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Messages - Fred93

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1966
Investing - General (not P2P) / Re: HFT skimming the market
« on: May 02, 2014, 10:37:00 PM »
Paying a stock $45.42 instead of $45.41 does not REALLY affect long-term returns.
But of course, none of us like be skimmed!

The effect can be bigger than 1 cent.

These days when I see a stock 40.00 bid 40.06 ask, and I bid 40.03, I immediately see the ask move to 40.09 .  Then when I decide to just take the ask, so up my bid to 40.09, I see the ask suddenly move to 40.11 .   The traders are all trying to game me.  Even if I had been able to take the ask at 40.06 or 40.09, it likely would have been for 100 or 200 shares.  I'm buying in much bigger size than that.  The only tool I have is patience.  I can put the bid in at 40.05 or whatever and go away for a few hours.  If the traders (be they human or computer) see I'm not anxious, then they stop trying to game me, or perhaps they just stand aside until someone takes my bid.  However, when you do that the stock can move while you're away.  You may intend to hold for many years, but first you have to complete the purchase!  My belief, from my own experience, is that this is much more work than it used to be.  I'm the opposite of a day trader.  I don't want to sit at the computer watching and playing games.  Don't have time for it.  When they make me spend my time on this stuff I'm unhappy.

1967
Investing - General (not P2P) / Re: HFT skimming the market
« on: May 02, 2014, 05:12:07 PM »
Any retail investor really affected by HFT is trading too frequently. Day-trading is fun, but it's not investing.

That's a pretty darn broad statement. 

I trade very slowly.  My average holding time is many years.  However, that does not make me insensitive to the price at which I buy or sell.  If I'm getting skimmed I care about it. 

I think you need to read the book.

1968
Investing - General (not P2P) / Re: HFT skimming the market
« on: May 01, 2014, 06:25:50 PM »
...but I think he is trying to say that if you have your limit order in for $30 and the stock is sitting at something lower than that...say $29...then...

First, there is no such thing as "the stock is sitting at...".  Stocks don't "sit".  The market has orders, which make "bids" and "asks".  There are "bids" and "asks" sitting out there, not stocks.  When you look at those bids and asks, you take away information, and reach conclusions, such as "the stock is selling at around this price".  The market makes the price.  But what if many (most!) of those bids and asks are fake.  They are thrown in there in massive quantity by HFT and 90% of them are removed seconds (or even milliseconds) later.  You are attempting to extract information from the bids and asks, under the PRESUMPTION that these are REAL bids and asks, that make a market.

If most of the bids and asks are fake, then where is the real market?  You can't be sure.  Therefore, the fakeout starts much earlier than the time you place your order.  You place a limit order at 30 because of your observation of what you believe are other real people wanting to do real transactions.  Perhaps you are wrong.  If so, the HFT can skim you, and his work on you began even before you placed the trade.

1969
Investing - General (not P2P) / Re: HFT skimming the market
« on: May 01, 2014, 03:05:12 PM »
It's a great book.  I direct my trades through IEX now.

I was going to do same, but my brokers don't seem to offer that option.  Which brokers allow one to direct thru IEX ?

1970
Investors - LC / Re: So Many Loans!
« on: April 26, 2014, 03:44:21 PM »
Wow.  I presume you captured that data yourself?  Thank you.

1971
Investors - LC / Re: LC database sloppiness
« on: April 25, 2014, 01:28:50 PM »
I have a theory on the interest rates with six digits, such as "0.112628" in my notes.csv file.

I observed that these only occur on very old notes.  That  has led me to suspect that this is a "historical oddity", which likely has little importance for the present or future. 

I usually apply date cutoffs when I analyze my notes.csv file anyway, because my strategy has changed so much over time that I am usually uninterested in performance of old notes.


1972
Investors - LC / Re: So Many Loans!
« on: April 24, 2014, 08:01:56 PM »
I must agree.  Good loans are again in short supply.  We have no visibility to the cause of this ebb and flow, but we've definitely fallen into another ebb.

