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Messages - dmcnic

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Investors - P / Re: Loan Volume
« on: October 29, 2017, 06:49:49 PM »
Thanks for making that call to Prosper. I had some additional funds to invest during October, but they've gone elsewhere.

Investing - General (not P2P) / Re: Robo-advisors?
« on: January 08, 2017, 10:39:28 AM »
Are any of you guys using a robo-advisor such as Wealthfront or Betterment? What are your experiences like so far?

I had an account on both Acorns and WiseBanyan for eight months just to see how they worked. Both were fine and did exactly what was expected.

For both accounts, I had to complete a questionnaire to establish my risk tolerance. On some questions, I can see new investors getting confused by the terms. At the conclusion, I can see other new investors becoming frustrated because the recommended investment portfolio doesn't make sense given what they have seen on financial media or heard in commercials.

I dropped WiseBanyan first because their statement was extraordinarily hard to understand. There were many micropayments into investment accounts and seemingly rebalancing taking place twice a month.

I dropped Acorns shortly after. The Acorns app was well designed and simplified the web site so I could make additional investments quickly. Of the two, I preferred Acorns.

Investors - LC / Re: New to LC/Few Questions/Advice
« on: November 26, 2016, 12:40:13 PM »
I agree with you on the trust part. The biggest assumption I think I am making is implicit in decision to buy loans on the primary market at all, which is that I basically trust that LC is allocating loans to the fractional market fairly and that they are not saving a better segment of loans for bigger, institutional investors.

You seem to have a good method at evaluating loans on Folio. Why haven't you purchased anything there yet? Nothing hit your criteria?

Investors - LC / Re: New to LC/Few Questions/Advice
« on: November 25, 2016, 10:15:46 AM »
When you find loans that fit your buy criteria (i.e. your "secret sauce"), what is it that you use as a guide to determine whether to buy them off of Folio on the secondary market vs. newly issued loans? I guess what I'm getting at is, why not use those same loan characteristics to buy new notes off the platform? Surely you've answered this to your own satisfaction, I'd be curious to find out how you arrived at the answer.

When I buy any loan, I have the expectation that I will not be able to sell and will be forced to hold it until maturity. With that in mind, I am much stricter about the characteristics of a new loan versus a loan on the secondary market. For example, I calculate the monthly payment * 12 and divide by annual income. On the secondary market, I want that to be less than 10%. For a new issue, I want that to be less than 5%.

One of the methods I use to diversify the portfolio of loans is to have an equal investment amount in each of the months (I only buy 36 month loans, so I want an equal investment amount across the 36 months). I have found that is hard to achieve since loans with less than twelve months to maturity are almost never available with a discount.

I haven't cracked any code and the results are not perfect. Even a new loan I purchased went IGP before the first payment. Flying blind? Perhaps. The greatest risk I am assuming is trust. I am trusting that people are honest in their application. I am trusting that Lending Club has adequate controls. I am trusting that people will make the payments they promised to make. But I do not let those uncertainties stop me from continuing to pursue new opportunities on Folio or Lending Club.

Investors - LC / Re: New to LC/Few Questions/Advice
« on: November 21, 2016, 07:49:46 PM »
I'd be curious as to how other people buy notes and tackle the issue I struggle with. It's not obvious to me that simply buying a note at x% discount results in a better purchase than buying a fresh note off the regular LC platform. Of course I understand buying notes for individuals who live in restricted states, that's a whole other ball of wax. But I feel like if you're going to buy a note off of Folio, you have to figure out (a) whether the interest rate is better than what can be had on the retail LC platform (b) what the probability of default looks like for the note you are buying. Then, you have to come to some conclusion that justifies why buying a note on the secondary market is better than buying a newly issued note. Don't forget to factor in taxes!

I have a small set of loan characteristics that I look for. These were determined by looking at historical loans and the charge-off rates for those characteristics. Only then do I look at the price of the loan. I can find quite a few that meet my criteria, but not my price.

