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Messages - Edward Reid

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31 is down.

Investors - LC / Re: Where is the sweet spot for loans? C,D,E? B,C,D?
« on: September 09, 2017, 09:37:47 AM »
Any one have comments on what is the best strategy for the grade of loans to invest in?

Know your risk tolerance.

As Fred explains, returns will vary by vintage, and you will only know afterward. The 2008-2009 period is a good lesson. When I started a couple of years ago, C and D loans were returning about the same. But back in 2008-2009, C loans held fairly steady, while D loans tanked, even giving negative returns for a while. You can get higher returns from riskier loans if you can tolerate the risk of losing money. Sound familiar? At least in P2P lending, losing big is a lot less likely than if you are in the stock market.



Adjusted Net Annualized Return:   7.44%
Weighted Average Interest Rate:   13.80%
Weighted Average Age of Portfolio:   14.6 mos
Number of Notes:   502

Grade: A (0.4%) B (1.7%) C (96.5%) D (1.4%) E (0.0%) F (0.0%) G (0.0%)
Term: Payments  36 (46.3%) 60 (53.7%)

vs All Accounts: 88.72
vs Similar Age Accounts: 97.31
vs Similar Age and WAIR Accounts: 97.70

(no folio)

Meanwhile, the DOW reached an all time high today.  Why should I keep my money at LC?
Diversification.  DOW will go down.
And lower volatility, depending on your choices. Those investing in E/F class may consider the risk similar to stocks. But I'm mostly in hand-picked class C, and evidence from the past is that this portfolio is far less volatile than stocks, not as safe as bonds but with far better returns than bonds and virtually no risk of loss of capital. My ANAR dropped under 8% the past few months and crept back up to 8%, and my portfolio is now old enough to have reached its likely minimum ANAR. I realize that it isn't likely to maintain 8% all the way to the end, but it still offers a combination of return and safety that's hard to find elsewhere.



Adjusted Net Annualized Return:   8.02%
Weighted Average Interest Rate:  13.78%
Weighted Average Age of Portfolio:  14.0 mos
Number of Notes:  492

Grade A (0.4%) B (1.8%) C (96.4%) D (1.5%) E (0.0%) F (0.0%) G (0.0%)
Term Payments  36 (44.4%) 60 (55.6%)

vs All Accounts: 88.92
vs Similar Age Accounts: 97.35
vs Similar Age and WAIR Accounts: 97.72

(no folio)

Under the circumstances, I'm sure everyone here will understandyour taking a few more days ... or weeks. Take care of yourself first.

Holy cow. Or rather, unholy deer! Very glad that both cars and eye surgery are far better than 50 years ago. I've been through cataract surgery and retinal surgery; neither was nearly as painful as inflammation of third cranial nerve, which among other things resulted in loss of control of one eye for a couple of months. Just saying I know how hard it is to try to do anything with one eye out of commission.


Adjusted Net Annualized Return:   7.75%
Weighted Average Interest Rate:   13.79%
Weighted Average Age of Portfolio:   13.3 mos
Number of Notes:   480

Grade: A (0.4%) B (1.9%) C (96.2%) D (1.6%) E (0.0%) F (0.0%) G (0.0%)
Term: Payments  36 (42.6%) 60 (57.4%)

vs All Accounts: 86.33
vs Similar Age Accounts: 95.52
vs Similar Age and WAIR Accounts: 96.36

(No folio)



Adjusted Net Annualized Return:   7.76%
Weighted Average Interest Rate:   13.76%
Weighted Average Age of Portfolio:   12.8 mos
Number of Notes:   464

Grade: A(0.4%) B (1.9%) C(96.0%) D(1.6%) E(0.0%) F(0.0%) G(0.0%)
Term: Payments  36(38.9%) 60(61.1%)

vs All Accounts: 86.99
vs Similar Age Accounts: 95.22
vs Similar Age and WAIR Accounts: 96.08

no folio

Investors - LC / Re: New Sign In Window
« on: May 10, 2017, 06:53:05 PM »
Fidelity is probably the most heavily targeted institution in the world. If it can play nicely with Last Pass then why can't everyone?

Because web developers have lots of new toys, and like playing with them. At most sites, new toys get priority over mundane security.


