Author Topic: Prosper--OK, you win!  (Read 22724 times)

investforfreedom

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Prosper--OK, you win!
« on: January 20, 2014, 12:38:00 PM »
I have been investing with Prosper for a year and a half now, but I have not been able to pick up any good D and E loans that meet my criteria lately.  The really good ones are gone literally in the first few seconds of listing, whereas there was a sufficient supply (if not an abundance) of these a year ago. 

I know the competition for loans has been heating up.  But I am not reinvesting my payments into Prosper for several reasons:

1.  As I wrote before, if I can't get at least 11%, there is no point in doing this actively.  I have mutual funds that have been churning out 12% on average for the past 10 years without myself doing anything.  And given the drought of good D and E loans, I don't believe I can maintain 11% returns.  In fact, good C loans get filled very quickly as well.  And the drop in interest rates doesn't help either. 

2.  Prosper is not interested in leveling the playing field for small investors.  How can the small fish have a fighting chance if they just let the big boys pick up half of the loan or the full loan in the first few seconds?  We have been talking about imposing percentage and time moratorium on this, but it has fallen on deaf ears.

3.  I definitely understand that not everyone has the time to manually pick the loans, and there is a reason for auto-invest and APIs.  But as I pointed out many times before, this would lead to cut-throat type of frontrunning just like what they have with high-frequency trading in the stock market.  And eventually, only the ones with the best APIs and fastest servers will grab the best loans.  And who is most likely to win in this game?  Again the institutional players with deep pockets.  Prosper allows this to happen more than LC. 

You guys will have one less competitor. 
« Last Edit: January 20, 2014, 12:39:52 PM by investforfreedom »

dontvote

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Re: Prosper--OK, you win!
« Reply #1 on: January 20, 2014, 12:48:56 PM »
I'm investigating NSR Premium to automateProsper investing. I'm fine with their business plan including me or not but am wildly irritated by their absolutely shitty customer service. I've asked for instructions on withdrawing idle cash from an IRA (the proper forms) six time - messages, emails, emails to salespeople, emails to corporate, calls, whathaveyou. Zero response. I'll wait and see how NSRP works then make a decision to close the account or not. If I choose to close the account I can let people know how liquidation goes.

I have not seen more than 33 loans on the platform. Peter and Zach should really move Prosper under 'other platforms' on this forum as there really isn't that much 'peer' related stuff to talk about.

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dontvote

Interest Radar IRR: 46.11%
NSR ROI: 41.22%
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Bilgefisher

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Re: Prosper--OK, you win!
« Reply #2 on: January 21, 2014, 09:49:24 AM »
I agree.  I've pulled out nearly 30% of my meager portfolio. My money has sat idle for 6 weeks. I think peter recently had a post were 95% of the money was institutional. They are no longer peer to peer lending.  Its merely another form of institutional lending.  Lending club is no better. 

MarinBB

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Re: Prosper--OK, you win!
« Reply #3 on: January 21, 2014, 09:53:27 AM »
What has been people's experience with NSR Premium? Are you able to pick up higher-rate loans through it?

I used to invest manually 100% of the time and now I'm 100% automated through the API. The speed race in the API is vicious; the very best loans are gone inside of 1 second.

I would really like for Prosper to lower the participation cap on fractional listings to something like 10% so that more investors can get on each listing. This should also extend the lifespan of listings and make it possible for website users to once again pick up some higher-rate loans.

investforfreedom

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Re: Prosper--OK, you win!
« Reply #4 on: January 21, 2014, 10:49:39 AM »
I know the current management at Prosper wants to turn the platform profitable as early as it can, and I don't know what kind of agreement it has struck with the institutional players in order to get their backing.  But the truth of the matter is that there is already so much money ready to invest from the retail side that it isn't necessary to kowtow to institutions by letting them grab 95%(?) of the loans.  (Even if it was 80%, it would still be excessive.)

What began as a revolutionary idea, as a kind of social revolt against the dominant banking practice is once again lost to the colonizing power of deep pockets of the same system.  It is futile, my friends.






Emmanuel

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Re: Prosper--OK, you win!
« Reply #5 on: January 21, 2014, 02:46:50 PM »
I know the current management at Prosper wants to turn the platform profitable as early as it can, and I don't know what kind of agreement it has struck with the institutional players in order to get their backing.  But the truth of the matter is that there is already so much money ready to invest from the retail side that it isn't necessary to kowtow to institutions by letting them grab 95%(?) of the loans.  (Even if it was 80%, it would still be excessive.)

What began as a revolutionary idea, as a kind of social revolt against the dominant banking practice is once again lost to the colonizing power of deep pockets of the same system.  It is futile, my friends.

It's an uphill battle, but I'm confident technology will make Wall Street's sophistication available to individuals. Look at what happened in the travel industry: travel agents were replaced first by a handful of big websites, then it became easy enough for many, small and niche sites to sprout as well.

Bohb Daishi

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Re: Prosper--OK, you win!
« Reply #6 on: January 22, 2014, 03:03:29 AM »
It's an uphill battle, but I'm confident technology will make Wall Street's sophistication available to individuals.

That will never happen.
There are three ways to make a living in this business: be first, be smarter, or cheat.

investforfreedom

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Re: Prosper--OK, you win!
« Reply #7 on: January 22, 2014, 08:59:19 AM »
I know the current management at Prosper wants to turn the platform profitable as early as it can, and I don't know what kind of agreement it has struck with the institutional players in order to get their backing.  But the truth of the matter is that there is already so much money ready to invest from the retail side that it isn't necessary to kowtow to institutions by letting them grab 95%(?) of the loans.  (Even if it was 80%, it would still be excessive.)

