Author Topic: Sell / Hold ?  (Read 3093 times)

fbessede

  • Newbie
  • *
  • Posts: 2
    • View Profile
    • Email
Sell / Hold ?
« on: January 14, 2013, 11:57:54 PM »
Hey,

After reading you guys carefully, I learned a lot about investing and what to do in some situations (thanks for that).

I often read that people immediately sell In Grace Period notes with a 20% discount and usually don't end up regretting it.
Today, I have 2 In Grace Period notes that I would like opinions on:

1 - https://www.lendingclub.com/account/loanPerf.action?loan_id=1575560&order_id=3433973&note_id=14262413
Credit score going up BUT all the payments have been done during the grace period.

2 - https://www.lendingclub.com/account/loanPerf.action?loan_id=1583738&order_id=3448473&note_id=14333845
Credit score slightly going down BUT all payments have been done on time.

What do you think? :)

rawraw

  • Hero Member
  • *****
  • Posts: 2756
    • View Profile
Re: Sell / Hold ?
« Reply #1 on: January 15, 2013, 06:23:47 AM »
He pays on the 20th every week.  This implies to me that its something other than being late.  He needs to request a payment change to modify his due date to later in the month.  I wouldn't be extremely concerned, but I would sell it.  Why? Because of the underlying items on his financials suggest to me its among the riskier types of notes I'd invest in.  And if that is true, this note would not give me a warning if it is going late -- which is a valuable embedded option for this investor.  So I'd sell it.

rawraw

  • Hero Member
  • *****
  • Posts: 2756
    • View Profile
Re: Sell / Hold ?
« Reply #2 on: January 15, 2013, 06:26:15 AM »
And for the other, I wouldn't be concerned by that decline.  I am confused as FICO didn't move after the loan was issued.  Perhaps this is due to requesting an installment loan larger than the current revolving balance.  But I personally would expect a slight bump when CC's were paid off.  At least that happens when requested amount is much closer to revolving line.

william

  • Jr. Member
  • **
  • Posts: 78
    • View Profile
Re: Sell / Hold ?
« Reply #3 on: January 15, 2013, 09:06:05 AM »
It really depends on what type of investor you are. If you can't sleep at night if you have a note in grace period then sell them. But if you don't mind the risk then you should just hold it. Personally I would have sold them the first time they hit grace period. But for the first loan it seem like the person is taking advantage of grace period because it does not effect their credit score, so they realize it's like a freebie. If you don't mind the risk keep it and see how it all plays out. After saying all this in the end it is completely up to you and what kind of investor you are.

lender_john

  • Jr. Member
  • **
  • Posts: 88
    • View Profile
Re: Sell / Hold ?
« Reply #4 on: January 15, 2013, 02:15:07 PM »

I would try to sell both of these.

I think that they are likely to keep paying for a while and wouldn't sell them for fear of default.

I would get rid of these simply because I don't think they are good notes.  There are a few items that concern me, including no verified income, credit inquiries, major derogatory, location etc. 

These factors combined with the fact that its in grace period would lead me to try to get rid of them (or never buy them in the first place).

Of course if I held an obscenely large number of notes I probably wouldn't bother with each note that goes into grace period.



rawraw

  • Hero Member
  • *****
  • Posts: 2756
    • View Profile
Re: Sell / Hold ?
« Reply #5 on: January 15, 2013, 05:34:46 PM »

I would try to sell both of these.

I think that they are likely to keep paying for a while and wouldn't sell them for fear of default.

I would get rid of these simply because I don't think they are good notes.  There are a few items that concern me, including no verified income, credit inquiries, major derogatory, location etc. 

These factors combined with the fact that its in grace period would lead me to try to get rid of them (or never buy them in the first place).

Of course if I held an obscenely large number of notes I probably wouldn't bother with each note that goes into grace period.
Verified Income notes under perform non-verified income notes.

fbessede

  • Newbie
  • *
  • Posts: 2
    • View Profile
    • Email
Re: Sell / Hold ?
« Reply #6 on: January 18, 2013, 10:26:59 PM »
For the record, I had some faith and decided to not sell those. Today, both of these loans went back to Current. I know it doesn't mean much, but it doesn't hurt to believe in our borrowers. :)

writing2reality

  • Jr. Member
  • **
  • Posts: 51
    • View Profile
    • WriteYourOwnReality Blog
    • Email
Re: Sell / Hold ?
« Reply #7 on: January 18, 2013, 11:52:33 PM »
For the record, I had some faith and decided to not sell those. Today, both of these loans went back to Current. I know it doesn't mean much, but it doesn't hurt to believe in our borrowers. :)

Not to disagree so boldly, but my belief in the borrowers only extends as far as the size of my investment, and the coldly calculated risk of said investment. While P2P lending was originally founded as a social enterprise, at the end of the day, trying to infer belief, or faith, into "feel good" situations is a losing proposition. As william so nicely put it, it all depends on the type of investor you are, and ultimately what your appetite for risk allows. Good luck with your notes.
WriteYourOwnReality Blog: http://www.writeyourownreality.com