Author Topic: Two New Articles from New Jersey Guy about his Penny Notes strategy  (Read 9519 times)


Ran

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Re: Two New Articles from New Jersey Guy about his Penny Notes strategy
« Reply #1 on: June 11, 2014, 11:06:41 AM »
Without getting too much into the detail, it's a pain to scan through $6-$15 notes without a system. So even the strategy looks good, it may or may not cover the minimum hourly wages :)

PeerSocialLending

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Re: Two New Articles from New Jersey Guy about his Penny Notes strategy
« Reply #2 on: June 11, 2014, 05:53:53 PM »
Ran, you bring up a good point, but there have been times when they aren't originally $25 notes (granted there aren't as many). If you have a fair amount invested, you can look at these notes portions that started at 50, 100 or more.  Availability should get better as time goes on, but perhaps folks will find ways to automate strategies like this.  I've purchased over 180 (over 2k in the portfolio) notes using this method and have been happy with the results so far.   It's a great way to diversify in my opinion.
-Ryan
p2p lending blogger @ www.peersociallending.com

New Jersey Guy

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Re: Two New Articles from New Jersey Guy about his Penny Notes strategy
« Reply #3 on: June 11, 2014, 08:01:17 PM »
Ryan is right.  This is a (very) part-time job, nothing more than a sideline.

I don't do it every day.  Sometimes only once per week.  Or, when my idle cash is getting a little too high.  Or, when I can't find anything else worth buying. Or, when Ryan emails me and tells me somebody just dumped some good notes!

Interest Radar works best with this, as it has a "Discard" feature that will black mark notes you already looked at.  Unlike the Folio platform, you won't be looking at the same notes over and over again.  Plus, you can set up some filters if you wish, to narrow your results.

And he's also right about owning larger notes.  You can filter $50 notes and higher.  Typically, a $100 note will run you about $50.  I have (or had) a few $100 notes.

I purchased https://www.lendingclub.com/account/loanPerf.action?loan_id=1350565&order_id=2914637&note_id=11536239

$100 Note purchased at a 2.5% discount for $39.63:  YTM with the discount will be $14.4%
Steady 680 FICO
Good pay history
What's not to like?


« Last Edit: June 11, 2014, 08:22:34 PM by New Jersey Guy »
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

alimoyni

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Re: Two New Articles from New Jersey Guy about his Penny Notes strategy
« Reply #4 on: July 14, 2014, 12:31:16 PM »
I am going to try a few of the strats you mentioned in your series of articles.  Thanks for educating me on another aspect of P2P lending!

edward

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Re: Two New Articles from New Jersey Guy about his Penny Notes strategy
« Reply #5 on: July 14, 2014, 05:15:25 PM »
May just be a personal feeling, but a $15 investment going into charge-off isn't nearly as bad as a $25 investment. I've used New Jersey Guy's advice and now folio notes make up about 1/3 of my portfolio. True, it's a lot of time, but with Interest Radar it's not bad. But more importantly, I found it to be an excellent investment in learning more about how notes behave.

jpildis

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Re: Two New Articles from New Jersey Guy about his Penny Notes strategy
« Reply #6 on: July 15, 2014, 08:25:22 AM »
Ryan is right.  This is a (very) part-time job, nothing more than a sideline.

I don't do it every day.  Sometimes only once per week.  Or, when my idle cash is getting a little too high.  Or, when I can't find anything else worth buying. Or, when Ryan emails me and tells me somebody just dumped some good notes!

Interest Radar works best with this, as it has a "Discard" feature that will black mark notes you already looked at.  Unlike the Folio platform, you won't be looking at the same notes over and over again.  Plus, you can set up some filters if you wish, to narrow your results.

And he's also right about owning larger notes.  You can filter $50 notes and higher.  Typically, a $100 note will run you about $50.  I have (or had) a few $100 notes.

I purchased https://www.lendingclub.com/account/loanPerf.action?loan_id=1350565&order_id=2914637&note_id=11536239

$100 Note purchased at a 2.5% discount for $39.63:  YTM with the discount will be $14.4%
Steady 680 FICO
Good pay history
What's not to like?

What's not to like?  The 25 point drop to 655 FICO.  For that FICO, you should be getting a 30% YTM.

PeerSocialLending

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Re: Two New Articles from New Jersey Guy about his Penny Notes strategy
« Reply #7 on: July 15, 2014, 09:13:54 AM »
Ryan is right.  This is a (very) part-time job, nothing more than a sideline.

I don't do it every day.  Sometimes only once per week.  Or, when my idle cash is getting a little too high.  Or, when I can't find anything else worth buying. Or, when Ryan emails me and tells me somebody just dumped some good notes!

Interest Radar works best with this, as it has a "Discard" feature that will black mark notes you already looked at.  Unlike the Folio platform, you won't be looking at the same notes over and over again.  Plus, you can set up some filters if you wish, to narrow your results.

And he's also right about owning larger notes.  You can filter $50 notes and higher.  Typically, a $100 note will run you about $50.  I have (or had) a few $100 notes.

I purchased https://www.lendingclub.com/account/loanPerf.action?loan_id=1350565&order_id=2914637&note_id=11536239

$100 Note purchased at a 2.5% discount for $39.63:  YTM with the discount will be $14.4%
Steady 680 FICO
Good pay history
What's not to like?

What's not to like?  The 25 point drop to 655 FICO.  For that FICO, you should be getting a 30% YTM.

I would imagine he likely bought this before the 25 point drop. If I saw that and was using this strategy I would probably pass. The key is a consistent FICO, which that loan had.
-Ryan
p2p lending blogger @ www.peersociallending.com

hoggy1

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Re: Two New Articles from New Jersey Guy about his Penny Notes strategy
« Reply #8 on: July 15, 2014, 11:16:10 AM »
C.)   The FICO Score.  Look for a steady FICO with no major drops for at least 6 to 8 months.

Above from Jersey Guy's post. Can someone tell me where to find the FICO history? I see the original and current in the download csv but do one of the third party sites maintain this for every loan or do I have to collect this data myself if I want to use it?

-----------------UPDATE
OK I have finally found the link on Folio ("DOWN" after the arrow indicator) so this works for NJG's strategy. But can you get this data elsewhere for any loan not listed on folio? I have always thought Folio has a LC API with queries beyond what the LC API for retail investors provides.
« Last Edit: July 15, 2014, 11:31:39 AM by hoggy1 »
Steve