1973
Investors - LC / Re: LC accounting problems
« on: April 24, 2014, 12:51:37 PM »
These are notes I bought on folio.

I'm a little late to the conversation, but I was going to say for you to double-check if you purchased them on folio.

Pretty hard to do.  I eventually found them in a folio statement from 2009.  I'm not going to check >1000 notes vs many years of folio statements.


What did they do with the banned members' notes in the accounts?  Did Prosper pay the users full value even for past due notes?  Or were the folks just prevented from buying new notes?
Prosper simply banned them from buying new notes, banned them from sending messages to other members or participating in the forum (which were features of the prosper platform at that time).  There were forums outside prosper where lenders communicated, so we all kept in touch. 

Do you have proof of this?
[/quote]

I was there at the time, engaged in the conversation as it was happening.

1974
Investors - P / Re: Prosper advises users to change their passwords
« on: April 23, 2014, 04:48:53 PM »
I vote for the royal waste of time category.

So many folks are being advised to issue advisories for CYA purposes.

1975
Investors - LC / Re: LC database sloppiness
« on: April 23, 2014, 01:50:19 PM »
At LC's request, I sent them a screen shot showing that the notes files has more digits in the interest rate than the loans files.  I thought words explained this one pretty well, but I figured I wouldn't argue about a picture.

I think we should all ask for a data dictionary for the notes.csv file.  That way next time some guy sees that he got paid back more principal than the "AmountLent" he won't be so befuddled.

1976
Investors - LC / Re: LC accounting problems
« on: April 23, 2014, 01:47:00 PM »
What did they do with the banned members' notes in the accounts?  Did Prosper pay the users full value even for past due notes?  Or were the folks just prevented from buying new notes?

Prosper simply banned them from buying new notes, banned them from sending messages to other members or participating in the forum (which were features of the prosper platform at that time).  There were forums outside prosper where lenders communicated, so we all kept in touch. 

1977
Investors - LC / Re: LC accounting problems
« on: April 23, 2014, 01:22:11 PM »
They got back to me this morning.  The answer is...

These are notes I bought on folio.  I had forgotten that I ever bought notes on folio, but apparently I did, several years ago.

For loan ID 36784, the web shows $800 'cause that's the original amount loaned in this note.  My statement says Principal Invested $781.22 because that's the par value of the note at the time I bought it.  (some principal had been repaid)  Finally, the notes.csv file says Amount Lent $756.55 because that's the amount I paid for the note on folio.  This explains why the three numbers are different.

Would be nice if there was a data dictionary for the notes.csv file that said what the fields were supposed to mean.

So when calculating from a notes.csv file, I guess you shouldn't be surprised if it appears someone paid you back more than you lent, because the "amount lent" numbers there aren't actually what you lent.

1978
Investors - LC / Re: LC accounting problems
« on: April 23, 2014, 12:46:06 PM »
Between this and the other thread, you're just about at that point where people mysteriously disappear after finding out too much.  Do be careful.

What you describe actually happened to some prosper lenders in the early years.  Prosper actually banned some lenders for discovering/reporting borrower fraud, etc.

1979
Investors - LC / LC accounting problems
« on: April 23, 2014, 05:29:24 AM »
I sent the following message to LC this morning...
Quote
I've found some discrepancies.  Need someone to investigate and provide an answer quickly. 

Tonite I tried to do some calculations using my notes.csv file, and noticed some calculations weren't coming out right.  I investigated a few of the numbers, and found what appear to be several problems.

When I compare the notes.csv file downloaded from the LC web site against the information about my notes displayed on the LC web site, I find what appear to be disagreements.  When I compare both to my statements, again I find disagreements.  All these things should agree perfectly.

I will give three examples.  In each case, this is a paid off loan, just to make things real simple.

