As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

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Tuesday, 17 July 2018

Hell Of Difference In Thinking Between Retail Investing And Crowd Lending


For retail investors who are keen in FA; they will be looking closely at interests payment. High interest payment and  highly leveraged may be a red flag to look closely.

But; for crowd lending; retail lenders are full of smile on their face as they love high interests payment from SME. They don't really care how high interests payment will affect company's bottom line and profitability and may be also a red flag to company's ability to stay competitive and survive due to higher cost base.

Strange!

Lending and investing. 

Can be so different! Sigh!!!


1 comment:

  1. Hi Uncle8888,

    Lending platforms also got retail-but-not-so-retail speculators, as well as the pure bei kambing / yield hogs... :)

    Those more experienced will study the borrowing company's financials & business prospects, as well as its industry outlook.

    I won't be surprised if the owners or shareholders of such retail lending platforms often have 1st bite of the pie for the more promising companies. LOL

    In the "professional" world of lending i.e. bond market & private equity (they usually do it with contingent convertible bonds or CoCos), the average investor is usually "smarter" than the average stock investor. That's why the old adage that bond market is "more correct" than stock market.

    But when you open up junk bonds & "retail" bonds to bei kambings, yield hogs, HNWs, and snake oil bank RMs ... Alamak ... you get fun shows happening!

    ReplyDelete

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