Lend Academy Network Forum

Lending Club Discussion => Investors - LC => Topic started by: Zach on August 21, 2013, 05:37:58 PM

Title: Why not use an auto-invest service?
Post by: Zach on August 21, 2013, 05:37:58 PM
I know many members of the forum have had extreme difficulty in getting the loans/notes that you want. Throughout this whole constricted supply period, I've been able to aggressively get my capital to work using Interest Radar's auto-invest.

I'm curious to know why any investors who don't use an automated solution don't do so?
Title: Re: Why not use an auto-invest service?
Post by: thezinfan on August 21, 2013, 05:49:00 PM
As I just posted in Bryce's thread, I haven't had much problem manually buying loans, so I haven't looked into the IR auto invest (I am an IR member though and use other features of the web site). I buy 100 dollar notes, so i don't need as many loans to get my money in. But i have over 100k so there's constantly paid-off/new payments coming in, so i re-invest a few times a week.

I have my filters set and i buy whatever matches my filter. I do a quick review in the cart since there still is no filter i know of native to LC.com that will check current debt vs requested loan amount.

Title: Re: Why not use an auto-invest service?
Post by: SeanMcD on August 21, 2013, 05:54:47 PM
I use IR's auto-invest, but I've still had trouble keeping up.  The last few days have seen very few successful purchases - lots of "Loan fully funded" emails. 
Title: Re: Why not use an auto-invest service?
Post by: Zach on August 21, 2013, 06:02:53 PM
I use IR's auto-invest, but I've still had trouble keeping up.  The last few days have seen very few successful purchases - lots of "Loan fully funded" emails.

I do get my fair share of those too, but overall, my available cash is always less than $200. What are some of your strategies?

My strategy is pretty simple:

1) IR01 score 400+, Low or Unknown IR04, and Word Loss-Rate of less than 6%.
Title: Re: Why not use an auto-invest service?
Post by: SeanMcD on August 21, 2013, 07:11:41 PM
Similar, but I don't have Unknown on auto-invest.  I still check those manually, since there's no information to indicate which attributes are out of the norm or how far they wander.
Title: Re: Why not use an auto-invest service?
Post by: Fred on August 22, 2013, 01:13:19 AM
I use IR's auto-invest, but I've still had trouble keeping up.  The last few days have seen very few successful purchases - lots of "Loan fully funded" emails.

Anyone here is using auto-invest in NickelSteamRoller (NSR) premium?  Is it also experiencing the same "Loan fully funded" phenomenon?
Title: Re: Why not use an auto-invest service?
Post by: TonySaunders on August 22, 2013, 04:12:32 AM
I know many members of the forum have had extreme difficulty in getting the loans/notes that you want. Throughout this whole constricted supply period, I've been able to aggressively get my capital to work using Interest Radar's auto-invest.

I'm curious to know why any investors who don't use an automated solution don't do so?

I tried this service. It didn't succeed at getting the most desirable notes before they were gone. The problem is a condition of having to race for limited resources. No matter how fast everyone gets, some of them still lose.
Title: Re: Why not use an auto-invest service?
Post by: DanB on August 22, 2013, 07:19:03 AM
I know many members of the forum have had extreme difficulty in getting the loans/notes that you want. Throughout this whole constricted supply period, I've been able to aggressively get my capital to work using Interest Radar's auto-invest.

I'm curious to know why any investors who don't use an automated solution don't do so?

Yes, not using an automated system does sound rather ludicrous, doesn't it? But only if you believe that everyone is actually having "extreme difficulty". So I can answer your question this way.  This investor, who has been investing daily in p2p for almost 4 years now, owns thousands of notes & has had real returns of over 15% for the last 3 yrs...........doesn't use an automated solution because he finds it unnecessary since he is not currently, nor has he ever really experienced "extreme difficulty" in getting loans. Of course it's probable that this investor may not use terms like "extreme difficulty" as liberally as others may. Why is this investor seemingly less concerned? Because his focus is on the bottom line. Isn't that really what matters?

No one is going to argue that it's not harder than it was a few months ago & no one is going to argue that having a larger or even a much larger supply to choose from is not preferable to the situation today,..............but as some of us know, this is hardly the only thing that matters in generating satisfying return numbers. Even picking "good" notes isn't the only thing that matters............Besides, though many services (& people) claim they can identify the "best" notes, I remain unconvinced that most within that group really can...............but I digress.

