11 ms·

Peer-to-peer lending pretty much involves lending to people who can't get loans from banks, and the banks are actually pretty good at deciding who is too risky

Peer-to-peer lending pretty much involves lending to people who can't get loans from banks, and the banks are actually pretty good at deciding who is too risky to lend money to, so why should this be a surprise? The only way peer-to-peer lending will succeed is if the banks are overlooking or turning away a large group of creditworthy customers, and so far it doesn't seem like that is happening.

dragontamer 8y ago
> and the banks are actually pretty good at deciding who is too risky to lend money to, so why should this be a surprise? Well, what you say is certainly true in America. But is it necessarily true in China? Those are the kinds of assumptions that may not hold as you cross borders.
- mahranch 8y ago
  Wouldn't it be even more true in China, given the big brother system they have in place? The government (and by extension, the banks) knows more about its citizens than say, the U.S government. Hell, they just issued a "social credit score" to every citizen - it's similar to a financial credit score and just goes to show just how many things they're keeping tabs on. Source: https://newyork.cbslocal.com/2018/04/24/china-assigns-every-citizen-a-social-credit-score-to-identify-who-is-and-isnt-trustworthy/ https://newyork.cbslocal.com/2018/04/24/china-assigns-every-...
  - echevil 8y ago
    Things don't work like that at all in China. Even the basic "financial credit score" is in a very immature state at the moment
  - sonnyblarney 8y ago
    No, banks in China lend in order to achieve strategic targets set by the government, and for reasons of political patronage. Lending is not fully market driven. This is not necessarily personal lending, it's grey market business lending, so it's not about 'credit scores'.
  - Nasrudith 8y ago
    Given what I have heard about social credit I wouldn't be surprised one bit of one sector of shadow banking is perfectly creditworthy people whose only additional risk as a lender is lack of being repaid due to being disappeared or arrested on 'it means what we want it to mean' charges. The whole concept of social credit is what I refer to as stupid-evil. For one its whole concept is obviously exploitable as a 'recruit the low credit and purge the high credit' list if anyone ever want to form an insurrection powered by their newly minted low caste. And that is without the obvious side effects of people reacting accordingly to the actual information like not trusting anyone with top-tier social credit as likely too powerful to be held accountable and will thus screw you over at the drop of a hat. Unfortunately even the US has had a similar issue to a thankfully far lesser degree with the idiotic "Operation Choke Point" abuse of power. Such abuses should always be reigned in.
- looknetwork 8y ago
  It's very interesting that all of these events are starting to converge this year - Yuan falling 10% since January - Shanghai Composite falling 25% since January - Trump's 20% tariff on $200 Billion Chinese import - Trump's threat of tariff on $500 Billion Chinese import - EU and US agreeing on free trade - EU and Japan agreeing on free trade - US, Japan, and Australia forming an alliance to invest in SE Asia. - Xi Jing Ping becomes president for life - Anbang, Wanda, HNA being taken over by Chinese government - Manufacturers prompted by tariffs to move out of China - Xi Jing Ping's Made in China 2025 plan to have everything made in China - Malaysia, one of the one road one belt's strongest partner, pushes back on future Chinese projects, citing corruption. If I had to guess, China's economic collapse is near
  - kwizzt 8y ago
    Stop creating a new account just to post things like this
    - tomcam 8y ago
      What are the approved reasons to create a new account? Can you point me to a page supporting your assertion?
      - nkurz 8y ago
        The last entry in the FAQ (https://news.ycombinator.com/newsfaq.html https://news.ycombinator.com/newsfaq.html) says: "Throwaway accounts are ok for sensitive information, but please don't create them routinely. On HN, users should have an identity that others can relate to." There's room for interpretation here, but I think it's fair to say that the preferred default is the consistent use of a single permanent identifier. Do you prefer a different approach?
    - larkeith 8y ago
      ...is there something I'm missing? While I'm not sure I agree with parent's conclusion, they bring up valid topics for discussion and seem to be contributing value to the conversation. Is parent poster known for creating new accounts, and how can you tell? Why do you believe that they did not simply decide to create an account to comment here because they had something to contribute? Also, there's a certain irony to this being your second ever comment.
rahimnathwani 8y ago
