Author Topic: Lending robot  (Read 38759 times)

Emmanuel

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Re: Lending robot
« Reply #45 on: January 24, 2014, 07:52:36 PM »
Would somebody mind sending me an invitation link?

Did you sign up on the waiting list from https://lendingrobot.com/accounts/signup/?
We shall send another batch of invites tonight or tomorrow...

Agflyer

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Re: Lending robot
« Reply #46 on: January 24, 2014, 11:44:40 PM »
I got the invite.  Thank you very much for the quick responses!

BruiserB

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Re: Lending robot
« Reply #47 on: January 26, 2014, 05:00:32 PM »
I have a question about the "popular" filter that Lending Robot has.  I have set one up to screen for the top 10% popular loans.  However it seems to be selecting some loans that don't seem very popular at all.

I often log into my LendingClub account a few minutes after orders have gone through.  I click on the "orders" menu to view the orders that were placed.  I usually have two orders for each note release time...one for my filters that don't depend on popularity and one for my popular filter (as there is a delay while Lending Robot calculates popularity.  However when I look at the loans that were purchased, I often see a few that don't seem very popular at all as they are only 2-3% funded.   And if I go back a short time (an hour or two) later, they may still only be 20% funded.  How did these loans ever make the "popular" cut?  Could they have been placed into some investor's cart during the time when LendingRobot calculates popularity, but then never actually purchased by that investor?  If so then it would seem that someone could be gaming the system by placing large investments in some loans but then never completing the purchase.  I'm not sure this is what's happening, but it's the only explanation I can think of.  I'm thinking of disabling my popular filter because it seems unreliable.

Rob L

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Re: Lending robot
« Reply #48 on: January 26, 2014, 06:29:32 PM »
This cat has been let out of so many bags it must have far more than 9 lives. Let me point to the following thread, and particularly the first two paragraphs of the opening post by GS:
http://www.lendacademy.com/forum/index.php?topic=1907.msg16826;topicseen#msg16826
The "shopping cart exploit" is being used by boys and girls; men, women and children of all ages; one and all (and almost certainly ALL fractional note institutional investors).
I could spell it out in much more excruciating detail but I won't. It's simply faster and more flexible than the API. It's not gaming the system, it's just what works (now).
Everyone who has the technology and funding carts notes first, then filters; period.
Of course it's not compliant with LC TOS, but then again if you ask them "Mother may I" first you might be okay. If not then their whim is your command.
Meanwhile I wouldn't confuse quickly funded loans with the good stuff (whatever that is).

PS: There are other ways to skin said cat, but I haven't seen them spelled out in sufficient detail to do so myself.

BruiserB

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Re: Lending robot
« Reply #49 on: January 27, 2014, 11:32:06 AM »
I suspected something like this was responsible for these "popular" loans to in fact not be so popular.  Given that this sort of game playing is going on, I think there isn't much value to Lending Robot having the popularity screening attribute.  Unless Lending Club is able to provide data on amount actually funded vs just "reserved" but not later funded, then it won't be possible to have this sort of tool. 

I agree that following the heard is probably a questionable strategy anyway, but I put a rule at the end of all my others that just was screening for the top 10%.  I figured I'd buy a few that way and see how the returns turned out.  I will probably disable that rule now, given what I'm seeing happening.  Would be interested to have feedback from Lending Robot on this issue.

giladg

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Re: Lending robot
« Reply #50 on: January 27, 2014, 12:36:08 PM »
I suspected something like this was responsible for these "popular" loans to in fact not be so popular.  Given that this sort of game playing is going on, I think there isn't much value to Lending Robot having the popularity screening attribute.  Unless Lending Club is able to provide data on amount actually funded vs just "reserved" but not later funded, then it won't be possible to have this sort of tool. 

I agree that following the heard is probably a questionable strategy anyway, but I put a rule at the end of all my others that just was screening for the top 10%.  I figured I'd buy a few that way and see how the returns turned out.  I will probably disable that rule now, given what I'm seeing happening.  Would be interested to have feedback from Lending Robot on this issue.

To mitigate this risk you can always combine popularity based rules with other criteria you consider good indicators -e.g. 10% most popular + grades C to E + 0 inquiries last 6 months + 0 public records.
Quite a few investors do that, applying a "sanity check" to the crowd wisdom.

dontvote

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Re: Lending robot
« Reply #51 on: January 27, 2014, 12:39:33 PM »
For the record (and it's a popular opinion, to be sure), 'popularity' is a ridiculous reason to select an investment for your portfolio.

donotrecommend
dontvote

Interest Radar IRR: 46.11%
NSR ROI: 41.22%
Average Loan Age: Your Moms

BruiserB

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Re: Lending robot
« Reply #52 on: January 27, 2014, 04:26:23 PM »
To mitigate this risk you can always combine popularity based rules with other criteria you consider good indicators -e.g. 10% most popular + grades C to E + 0 inquiries last 6 months + 0 public records.
Quite a few investors do that, applying a "sanity check" to the crowd wisdom.