So yes, I understand. Who doesn't want to copy someones best filter, their best strategies, get the best notes etc etc. My suggestion (which might get me excommunicated from here  :) ) for those who wish to have a bit less difficulty during this TEMPORARY imbalance.............is consider using this time to develop your own strategy, stop paying for picks, stop sharing your strategies, filters, & stop copying what others do, for they rarely know as much as they'd want you to believe they do. Feel free to ignore their "expert" advice. Feel free to ignore mine, in fact I'd prefer it that way, since I'm not getting paid for it here :)***
  But if you choose to do all this, you may find that you don't "have to" use an automated anything right now. And regardless of whether you do or not, I suspect that "extreme difficulty" won't be part of your current vocabulary, just as it isn't part of mine. 

***Just remember that last year when there was this big  deal over the note shortage at Prosper due to everyone copying the experts & piling into "repeat borrowers" because those were the "best notes" (sound familiar?) .............only a very few of us advised against jumping on that bandwagon & suggested that the returns would drop substantially, making the aggravation not worth the hassle.
Title: Re: Why not use an auto-invest service?
Post by: rawraw on August 22, 2013, 07:28:25 AM
I'm amazed that DanB is the voice of reason during this period of forum chatter, given he doesn't really bite his tongue ha ha 

But I have to agree with him -- although he probably benefits from a large amount of legacy notes.  DanB, what average interest rate are you getting upon reinvestment?
Title: Re: Why not use an auto-invest service?
Post by: DanB on August 22, 2013, 08:15:52 AM
I'm amazed that DanB is the voice of reason during this period of forum chatter, given he doesn't really bite his tongue ha ha 

But I have to agree with him -- although he probably benefits from a large amount of legacy notes.  DanB, what average interest rate are you getting upon reinvestment?

Around 15-16% while my average weighted return across all accounts averages out at 15.7%. I could be more precise, but I can't remember exactly when the drop in note availability started. Last month, right?  Actually I doubt the legacy notes, as you call it, are helping at all,.............. as the average rate on 2010 notes (for example) is actually substantially lower than my total weighted average & obviously lower than my average notes from 2011. ............& 2012 is higher than either of the 2. Unless you mean something else by "legacy".  And to anticipate your next point, the percentage of 60 month loans as a part of my portfolio hasn't risen lately, & remains as it has always, a very small percentage of my portfoilo.
Title: Re: Why not use an auto-invest service?
Post by: p2p2p2p2p on August 22, 2013, 10:02:16 AM
I refuse for securities sake to give my user name and password to an unknown individual who obviously has the technical capability to wipe out my account overnight through fictitious sales on Folio Fn and can probably withdraw most if not all of the money before he or she can be stopped. At that point my Lending Club Net Annualized return goes to a -100% instantly while Lending Clubs attorneys point to all 87 paragraphs in their operating agreements and terms of service that they are in no way responsible for my giving out my accounts access information to a "Stranger" I never met , over the internet. However if I am interested they represent a guy willing to sell me a bridge.
Besides I have a significant amount of money invested and as in all things in life, if the return is too good, it wont last. So I have stopped adding new money to my account and am attempting to keep the existing funds reinvested. Even LC Advisors is not accepting additional funds for at least another 3 months.
In the meantime there are now numerous opportunities available elsewhere as a result of rising rates. i.e. NY State tax exempts are now yielding over 5%. Its not 12% but it is tax free and I don't think NY State is defaulting soon
Title: Re: Why not use an auto-invest service?
Post by: lender_john on August 22, 2013, 11:01:31 AM
I know many members of the forum have had extreme difficulty in getting the loans/notes that you want. Throughout this whole constricted supply period, I've been able to aggressively get my capital to work using Interest Radar's auto-invest.

I'm curious to know why any investors who don't use an automated solution don't do so?

Because I design software for a living, I have a slight mistrust of anything automatic when it comes to finances.
That doesn't mean that I don't use browser plugins/scripts to help me reprice and such, but I can't imagine just letting my accounts sit on autopilot on someone else's software...
Title: Re: Why not use an auto-invest service?
Post by: AnilG on August 22, 2013, 11:01:53 AM
I'm amazed that DanB is the voice of reason during this period of forum chatter, given he doesn't really bite his tongue ha ha 

Agree. DanB and p2p2p2p2p summed up my reasons for not using auto-invest despite having access to API and capability. I never had any issues finding notes that I would want to invest in. I spend less than 5 minutes a week investing in new loans for two LC and one Prosper accounts and don't bother to look at loans specially at release time.

I seriously doubt anyone on this forum, including myself, can determine what a good loan is. Everyone is guessing and trusting someone else's opinion of good loans.
Title: Re: Why not use an auto-invest service?
Post by: LendingClubStatistics on August 22, 2013, 11:31:57 AM
I think one benefit of picking up the "popular" notes is at least they get funded relatively fast, but I guess that doesn't necessarily mean they get issued any faster.  For now, getting highly sought after notes could allow people to flip notes on Folio.  (Currently trying out this strategy) I'll hold off until LC has some sort of auto-invest.  I also don't have nearly enough balance in my account to justify it.  Being in IT, I also don't trust anyone direct access to a financial account. Scary  :o
Title: Re: Why not use an auto-invest service?
Post by: Zach on August 22, 2013, 12:20:41 PM
Thanks everyone for your input.