Loan #367384
The notes.csv file says
  Amount Lent = $756.55
  PaymentsReceivedToDate = $920.17
The LC web site says
  Loan Fraction = $800.00
  Payments to Date = $946.46
Obviously these don't agree.  Then I went to my statements, where I found
  Principal Invested = $781.22

So what was the amount I invested?  $756.55?  $800.00?  $781.22?  Why are these numbers all different?  Why do the payments to date numbers not agree?
 
Loan #373930
The notes.csv file says
  Amount Lent = $391.22
  Payments to Date = $474.06
The LC web site says
  Loan Fraction = $400.00
  Payments to Date = $474.06
In this case, the amount lent doesn't agree, but the payments to date do agree.  How can that be?  Different than the prior case.  I then went to the statements, where
  Principal Invested = $400.00
So in this case the statement agreed with the web site, unlike the prior example.

Loan #374309
The notes.csv file says
  Amount Lent = $195.56
  Payments to Date = $236.68
The LC web site says
  Amount Lent = $195.56
  Payments to Date = $236.68
So in this case, the notes.csv file matches the LC web site.  For a double check I looked at my statements and found... get ready...
  Principal Invested = $200.

In each of these three cases, different things agree, and different things disagree.

Please explain.

If any of you have observed this in the past, perhaps you know the answer.  If not, perhaps you should check some of the older loans in your notes.csv file to see if the numbers make sense.

1980
Investors - LC / LC database sloppiness
« on: April 23, 2014, 02:02:13 AM »
While processing the loans and notes files distributed by LC, I've noted a few things that make one scratch the noggin'.  Some of them are just nonsensical sloppiness, such as giving the same field, containing the same data different names in different files, or providing the very same information in different files, but with different formats or conventions.  Then there are some things that just some kind of wrong.

Lending Club employees, feel free to defend yourself right here on the forum!

Those of you who've been thru this will  no doubt chuckle, 'cause you've all been thru this before me.

This is a mix of venting and a question or two.  I'll just spew...

1. In the loans files, there are some loans that have the status of "Current" and yet have never made any payments!  It was my understanding that the status "Issued" was for new loans that have not yet made payments, and "Current" was for loans that have made payments.  That's true sometimes, however it clearly ain't that simple.  I didn't count 'em, but there are over a dozen, and they are all recent.

Examples: ID = 12385147, or 12407908, or 12625678

In each case, total_pymnt = 0 and last_pymnt is null.  These loans have made no payments.

2. In the loans files, the term of a loan is in a field named "term" and is a text string, either " 36 months" or " 60 months" (yes it begins with a space!), whereas in the notes.csv file, the same information is in a field named "LoanMaturity.Maturity", and here it is a simple numeric, ie "36" or "60".  Different name.  Different format.  Same information.

3. In the loans files, the size of the loan is called "funded_amount".  In the notes.csv file, the same information is called "AmountLent".  (ok,  of course in one case its the total loan amount, and in the other case its the note amount, but its the same concept, and if I read both the loan files and my notes file in to do similar analysis on them, this number goes the same place in that calculation.)

4. Interest rate is really interesting.  It should be identical, but it has a different name, different format, and different data.  I'll use numbers from Loan ID 367384.  In the loans files, the field is named "int_rate", and the data is "11.26%"  (yes the percent sign is in the data), however, in the notes.csv file the field is named "InterestRate" and the data is "0.112628"  .  This is not only a different format, it is a different number.  Seems to be that way for every loan.  How can this be?  Where did those extra digits come from?  They're not shown to borrowers or lenders on the web site.  Are they paying me that extra money?

5. In the loans file, there are empty fields in some loans.  These are simply empty, ie they end up null fields when you read them into a database.  In the notes.csv file, there are also some empty fields, but IN ADDITION, there are also fields that contain the text string "null"!

These are not the only differences.  They're a sample.

Looking at these files one might imagine that they came from different companies, but in fact they came from the very same company!

If anyone has any insight on #1 or #4 I'd be interested to hear it. 

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