"banks are overlooking or turning away a large group of creditworthy customers, and so far it doesn't seem like that is happening." Bank do refuse to lend to large segments of the population which can be lent to profitably. In China, part of the reason is caps on loan interest rates. But banks in developed countries, like the US and the UK, also fail to serve a large segment of the population. Those underserved by banks have limited options to get loans for emergencies etc., and difficulty building their credit history to gain access to cheaper credit in future. If you're based in London and are a software engineer or data scientist interested in solving this problem, please email me (personal address in profile) and I can tell you about what we've built so far and what's ahead.
- pkaye 8y ago
  > Bank do refuse to lend to large segments of the population which can be lent to profitably. Why do they refuse to lend if it is profitable?
  - TooBrokeToBeg 8y ago
    Because of risk. Just because there's 10k people out there that can afford to borrow and repay, doesn't mean you set 100k loans hoping you got some of them.
    - sanderjd 8y ago
      That's the point the parent is making. If the risk profile is as you say, that isn't a profitable segment for the banks. The question being asked is: why would the risk profile be any different for peer to peer lenders than it is for the banks? If it isn't profitable for the banks, and the risk profile isn't different for the peer to peer lenders, then it won't be profitable for them either.
      - Viliam1234 8y ago
        The profit made by the bank needs to also cover the cost of employees, bureaucracy, huge buildings, etc. For a peer-to-peer lender, even tiny profit is enough. As an example, imagine that you lend someone $100, and there is a 50% chance they will pay you back, and in that case they will pay you $210. And all this costs you is a mouse click. Some individual would click "yes". In their free time. Now in the bank, there is an employee doing this as a part of their paid job. They have a manager, that manager also has a manager, plus you need to pay the janitor, etc. You also need to pay diversity training for all of them. And all financial transactions they do must follow all kinds of regulations, which regularly change. Simply, the overhead is not worth it.
bunderbunder 8y ago
It seems to me like, if you took a credit union, and then stripped out all the junk that isn't actually savings or loan - so free checking accounts, debit cards, ATM networks, branch locations & most the services offered therein, FDIC insurance, etc etc - how would that compare to Lending Club? The biggest remaining difference would be the "peer to peer" bit itself. Which feels like a good thing to drop to me. From a purely financial perspective, the "you choose who to loan to" just feels like a way to introduce economic inefficiencies: The loan facilitator doesn't have a whole lot on the line, so they're poorly incentivized to do their due diligence on each loan. And the lender doesn't have direct access to the borrower, so they aren't able to do so in the first place. Nor, being non-bankers, are they likely to have the expertise to do a great job of it even if they could. The more I think about it, the more peer-to-peer lending, at least as I understand it, sounds like CDOs in tie-dyed T-shirts.
- CompelTechnic 8y ago
  I remember reading a couple of introductory posts by financial bloggers that started giving out some loans on Prosper and the like. They promised to post updates about the returns, but those updates have been absent. I imagine the returns are not good.
  - LeftTurnSignal 8y ago
    Here's my experience. I don't recommend doing any p2p stuff like this. not really worth it For fun, I tossed $1,000 into prosper in 4/2015. I set it to auto invest each time I hit $50 in available funds from someone paying their loan back. I also only set it to auto invest at the B (estimated return of 6.8%) and C (est return of 7.8%) levels. The levels change a bit, but it factors in the estimated loss for each level too. Currently, my portfolio is about $1,300 with a little bit extra in available funds. Ive only logged in to get some tax documents after the initial $1k investment and setting up auto invest. Not much for experience, but here ya go
echevil 8y ago
First of all banks in China works very differently from those in US. It's very hard for individuals and small companies to get loans from banks. Secondly, there are tons of companies working on peer-to-peer lending in US as well. Lending Club and Prosper has been around for a while. Newer ones like Upstart and Lendup are also in the same category. Their claims essentially that they have more data and better models to make better decisions than what traditional banks can do
drb91 8y ago
> the banks are actually pretty good at deciding who is too risky to lend money to This seems like a pretty shitty premise given the US mortgage meltdown of 2007. In any case, peer-to-peer lending also has viability in microloans. The traditional alternatives for that have been credit cards (specifically the cash withdrawal), payday loans, and pawn shops, all of which have distinct downsides.
- pathseeker 8y ago
  >This seems like a pretty shitty premise given the US mortgage meltdown of 2007. Only if you have a very superficial understanding of the mortgage meltdown. The underwriters of many of the bad mortgages were able to quickly sell the mortgages off to other banks. So there was almost no incentive to actually restrict who they were lending to. Also, you imply a contrapositive that isn't the case. Just because there were banks that were excessively lending in the early 2000s doesn't mean that there are banks that are being excessively conservative and leaving behind good returns.