For those who are concerned about security, what's really the worst thing that could happen?

Someone schedules an ACH withdrawal out of your account? LC automatically sends an e-mail when a withdrawal request is received, and they can usually cancel these requests for about 1 day.

Someone tries to sell all of your notes on Folio? That may be more tricky to deal with (in terms of getting LC to cancel the sale), but lets be real here...your login credentials could be compromised at any time

Title: Re: Why not use an auto-invest service?
Post by: p2p2p2p2p on August 22, 2013, 12:51:07 PM
I am flabbergasted to hear you say:
For those who are concerned about security, what's really the worst thing that could happen?

Someone schedules an ACH withdrawal out of your account? LC automatically sends an e-mail when a withdrawal request is received, and they can usually cancel these requests for about 1 day.

Someone tries to sell all of your notes on Folio? That may be more tricky to deal with (in terms of getting LC to cancel the sale), but lets be real here...your login credentials could be compromised at any time

If I don't check my email for a day, or if a wire transfer is requested my account can be cleaned out in under 15 minutes.
And I watch and protect my login credentials just as closely as I watch my login credentials to my bank accounts, brokerage accounts, credit cards etc.

From my perspective giving up my user name and password to an unidentified IT professional (who may even be a hacker) that I only met on the internet,  is equivalent to giving someone the key to my safe deposit box on condition that they get me a 12% return on my money.

But as my former financial advisor used to say " I'm only here to help you"- Sincerely Bernie Madoff
Title: Re: Why not use an auto-invest service?
Post by: core on August 22, 2013, 12:57:28 PM
Someone tries to sell all of your notes on Folio? That may be more tricky to deal with (in terms of getting LC to cancel the sale), but lets be real here...your login credentials could be compromised at any time

There's a big difference between having your LC account randomly hacked and freely handing over your password to a complete stranger running a one-man shop.  Even if he has the best intentions.

If you use a unique password not used on other sites, do not store your password anywhere, and aren't in the habit of getting your machine infected, there is hardly any chance of your one account being hacked.  Practically zero.  Assuming you have never given your credentials to any service, of course.  A hacker would certainly have a better shot at getting into all LC accounts, but in that case LC would certainly do something about it after the mass intrusion was brought to someone's attention. 

.........is consider using this time to develop your own strategy, stop paying for picks, stop sharing your strategies, filters, & stop copying what others do, for they rarely know as much as they'd want you to believe they do.

Best advice I've read today!!  You can't use some picks score, the same one hundreds/thousands of other people are using, and then complain that there are no good notes that match it.  Even if the scoring model you paid for is better than random chance at picking notes, obviously the artificial demand it creates means its benefit as a public tool is limited.
Title: Re: Why not use an auto-invest service?
Post by: rlv99 on August 22, 2013, 02:07:07 PM
Zach-  There is a more basic problem when using IR's auto-invest.  Some of those notes that are selected using your specific criteria are poor investments!  Income too low and DTI too high as an example.  While I use IR's auto-invest, my IR filters are set deliberately to be much tighter thereby yielding about 1 loan for every two that I can capture manually on the LC platform.  That way I can minimize, if not eliminate, the financially weak borrowers.  On an average day, I gross 15 loans @$25.each which is enough for me until LC corrects its way of doing business ( imo, its payment posting and collection practices suck).
Title: Re: Why not use an auto-invest service?
Post by: AnilG on August 22, 2013, 02:33:48 PM
Wow, I never thought I will ever read such an statement from a forum moderator, supposedly savvier and unbiased than the rest. I hope Peter hasn't handed you all the keys to the hen house.

I agree with core and p2p2p2... just because credentials can be compromised doesn't mean you should freely share them.

There is no absolute guarantee that credentials will not be compromised that is why financial institutions spend millions and hire experts for fraud detection and security, regulations limit institution and account holder liability (for example credit cards), and institutions put back stop measures to remediate such situations (for example, credit card companies sending new credit card because they believe old one is compromised).

lets be real here...your login credentials could be compromised at any time
Title: Re: Why not use an auto-invest service?
Post by: rawraw on August 22, 2013, 05:32:45 PM
My account is tied to an email with 2-Factor authentication.  My password is unique, randomly generated and stored encrypted behind 2-Factor authentication.  My list of passwords is stored an encrypted jump drive.  My phone with the second factor is password protected, has no passwords stored on it, and can be remotely wiped/locked/etc if stolen.  Needless to say I try to ensure my credentials can't just be compromised at any time lol  I want them to work for it :)
Title: Re: Why not use an auto-invest service?
Post by: cfb on August 22, 2013, 07:04:37 PM
I'm surprised by the folks who say they have no problems buying notes.  I've been able to get almost nothing the last 2 weeks and have pretty much given up.  Most of the time when I look, there are 30-50 notes, most A's and B's, which sure aren't getting anyone to 15%.

