Fast, cheap, good – where to invest, version 1, part 2 (table)

Note 2016-02-25: Twino have lowered interest. Today I have updated table in my post

In previous post I told about 3 main criteria (available time, money, appetite for profit) to select platform for investment. I have mentioned need of diversification as well.  Now I will try to compare how platforms qualify needs of different investors.
Continue reading Fast, cheap, good – where to invest, version 1, part 2 (table)

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Fast, cheap, good – where to invest, version 1, part 1

Time to time I hear question where to invest. Once I told that this recommendation depends on several criteria. Let me explain what I had in minds.

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In classical triangle “fast-cheap-good” you can select only two of three values. i.e. fast and cheap, but then result may become not so good. When I am getting question “where to invest” I propose you to think about the following 3 components Continue reading Fast, cheap, good – where to invest, version 1, part 1

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Why I am lowering my portfolio at Bondora (Feb 2016)

I would like to explain decision to lower my portfolio at Bondora.

Bondora was my first p2p lending platform. I did first investment in February 2013. It was something very new and interesting. Today I know, I was quite naive and did many mistakes, but I was happy with proposed return. Later, around the end of 2014, I read couple of discussions, did my first calculation of risk adjusted return (XIRR) and did my first look on rate of default. I was quite shocked, when I understood that I have lost almost one and half year and my risk adjusted investments give me almost zero return.

I have started to build small datamodel to organize data about loans & secondary market and data from my personal dataset. That gives me a possibility to monitor constantly historical data, result of investments and do some automation. At the same time, around the end of 2014, I got a nice occasion to meet another investor at Bondora, an excellent data analyst, one of most professional statisticians I have seen during my short but several year banking experience.  Together we spent much over 5000 hours with data automation, data mining and analyse. Very often I have heard “no data”, “too early”, “too small dataset”, but later my colleague have found several interesting scenarios to invest. And recently he said “enough”, too.

Why I am telling this? Just to show you that it is so painful and sad for me is to say “I lower my portfolio”.

Let’s look on several issues.

  • I am not happy with time spent and achieved result.

Long time Bondora show my return bigger than 30%. But I have never got so nice result. When I count with Excel, my XIRR is around  23%.  More,  I count an “exit scenario” to simulate possible exit from Bondora in 2-3 weeks. For that I calculate a sell of my “green” portfolio at 100%,  a sell of overdue loans with 50% discount and a sell of my defaulted loans with 80% discount. In such situation I am getting my XIRR  just around 6%.
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  • It is close to impossible to implement any own investments strategy with Bondora.

I had several supporting scripts, but it cost too much to support them working, as Bondora is changing layouts quite often (not necessary in better way and not necessary without bugs). I invested into automatic dataloading, but Bondora is changing dataset format without announcements and documentation. And several times they did changes in meaning of data, that breaks data consistency.

 

  • I am unclear of rules what Bondora will use each next week.

Today it is still possible to invest manually or via API. Tomorrow Bondora may change priorities and manual or API investments will be moved out to the end of queue by institutional investors or Bondora’s Portfolio Manager.

To invest is only part of work. It is almost more important what you do after your invested. But it is unclear how Secondary market will work and how it will affect investors. I worry that exit from Bondora will be more difficult.

  • I am not a programmer to develop own API and I do not like to share my  connection details, my investments strategy, my results to any third party

 

  • I cannot accept Bondora’s way of communication.

I think Bondora misleading investors, when “hides” real amount of late and defaulted loans. I think one day it may cost Bondora a lot. It may even stop their existence.

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In my opinion they use more than optimistic way to calculate status of portfolio. It is strange for me, but today when I use different p2p lending platforms, quite often I am looking why platform is showing me lower return versus I have calculated in conservative way with excel. In case of Bondora it is different.

There are cases of fraud, when borrower asking for loan without intention to pay. Hi/She gets loan and disappears. What Bondora do with that? They simply count that this borrower like he will pay without problems. So, if he not paid 2 month before going to default, they skip that 2 month, but rest of future payments are counted as “green”, even it will cost a lot of time to collect money.

Since  2013 over 2900 of borrowers failed on first payment. Only about 180 of them  have repaid borrowed principal. Only about 1200 of them have paid more than 10Eur of interest.

Bondora counts in most of cases recovery of  “Principal amount” instead of recovery of Principal+Interest+Late fee. Recovery of principal amount  simply means that money were wasted, lowered by inflation and at the end an investor got back part of money after 2-3 yeas. More, Late fee is not used anymore. Simply means that late/defaulted money does not give you any interest. More, cost of collectors are included and not visible. You may buy item on Secondary market hoping to get good profit. But who knows, may be most of this profit will go to collector.

  • Bondora never say “sorry”. Even they were telling that Slovakia and Spain are same good as Estonians. Even they failed with recovery in that countries. Even they did number of other bugs.

 

  • Bondora closed forum and left only blog – an official moderated propaganda channel.  I was not big favorite of “all is bad” discussions, but forum had a lot of other good discussions.  Forum was nice (and in fact the only one) channel to find answer to question and discuss i.e. implementation of API, investment techniques, announce big discount deals, etc. Each topic had hundreds and thousands of views.  It was possible to use it to get new ideas, get information about bugs etc. Instead of properly supporting community Bondora closed it. Ok, let’s Bondora feel fine, with comments-free one way posts in their blog. Sad, that company do not understand difference between forum and blog.

