Author Topic: FOLIOfn Selling Strategy... Flawed?  (Read 15578 times)


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Re: FOLIOfn Selling Strategy... Flawed?
« Reply #15 on: November 19, 2012, 01:43:55 PM »
I merely think that they're in a super-position of states and that no control has yet been established over the sale of notes into secondary markets, much the same way that tax treatment of "member dependent notes" is also still a matter of interpretation.

And much the same way that the status of "loans" (now "notes") were in a super-position of states before the SEC "observed".

So, to answer directly, is LendingClub doing anything "illegal"?  Magic 8-ball says "unclear", since the only way to find out if they happen to be is if some regulatory entity steps in and says that they are, after the fact.  Don't get me wrong, I think that sucks - but it is a risk...
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Re: FOLIOfn Selling Strategy... Flawed?
« Reply #16 on: November 19, 2012, 02:13:21 PM »
I posted all my notes for sale with a markup irrelevant of my intent to keep them or not. All notes I buy I wouldn't purchase unless I intended to keep them so if they are not bought I do not run into a problem. I started posting clean just issued notes for sale @ a rate of 25.50 to 26.00 and depending on the interest rate of the note. I just went to look at how my "issued" notes are performing on the secondary market and see that I have 8 listed right and of the 8 listed two sold for 25.65 and another at 25.50. Another thing I would want is an extra month or so of interest out of my note sale after the service fee. I have no problem getting my funds re-investing into an interest earning state within 10-14 days and the FAR end. But I'm also a small player.

My biggest concern with continually posting my notes for sale, including my seasoned notes, is that I'm reducing my diversification by insisting that my average note balance remains higher than it would if I were to let more of my notes run their course. This is because I find the more seasoned notes sell faster on the secondary market. This is what I was trying to get at in my post and do not think I worded it clearly enough. Instead of having notes that ride the range of $25.00 to a buck or less I'm constantly pushing my average outstanding principle balance back towards that 25.00 mark. This means I hold less notes for the amount of funds that I have invested, and increases the damage that defaults can do to my portfolio. I suppose this risk is mitigated through larger investments (meaning more notes) but at this time I only have roughly 2 grand. This is what I mean by the question, am I doing more harm than good by doing this?