I don't use an autoinvest service because the ones I've seen don't let me filter at the level I want, or they don't check the data often enough, or stuff is just selling out too fast.  Plus I'm not excited about giving some random person control over my money.

Six months ago I had 10k to invest on top of the notes I already own (about 2300) and now I've got almost 17k.  Looks like I'd have to accept crap notes that aren't snapped up 2 minutes after they release, I'd have to take A and B notes, or give up until this clears up...if it does.  Looking like option C right now.
Title: Re: Re: Why not use an auto-invest service?
Post by: Zach on August 22, 2013, 09:18:11 PM
Wow, I never thought I will ever read such an statement from a forum moderator, supposedly savvier and unbiased than the rest. I hope Peter hasn't handed you all the keys to the hen house.

I agree with core and p2p2p2... just because credentials can be compromised doesn't mean you should freely share them.

There is no absolute guarantee that credentials will not be compromised that is why financial institutions spend millions and hire experts for fraud detection and security, regulations limit institution and account holder liability (for example credit cards), and institutions put back stop measures to remediate such situations (for example, credit card companies sending new credit card because they believe old one is compromised).

lets be real here...your login credentials could be compromised at any time

Anil, I definitely agree with what you're saying here. Too much of my personal opinion went into that statement. My statement can be "unofficially retracted".

Sent with Tapatalk 4 on my HTC DNA.

Title: Re: Why not use an auto-invest service?
Post by: GS on August 22, 2013, 10:15:47 PM
I'm surprised by the folks who say they have no problems buying notes.  I've been able to get almost nothing the last 2 weeks and have pretty much given up.  Most of the time when I look, there are 30-50 notes, most A's and B's, which sure aren't getting anyone to 15%.

I agree, and it can't be good for LC when new potential investors log on to find 30-50 notes, with the average note being a B1, 80% invested.  When you look at the flow recently, in early 2013 (when I started with LC) wasn't unusual to log on and find 1000 notes to pick from, then it started dropping ... 700 ... 500 ... 300 ... now it's in the double digits.  It feels like were quickly heading towards 0. 
Title: Re: Why not use an auto-invest service?
Post by: thezfunk on August 22, 2013, 11:49:12 PM
The reason I don't is that $25 takes a big chunk out of my monthly earnings right now because I only have about 5K in with LC.  I can't get it all funded the way I want yet and I have been trying for two months.  So...very little incentive to put more in for it to only sit there.  That $25 needs to pay for itself and it can't quite yet.
Title: Re: Why not use an auto-invest service?
Post by: cfb on August 23, 2013, 09:37:54 AM
The reason I don't is that $25 takes a big chunk out of my monthly earnings right now because I only have about 5K in with LC.  I can't get it all funded the way I want yet and I have been trying for two months.  So...very little incentive to put more in for it to only sit there.  That $25 needs to pay for itself and it can't quite yet.

Even with much larger than $25 chunks, and when 400-500+ notes at any time was common, it still took me many months to invest my initial 50k stake.  I was placing as much as $500 with some really squeaky clean notes, although that was rare and most got $50-250.  When I found that even the squeaky clean ones tended to default at not that much lower rate than the uglier looking ones, that started to become less and less of a good idea.  I'm VERY hesitant to commit more than $25, but I might go up to $50 and follow through with drawing some money off the account.
Title: Re: Why not use an auto-invest service?
Post by: DanB on August 23, 2013, 09:58:10 AM
I'm surprised by the folks who say they have no problems buying notes.  I've been able to get almost nothing the last 2 weeks and have pretty much given up.  Most of the time when I look, there are 30-50 notes, most A's and B's, which sure aren't getting anyone to 15%.



Who is saying that they're having "no problems"? I know I didn't. I said I wasn't having "extreme difficulty" in response to the term used as the premise of this whole conversation, which presupposed that investors must be facing extreme difficulty. I imagine that it is unnecessary to point out that someone who says they are not having extreme difficulty isn't  in any way saying that they are having no problems.............since the 2 expressions are on almost opposite sides of a spectrum that has quite a few steps in between!

