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Messages - Edward Reid

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1
If LC opens it up again, I'll invest again. I'm not planning on it though. I'm withdrawing cash as it accumulates and spending my time thinking about other stuff. Lending Club? Sounds vaguely familiar. Was that a basketball team?

Edward

2
individual investors now represent only 5% of originations

I wonder ... is this due to lack of retail investor interest? Or did the large investors simply gain interest and push out retail by being faster and cheaper and easier for LC to deal with?

Edward

3
This theory seems to fit the facts.

Makes sense to me ... if anything does.  ;)

Edward

4
If anyone figures out what's really going on, I'm interested. Clearly it's something that happened at LC, not in the states, since several got restricted at the same moment. (I'm in Florida.)

Edward

5
Investors - LC / Re: Collection logs no longer published?
« on: April 06, 2019, 10:46:21 AM »
Got email from LC yesterday saying they are working on it. Today I see collection logs.

Edward

6
Investors - LC / Re: Collection logs no longer published?
« on: April 04, 2019, 02:44:32 PM »
I came here with the same question. I'm guessing it's a bug.

https://help.lendingclub.com/hc/en-us/articles/216127987-Where-can-investors-see-ongoing-collection-activities-on-late-Notes-

still says investors can see collection activity. Just like always. I think they would have fixed that had the change been planned.

Edward

7
General P2P Lending Discussion / Re: FICO score inflation
« on: January 08, 2019, 11:23:38 AM »
the WSJ should be ashamed of graphing it in a way that is misleading
Why would they do something like that though? Do you think it was malicious or just an oversight?

I'd say ignorance of proper and honest presentation of statistics. Also, very likely the graphic was produced by someone other than the author and the two were joined by a harried editor.

Still, this is one of the most basic and well known errors in data presentation. The WSJ should be ashamed. I don't read it, but based on this I would not trust them with numbers.

Edward

8
Looking at https://www.lendingclub.com/browse/browse.action and filtering by Time left, out of 685 pages of loans, only half a page is loans between 21-28 days left. The other 684.5 pages are loans 29 days left. Am I not looking at the right thing?

That's loans, not pages (currently 646 loans).

If you have a "time left" filter, then you are looking at a different UI from me. I can filter by "listing expires in", but my only choices are 3 or 7 days.

However, I look at the first 60 loans in the list, and only 4 are 29 days left. the other 56 are 20-28 days. 41 are under 25 days. That's for all loans, not just the ones in the filter I use.

Quote
Retail note investors are very small portion of lending club investor mix. I hope banks and fund managers know the difference between lending club stock and their notes :)

Sure, but I'm only talking about retail.

Edward

9
Why would the lenders care about this?

Dunno. Didn't slow me down. Yet I've heard rather bright people confuse investing in LC's stock with investing in LC loans. I somewhat doubt seasonality, as this is a more serious swing than I've seen before. More likely one of the other factors you note.

Edward

10
10,000 people asking divided by 2,000,000 loans = 0.5% which seems like a small number.  ... chances are that the actual number was something like 10,001.

I'd say the actual number was probably 20,000 based on "tens" (plural). Same argument though.

Half a percent asking ... yeah, seems extremely small. To me, that indicates that LC was doing a very good job of pointing out the fee, given how hard it is to get some people to read.

I hadn't heard about this development. Went on LC today to reinvest proceeds and noticed a lot of loans with 21-27 days left. Hardly ever saw those before (after filtering). Looks like lenders are spooked? Or is there some other reason? On the one hand, I had a lot of loans meeting my criteria to pick from. On the other hand, if it takes a couple of weeks to fund them, or if they don't get funded, that's time (=money) lost. And I'm not in a position to fund the entire loans.

Edward

11
Investors - LC / Re: Take on debt and put it in Lending Club?
« on: May 02, 2018, 05:19:14 PM »
Yeah, borrowing to invest is almost always a bad idea unless you have a guaranteed return, and I mean like FDIC insured. IOW, at least as certain as the debt you owe.

