When a debtor fails to repay, Cambist pays the buyer back for the original contract amount (without interest). One of the contracts I had bought did in fact go bad but I didn't loose a cent. The only risks I see are the industry, economy or the company goes bust. I don't see this happening anytime soon.
The company certainly has no intention of risking going bust on defaults - that'll be why the liability for defaults is incurred by a trust. It's quite clearly a stopper mechanism that'll cap losses for the operators if everything ever does go totally pear shaped.Originally Posted by Savvy
Savvy has already covered much of what I found in my research. It's real. The operators are experienced. And sharp!
I'm not quite as upbeat as Savvy on the risk side of things though. As Blurock points out, the overall environment just at the moment indicates risk is probably increasing for this segment. Thinking about it, this could explain the recent downgrade on returns - perhaps a bit more margin is being set aside for defaults.
If I'm right - it means this is an investment mechanism with an unusual contra-cycle feature.
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