BTW, since you referenced the 15% figure I stated............... as I mentioned before, getting high yielding notes or if you prefer, getting what one perceives to be "good performing" high yielding notes, is only one of several ways I personally know of that can be employed in order to achieve a consistent 15%+ real return. In fact there are a few people right here in this forum that are getting substantially higher than 15% real returns. I'm very confident that these people know some methods that I don't know of and/or methods that I don't employ.
Your remarks though technically correct, within the narrow perspective you take, may be interpreted to suggest that what I say isn't true, isn't possible, or at the very least, that my numbers may be exaggerated. But I take no offense from these potential inferences because the reasoning within your remarks clearly illustrate to those of us who are consistently achieving these higher returns where you appear to currently reside on the p2p learning curve...........& I completely understand :)
Title: Re: Why not use an auto-invest service?
Post by: cfb on August 23, 2013, 10:52:15 AM
Semantics?  While understanding other people you can't see with a few sentences leaves a lot of room for interpretation, what you said seemed to imply that you were finding notes that would enable high returns recently without jumping on the 'dump times', which with my limited experience would seem to require mostly E, F and G notes, and you said you don't use an automated service.  Over the last two weeks, using frequent random look-ins, I see generally 30-50 notes, most of which are A or B grade (which wouldn't support a 15% return), very few notes past a D, and the E-G notes I've seen had very low FICO, very low income, 3 or more inquiries, several recent deliquencies, numerous public records or some other serious defect that statistically would seem to indicate a high default rate, which would likely dip you well under 15%.

I think the gist of it is that I hardly see ANY notes in a range that would sustain a high rate of return, let alone finding them without 'extreme difficulty'.  I had good luck this morning in the 60 seconds some notes were available at the 9am drop time, but I'd actually term the ability to find E-G notes at all the last few weeks to be 'nearly impossible'.  Of the bunch I managed to buy this morning, only one was an E, one D, and the rest C and above.

So I'm guessing you're A) putting high 3, 4 or 5 figure amounts into each note, B) buying and selling on the secondary market and getting some great discounts, C) you're accidentally buying new notes in the one minute after the drop time when decent ones are still available on a persistent basis, D) you've developed your own automated system (which I've considered, although the last time I coded I was excited about PL/1 because it was so much better than Fortran), or E) you're a statistical anomaly.

There is also another option, which is one I weigh frequently.  In mutual funds, actively managed funds always trail index funds over the long haul, and the number of managed funds that do exceed their index for more than a few years is much lower than it should be, given even a random distribution.  As William Bernstein noted, monkeys throwing darts at the Wall Street Journal's stock page would give better results on a random basis than we see from 'investing professionals'.  Much like that, the % of LC investors with high rates of return is lower than it should be, indicating that like many investments, a person trying to employ strategies does worse than someone buying a big diversified bucket of a product and then doing nothing with it.  Some LC reps have implied that to me, saying that most large investors trust LC's vetting process and just buy on grade.  Given that my analysis of prior results as a predictor of future results tells me that most of the data people go on is at best a bit skimpy and was effected by situational influences unlikely to repeat, it seems there is a great analog between stock market performance and loan return performance in terms of guessing where a stock/loan is going to go.

With all that in mind, it seems the wisest choice would be to A) put your money to work, B) diversify, and C) buy every E and F note you see, as G's high default rate drag their end returns to below E's and F's, and D) don't bother looking at anything else and when something goes wrong with a note, just stand there and do nothing.  But historically, that wouldn't give you 15%, but closer to 12.5 to 13.5, which is exactly where my returns are with a couple of thousand notes over 18 months.  Although my results are dragged down from buying B's and C's to get a lot of capital deployed in a short time.  I expect my returns to move higher as the composition of my portfolio shifts from heavy B/C/D to D/E/F.

I think its also interesting to note that high return investors tend to do better with G's when holding fewer, higher amount notes, so I'll go out on a limb and guess that your strategy is to buy all and F notes, and put a lot of $$$ into them, and you've been slightly lucky or found one or two things to filter on that have been effective the last 3 years, but may not work for the next 3.

All this is very interesting and I'm really glad to have found people willing to talk about what they're doing.  My LC "experiment" has proven to be a very educational and very interesting endeavor.
Title: Re: Why not use an auto-invest service?
Post by: cfb on August 23, 2013, 12:16:17 PM
For those who are concerned about security, what's really the worst thing that could happen?

The automated system spends the max on a bunch of G notes with the worst specs that LC will accept, and they all default in the first month.  Or even more plausible, the system hiccups and buys all sorts of stuff that I wouldn't want and didn't fit my criteria.
Title: Re: Why not use an auto-invest service?
Post by: core on August 23, 2013, 12:23:53 PM
The automated system spends the max on a bunch of G notes with the worst specs that LC will accept

If that happens you should throw a party and booze it up.  Because those seem to be the ones that everyone wants. If it doesn't suit your risk tolerance then you just turn around and make a quick profit by selling them.

Or even more plausible, the system hiccups and buys all sorts of stuff that I wouldn't want and didn't fit my criteria.

