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Messages - TRPeterson

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1
Investors - P / Re: No more info on loan investors and bids
« on: March 11, 2013, 08:20:29 AM »
I'm unfortunately not surprised that Prosper made this move with no substantial notice.   When I started building NumberWhale.com (after the fall of LendStats) the VP of IT at Prosper, Ron Pugh, was very easy to get in touch with and quick to respond.  Granted NumberWhale wasn't a shadow of what Rocco put forward with Prosper-Stats.

Since Q4-2012, I started getting short or no-responses from him.  I asked about rumors that the API would remove member bids, etc. and I would get "I'll check on this and get back to you" responses.  If the VP of IT has to "check on it", I knew I was starting to get the run-around.

There is a big spread between (1) making the masses happy that invest a couple hundred per month and are high-maintenance versus (2) catering to institutional investors who have their own research staff and don't need LendStats/Prosper-Stats/etc.  Prosper knows they lost the popularity contest to LC even without LC providing access to member bid info, so Prosper shouldn't think they're still going to "win" just by making that data available.  If Prosper was in touch with even just a few institional investors willing to invest with the additional privacy, it makes sense for them. 

If they can't be the "household name" of P2P investing like LC, then they will aim to be a profitable boutique firm with fewer but higher-net-worth investors.  Just IMHO... at least I still have my NumberWhale database to datamine out the investing techniques of the past successful Prosper investors. :)

2
Investors - P / Re: Worth-Blanket2 is back...
« on: February 12, 2013, 01:32:18 PM »
Anyone can use Prosper's API to automate their orders and get them in faster then automated quick invest does.  It just so happens that only those with a technical background capable of using the API and/or those with enough money (i.e. big investors) to pay someone with the right technical background are using the API.

I use the API for my investing but I have two issues with the API.  One, I cannot query to find out how much cash I have available for investing at that moment through the API (not a huge deal, but lacking none-the-less).  Two, via the API you can only invest in 1 loan per 30 seconds. Major Inconvenience!

I have a program that dowloads listings and grades them (on a custom statistical scale I had developed), then the one's I like I plug into the API to invest.  But if it's more than just a few listing, I still log into the site and go to the listing numbers manually to invest.

I'm not a "big investor" (under $75K total in Prosper) nor a "techie" (though I am an IT Project Manager)... I just hire the right people at the right price  ;D

3
Investors - P / Re: Pending investments
« on: January 29, 2013, 07:30:40 AM »
DanB... not that you need any encouragment... but some mornings I read your responses instead of the newspaper comics.  ;D

4
Investors - P / Re: Does AQI ever "screw up" ???
« on: January 29, 2013, 07:24:58 AM »
I had a similar, yet different situation in early 2012 when using AQI's to get my IRA invested.    Since you can set the sort order within a Saved Search, and AQIs are based on Saved Search results, I assumed the AQI would invest in the loans near the 'top' of my sort first.  I started with very broad Saved Search critera, sorted for highest credit score (1st sort) and lowest inquiries (2nd sort) with few other criteria.  I ended up stuck with MANY loans I would not have invested in with low credit scores and high inquiries... many of which have just recently been charged-off.  These loans were within my Saved Search results, but near the bottom of the list.

The developer I spoke with at Prosper found it to be an "interesting idea" that AQI's should consider the sort order and said he'd put it on the list of considerations for a code release.  I never followed up to hear if it actually made it into production code.  It seemed like an obvious system design to me, but was new hat to him.  Granted, no where doea the Prosper site claime that AQI's consider (or do not consider) the sort order.

In the end, the developer and I had good conversation and he was very open to ideas.  ...but... I was still surprised some of my 'ideas' were not already baked into the system design.  At that point I decided to no longer rely on AQIs and began venturing into building NumberWhale and a stats program to analyze and invest without 'blindly trusting' Prosper's system.  I thought I would make them availalble for public use, but in the end decided to have them as personal use tools.

...didn't mean to go on a tangent... but I'd be curious to hear what Prosper says in response.  It would be nice if they provided a code release blog so we investors knew across time when and what features are implemented.  I might even begin using AQIs again if they did that.

5
Investors - P / Re: Prosper Roth IRA
« on: January 28, 2013, 07:32:29 AM »
I agree with everything you wrote with one exception. I'm certainly surprised you would allocate 60% of your retirement funds into any one single basket :/

I can't argue that it's a riskier move.  To shed a little more light, currently my IRA in Prosper accounts for about 60% of my retirement.  My current employer for the past two years offers 100% match on the first 6% to our 401K, fully vested from day one... and made 14% return in 2012 (generally riskier stocks).  So that account is quickly catching up to my Prosper IRA.

