The Italian Leather Sofa

Last week I received an email from Mintos saying that IuteCredit, a loan originator on the platform, announced the issuance of a four year senior unsecured corporate bond (ISIN XS2033386603) worth EUR 40 million, with an annual interest rate of 13%. So yes, this is not technically a Mintos bond...but who knows IuteCredit otherwise? This is not the company first bond, I see that in the past they issued EUR and USD bonds but in amounts substantially lower, one and two million. My thoughts in random order: - I do not have Bloomberg in front of me (so nice to have Anywhere and then leave the token systematically at the office) to check how far in ratings you have to go today to get a 13% yield in EUR but I suspect something quite 'toxic', so this bond has a potential market - for the evolution and acceptance of the industry, this is a step forward: institutional investors have formal mandates and a senior bond is one of the few ways they have to get exposure to this ty...

In my researches about p2p lending and investments in general I stumble sometimes on articles about passive income. But what is passive income? Literally should mean a way to earn an income without making an active effort; this is the first misconception: to find and put in place the conditions to have a future stream of funds, coming from an investment or an entrepreneurial activity, needs a substantial effort of research (or an initial investment in that newsletter/YouTube channel guru -.-), for example, so what seems passive is simply a disconnection between the moment the effort is made and the payback. This is because we are influenced by the dynamics of the most common jobs: you work and at the end of the day/month you receive a salary for the work done. Reading a book about security analysis will not earn you any money at that of the day, but you will use the knowledge acquired to research this stock and that stock, today and tomorrow, so the payback of reading can be distrib...

Linked Finance is an Irish P2P platform that started in 2013 and specialises in Euro-denominated business loans, up to EUR 300.000, for small and medium-sized enterprises. So far, the platform originated c2100 loans for EUR 92m, with volumes growing steadily each year. Interest rates are between 6% and 17.5%, depending on loan rating and duration: Their reported default rate to date is 1.05%, quite low; it is important to know that these p2b platform performance should be judged after a full economic cycle: Linked Finance opened its book right after the last recession in Ireland and their default rate will most likely increase once the next recession hit the country. LF has a nice interface which makes investing easy to understand and quite fun: it’s interesting to read about the projects on offer and decide where to invest; investors can start with as little as €50. I started to invest in 2017 and the sing-up/identity verification was quick and easy…as far as I recall....

When I received the invite from Bondora to join the new product Go&Grow, my first reaction was: why should I be interested in such a low yield? Personally, I did not see any appeal in it but then I saw, from Bondora reports, that it was having a huge traction among other investors and I wanted to understand why. The user interface, as expected from Bondora, is really well done: the possibility to choose explicit saving goals is smart, you can visualise how your gains will compound over time and even maintain different portfolios under the same user profile. The problems start when you look what’s behind the curtain. I decided to invest in p2p loans because of the high yield and diversification from other asset classes; Go&Grow definitely do not offer any upside on this front. The current shown yield, 6.75%, is also capped on the upside but is not guaranteed, meaning there is a chance you will get even a lower return. On the other side, not only I do not need d...

Lot of blogs offer their own created merchandise, but I am an engineer and I feel more productive advising you on risks and returns than to design your summer T. That's why I want to suggest you someone else work the I find nice and easy:  StockTwits is the largest social network for investors and traders, with over two million registered community members and millions of monthly visitors. StockTwits was founded in 2008, with a mission to connect regular investors and traders with each other so they can profit, learn, and have fun.  StockTwits is the inventor of the cashtag (e.g.   $AAPL ) and they have a small shop with interesting items. Let me you know in the comment section if you like them as well! And what about all those gains you made with P2P? Compounding is incredible but sometimes we need a pause from our FIRE lifestyle, innit? GOAT and StockX are two sneaker marketplace where you can find new and used authentic kicks. StockX deals ...

First I started to invest with Portfolio Manager; if I remember correctly I choose a Conservative profile, just to try. First year everything was great, returns were high but being already mindful of the platform default risk, I started to withdraw 100 euro every 200 euro of profits. I wanted to let the compounding do its miracle but at the same time take something back just in case. At the beginning of 2016, the first defaults started to materialise and the reporting package changed, Bondora initiated a long campaign to defend its new method of default loan accounting; I was lured into it, you have to wait the whole life of a loan to properly compare results between repaid and default loans…no? In the meantime, I saw the proportion of F and HR loans grow even if I did not change the portfolio profile: Bondora explained that if the portfolio return was lower than the target return, they were effectively taking in more risk to ‘re-align’ the portfolio. If you are familiar with the ...

"do applicants ever get rejected?"  Let me introduce you, at minute 1:03, to  Bondora (YES it is an affiliate link, YES I will get $ if you invest and you will get $ BUT I hope you will change your mind by the end of this post). I want to use this post as a cautionary tale about the risks investing in P2P lending and I will start with an analogy with the Great Financial Crisis. The above video is from the movie The Big Short and if you did not watch it, please give yourself a favour and buy the book . In normal times, banks use to take the money you deposit with them and lend to others; those loans stay on the bank balance sheet, meaning if the loan defaults the bank has a loss, therefore the bank has the incentive to give loans to entities it reputes solvable and trustable. More than a decade ago, banks started to 'package' those loans and sell them to external investors: those loans cease to be on the bank balance sheet and the bank get remunerated wi...