This certainly is plausible and has been discussed in detail here before.  One has to have a lot of trust in whoever wrote the thing.  Worst case you take a 1-2% hit by having to sell them back.  And then show up at the site admin's house for a "friendly chat".  But occasional hiccups are bound to happen; in the software biz we call this "user error".
Title: Re: Why not use an auto-invest service?
Post by: cfb on August 23, 2013, 12:27:48 PM
I guess I shouldn't be surprised at the risk tolerance of folks who make unsecured loans to strangers over the internet.  :D

Usually I'm considered the risky outlier that everyone thinks is nuts for doing this.  All this dialog is really cheering me up and making me feel like playing in traffic.  ;D
Title: Re: Re: Why not use an auto-invest service?
Post by: rawraw on August 23, 2013, 03:21:22 PM
I guess I shouldn't be surprised at the risk tolerance of folks who make unsecured loans to strangers over the internet.  :D

Usually I'm considered the risky outlier that everyone thinks is nuts for doing this.  All this dialog is really cheering me up and making me feel like playing in traffic.  ;D
Ha ha, I'm all about calculated risks

Sent from my SAMSUNG-SGH-I747 using Tapatalk 2

Title: Re: Why not use an auto-invest service?
Post by: New Jersey Guy on August 23, 2013, 04:25:51 PM
Thanks everyone for your input.

For those who are concerned about security, what's really the worst thing that could happen?

Someone schedules an ACH withdrawal out of your account? LC automatically sends an e-mail when a withdrawal request is received, and they can usually cancel these requests for about 1 day.

Someone tries to sell all of your notes on Folio? That may be more tricky to deal with (in terms of getting LC to cancel the sale), but lets be real here...your login credentials could be compromised at any time

Zach....Good Points.
I mean, you just need to learn to trust the system.  I've been disclosing personal info online since 1996 when I first signed up with Ebay and Paypal and never had a problem.  You're only other alternative for full security is to stuff your cash in the mattress.
However, that could pose problems, too.
Nothing is totally fool-proof.
Title: Re: Why not use an auto-invest service?
Post by: Zach on August 23, 2013, 04:34:04 PM
Thanks everyone for your input.

For those who are concerned about security, what's really the worst thing that could happen?

Someone schedules an ACH withdrawal out of your account? LC automatically sends an e-mail when a withdrawal request is received, and they can usually cancel these requests for about 1 day.

Someone tries to sell all of your notes on Folio? That may be more tricky to deal with (in terms of getting LC to cancel the sale), but lets be real here...your login credentials could be compromised at any time

Zach....Good Points.
I mean, you just need to learn to trust the system.  I've been disclosing personal info online since 1996 when I first signed up with Ebay and Paypal and never had a problem.  You're only other alternative for full security is to stuff your cash in the mattress.
However, that could pose problems, too.
Nothing is totally fool-proof.

Thanks NJ Guy. I'm glad someone sees it the way I do. I basically have the exact same thought process on it. My thinking is that if you don't take those calculated risks to use online services for example, you'll never really be doing yourself any justice. Fraud usually screams to me pretty easily, and I've therefore never had any issues with it.
Title: Re: Why not use an auto-invest service?
Post by: cfb on August 23, 2013, 04:43:45 PM
I've been disclosing personal info online since 1996 when I first signed up with Ebay and Paypal and never had a problem.  You're only other alternative for full security is to stuff your cash in the mattress.

Discomforting for the guy who had paypal lose some of his credit card #'s and bank account information to hackers, then refuse to remove the remaining info, even when I told them I'd just change it, which would be a PITA for me and would render the information they refused to delete useless.  They told me I had to change it all, because the TOS said they didn't have to delete it and they therefore would not.  Haven't used it since.

And my ebay account was hacked, by someone who bought lots and lots of tickets to sporting events, then tried to sign up for MyUPS at my address to change the delivery address of the shipments, but I'm one of the rare people who already had an account established.  I still use those tix for bookmarks, since they were declared stolen and replaced to the original sellers.  Got the Dolphins vs Patriots from a few seasons ago in my current book.

At least I was protected against loss, but that was quite a bit of work.  Had my CC's routinely stolen the last few years until I finally quit using the CC #'s to buy stuff online and only use the 'shopsafe' unique one time numbers from my bank.  Would LC or the independent auto invest service step up and fix anything that went wrong?
Title: Re: Why not use an auto-invest service?
Post by: New Jersey Guy on August 23, 2013, 05:00:06 PM
CFB.....I've found that most of the time somebody had their online account compromised is because of something else they did.  Someplace down the line, they did something they shouldn't have, and didn't realize it.  Most of it is because of phishing scams.