On a more 'academic' level though, since baskets are synonymous with risks...
While Prosper today carries a forms of risk, after the bankrupty vehicle is in place on February 1, I see each and every loan as an individual basket.  Meaning once the risk of Prosper's bankrupty is mitigated, then I would no longer view Prosper as the single basket risk but as hundreds of loans diversifying the risk.  I know true diversity includes stocks, bonds, mutual funds, etc... but I've never been one to believe in putting my money into a lower-interest investment is better when a high-interest investment is available.  I'm 100% in to higher-risk stocks and P2P.


6
Investors - P / Re: Prosper Roth IRA
« on: January 26, 2013, 06:40:58 PM »
This really comes down to a matter of your financial planning. The facts are the facts as far as (1) what Prosper allows and (2) how quickly you may be able to liquidate.  If I felt I may need quicker access to my funds I would probably accept a lower ROI and use LC.

While I would like to be able to sell loans within my Prosper IRA, fact is it's not allowed.  Many on this forum like to debate what Prosper and LC should do differently; but convincing a company to change policies is an uphill climb which I don't expend time worrying about.  I just make my financial planning around that.  For my own planning I maintain about 60% of my retirements in Prosper, knowing it's not readily accessible.  I have a large cash Prosper account that I will likely split and deposit half into a Roth IRA next year. 

So, I get the want to be able to sell IRA notes on the secondary market.  But instead of worrying about it I would just suggest using a vehicle other than a Prosper IRA for funds you're more concerned about gaining access to.

7
Investors - P / Re: Can I "roll" my notes into an IRA?
« on: January 25, 2013, 07:08:58 AM »
If your not sure you want to tie your funds up for a full 3 or 5 years, I would suggest using Lending Club.

While I believe the question's been answered about 'rolling' into an IRA... as far as the money tied up for 3 to 5 years, you may want to see another post of mine.  It's actually about 2 years at most.  Here is an excerpt:

http://www.lendacademy.com/forum/index.php?topic=211.0
While that is true, it's not quite as bad as it sounds.  I manage 3 Prosper accounts (cash, my IRA and my wive's IRA).  They all have an average repayment rate of 5%/month, meaning it would take roughly 20 to 22 months for all notes to become liquid.  If you had $50,000 invested, you could count on receiving $2,500/month in payments.  This assume you invest in mostly 36-month notes with maybe a 20% blend of 12- and 60-month notes.

8
Investors - P / Re: Prosper Roth IRA
« on: January 25, 2013, 07:04:04 AM »
Here is the HUGE problem. Once you buy a note in your IRA account, you own that note until maturity. There is NO WAY to get back out of that note.

While that is true, it's not quite as bad as it sounds.  I manage 3 Prosper accounts (cash, my IRA and my wive's IRA).  They all have an average repayment rate of 5%/month, meaning it would take roughly 20 to 22 months for all notes to become liquid.  If you had $50,000 invested, you could count on receiving $2,500/month in payments.  This assume you invest in mostly 36-month notes with maybe a 20% blend of 12- and 60-month notes. 

The average grade of your notes will affect this repayment percentage, higher risk notes = higher APR = higher repayment rate.  All my accounts average out to a C roughly, maybe a C-.  So if you were a more risky investor with an E average portfolio then your repayment rate would be slightly higher and your money returned faster.  Vice-versa, a more conservative A- grade portfolio would probably take over 2 years to become liquid.

I work within the IT department of a bank, so through osmosis I get to learn some finance/banking stuff I wouldn't have access to otherwise.  Apparently all loans made have a pre-determined early repayment rate 'assigned' by the bank.  So if a bank makes a 3-year loan, their loan accounting system automatically assume that loan will be paid off in 20 months ( + / - pending a lot of factors of course).

Hope that helps!
Terry

9
Investors - P / Re: Class action lawsuit
« on: January 20, 2013, 08:51:27 AM »
I think the bottom line for most of us here regarding Prosper is that we don't want to lose our money. Personally, I could care less if Prosper lives or dies as long as my investments continue to be serviced as intended...

At any rate, I think NoGoodDeed's biggest mistake is to think we care about Prosper beyond its impact on our own money. ...

Apparently you and I think similarly...

I have to find the heavily positive and negative 'emotions' towards a company and it's future rather comical.  I don't attach smiley faces or frowny faces to my George Washingtons.  Right now I make better returns on Prosper than LC, so I will continue to invest with Prosper until which time I think I can do better elsewhere.  If the notes I invest in begin to not get funded on Prosper, hence making a return more difficult, then I will transition over to LC.  Rather black-and-white.