Investors - LC / Re: New to LC-Bad Timing?
« on: May 01, 2017, 03:38:40 PM »
What do you think of this chart?,3551.msg40027.html#msg40027

The whole report

Mostly what I see is 1) too much volatility to draw any conclusions (neither that individual investors are pulling out nor that they are staying in), and 2) a drop in individual originations, not in balance held.

What the heck happened in 2Q16? (True question. I assume someone here knows; I don't. It sort of looks like they decided to put a cap on originations.) You could say from the same chart that Other Insitutional are pulling out too. Maybe they are. (I don't know exactly what that category consists of.) Banks and Managed Accounts have been flip-flopping for the past four quarters. Obviously some things are changing fairly drastically from quarter to quarter, but I see no trend.

In any case, these are originations. There are clues that LC is exiting its fast growth stage and moving into something closer to a steady state. What's happening to total value of individual investor notes held? Is even the slightly lower funds in originations enough to keep the total investments growing? If it is, then there's no evidence of "pulling out", just that there are fewer new investors. Slower growth is a different animal from contraction. What's the average age of outstanding notes? I doubt LC gives us any data on that. If the average age of notes is older, that counterbalances a drop in originations.

See page 23 of the report, the Servicing Portfolio Balance. This is the only chart I find in the report which addresses balances held. It rather clearly shows the total balance leveling off in the past year. It does not give numbers for the categories, but eyeballing it, it looks to me like there's a tiny growth in Notes in the past year, with no Q/Q drop at any point. Certificates have dropped a tiny bit, and whole loans have expanded quite a bit.

Until we see a drop in balance held by individual investors, I don't believe there's any reason to say individual investors are pulling out.


Investors - LC / Re: New to LC-Bad Timing?
« on: May 01, 2017, 11:54:51 AM »
It seems like a lot of people are bailing out of P2P investing.
I see no evidence of that. The people who talk about getting out are a self-selected sample. Self-selected samples are worthless. And especially so in this kind of environment, because the unhappy tend to talk about their complaints far more than the happy talk about what they like.



Adjusted Net Annualized Return:    7.82%
Weighted Average Interest Rate:    13.74%
Weighted Average Age of Portfolio:    12.1 mos
Number of Notes:    456

A (0.4%) B (2.3%) C (95.6%) D (1.7%) E (0.0%) F (0.0%) G (0.0%)

Payments  36 (36.8%) 60 (63.2%) is throwing 502s at me tonight.

vs All Accounts: 87.93
vs Similar Age Accounts: 95.28
vs Similar Age and WAIR Accounts: 96.10

(no folio)

Investors - LC / Re: The identiy fraud repayment promise
« on: April 04, 2017, 10:18:53 PM »
I think its a mistake to underestimate the bad guys.

Oh yeah. I brought up one possible factor, but the numbers LC is passing out (like the 3 in 20K that au88 posted) sound very low to me. The ones that didn't make any payments, or only one, and LC was never able to contact them and charged off the loan ... how many of those were loan fraud, not just individuals taking a loan they don't intend to pay but, as you say, organized crime.

Still, I tend to think that loan fraud is harder than, say, skimming a credit card. But I don't doubt for a second that Bad Guys are working hard.


Investors - LC / Re: The identiy fraud repayment promise
« on: April 02, 2017, 12:34:58 PM »
Interesting, though I don't have enough notes to be worth contacting LC ... I'll wait to hear more here. I found this article stating that 4.4% of identity theft involves loan fraud. (The article lists references, but I did not follow them to find out where they got this number.)

OTOH ... I wonder. LC only provides the loan proceeds as a direct transfer to a bank account. This means a loan fraudster not only has to impersonate the victim to LC, they also have to either gain access to the victim's bank account or set up an account in the victim's name. (LC probably does at least some rudimentary name match checks on the accounts they send money to.) If they have access to the victim's account, it's probably easier for them just to drain the account and not worry about refilling it. And perhaps this complication -- the need to break in twice rather than just one -- is enough of a hassle and delay to make the thieves look elsewhere. "I don't have to outrun the bear, I just have to outrun you."

I'll certainly be interested in the results, given that what LC has already told those who have requested the info is that their identify fraud rate is essentially zero.


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