That is actually similar to what I do have.  8)   And I agree that popularity shouldn't  be one's main criteria, but I did find the idea intriguing, so I decided to give the filter a try and only after all of my other selection criteria are exhausted.  But since it's not actually based on funds that are invested and not just in a shopping cart, then it doesn't even stand up as something worth experimenting with.  I might as well just buy random loans!

Rob L

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Re: Lending robot
« Reply #53 on: January 29, 2014, 10:31:20 AM »
The article "146: The Magic Number ..." is quite interesting, as is the associated chart:
http://blog.lendingrobot.com/
https://www.lendingrobot.com/data
Thanks for all the charts and data presented there.

Seems everyone has an opinion on the number of loans needed to be diversified. 800, 400, 200, etc.

Isn't it true that the riskier the loans then the more of those loans I need to own to reduce that risk by diversification?

Rather than "146", there's a different magic number (and curve) associated with each loan grade (and sub grade). Those curves and numbers would be nice to see.
That way I could look at my portfolio and say for diversification purposes that I have plenty of C's but not nearly enough E's, etc. Or, I can buy fewer/larger low risk notes but must buy more/smaller high risk notes to be diversified (something at complete odds with LC loan availability).

If not true (very possible given my limited level of understanding) then a few words about what I fail to understand would be appreciated.


dontvote

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Re: Lending robot
« Reply #54 on: January 29, 2014, 07:33:26 PM »
I'm not sure I fully appreciate the 'independence' of the loans in their analysis. While I agree that the boob job loan in Kansas doesn't have a lot to do with the get rich quick scam in Florida (you know who you are), there is no doubt that the return and the likelihood of loans defaulting and their real returns are significantly correlated. If the economy goes bad we'll all have more defaults and if you have 146 loans you'll do better than the guy who has 6 loans but seems like maybe worse than the guy who has 500 loans. the idea that there is a zero connection between the two outcomes at a fundamental level seems misguided.
dontvote

Interest Radar IRR: 46.11%
NSR ROI: 41.22%
Average Loan Age: Your Moms

Emmanuel

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Re: Lending robot
« Reply #55 on: January 29, 2014, 08:07:48 PM »
If the economy goes bad we'll all have more defaults. [...]. The idea that there is a zero connection between the two outcomes at a fundamental level seems misguided.

The loans themselves are disconnected (although there may be some connection between plastic surgery and get-rich schemes, who knows?), but you're right that they are ultimately all linked to the economy. Unfortunately at this stage we still don't have enough data to assess the independence of P2P loans. As far as consumer credit is concerned, there's definitely a bump in default in 2009, and it's not the flat, noisy line of a truly random variable (even if there's still less momentum than on the real-estate or the stock market):



In any case, the monte-carlo simulation is based on 'old' LC loans, many of them issued in 2008-, so in a way the bad scenario is already accounted for.

sun2gz

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Re: Lending robot
« Reply #56 on: February 17, 2014, 02:35:43 PM »
Question on pricing...

"Only 0.49% of orders submitted. No setup fees, no monthly minimum."

So I get charged for the cost of the orders submitted, not just the notes that get issued? That could mean that if I deposit $450 a month into my Roth IRA that I end up getting charged based on an investment of $800 because of all of the loans that are cancelled or denied before they are issued and I get the money back to re-invest.

Other than that, I'm interested to check this out.

I possess the same concern. The successful invest rate can be less than 50%, so the actual charge by IR is ~1%.

BruiserB

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Re: Lending robot
« Reply #57 on: February 17, 2014, 02:41:20 PM »
I possess the same concern. The successful invest rate can be less than 50%, so the actual charge by IR is ~1%.

That's no longer the way they calculate their charges.  They now charge 0.69% of notes that actually complete and issue.

adventurerneil

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Re: Lending robot
« Reply #58 on: February 22, 2014, 02:14:32 AM »
So if there are any specific filtering options people are missing, we'd love to hear about those.

I'd like to put my vote in for Revolving Credit Utilization as a new filtering criteria for LR. It slices and dices! ;)

giladg

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Re: Lending robot
« Reply #59 on: February 22, 2014, 03:36:06 AM »
So if there are any specific filtering options people are missing, we'd love to hear about those.

I'd like to put my vote in for Revolving Credit Utilization as a new filtering criteria for LR. It slices and dices! ;)

Thanks for the feedback - stay tuned, more filtering options are in the pipeline.