- zhonwang 8y ago
  Well Subprime loans were knowingly targeted at people who had poor prospects of repayment in the first place (People with subprime credit).
- sp527 8y ago
  I feel like you just reinforced the parent's point? In a distorted macroeconomic environment (as has been the case for a decade plus in the US), banks are generally loathe to have false negatives, which makes a loan denial a fairly strong indicator of untrustworthiness.
  - deleted 8y ago
    [deleted]
  - deleted 8y ago
    [deleted]
- bunderbunder 8y ago
  > This seems like a pretty shitty premise given the US mortgage meltdown of 2007. Not exactly. The US mortgage meltdown of 2007 happened because, in effect, banks realized that the aftermarket for debt had grown so unskeptical that they could basically resell any loan immediately after they made it. So, from their narrow perspective, virtually no loan was too risky.
sonnyblarney 8y ago
"and the banks are actually pretty good at deciding who is too risky to lend money to" Uh, no. Chinese banks are politicized, they lend for the strategic impetus of the government, which in itself is often really just the result of patronage (read: soft corruption) anyhow. And even without that you have crazy targets which distorts not only lending, but entire sectors of the economy. Chinese lending is la-la land and not really based on credit worthiness. Also - lending is all intertwined, public or not. Credit doesn't care where credit comes from, so if this lending bubble is big enough it could cause a recession. And now that China is #1 or #2 sized economy, it would possibly hit everyone.
xivzgrev 8y ago
I worked at one such lender. Here’s how they actually work with banks. Banks, being an integral part of the financial system, are only allowed to take on so much risk. Third party companies have no such restrictions. But they can’t issue loans because they are not a bank. So what happens is a bank issues a loan according to criteria the bank and the third party agree to. Then the bank sells it the next day to the third party. That way the bank is more insulated from risk because they aren’t holding the loan. Some p2p companies such as lending club actually do the same thing. The bank sells the loan to lending club, and then lending club essentially “sells” to all the individual investors: lending club doesn’t take the hit when people default. The downside of such a model, besides missing out on upside, is requiring volume. You need lots of it to keep the lights on. So if investors get spooked you are in a world of hurt, which is probably what is happening here.
- majani 8y ago
  Can't the third party instead raise the money for loans from investors?
  - nradov 8y ago
    Sure there are hard money lenders which do exactly that. But their cost of capital is higher and so they have to charge much higher interest rates.
majani 8y ago
In developed countries with effective credit scoring methods, this is true. In developing countries, the banks don't have good methods of effectively scoring vast chunks of the population, plus the amounts poorer people would want as loans is smaller, so it's easier to just ignore them in favour of bigger clients. Tech companies are now trying to step in with innovative ways of credit scoring through phone data analysis(e.g reading through SMS for mobile money transactions, gambling transactions etc)
seanmcdirmid 8y ago
Banks are messed up in China and won’t officially lend to companies that aren’t really safe bets or politically connected (SOEs). As a result, a lot of shadow and underground banking was needed to fill in the gaps, the P2P lending being basically an extension of that. For consumers, it’s a bit different, but again the kind of official loans available are much more restricted than the developed world, with lots of unofficial lending again filling in the gaps.
dalore 8y ago
If you calculate risk and charge a high enough interest rate you can make a profit. That's how a lot of the predatory load practices work. They charge an extremely high rate to people who normally can't get credit.
MichaelMoser123 8y ago
so they decided that subprime lending is becoming a systemic risk and want to reduce it? Is this understanding correct?
ian0 8y ago
The theory is that fixed costs for banks are so high they cant profitably source and score these loans. However Fintech p2p firms can using "technology". Note in my experience most p2p financing companies aren't actually peer to peer. They have a bunch of cash from investors, banks or other p2p loans companies which they then loan out.
evandijk70 8y ago
So far, 130 million euro's have been lend through the largest peer-to-peer lending platform in the Netherlands, www.geldvoorelkaar.nl. This was spread over 1300 projects. Over all the projects, the average interest rate (after incorporation of defaults) was 4-5%. This is not good enough for a bank, especially considering they would have to check each individual project, whereas that is now done by 'the crowd'. Still, it is a lot better than you can get through a savings account as a consumer, and a lot more fun than investing in big companies.

