Posts

How to save

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Each of us invests to reach a financial goal in the future; it can be a simple one like buying a car or a complex one like a pension. The first one is simple because the target is very specific, the price of the car, and usually the time we give us to reach the target is short. Building a portfolio that will generate enough income to guarantee us the same lifestyle we have now is more complex for different reasons. For my generation is a pension, for the young and hip is financial independence, still we are talking the same s**t. First you have to define what is the income part generated by the portfolio. When stocks are involved, the FIRE community is obsessed with dividends, I guess because it easy to differentiate: a dividend is income, price appreciation is portfolio appreciation. This is wrong for many reasons (I hope I will write a post on the topic in the future), all cash flows are part of the portfolio and income is the % of the portfolio you can spend each year while maint
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Yields will go down - Get over it

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Recently I read a lot of comments about the current yield offered on Mintos, so I thought it is the right time to give you my 2 cents on why you should expect yields to go down. I used Mintos as an example to introduce the topic but from now on I will talk about p2p in general. I would like to start with a short digression on how the industry was born. P2p lending platforms are not doing anything different that standard brick and mortar banks did before them. Banks use the money you deposit to lend to businesses/consumers; consumers get a loan at double digits rates (let’s say 15%) and the remuneration on your deposits is normally in line with the Central Bank rate +/- a little spread (now 0% in EUR). The spread, 15% - 0%, is retained by the bank because they hold the borrower default risk and to cover their cost base (rents for physical branches, salaries, private jets for CEOs, etc). After 2008, banks were scared by the financial crisis and stopped lending to anyone; at the
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Reminiscences of a book you should read

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Since every post I write I include a book suggestion, this time I would like to talk about one I always mention when people that are starting to get involved in the financial markets, professional and casual, ask me what book they should read. Reminiscences of a Stock Operator  is a quasi-biography of the legendary  Jesse Livermore , who went from early 1900’s bucket shop speculator to master trader, having won and lost large fortunes along the way in everything from stocks to cotton futures. Written by  Edwin LeFevre  in the 1920’s,  ROASO  is one of the best books about trading ever written.  The narrative sucks you right into the mindset of a speculator as trades go wrong, right, and then wrong again. Along the way, you get a tour of the turn-of-the-century brokerage world, a glimpse into the commodity markets, and a chance to meet an incredibly well-drawn cast of characters based on real-life figures who shaped the way our markets work today. During the years, my ta
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Weird ETF I own

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I am investing since more than two decades now and in the constant research for the strategy or product that will make me rich (which does not exists) I bought some out-of-the-ordinary products, some of which I still own. The core of my portfolio are standard stocks and bonds but I dedicated a small part to fringe strategies to educate myself and, to be honest, to keep me interested: after you realise it is very hard to do better than a 60/40 mix, once you can stomach the volatility, financial life tends to get pretty boring. XTXC This ETF tracks the performance of the Markit iTraxx Crossover 5-year Total Return Index. The index measures the return for a credit protection seller holding the most current issue of the iTraxx Crossover credit derivative; the performance of the index is generated by three factors: running yield of the CDS (carry), change in CDS prices and the running yield from the funding component (EONIA rate). XTXC performs like an insurance company: collects
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Fellow Finance

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I started investing in FellowFinance   two years ago and I thought this should be a good time to write a report about my experience so far, even if I still have more questions than answers. So, if anyone of you is also using it, please share with me your experience. FF is the fifth platform in Europe+UK in terms of monthly new loans origination but despite this fact I do not see a lot of investor talking about it. The main reason I decided to test FF is that it offers exposure to new markets and sectors that I was not capable to invest in with other sites. Business and invoice financing in Finland represent two great diversification opportunities: the risk profile is lower than consumer financing but prospected returns are still high, especially if you compare it with what you can achieve outside the p2p world.  Invoice funding is best described as a short term business loan in which a company receives funding against its trade receivable; the advantage for the company is that
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Bitcoin

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It has been a while since I am studying Bitcoin and crypto; my assumption for this post is that you know the basic stuff and if you do not, go and inform yourself because in a way or another this will have an impact on you in the future. I am very optimistic regarding the technology behind Bitcoin, the blockchain, I am not so sure what to think about Bitcoin and the rest of cryptocurrencies from an investment point of view. The first analogy that came to my mind is with Magic cards. Magic the Gathering  is a game I used to play while I was at university; due to two random events, I am old enough and I started to play in the infancy of the game, I had a lot of old cards in my collection. Bitcoin is limited in supply by design, as old Magic cards are in a finite number and cannot be reprinted. Due to the game growth in popularity, old cards became scarce and as per Econ 101, their value grew with their demand. When I stopped playing the game, I sold all the valuable cards (at the ti
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Real Estate

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I am investing in three p2p real estate platform, EstateGuru in EUR and LandlordInvest , Kuflink in GBP; I am also looking for a silver lining in this Brexit joke, a.k.a. to buy an apartment in London now that prices are soft , so I keep more than an eye on the RE market and here are some considerations. In Switzerland and Denmark  you can have a negative rate mortgage; sadly is not (yet) an interest rate only mortgage, where you live in your property AND get paid every month for it...but I think today this scenario is more probable than seeing rates at 6% in Europe. Only time will tell but few years ago I would have called crazy anyone who would have told me negative rate mortgages would be a reality. Fascinating. Property search websites in UK sometimes display the price history of a house/apartment. Few days ago I found this apartment that is priced 10 times more than its selling price in 1999. 10x in twenty years sounds like a hedge fund guru return, innit? Real Estate
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