I am good enough at scripting in Python that I can run a program to download and test the loans for sale on folio. Once a month I run tests on my assumptions (those characteristics I mentioned earlier) and make adjustments if necessary. It was certainly time consuming initially, but I am comfortable enough now that I run through a test only once per month.

Good job running through a scenario using folio loans, but if you are going to be convinced you are the sucker at the table, then folio isn't going to be for you. There are plenty of other options available in the marketplace.

Investors - LC / Re: Worst Month Yet
« on: November 19, 2016, 01:01:47 AM »
At the risk of sounding bad, when people get scared and dump their notes, I can't buy them fast enough.

That doesn't sound bad; that sounds prudent. I've dropped a few investment newsletters when they sell a stock after it crashes. Seems like that is the time to be buying. If people are selling, I'm like Rodney Dangerfield on the golf course, "Buy! Buy!"

Investors - LC / Re: New to LC/Few Questions/Advice
« on: November 17, 2016, 08:21:59 PM »
Now the good buys are mainly picked over by automation and people are not so eager to bail out at steep discounts. 

I second that. I can find some good discounts throughout the day, but the timing is random. I have found nothing for two months with a decent discount after hours.

Investors - LC / Re: Worst Month Yet
« on: November 17, 2016, 08:16:13 PM »
You actually get sales with a markup? That's amazing, but I always have to remember that not everyone is like me and looking for a bargain.

Groundfloor is new to me. What made you open an account there when LC already offers home improvement loans?

Investors - LC / Re: LC's home page shows the collapse
« on: November 12, 2016, 10:04:32 AM »
I'm glad several of the investors on this forum are leaving.

It seems to me there are not a lot of people leaving by selling their portfolio on folio. The quantity of loans for sale seems stable and the discount / markup ratio does not seem to be rising. I have found a lack of discounted loans over the past two weeks. It feels like people are not leaving by closing out, but instead by allowing the loans to roll off through maturity or default. That's a way of accepting risk that I wouldn't be able to tolerate. But that's me.

Introductions / Re: Joined the Forum
« on: November 09, 2016, 03:59:33 PM »
Hey, fliphusker. The program I have created simply looks at a field titled CreditScoreTrend. I filter out anything with a value of "DOWN". I do not know if this is a downward trend since inception of the loan or since the most recent FICO score collection.

Investors - LC / Re: New to LC investing
« on: November 07, 2016, 08:03:47 PM »
I think the proper investment goal should always be to meet or better the Dow.
You can always put your money into a DJ fund and match the market. The goal should be to beat the market.

The notes available on LC are fixed income notes with a limited maturity. That is nothing like the Dow (which is composed of variable income equities with indefinite maturity). It is much better to find something that has similar characteristics. Perhaps the Vanguard Total Bond Market ETF (BND). It has a YTD Return of 4.89% and a current yield of 2.42%.

Use the equity portion of your portfolio to beat an equity market measure like the Dow.

Investors - LC / October 2016 Statement Results
« on: November 05, 2016, 10:19:14 AM »
With the release of my October 2016 Monthly Statement, I was able to calculate the XIRR of my portfolio. Here are the necessary context numbers:

Percent Invested: 45% (I've been a member for four months and slowly getting invested).

Grade Composition:
A: 45%
B: 19%
C: 21%
D: 5%
E: 10%
F: 0%
G: 0%

Status Composition:
Current: 92%
IGP: 2%
Late: 6%

October 2016 XIRR: 4.80%

Foliofn - LC / Re: how often is folio inventory CSV file updated?
« on: November 05, 2016, 10:12:15 AM »
I left a message Thursday afternoon. No response after the end of the day on Friday. I'll try again next week.

Foliofn - LC / Re: how often is folio inventory CSV file updated?
« on: November 02, 2016, 08:28:37 PM »

I reported this problem to LC tonite.  I reproduced it with both Firefox and IE, and sent them images captured with a binary editor showing them blocks of null characters in the corrupted CSV files.

Could you please also report it?  Sometimes it is difficult to get priority on a bug unless it is reported by multiple people.  The more the merrier.

I do have a person's name who contacted me just after I joined. I'll call her tomorrow and see if I can help get this bumped up the priority list.

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