Author Topic: P2P-Picks.com Beta is Live  (Read 12374 times)

OrthoInvest

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Re: P2P-Picks.com Beta is Live
« Reply #15 on: February 22, 2013, 11:00:33 AM »
Hi Bryce,

Been using the site and it looks great!

Two questions:

A minor issue was trying to incorporate some of my own parameters with yours. I know you have you own benchmarks, but if I chose to not invest in loans that have public records and the link you have includes it - then I click it and decide to delete it on the site, I still pay a certain amount to add it. I guess the only way to bypass this, is to create a personal filter on your site that allows us to exclude loans with certain attributes. It kind of defeats the purpose in some ways, but there are some things I can't bring myself to invest in. Have you explored these options?

Second, how does the ROI change with your fee assessed. If someone is average a 10% return, and you state with your methods they can get an xyz return %, does the 13 cent or other fee cancel out that return? I'm too lazy to figure it out right now, but it looks fairly minor, such that for $5,000 invested it would amount to only $26 charged.

Thanks again!


brycemason

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Re: P2P-Picks.com Beta is Live
« Reply #16 on: February 22, 2013, 01:26:26 PM »
Hi OrthoInvest,

Thanks for the compliments. We're continuing to work on important back-end stuff for billing, and have a ways to go to finish and go fully live. But I am glad you are enjoying the site thus far.

#1 - Other fields - I'm of two minds on this one and still deciding what to do. Many people have commented that they would like to see one or more fields in addition to the ones provided. The common ones are loan purpose, interest rate/subgrade, and you are interested in public records. All of these things are already incorporated into the picking process such that a pick with a public record would be equivalent (on average over a hundred such loans) to those without. Each of these items individually has an effect on the chances of a charge off, but if they are already taken into account, I don't see the point of further reducing the set of usable picks for my clients. Then people start to get irritated that there aren't enough loans after they are filtering further on top of my set (and I suspect for no good reason).

I may do some research on my own picks historically to illustrate to the users that once you're already using the picks, there is no further benefit to filtering out loans with XYZ characteristics. Perhaps that would solve the issue.

I'd really like to stick only to the additional fields that provide some purpose outside of the picking process. For example, once we start recommending 60 month loans, people have a legitimate investment choice on when they want their principal back. So that's why I wanted to provide the term. The same goes for general grade, as the variance around E notes is much higher than B notes, so a person with less capital might wish to reduce his or her variance and emphasize those.

#2 - The ROI obviously decreases because I charge a fee. I'm not sure I can promise a specific return, but I intend to add a module to the site that states what my personal portfolio is returning in a given month and what the average age of the notes in it is. That will give some sense of real-world performance (ex fees, of course). I have set the fees at a level I believe that splits the alpha (the benefit of the service) fairly between myself and the user.

Best,

Bryce



rajuabju

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Re: P2P-Picks.com Beta is Live
« Reply #17 on: February 22, 2013, 02:36:52 PM »
PM Sent. I'm definitely interested to try this site out.


OrthoInvest

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Re: P2P-Picks.com Beta is Live
« Reply #18 on: February 22, 2013, 04:11:08 PM »
Hi OrthoInvest,

Thanks for the compliments. We're continuing to work on important back-end stuff for billing, and have a ways to go to finish and go fully live. But I am glad you are enjoying the site thus far.

#1 - Other fields - I'm of two minds on this one and still deciding what to do. Many people have commented that they would like to see one or more fields in addition to the ones provided. The common ones are loan purpose, interest rate/subgrade, and you are interested in public records. All of these things are already incorporated into the picking process such that a pick with a public record would be equivalent (on average over a hundred such loans) to those without. Each of these items individually has an effect on the chances of a charge off, but if they are already taken into account, I don't see the point of further reducing the set of usable picks for my clients. Then people start to get irritated that there aren't enough loans after they are filtering further on top of my set (and I suspect for no good reason).