I had my Discover Card compromised a couple of years ago.  Somebody in Philly was having a hey-day ordering online.  Discover took care of it for me.  I have no idea what I did, but I'm sure I had to have screwed up someplace.  However, I didn't cancel my Discover Card because of it.

Title: Re: Why not use an auto-invest service?
Post by: Zach on August 23, 2013, 05:05:03 PM
CFB.....I've found that most of the time somebody had their online account compromised is because of something else they did.  Someplace down the line, they did something they shouldn't have, and didn't realize it.  Most of it is because of phishing scams.

That is very true.
Title: Re: Why not use an auto-invest service?
Post by: cfb on August 23, 2013, 06:02:37 PM
CFB.....I've found that most of the time somebody had their online account compromised is because of something else they did.  Someplace down the line, they did something they shouldn't have, and didn't realize it.  Most of it is because of phishing scams.

I had my Discover Card compromised a couple of years ago.  Somebody in Philly was having a hey-day ordering online.  Discover took care of it for me.  I have no idea what I did, but I'm sure I had to have screwed up someplace.  However, I didn't cancel my Discover Card because of it.

My paypal and ebay leaks were because someone hacked into their data and it wasn't encrypted.  I see stories about similar leaks pretty regularly.

My credit card leaks were tracked back to two online sellers who exposed credit card info through an exploit.  Believe it or not, Walmart and Rakuten (Buy.com).  I've had no problems since I started using one-time CC numbers.

One of my former employers (originally Digital Equipment Corp, bought by Compaq, bought by HP) also exposed all of their employees pension/retirement account information and they're still paying for free credit monitoring, which so far has never worked.  You'd think that a premier technology company would do better than that.  But that turned out to be a bit of a good thing.  I had no idea that I'd worked long enough back in the 70's and 80's to qualify for a pension, until they sent me a letter saying my pension data had been exposed, and I got to ask the question "What pension?".  Turns out I'll get ~$40 a month starting in a few years.  Thanks hackers and incompetent IT people!!! :)

A major problem for many people is they use the same passwords for a lot of sites, and all you need is for one of them to not encrypt the data and expose it.  If someone gets it, they can try the usual sites for the same email/username and password combo.  The big kill is getting into your email and finding messages from all the sites you use.  I use different ones for everything and change them every six months or so.

The only reason why I stopped using paypal is because they refused to delete bank and credit information I didn't want them to have, and didn't intend to use again with them, and they refused, even though I told them I'd change it at great effort, rending it worthless to them.  A poor policy decision IMO.  Once they get a bank account # and cc#, they really don't want to let it go.
Title: Re: Why not use an auto-invest service?
Post by: core on August 23, 2013, 06:18:41 PM
A major problem for many people is they use the same passwords for a lot of sites, and all you need is for one of them to not encrypt the data and expose it.  If someone gets it, they can try the usual sites for the same email/username and password combo.

Precisely.  You buy something from Big Bob's Bargains, some Russian hacker with time on his hands uses SQL injection to get into the database.  The Ruskie then sells the database contents for a surprisingly small amount of cash.  They've got your email, password (for that site), credit card number, and they go to town.


The only reason why I stopped using paypal is because they refused to delete bank and credit information I didn't want them to have, and didn't intend to use again with them, and they refused, even though I told them I'd change it at great effort, rending it worthless to them.  A poor policy decision IMO.  Once they get a bank account # and cc#, they really don't want to let it go.

I'm sure one reason for this is so they can prevent you from opening another account with that information, or at least log it if you try.  They had a real problem with delinquent ebay fees and PP chargebacks leaving accounts negative and people would just walk away from it and start a second account.  They really cracked down on things to the point where roommates would get tagged for another's misdeeds.  It's not hard to get another CC# but I guess every bit of information helps them.

You're lucky you never had your PP account locked.  A couple of my accounts were locked for almost 2 years with $30k tied up between the two.  They would do this to people at random, ask for all sorts of identity verification documents, and still not release the account.  Didn't they get sued for that?  Anyway I'm an active paypal user once again but I sure as hell wouldn't keep large amounts of money in there.  Back then they had a money market that was paying a darn good rate.... that's the only reason I left the cash there.
Title: Re: Why not use an auto-invest service?
Post by: Zach on August 23, 2013, 10:09:15 PM
Kind of ironic that as we're talking about security/passwords, Aaron Vermut, the President of Prosper had his Twitter account hacked today.
Title: Re: Why not use an auto-invest service?
Post by: cfb on August 23, 2013, 10:24:57 PM
Precisely.  You buy something from Big Bob's Bargains, some Russian hacker with time on his hands uses SQL injection to get into the database.  The Ruskie then sells the database contents for a surprisingly small amount of cash.  They've got your email, password (for that site), credit card number, and they go to town.

