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Author Topic: Lending Club Results - NEGATIVE RETURNS

j
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Lending Club Results - NEGATIVE RETURNS
OP: June 10, 2017, 11:00:00 PM
Since a lot of talk is about moving to fundraise, my question is how can you really make that decision with any better information than what is available with LC.  Aren't all there ereits designed to hold property for like 5 years then disolve/sell?  So you really have no idea what the actual return is until that happens.   8% now but a closing sale price negative and that return goes to junk too.

At least I feel like that was the stated goals off them before.  I was trying to find it quickly again but on my phone and they seem to have rearranged their site since I last looked at it.
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Lending Club Results - NEGATIVE RETURNS
#2: June 10, 2017, 11:00:00 PM
Thanks for the chuckle about shiny things. I tend to get stuck with some words sometime.

In the past I have been part of several private real-estate partnerships. Sustaining 8+% might be unrealistic. What kind of historical data Fundrise provides on properties? Do you know cash-over-cash, LTV for these properties? Do you know exactly what properties (location address) included in your investment? Any claims of above 4-5% usually gets my warning flags up. Yeah, all real-estate investment sales pitches starts with we have collateral and your investment is safe. All new expenses start showing up when properties start going bad.

Quote"> from: dr.everett on June 10, 2017, 10:59:19 PM
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Lending Club Results - NEGATIVE RETURNS
#3: June 10, 2017, 11:00:00 PM
 Closest I can seem to find is:
Quote
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Lending Club Results - NEGATIVE RETURNS
#4: June 10, 2017, 11:00:00 PM
While I believe in p2p consumer lending as investment, I don't agree with the current direction and how the business is being conducted by the companies like Lending Club and Prosper. They were going to disrupt the financial world, instead they got enslaved by the very same firms. I don't know if you ever read Clayton Christensen and his books Innovator's Dilemma and Solutions. I am pretty sure someday it will become part of his case study how to handle and destroy disruption.

Well, any debt based investment without liquidity has upper limit on return (the interest rate). Equity investment comparison is not a fair one. Debt investment has "limited" upside potential, Equity investment has "unlimited" upside potential. That is the reason equities are considered riskier, investors demand higher on average return but also get high return volatility. 6% long term return doesn't exist without taking more risk. Everybody will be piling into non-volatile 6% if there was one.

Quote"> from: Rob L on June 10, 2017, 11:32:42 PM
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Lending Club Results - NEGATIVE RETURNS
#5: June 10, 2017, 11:00:00 PM
Opened the prospective and search liquidate

Although we presently intend to complete a transaction providing liquidity to shareholders within approximately five to seven
years from the completion of our initial offering (December 6, 2016), our operating agreement does not require our Manager to pursue
such a liquidity transaction. Market conditions and other factors could cause us to delay the listing of our shares on a national securities
exchange or delay the commencement of a liquidation or other type of liquidity transaction, such as a merger or sale of assets, beyond
five to seven years from the termination of this offering. If our Manager does determine to pursue a liquidity transaction, we would be
under no obligation to conclude the process within a set time. If we adopt a plan of liquidation, the timing of the sale of assets will
depend on real estate and financial markets, economic conditions in areas in which properties are located, and federal income tax effects
on shareholders, that may prevail in the future. We cannot guarantee that we will be able to liquidate all assets. After we adopt a plan of
liquidation, we would likely remain in existence until all our investments are liquidated. If we do not pursue a liquidity transaction, or
delay such a transaction due to market conditions, your shares may continue to be illiquid and you may, for an indefinite period of time,
be unable to convert your investment to cash easily and could suffer losses on your investment.


Depending upon then prevailing market conditions, and subject to our consideration of alternative liquidity events, it is our
intention to consider beginning the process of liquidating our assets and distributing the net proceeds to our shareholders within
approximately five years after the termination of this offering. However, our Manager may determine to defer such liquidation beyond
the fifth anniversary of the termination of this offering.
Market conditions, our status as a REIT and other factors could cause us to delay the commencement of our liquidation or other
liquidity event. Even after we decide to liquidate, we are under no obligation to conclude our liquidation within a set time because the
timing of the sale of our assets depends on real estate and financial markets, economic conditions of the areas in which the properties
are located and federal income tax effects on shareholders that may prevail in the future, and we cannot assure you that we will be able
to liquidate our assets. After commencing a liquidation, we would continue in existence until all properties are sold and our other assets
are liquidated. In general, the federal income tax rules applicable to REITs will require us to complete our liquidation within 24 months
following our adoption of a plan of liquidation. Compliance with this 24 month requirement could require us to sell assets at
unattractive prices, distribute unsold assets to a “liquidating trust” with potentially unfavorable tax consequences for our shareholders,
or terminate our status as a REIT.
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T
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Lending Club Results - NEGATIVE RETURNS
#8: June 10, 2017, 11:00:00 PM
No sweat about equity references! A 6% return target for p2p lending is very reasonable from long term perspective but in short term there will be times when we undershoot or overshoot.

Just curious what made you take position in MSFT, NVDA and SPY before election and then closed out recently? I am always interested in learning about what kinda thinking process goes in investors' mind about buying and selling investments.

from: Rob L on June 11, 2017, 08:04:27 PM
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#9: June 11, 2017, 11:00:00 PM
I want to chime in on this post. I basically agree with dr. everett, Rob L, and Russ G, which is why I too have been letting my notes mature without reinvestment.I don't feel like I had unrealistic expectations about LC or this particular asset class. I do, however, think that LC made a mistake in the underwriting. But what really sort of soured is that now that the underperformance is visible, I don't think they are doing near enough in going in the other direction to help compensate for a patch of underperformance. I think they should have more forcefully raised interest rates to make up for the losses that the lenders incurred.

I always go back to the asymmetries of power: LC controls the rates via underwriting, but lenders and borrowers are only free to accept terms or not participate. There are probably bunches of loans that I would still buy on the platform, but I would want like a 2% to 3% increase in rates as a cushion given recent history.
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Lending Club Results - NEGATIVE RETURNS
#13: July 15, 2017, 11:00:00 PM
Over 3 years I have had a NAR of 8.6% to 10.5% (never lower never higher).  My defaults are less than 3% (2.8 as of right now).  Please check out my YouTube video and please give my LC Investment strategy a try.  It is free for now in Beta!  :) 

YouTube Intro:  https://www.youtube.com/watch?v=dIE5bVgj8eE&t=3s

Register Here:  LCPicks.com

Let me know if you have any questions along the way just send me a message and I'll help out.

Thanks,

-Chris
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Lending Club Results - NEGATIVE RETURNS
#14: July 16, 2017, 11:00:00 PM
Brief update to my post of 6/12. On Friday 7/14/2017 the US stock market Cyclically Adjusted PE Ratio (CAPE Ratio, also called Shiller PE Ratio, or PE 10) surpassed 30.00 for the first time since 1929. Okay,so what. I found the following paper a very interesting read that attempts to provided an answer to that question. Spoiler alert; CAPE's predictive value is only over the long term (10-15 years), but at this level the long term isn't looking too good.

http://www.starcapital.de/files/publikationen/Research_2016-01_Predicting_Stock_Market_Returns_Shiller_CAPE_Keimling.pdf

If you are interested in keeping up with the CAPE ratio see http://www.multpl.com/shiller-pe/

Finally, in an oversight, I didn't mention that I also owned and then sold WDC at the same time as MSFT, NVDA and SPY mentioned previously. I forgot; my bad.

This thread really went off the rails somewhere.  :)
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