Your 8.5% return is phantom, it is only true as long as you continue to reinvest the repayments. Once you decide to stop buying new loans and start liquidating your account, your return will start declining as interest amount in repayments received will decline and may not be enough to meet the losses resulting from defaults.

How do you figure this? The interest rate doesn't change as the principal declines. Are you saying there are more defaults late in the life of loans? Are you calculating the return on the assumption that you don't reinvest repayments anywhere, just leave the cash sitting there? Something else?

Edward

12
Investors - LC / Re: Worst Loan of the Day Thread, Grades A - C
« on: April 11, 2018, 07:15:14 PM »
Non-verified monthly gross income $1,667 per month, monthly loan payment $803.46.
Yep, that's right. Monthly payment is 48% of gross income.

Interesting. I would not invest in it due to only five years of credit history, and I don't even look at Business loans. However, I note that credit history is absolutely clean. No inquiries. Claims to own home (a pretty big deal for a MT since they often work out of their homes). I can see ways it could be reasonable. If I were opening a new business and applying for a loan, I would honestly list my current income even if I had a sound business plan to triple my income. Not that I'd consider investing in this one ... but compared with some of the others posted, this one doesn't look nearly as bad to me.

I've never been clear on whether the reported DTI includes the loan payment. This one makes it abundantly clear that it does not. When looking at Credit Card Payoff or Consolidation loans, it matters less IF the applicant is honest, since moving debts from a card to LC is likely to reduce payments. If.

Edward

13
if the market tanks, loan defaults would go up even more as people get demolished.

Before I started P2P investing, I dug through the LC stats. It was clear that during the 2008-2009 crisis, D+ loans tanked, but A-C loans did not. I'm sure that in a similar crisis, my investment (mostly C) would barely hold rather than continuing the consistent 8% I'm getting now. But it would take something even worse for me to lose money, and in that case just about anything but treasury bonds would be even worse. And 2008-2009 was a true economic crisis, not just the market tanking, which is unlikely to directly affect the great majority of LC borrowers.

Quote
And couple that with the fact that it takes forever to liquidate an account... imagine handling an estate where someone has 50k or more loans?

An estate with 50K notes is likely worth at least half a million dollars even if all notes are $25. (I'm assuming a steady state of investment, hence notes of average value around half the face value, and perhaps investment halted some time before death.) Anyone who has that much to invest should be putting it in notes of at least $1000 (that's still over 1000 notes, and the stats show that's far more than needed to spread the risk), so for an investor acting reasonably, the account is likely worth $20-25 million.

I could deal with managing that estate ... even if my fee were only 1%. And that size estate would likely take at least three years to unravel anyway, so I would just let it age out. Took almost that long to close my mom's estate, and it was simple by comparison.

Edward

14
Investors - LC / Re: Worst Loan of the Day Thread, Grades A - C
« on: February 05, 2018, 03:07:14 PM »
That's going to be a struggle.
yeah ... have to wonder what was on the application, or what the reviewer was on ... Based on what we see, I just cannot imagine a scenario where it's viable, implying there's likely significant info we don't see.

On track to be fully funded within six hours of release. Yet I often pick up notes on loans that actually look very good for grade C which have gone more than 24 hours since release.

Edward

15
Investors - LC / Re: What is Your Minimum Acceptable Return
« on: January 20, 2018, 09:56:20 AM »
No single number, because it's a trade-off between risk and return. I've picked a risk profile (accurately so far, but only so far) and I'm on about 8% ANAR with about 18 months average age. I'd be happy with a 4% return on that, because I think that would be better than I could get with other investments with similar risk. If I needed more safety, I'd be happy with a lower return. If it were pure play money, I wouldn't be happy with any level of return, because it wouldn't be as exciting as betting on horses.

Edward

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