I may do some research on my own picks historically to illustrate to the users that once you're already using the picks, there is no further benefit to filtering out loans with XYZ characteristics. Perhaps that would solve the issue.

I'd really like to stick only to the additional fields that provide some purpose outside of the picking process. For example, once we start recommending 60 month loans, people have a legitimate investment choice on when they want their principal back. So that's why I wanted to provide the term. The same goes for general grade, as the variance around E notes is much higher than B notes, so a person with less capital might wish to reduce his or her variance and emphasize those.

#2 - The ROI obviously decreases because I charge a fee. I'm not sure I can promise a specific return, but I intend to add a module to the site that states what my personal portfolio is returning in a given month and what the average age of the notes in it is. That will give some sense of real-world performance (ex fees, of course). I have set the fees at a level I believe that splits the alpha (the benefit of the service) fairly between myself and the user.

Best,

Bryce

Thanks for the reply!

It would be interesting if you were able to break down your own categories into those subsets and see. I'm assuming that's what you do when you categorize 1 percent, 5 percent, and 10 percent.

Can you elaborate on what exactly that means? I have always assumed it meant, top 1 percent of your picks and top 5 percent and so on. But does it represent something else?

Also, with question number 2 -- I guess what I'm getting at is: If lending club calculates we earned 14 percent using P2P picks, what is the real Return on the Investment with paying the 13 cents? Does it depend on how much invested? Or is it a steady shot across the board. As I said, my brain hurts and I can't seem to think this out.
But basically would have to be, (Estimated ROI of P2PPicks - Cost to Utilize P2PPicks) compared to Investing on Own

So is that xyz% - fee for utilization >, =, or < investing on own.

Sounds like you have thought it out a lot and you are splitting the alpha...but curious if you can present it in a way the lazier people (me) can see and justify paying someone to choose the notes I invest in :)

Thanks!

rawraw

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Re: P2P-Picks.com Beta is Live
« Reply #19 on: February 22, 2013, 05:22:46 PM »
Bryce, I think you are always going to struggle with this 'black box' situation.  People get nervous if they don't have a feeling of what is going on, but at the same time we may not know statistics well enough to actually understand it/you don't want to reveal to much.  Maybe look to how the credit scores handled this dillema?  I've started building a portfolio of your notes and most of them, I normally wouldn't have invested in.  Hopefully I can try this out long enough in Beta to see if I'd want to pay for it -- because I have no qualms in paying for useful services.  But seeing the effectiveness of something like this does take time.


brycemason

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Re: P2P-Picks.com Beta is Live
« Reply #20 on: February 22, 2013, 06:05:18 PM »
Certainly does. I also think the hobbyists on this board are fundamentally different than quite a bit of my target audience. There are a lot of people out there who don't care to know all the details of this asset class. They just want something that's going to deliver above-average returns and that someone they trust has done some homework on. For them, the simpler the better.

rawraw

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Re: P2P-Picks.com Beta is Live
« Reply #21 on: February 22, 2013, 10:46:40 PM »
Certainly does. I also think the hobbyists on this board are fundamentally different than quite a bit of my target audience. There are a lot of people out there who don't care to know all the details of this asset class. They just want something that's going to deliver above-average returns and that someone they trust has done some homework on. For them, the simpler the better.
I agree that is the case.  But I think because of recent headlines like Madoff, people I think are more prone to be skeptical of those type of situations. 

brycemason

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Re: P2P-Picks.com Beta is Live
« Reply #22 on: February 23, 2013, 01:51:32 AM »
I'm sure you're right. And that's why I'm happy to cater first to my friends and family, people who want to risk $1k, and just let it grow organically through word of mouth. I'm in no rush. In the mean time though I will do my best to be clear and provide metrics.

brycemason

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Re: P2P-Picks.com Beta is Live
« Reply #23 on: February 23, 2013, 02:34:04 PM »
I have written a thorough explanation of why more fields for the purpose of further juicing returns doesn't make sense inside of the method we employ. You can read it in the P2P-Picks section of this website.