After losing almost every dime I put into Prosper 1.0, I never considered starting a blog to complain about it.  It was my choice to invest, not theirs.  It seems very pointless to waste a minute of time complaining about how someone operated a business if I'm the one that decided I trusted the business plan/product well enough to put money into it.  I'm responsible for where I put that dollar, not them.

I invested heavily in Tesla because I like Elon Musks' business plan and thought the product was solid, not because I was 'happy' or 'emotional' about a hot-looking electric car that the kid in me wants just like a Hummer and a Lambo.  It paid well, I increased my IRA 20% in 2008.  I don't see such rises coming again so right now I'm not invested in Tesla.  I participate in these forum looking for good returns or ideas for good returns, not an emotional outlet.

10
General P2P Lending Discussion / Re: Background of P2P Investors
« on: January 17, 2013, 07:42:10 AM »
Orthopaedic Surgeon... Interesting only one other person in medicine on here.

We tend to know a lot about debt unfortunately.

You may already be aware of this blog, but I've found whitecoatinvestor.com quite a useful resource.  I'm not in the medical arena, but happened across this blog doing other financial research.

11
Investors - P / Re: Class action lawsuit
« on: January 16, 2013, 09:36:25 AM »
Roy S..............One would not be going far out on a limb to suggest that the next round of financing is all but secured & that the announcement of such may be imminent.

DanB,
While I'm very hopeful what you say is true (I'm 99% in Prosper and 1% in LC), just curious if there's any public news backing your financing prediction.  We tend to learn so much more inside news on this forum... then Prosper tells us via email weeks later.

12
Investors - P / Re: Math Problem
« on: January 16, 2013, 09:33:04 AM »
The interest rate calculation is:
Interest rate/ 365 = daily interest rate
Daily interest rate X remaining principal = Daily interest amount

Daily interest rate X remaining principal = Interest for day 1
Daily interest rate X remaining principal = Interest for day 2
Daily interest rate X remaining principal = Interest for day 3

This is calculated each day for 30 days.
Once the payment is made, the remaining principal will drop for the next month.

Learn something new every day... while I've got an IT background, know SQL well, and can make Excel sing and dance... I'm no finance guy.  I've used (Interest Rate/12)*Principal as a monthly figure but my numbers are always a hair off.  If they use a daily interest rate then my way will be off -0.58 to 2.42 days depending on a 28-to-31 day month. Thanks dagilbe

13
Investors - P / Re: Math Problem
« on: January 14, 2013, 07:57:35 AM »
Thank you for the responses.  I guess it makes sense that the interest and principal return could have been invested in other notes.  Looking at the big picture, I am not so sure that I would invest in 1 year notes again as the reward simply isn't worth the risk i.e. earning $3.49 on a $25.00 investment, if everything goes right.

To each his own as far as risk/reward tolerance.  Having a 24% loan pay in full is incredible return.  Compare that to buying a CD, money market account, etc. and you'll realize that even at a 'realized' return of 13% that you mention is far better than many investing vehicles you could find outside of P2P.

However the harsh reality is that it takes money to make money when it comes to investing.  Turning $25 into $28.50 in a years time may not be too exiting, especially if you have other needs for the money (bills, taxes, monthly expenses, etc).  But if you keep adding a little bit at a time every paycheck and buying more notes, it begins to get more addicting as you see your money making money.  Before you know it you can have a couple extra hundred per month in interest.  I started with Prosper in 2007 with $150; today I have a couple-hundred-fold more than that invested.

But again, to each his own.  P2P isn't the worst habit you could have ;)

14
Investors - P / Re: Math Problem
« on: January 12, 2013, 01:03:33 PM »
The interest paid out is based on the balance of the principal. So as the principal decreased so did the amount paid in interest.

dagilbe,
To carry priuspilot's answer one step further, you have to reinvest each of those payments you received into additional 24% +/- loans so that your money stays full invested for 12 months. 

15
General Prosper Discussion / Re: Prosper Funding LLC Approved by the SEC
« on: January 10, 2013, 11:10:25 AM »
I would assume most of that crew had a poor Prosper 1.0 experience... like most everyone who experienced Prosper 1.0... or have no understanding of balance in financial risks/returns and chose to invest heavily in E & HR loans even in Prosper 2.0 era thinking they'd achieve 30% ROI.

While I only put pocket change in Prosper 1.0 and lost most of it; I've learned not to view money / investments / financials using emotions as it really lends towards bad decisions.  Let equations, statistics and data trends make the decision for you.  I even did a post to practically poke fun at the money I lost in the early P2P days http://www.prospertoretire.com/88/i-lost-it-all-with-p2p-lending-but-then/

It's not like getting mad at Bank of America for charging me 12.99% on a credit card is going to net any benefit... it's just a business decision on their end and my end that either results in a transaction or doesn't result in a transaction.

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