What began as a revolutionary idea, as a kind of social revolt against the dominant banking practice is once again lost to the colonizing power of deep pockets of the same system.  It is futile, my friends.

It's an uphill battle, but I'm confident technology will make Wall Street's sophistication available to individuals. Look at what happened in the travel industry: travel agents were replaced first by a handful of big websites, then it became easy enough for many, small and niche sites to sprout as well.

I assume you mean Priceline, Travelocity, Expedia, etc., but this is comparing apples to oranges.  No big banks, institutions or individuals with deep pockets will buy up tens of thousands of airline tickets or make thousands of hotel reservations at one time at these sites on a daily basis for the purpose of generating profits.  But they can soak up all the good loan listings at no time on Prosper or LC.  For Wall Street, the latter is a far superior way to make money.  And in fact that is how the investment bankers make money, not the least of which is to engage in high frequency trading. 
« Last Edit: January 22, 2014, 09:08:52 AM by investforfreedom »

Emmanuel

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Re: Prosper--OK, you win!
« Reply #8 on: January 22, 2014, 12:45:38 PM »
But they can soak up all the good loan listings at no time on Prosper or LC.

If you excuse the self-promotion, I know for a fact our tool LendingRobot.com allows even small investors to compete on equal foot with Wall Street guys (granted, it's on LC only and not Prosper....yet).

priuspilot

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Re: Prosper--OK, you win!
« Reply #9 on: January 22, 2014, 01:43:18 PM »
I've been having a bad time with Prosper as well for this reason. I just manually bought some 11% loans... Hardly worth the risk IMO. 

Maybe any idle amount I have over $xx.xx cash now I'll withdraw from the platform and put towards my index fund purchases from now on. It was fun while it lasted though!

core

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Re: Prosper--OK, you win!
« Reply #10 on: January 22, 2014, 04:11:59 PM »
If you excuse the self-promotion, I know for a fact our tool LendingRobot.com allows even small investors to compete on equal foot with Wall Street guys (granted, it's on LC only and not Prosper....yet).

Sorry, but 30 seconds is not equal footing.  Especially if the shopping cart exploit is not used, and to my knowledge you are not using it.

Emmanuel

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Re: Prosper--OK, you win!
« Reply #11 on: January 22, 2014, 07:59:38 PM »
Sorry, but 30 seconds is not equal footing.  Especially if the shopping cart exploit is not used, and to my knowledge you are not using it.

Of course not. We're under 2s with the LC API, and aim for comparable speed with Prosper.

investforfreedom

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Re: Prosper--OK, you win!
« Reply #12 on: January 23, 2014, 08:53:24 AM »
2 seconds is quite fast, but you guys had better keep it up.  I am talking about this type of competition from the big boys that you are up against: http://www.pcmag.com/article2/0,2817,2424495,00.asp   (I traded stocks for a while.) We are seeing more and more of technology platforms like yours popping up as social lending catches on.  Not only do you have to have the fastest APIs, you've got to have the fastest servers as well as the nearest locations to LC's (or Prosper's) main frames in order to stay ahead.  Seconds will inevitably become micro-seconds.  And only the best 1 or 2 technology platforms will eventually survive in this cut-throat type of frontrunning competition.  And chances are the big boys will come out on top.  Do you have what it takes to beat them?  I hope you do.   

As for myself, I still like to eyeball all the loans I invest in.  There are far too many variables I take into account for me to confidently allow bots to do the investing.  For example, many on this platform avoid states like FL or CA, but I do in some cases.  And for D, E, F loans, I invest mostly in 60-month periods, but I also invest in 36- month loans because sometimes, they are better.  It all depends. 

Sorry, but 30 seconds is not equal footing.  Especially if the shopping cart exploit is not used, and to my knowledge you are not using it.

Of course not. We're under 2s with the LC API, and aim for comparable speed with Prosper.
« Last Edit: January 23, 2014, 09:01:01 AM by investforfreedom »

Bohb Daishi

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Re: Prosper--OK, you win!
« Reply #13 on: January 23, 2014, 10:18:41 AM »
Want to know the easiest way to be the first on a good loan? Have a $10+ million account and strike a deal with Prosper to invest you in partial/whole loans that meet your criteria, before those loans even hit the market.
There are three ways to make a living in this business: be first, be smarter, or cheat.

Emmanuel

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Re: Prosper--OK, you win!
« Reply #14 on: January 23, 2014, 03:50:15 PM »
2 seconds is quite fast, but you guys had better keep it up.  I am talking about this type of competition from the big boys that you are up against: http://www.pcmag.com/article2/0,2817,2424495,00.asp   (I traded stocks for a while.) We are seeing more and more of technology platforms like yours popping up as social lending catches on.  Not only do you have to have the fastest APIs, you've got to have the fastest servers as well as the nearest locations to LC's (or Prosper's) main frames in order to stay ahead.  Seconds will inevitably become micro-seconds.  And only the best 1 or 2 technology platforms will eventually survive in this cut-throat type of frontrunning competition.  And chances are the big boys will come out on top.  Do you have what it takes to beat them?  I hope you do. 

Agreed, it will heat up for sure. And that will be interesting.

Albeit I don't see it reaching HFT levels before a little while, since for the moment being it's impossible to churn a lot of assets very quickly. HTF is not so much about snatching up the best stocks before others, but about going in front of suckers and reselling to them!