dragontamer 8y ago

> and the banks are actually pretty good at deciding who is too risky to lend money to, so why should this be a surprise? Well, what you say is certainly true in America. But is it necessarily true in China? Those are the kinds of assumptions that may not hold as you cross borders.

mahranch 8y ago
Wouldn't it be even more true in China, given the big brother system they have in place? The government (and by extension, the banks) knows more about its citizens than say, the U.S government. Hell, they just issued a "social credit score" to every citizen - it's similar to a financial credit score and just goes to show just how many things they're keeping tabs on. Source: https://newyork.cbslocal.com/2018/04/24/china-assigns-every-citizen-a-social-credit-score-to-identify-who-is-and-isnt-trustworthy/ https://newyork.cbslocal.com/2018/04/24/china-assigns-every-...
- echevil 8y ago
  Things don't work like that at all in China. Even the basic "financial credit score" is in a very immature state at the moment
- sonnyblarney 8y ago
  No, banks in China lend in order to achieve strategic targets set by the government, and for reasons of political patronage. Lending is not fully market driven. This is not necessarily personal lending, it's grey market business lending, so it's not about 'credit scores'.
- Nasrudith 8y ago
  Given what I have heard about social credit I wouldn't be surprised one bit of one sector of shadow banking is perfectly creditworthy people whose only additional risk as a lender is lack of being repaid due to being disappeared or arrested on 'it means what we want it to mean' charges. The whole concept of social credit is what I refer to as stupid-evil. For one its whole concept is obviously exploitable as a 'recruit the low credit and purge the high credit' list if anyone ever want to form an insurrection powered by their newly minted low caste. And that is without the obvious side effects of people reacting accordingly to the actual information like not trusting anyone with top-tier social credit as likely too powerful to be held accountable and will thus screw you over at the drop of a hat. Unfortunately even the US has had a similar issue to a thankfully far lesser degree with the idiotic "Operation Choke Point" abuse of power. Such abuses should always be reigned in.
looknetwork 8y ago
It's very interesting that all of these events are starting to converge this year - Yuan falling 10% since January - Shanghai Composite falling 25% since January - Trump's 20% tariff on $200 Billion Chinese import - Trump's threat of tariff on $500 Billion Chinese import - EU and US agreeing on free trade - EU and Japan agreeing on free trade - US, Japan, and Australia forming an alliance to invest in SE Asia. - Xi Jing Ping becomes president for life - Anbang, Wanda, HNA being taken over by Chinese government - Manufacturers prompted by tariffs to move out of China - Xi Jing Ping's Made in China 2025 plan to have everything made in China - Malaysia, one of the one road one belt's strongest partner, pushes back on future Chinese projects, citing corruption. If I had to guess, China's economic collapse is near
- kwizzt 8y ago
  Stop creating a new account just to post things like this
  - tomcam 8y ago
    What are the approved reasons to create a new account? Can you point me to a page supporting your assertion?
    - nkurz 8y ago
      The last entry in the FAQ (https://news.ycombinator.com/newsfaq.html https://news.ycombinator.com/newsfaq.html) says: "Throwaway accounts are ok for sensitive information, but please don't create them routinely. On HN, users should have an identity that others can relate to." There's room for interpretation here, but I think it's fair to say that the preferred default is the consistent use of a single permanent identifier. Do you prefer a different approach?
  - larkeith 8y ago
    ...is there something I'm missing? While I'm not sure I agree with parent's conclusion, they bring up valid topics for discussion and seem to be contributing value to the conversation. Is parent poster known for creating new accounts, and how can you tell? Why do you believe that they did not simply decide to create an account to comment here because they had something to contribute? Also, there's a certain irony to this being your second ever comment.

rahimnathwani 8y ago

"banks are overlooking or turning away a large group of creditworthy customers, and so far it doesn't seem like that is happening." Bank do refuse to lend to large segments of the population which can be lent to profitably. In China, part of the reason is caps on loan interest rates. But banks in developed countries, like the US and the UK, also fail to serve a large segment of the population. Those underserved by banks have limited options to get loans for emergencies etc., and difficulty building their credit history to gain access to cheaper credit in future. If you're based in London and are a software engineer or data scientist interested in solving this problem, please email me (personal address in profile) and I can tell you about what we've built so far and what's ahead.