Lots of smart people with lots of ways to subvert a system.  If I remember right (not a sure thing!) the walmart one allowed you to access someones CC data just by fiddling with the URL.  It'd pop you into a random recent order and let you access the account info associated with that order.  The Rakuten/Buy.com thing was rumored to be an employee with access to the database selling copies of the data out the door.  If someone wants money and has a brain or physical access, there will always be the temptation.  Hope the autoinvest guys are financially smart and have a strong security background or a partner who does.

Quote
You're lucky you never had your PP account locked.  A couple of my accounts were locked for almost 2 years with $30k tied up between the two.  They would do this to people at random, ask for all sorts of identity verification documents, and still not release the account.  Didn't they get sued for that?  Anyway I'm an active paypal user once again but I sure as hell wouldn't keep large amounts of money in there.  Back then they had a money market that was paying a darn good rate.... that's the only reason I left the cash there.

I missed all the fun!  I think it was 11 or 12 years ago that I pulled the plug.  It was really only good for ebay back in the day, and ebay went to hell in a handbasket with fraud and scammers not long thereafter.  I actually did create a new paypal account a few months back, but I gave them a one time use card # good for $10 and 12 months.  A site I used to contribute to a long time ago got bought by them through a serial acquisition and apparently part of the deal was considering contributors stakeholders of some sort, as they offered to pay me $6 a month as a royalty, but only through paypal.  Since I like free money and I have very little at risk, I figured why not.  Almost covers my netflix bill.  I'll just have them send me a check when the amount gets high enough.
Title: Why not use an auto-invest service?
Post by: dontvote on August 24, 2013, 09:49:17 AM

Kind of ironic that as we're talking about security/passwords, Aaron Vermut, the President of Prosper had his Twitter account hacked today.

Why would anyone bother?
Title: Re: Why not use an auto-invest service?
Post by: cfb on August 24, 2013, 09:55:31 AM
Why would anyone bother?

"I did NOT have 12 beers and say that on twitter......someone hacked my account!"
Title: Re: Why not use an auto-invest service?
Post by: Zach on August 24, 2013, 10:40:39 AM
Why would anyone bother?

"I did NOT have 12 beers and say that on twitter......someone hacked my account!"

No, all of his followers were sent links to some malware/virus. I highly doubt that was a result of being drunk.
Title: Re: Why not use an auto-invest service?
Post by: rawraw on August 24, 2013, 11:14:44 AM
Thanks everyone for your input.

For those who are concerned about security, what's really the worst thing that could happen?

Someone schedules an ACH withdrawal out of your account? LC automatically sends an e-mail when a withdrawal request is received, and they can usually cancel these requests for about 1 day.

Someone tries to sell all of your notes on Folio? That may be more tricky to deal with (in terms of getting LC to cancel the sale), but lets be real here...your login credentials could be compromised at any time

Zach....Good Points.
I mean, you just need to learn to trust the system.  I've been disclosing personal info online since 1996 when I first signed up with Ebay and Paypal and never had a problem.  You're only other alternative for full security is to stuff your cash in the mattress.
However, that could pose problems, too.
Nothing is totally fool-proof.

Thanks NJ Guy. I'm glad someone sees it the way I do. I basically have the exact same thought process on it. My thinking is that if you don't take those calculated risks to use online services for example, you'll never really be doing yourself any justice. Fraud usually screams to me pretty easily, and I've therefore never had any issues with it.
All websites aren't created equal.  That logic is predicated on that all websites have the same inherent risk -- and I'm sure we'd all agree that is simply not true.  Some websites can be made specifically to steal your information.
Title: Re: Why not use an auto-invest service?
Post by: New Jersey Guy on August 24, 2013, 11:53:47 AM

"Some websites can be made specifically to steal your information."

Rawraw....that's absolutely true!  Which, brings me back to my post from the 23rd.


CFB.....I've found that most of the time somebody had their online account compromised is because of something else they did.  Someplace down the line, they did something they shouldn't have, and didn't realize it.  Most of it is because of phishing scams.

I had my Discover Card compromised a couple of years ago.  Somebody in Philly was having a hey-day ordering online.  Discover took care of it for me.  I have no idea what I did, but I'm sure I had to have screwed up someplace.  However, I didn't cancel my Discover Card because of it.
Title: Re: Why not use an auto-invest service?
Post by: core on August 24, 2013, 08:20:41 PM
No, all of his followers were sent links to some malware/virus.

So it wasn't even anything juicy that was sent.  Definitely the work of an automated spambot and whoever was operating it didn't even realize how good of an account they had on their list.  This means he was dumb enough to use the same password on other sites or he was tricked into entering it.  Neither alternative says anything good about Mr. Vermut.  Is this the kind of person you'd want running an internet based company that deals with mega dollars?