happens when I have no funds!
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Post by Ace on Jul 25, 2023 18:10:49 GMT
Quick snap 'em up ! Always happens when I have no funds! Me too. I'd gladly have taken them if I could. One had an XIRR of over 20%.
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rscal
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Post by rscal on Oct 13, 2023 10:34:51 GMT
Posted this remark before but I can't find in which thread anymore - so here goes:
SoMos 'to dates' do NOT reflect actual interest payable - they are all 6 days different (I did say '7' before, we won't quibble) What this is intended to show (using TODAY'S secondary market listings as examples) is how, when you recalculate the effective return based on this shorter period, you get a slight reordering of what you might expect - because some higher rate loans are for quite short periods.... (I also think this ends the debate on whether this is in error only happening at odd times - it isn't.)
The OTHER thing to bear in mind is the cumulative effect of 6 days interest x number of former (now repaid) loans ... I have had 35 or so repay which is '0.6y ears' worth on a standard investment, for instance.
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Post by Ton ⓉⓞⓃ on Oct 24, 2023 17:35:43 GMT
Concerning the question you pose above
I think your earlier discussion is here
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Greenwood2
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Post by Greenwood2 on Oct 26, 2023 8:32:51 GMT
Posted this remark before but I can't find in which thread anymore - so here goes: SoMos 'to dates' do NOT reflect actual interest payable - they are all 6 days different (I did say '7' before, we won't quibble) What this is intended to show (using TODAY'S secondary market listings as examples) is how, when you recalculate the effective return based on this shorter period, you get a slight reordering of what you might expect - because some higher rate loans are for quite short periods.... (I also think this ends the debate on whether this is in error only happening at odd times - it isn't.) The OTHER thing to bear in mind is the cumulative effect of 6 days interest x number of former (now repaid) loans ... I have had 35 or so repay which is '0.6y ears' worth on a standard investment, for instance.
If you look at the same loans in 'Live Loans' the end dates are all (as far as I've checked) 5 days different, ie, 2238 above is from 10/06/2022 to 10/06/2024, they all finish on the same day of the month that they start on. The only one I am in that is also currently on the SM is also 5 days different in 'My Current Loans'. It looks as if the SM end dates are consistently slightly wrong for some strange reason. The number of days left is correct, give or take, if you use the 'Live Loans' end dates. Edit: Just checked an SM purchase in my loans, I have no idea what the dates said when I bought it, but they currently agree with the dates in live loans.
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rscal
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Post by rscal on Oct 26, 2023 9:22:26 GMT
So a 'to do' then is to record the SM listing dates prior to purchasing to make future comparisons. (It's not a big deal however either way.)
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Greenwood2
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Post by Greenwood2 on Nov 10, 2023 17:31:40 GMT
Only 7 loans on the SM currently, back to an 'average' amount.
Edit: And no discounts.
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