pkaye 8y ago
> Bank do refuse to lend to large segments of the population which can be lent to profitably. Why do they refuse to lend if it is profitable?
- TooBrokeToBeg 8y ago
  Because of risk. Just because there's 10k people out there that can afford to borrow and repay, doesn't mean you set 100k loans hoping you got some of them.
  - sanderjd 8y ago
    That's the point the parent is making. If the risk profile is as you say, that isn't a profitable segment for the banks. The question being asked is: why would the risk profile be any different for peer to peer lenders than it is for the banks? If it isn't profitable for the banks, and the risk profile isn't different for the peer to peer lenders, then it won't be profitable for them either.
    - Viliam1234 8y ago
      The profit made by the bank needs to also cover the cost of employees, bureaucracy, huge buildings, etc. For a peer-to-peer lender, even tiny profit is enough. As an example, imagine that you lend someone $100, and there is a 50% chance they will pay you back, and in that case they will pay you $210. And all this costs you is a mouse click. Some individual would click "yes". In their free time. Now in the bank, there is an employee doing this as a part of their paid job. They have a manager, that manager also has a manager, plus you need to pay the janitor, etc. You also need to pay diversity training for all of them. And all financial transactions they do must follow all kinds of regulations, which regularly change. Simply, the overhead is not worth it.

bunderbunder 8y ago

It seems to me like, if you took a credit union, and then stripped out all the junk that isn't actually savings or loan - so free checking accounts, debit cards, ATM networks, branch locations & most the services offered therein, FDIC insurance, etc etc - how would that compare to Lending Club? The biggest remaining difference would be the "peer to peer" bit itself. Which feels like a good thing to drop to me. From a purely financial perspective, the "you choose who to loan to" just feels like a way to introduce economic inefficiencies: The loan facilitator doesn't have a whole lot on the line, so they're poorly incentivized to do their due diligence on each loan. And the lender doesn't have direct access to the borrower, so they aren't able to do so in the first place. Nor, being non-bankers, are they likely to have the expertise to do a great job of it even if they could. The more I think about it, the more peer-to-peer lending, at least as I understand it, sounds like CDOs in tie-dyed T-shirts.

CompelTechnic 8y ago
I remember reading a couple of introductory posts by financial bloggers that started giving out some loans on Prosper and the like. They promised to post updates about the returns, but those updates have been absent. I imagine the returns are not good.
- LeftTurnSignal 8y ago
  Here's my experience. I don't recommend doing any p2p stuff like this. not really worth it For fun, I tossed $1,000 into prosper in 4/2015. I set it to auto invest each time I hit $50 in available funds from someone paying their loan back. I also only set it to auto invest at the B (estimated return of 6.8%) and C (est return of 7.8%) levels. The levels change a bit, but it factors in the estimated loss for each level too. Currently, my portfolio is about $1,300 with a little bit extra in available funds. Ive only logged in to get some tax documents after the initial $1k investment and setting up auto invest. Not much for experience, but here ya go

echevil 8y ago

First of all banks in China works very differently from those in US. It's very hard for individuals and small companies to get loans from banks. Secondly, there are tons of companies working on peer-to-peer lending in US as well. Lending Club and Prosper has been around for a while. Newer ones like Upstart and Lendup are also in the same category. Their claims essentially that they have more data and better models to make better decisions than what traditional banks can do

drb91 8y ago

> the banks are actually pretty good at deciding who is too risky to lend money to This seems like a pretty shitty premise given the US mortgage meltdown of 2007. In any case, peer-to-peer lending also has viability in microloans. The traditional alternatives for that have been credit cards (specifically the cash withdrawal), payday loans, and pawn shops, all of which have distinct downsides.

