Yesterday evening got questions from Kristaps Mors. Because I invested the time answering, wanted to publish my answers here as well.
I am compiling P2P blog author views on the situation after recent events. Would you be willing to comment these 2 questions? Ideally – couple of sentences for each that shows your main conclusions and that potentially could help others, but feel free to answer as short or as long as needed.
Keutzal and Envestio have shut down.
1. Any lessons learned?
2. Any changes to portfolio planned?
Here is my reply:
thank you for reaching out, I appreciate your effort. I hope many of fellow bloggers will join your interview.I hope this will be an open (no payment needed) article similarly as your latest ones. I would love to get your and other readers’ feedback.
I have read your article about how much P2P bloggers lost in Kuetzal’s case https://kristapsmors.substack.com/p/how-much-did-the-p2p-bloggers-lose). It is really unfortunate case for all who invested with them and I can see why this is interesting for you to gather this kind of information. Maybe for pure interest and also for educating people that there is no 15%+ returns without taking a high risk.High risk is part of P2P as it is and was for crypto. Probably you also have been burnt back in the beginning of 2018. However, I must say and I think you will agree with me, that in investing there is only one free lunch – diversification. This is why I chose 5 platforms from the very beginning of my first investment back in 2018 (https://www.investingsmall.eu/2018/09/01/picking-the-right-platforms-for-first-investment/). Over the time I do change my mind and when I do, I post openly about it, e.g., Crowdestate’s case in September 2019 (https://www.investingsmall.eu/2019/09/08/crowdestate-review-after-1-year-of-investing/).
1. You could read more on my lessons in my Summary of returns December 2019 post (https://www.investingsmall.eu/2020/01/07/summary-of-returns-december-2019/) and Selection of Viventor post (https://www.investingsmall.eu/2020/01/08/choice-of-viventor/). Main reasons were previously mentioned diversification and quickly deteriorating image of Envestio.
2. As you know, I had no investments with Kuetzal.
1. Those who read my blog have noticed that I do due diligence and I am questioning if I have suspicion of some sort. I had doubts about couple of the Envestio’s projects in February 2019 and I contacted the team to find out more (https://www.investingsmall.eu/2019/02/24/envestio-responds-to-my-findings/). Or just after Kuetzal’s fiasco again on Envestio and Monethera (https://www.investingsmall.eu/2019/02/24/envestio-responds-to-my-findings/).
Other findings could be read about Crowdestor’s buyback (https://www.investingsmall.eu/2019/10/10/crowdestor-buyback-guarantee-max-cap/) and further looking into comparison table update (https://www.investingsmall.eu/2019/09/21/crowdlending-comparison-update-september-2019/) where I mention Kuetzal, Monethera and Wisefund.
Also Fast Invest is long bashed in community about their loan originator transparency issues.
Fear, uncertainty, doubt (FUD) has always been part of the money game. An example of Krajbanka in Latvia. The liquidation process of Krajbanka started FUD for Swedbank. People withdrew all available money from ATMs within a weekend. The infamous bank run of Swedbank of 2011 (https://www.marketwatch.com/story/swedbank-no-liquidity-risk-from-latvia-bank-run-2011-12-12). For Envestio this created liquidity issue. In these cases all sides get hurt. Must admit that Swedbank did all they could to communicate and calm down their clients. Which unfortunately is not the case here.
2. For me it is too early to say. I will wait and react according to the situation – pragmatically like I feel I have done before. I closely follow Telegram group developments. If it all goes to court, let us see it through. One thing is can not be emphasized enough, diversification is the way forward. As Latvians have a saying “lai raža būtu labāka, mēslus vajag izkaisīt”. The same goes for the money.
On a weekly basis there are news on loan originators and projects from different platforms. Like in any investment market – be it crypto, stock picking, venture capital, if you want to take the risk and be part of the game you need to keep yourself updated. Question yourself and others and learn from your own and other’s mistakes. This is no newcomer but would like to remind everyone – never invest more than you can afford to lose, no matter how tempting the yield.
Also would like to give credit to you and my fellow bloggers, active readers and feedback givers and to thank them for their due diligence helping the whole community casting light in this new territory. Not everyone has the luxury time to keep up to date – moreover to dig through the rabbit hole.This is why we are stronger as a community.
Janis @ www.investingsmall.eu