 

  • I do not like to fight anymore with different small bugs and I don’t like to spend more time to cross checking data after each change (“innovation”) at Bondora. I have noticed, that instead of listening users, Bondora leaves buggy or “half made” system. Then investors do some scrypts or plugins, getting missing functionality fixed. And then after year of several month, Bondora may come with requested functionality (not necessary clean of bugs). I reported number of bugs to their support. I do not like that in my opinion most of support is far from understanding how investments works and what is in system. I got cases when buggy functionality was simply removed instead of fixed.

 

  • I do not trust Bondora’s development team.  Too many bugs, too many not tested releases. Too much of testing on live system. To many next bugs when fixing old one. I do not see good “owner” of system.

 

  • I worry that Bondora not growing when competitors are able to grow. Venture capital do not like when startup  is not growing (at time when market is rising) and startup is still unprofitable. Mintos and Twino started years after Bondora and are bigger than Bondora today (source)

 

  • Competition. There is number of platforms that offer same or almost same risk adjusted return with less time to invest.

Saying all this, I still do not close my doors to Bondora. May be they will change. May be they will stabilize development/communication, may be they will provide some special offers. I still have small “safe” portfolio with a bit better return. I will look if it is possible to save such return. If you stay with Bondora, I highly recommend to use Oktaeder’s plugin (a “sponsored” version – press there) and I really recommend you to monitor result of your portfolio. Some points how to do it, you can find there.

Thank you for reading and thank you in advance for any comments, questions and notes! Please subscribe in order to get my new posts if you feel that they can help you 🙂

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Portfolio Overview: February 2016 (#3)

February I will celebrate 3y since my first investments at p2p platform. 3 years ago I did first deposit to Bondora (former Isepankur).  And March I will pass 12 month since my first investments at BTC based p2p lending platform (BTCJAM).

3 years ago I had normal standard working place with notebook, relatively good sleep and 90% of time doing my ordinary job. Today my working place looks like this,

workand I use 2 ultra-wide monitors, I spend 80% of time closed to p2p or cryptos and have short nights with immediate connection for bitcoinwisdom after wake-up 🙂

Lets look on my return and understand, is there any reason in life like mine 🙂

Continue reading Portfolio Overview: February 2016 (#3)

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UPDATED: Portfolio Overview: January 2016 (2)

I found mistake in calculation of ROI at BTCJAM. Now corrected. I would like to apologize for my mistake!

Happy, Prosperous and Successful New 2016 Year to all readers of my blog!

New month and time to make new overview of my portfolio. My return: Continue reading UPDATED: Portfolio Overview: January 2016 (2)

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Portfolio Overview: December 2015 (1)

I plan to publish regular periodic overview of return on my portfolio.

Counting investments we have good and bad days and we have real and pseudo heroes. I see today as black day and you may note example of “pseudo good” investor. Such guy must be simply removed from your “following” lists 🙂 That’s me  Continue reading Portfolio Overview: December 2015 (1)

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Return from Secureae (NXT)

Some time ago I tested trading with altcoins. I understood that this is not mine. It is specific area that requires concentration, patience and specific knowledge. But since that times, I have two coins where I continue to invest more. That is SCRT (very cheap today, I think fair price will be over 5000SAT) and NXT(again very cheap today).

Most of altcoins are losing in price, when price of BTC skyrockets. You can buy some of them hoping to get good profit when price of BTC will stabilize or will go down. But speculation on price was not the main reason why I still have NXT. With NXT I have possibility to invest into assets (shares) and make money when price of assets grow and when asset holder pay dividends. I do that investments at Secureae platform. Continue reading Return from Secureae (NXT)

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Return Tracking: BTCJAM & Tied vs BTC Loans

I had intention to write a fast and easy post about the result of my investments at BTCJAM. I count result of my investments there since  day of first deposit March 14, 2015. Post was planned to come in 20-30 minutes. But… I got surprise!  Continue reading Return Tracking: BTCJAM & Tied vs BTC Loans

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Portfolio result: BTCPOP (Nov 2015)

This time I will write in an unusual way. I start with disclosure of my results and only in next posts I will share recommendations and comments about the lending platform.

Why it is so? First, BTCPOP is more than bitcoin based p2p lending platform. BTCPOP has much wider functionality. I need more time to finalize my personal opinion about that extended features. At the same time BTCPOP have number of places that requires a bit more attention or bug fixing. Developers& Owners of the Platform have excellent communication with users, therefore I think many areas will be improved before I will write my next article. Continue reading Portfolio result: BTCPOP (Nov 2015)

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Investment in P2P lending: Omaraha

Omaraha (www.omaraha.ee)  is relatively small, but efficient p2p investment platform from Estonia. Omaraha operates in Estonia and Slovakia. Investment currency – Euro. Investor must be 21 years of age and be permanent resident in Estonia or in any other European Union country.

Omaraha isn’t huge in number of stuff, but I never had any problems with support, both by email or forum. I have never seen any announcement about Omaraha plans to become “Nr 1” or talks about becoming “pan-European” or “pan-world” investment platform. Instead of that Omaraha provide fast and stable interface to invest and monitor results. Continue reading Investment in P2P lending: Omaraha

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