pathseeker 8y ago
>This seems like a pretty shitty premise given the US mortgage meltdown of 2007. Only if you have a very superficial understanding of the mortgage meltdown. The underwriters of many of the bad mortgages were able to quickly sell the mortgages off to other banks. So there was almost no incentive to actually restrict who they were lending to. Also, you imply a contrapositive that isn't the case. Just because there were banks that were excessively lending in the early 2000s doesn't mean that there are banks that are being excessively conservative and leaving behind good returns.
zhonwang 8y ago
Well Subprime loans were knowingly targeted at people who had poor prospects of repayment in the first place (People with subprime credit).
sp527 8y ago
I feel like you just reinforced the parent's point? In a distorted macroeconomic environment (as has been the case for a decade plus in the US), banks are generally loathe to have false negatives, which makes a loan denial a fairly strong indicator of untrustworthiness.
- deleted 8y ago
  [deleted]
- deleted 8y ago
  [deleted]
bunderbunder 8y ago
> This seems like a pretty shitty premise given the US mortgage meltdown of 2007. Not exactly. The US mortgage meltdown of 2007 happened because, in effect, banks realized that the aftermarket for debt had grown so unskeptical that they could basically resell any loan immediately after they made it. So, from their narrow perspective, virtually no loan was too risky.

sonnyblarney 8y ago

"and the banks are actually pretty good at deciding who is too risky to lend money to" Uh, no. Chinese banks are politicized, they lend for the strategic impetus of the government, which in itself is often really just the result of patronage (read: soft corruption) anyhow. And even without that you have crazy targets which distorts not only lending, but entire sectors of the economy. Chinese lending is la-la land and not really based on credit worthiness. Also - lending is all intertwined, public or not. Credit doesn't care where credit comes from, so if this lending bubble is big enough it could cause a recession. And now that China is #1 or #2 sized economy, it would possibly hit everyone.

xivzgrev 8y ago

I worked at one such lender. Here’s how they actually work with banks. Banks, being an integral part of the financial system, are only allowed to take on so much risk. Third party companies have no such restrictions. But they can’t issue loans because they are not a bank. So what happens is a bank issues a loan according to criteria the bank and the third party agree to. Then the bank sells it the next day to the third party. That way the bank is more insulated from risk because they aren’t holding the loan. Some p2p companies such as lending club actually do the same thing. The bank sells the loan to lending club, and then lending club essentially “sells” to all the individual investors: lending club doesn’t take the hit when people default. The downside of such a model, besides missing out on upside, is requiring volume. You need lots of it to keep the lights on. So if investors get spooked you are in a world of hurt, which is probably what is happening here.

majani 8y ago
Can't the third party instead raise the money for loans from investors?
- nradov 8y ago
  Sure there are hard money lenders which do exactly that. But their cost of capital is higher and so they have to charge much higher interest rates.

majani 8y ago

In developed countries with effective credit scoring methods, this is true. In developing countries, the banks don't have good methods of effectively scoring vast chunks of the population, plus the amounts poorer people would want as loans is smaller, so it's easier to just ignore them in favour of bigger clients. Tech companies are now trying to step in with innovative ways of credit scoring through phone data analysis(e.g reading through SMS for mobile money transactions, gambling transactions etc)

seanmcdirmid 8y ago

Banks are messed up in China and won’t officially lend to companies that aren’t really safe bets or politically connected (SOEs). As a result, a lot of shadow and underground banking was needed to fill in the gaps, the P2P lending being basically an extension of that. For consumers, it’s a bit different, but again the kind of official loans available are much more restricted than the developed world, with lots of unofficial lending again filling in the gaps.

dalore 8y ago

If you calculate risk and charge a high enough interest rate you can make a profit. That's how a lot of the predatory load practices work. They charge an extremely high rate to people who normally can't get credit.

MichaelMoser123 8y ago

so they decided that subprime lending is becoming a systemic risk and want to reduce it? Is this understanding correct?

ian0 8y ago

The theory is that fixed costs for banks are so high they cant profitably source and score these loans. However Fintech p2p firms can using "technology". Note in my experience most p2p financing companies aren't actually peer to peer. They have a bunch of cash from investors, banks or other p2p loans companies which they then loan out.

evandijk70 8y ago

So far, 130 million euro's have been lend through the largest peer-to-peer lending platform in the Netherlands, www.geldvoorelkaar.nl. This was spread over 1300 projects. Over all the projects, the average interest rate (after incorporation of defaults) was 4-5%. This is not good enough for a bank, especially considering they would have to check each individual project, whereas that is now done by 'the crowd'. Still, it is a lot better than you can get through a savings account as a consumer, and a lot more fun than investing in big companies.