Currently in the process of selling all of my Bondora investments

Times have been turbulent for Bondora for a while, and as someone who keeps an eye out for all kinds of changes in P2P investing, even I have managed to lose track of what Bondora is attempting to do. A while back I eliminated my private investing portfolio in Bondora, largely due to tax reasons, but I was still rather optimistic about their long term outlook, which meant that I built a company portfolio that I planned to run with a rather conservative strategy as a part of my p2p portfolio.

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To achieve a conservative portfolio I used an API solution that was self built, and picked loans that were only Estonian, and fell into the more conservative segment, focusing on loans up to C credit group. Within a couple of months I managed to build the portfolio up to about 5000 euros, and while the returns were on the lower end of my portfolio due to the changed risk evaluation policies I was OK with this, as I believed in the long term stability of the portfolio.

Then came all the changes. Firstly the DCA, which, while I understand was necessary was a PR disaster, even though we tried to do our best to help information spread through the investing podcast that we run. The final nail in the coffin, however, is turning out to be the thing that a lot of active investors, including myself, predicted would be the biggest issue – API investments cannot compete against portfolio managers, meaning as long as enough people turn on their autobidders being an active investor is close to impossible.

What this means, is that since the middle of October there has been a steep drop-off for loans, and as such, I have not received a single loan through API bids since October the 13th. Asking around, it seems like other investors are in the same boat as well, leaving only two options available. 1) turning on the automatic portfolio manager or 2) actively trading on the secondary market.

Fundamentally, I do not wish to passively invest in Bondora, which means that if I do turn on the autobidder, it will be just with some play money to test it. I’m just so confused at the direction that Bondora is moving towards – why build all the tools necessary for active investing and then actually make active investing impossible?

Unless the plan was to make API bidding viable for the secondary market only (where it seems to be quite successful). In that case, good luck to all the people making great deals on the secondary market, but I feel the amount of money I currently have in Bondora is not worth the effort of building up the level of statistical modelling which would be required for trading well on the secondary market.

Which means, I’ve slowly started to sell off my company portfolio’s loans, and will continue to do so until I manage to sell most of what I can at value, leaving maybe a small amount of money circulating to see what’s happening. Kind of sad, seeing as Bondora was the portal I started with, and I fundamentally liked their business ideas, but I think my investing ideals have just drifted very far apart from what they’re doing now. Lucky for me, though, there are multiple other viable offers on the market, meaning there is no reason for the money to sit idle!

Twino vs Mintos, initial impressions

I recently added both of the Latvian P2P platforms into my portfolio, and I’ve got some questions about my first thoughts so I thought I’d discuss a few things that have stood out to me within the first few weeks.

Loan terms

One of my key expectations for both portals was to have the ability to invest into short(er) term loans. Since my P2P investments in Estonian portals (Bondora, Omaraha, Moneyzen) are rather long deadlined (5 years), then for flexibility’s sake I wanted to invest into 1-6 month loans. This has proven to not be equally easy.

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For Twino loan volumes aren’t an issue. Any money I transfer in gets invested momentarily, which is one of the reasons why I’ve added in money twice already. Currently the only problem with portfolio building is limiting your own enthusiasm towards transfering in money.

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For Mintos, however, short term loans are in short supply. The first money I transferred in got invested within a few days, but since then it’s been problematic to see any short term loans. I attempted to lengthen the loan terms to 12 months, but that didn’t help much. This means that so far I haven’t added in any additional finances.

Automatic investing

Due to the simplicity of Twino’s product the autobidder is also phenomenally easy to use. I have to admit, they have made a good choice here – since your loans are buyback guaranteed than making automatic investing difficult in any way would be nonsensical. The money gets invested essentially the moment it’s transferred, so I hardly even log on, just glance at the daily reports in my mail.

For Mintos the autobidder to be honest is a bit painful to use. It’s both visually a bit clunky and some of the settings are problematic in terms of making sense. I get that this is an issue when you have multiple loan originators, but the bigger the market grows for them, the quicker they should work on making the autobidder smoother and more understandable at a glance.

Reliability

This is the question that everyone would like an answer to – who is more reliable of the two. I have no clue how exactly to check for this, but I suppose we should dig out the financial reports for both for Investeerimisraadio.

In terms of volume Mintos has clearly funded more lians (12M+), while Twino is at 6M+, one lists consumer loans and the other real estate backed loans and car backed loans as well, so the total amounts are clearly bound to be different.

I’d say if your tactic is long term investing then there probably isn’t much of a functional difference in the returns, but a slight difference in the experience. However, if you’re wishing for a short term investment that would be quicker to exit, then Twino is slightly in the lead for me at the moment.