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Author Topic: picking up pennies

m
  • Posts: 14
picking up pennies
OP: January 07, 2019, 12:00:00 AM
it seems like there are loans out there with a 5% ytm, just cost $2.something, you make a nickel, 3 months of payments left in the loan...  i am a little curious why these are out here, vs. already being picked up.  why do i see this in my search without a bot having already picked it up - is there a greater risk to these pennies than i'm noticing, or is the capital just deployed better elsewhere?  example for a current note would be: https://www.lendingclub.com/foliofn/browseNotesLoanPerf.action?showfoliofn=true&loan_id=70915052&order_id=148294353&note_id=119450233

2.44 to make 2.49 over the next 3 remaining payments.  a fast, but lowly nickel.  seems safe.  why hasn't it been gobbled up?

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  • Posts: 601
picking up pennies
#1: December 31, 1969, 07:00:00 PM
That's not a high enough YTM for a "C1" note in general.
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T
  • Posts: 6588
picking up pennies
#2: December 31, 1969, 07:00:00 PM
i suppose that is too low a ytm for my own algo to keep with a c1 (i had already filtered it out for other reasons)

nonetheless, would the same borrower warrant a c today?  seems their risk of not paying it off is substantially lower today, and with only 3 payments left, how substantially does that it was a c nearly 3 years ago matter today?

i did consider that this is akin to picking up pennies in front of a steamroller possibly as well
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R
  • Posts: 484
picking up pennies
#3: December 31, 1969, 07:00:00 PM
I think somebody bought it.  ???
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T
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picking up pennies
#4: December 31, 1969, 07:00:00 PM
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l
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picking up pennies
#5: December 31, 1969, 07:00:00 PM
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T
  • Posts: 6588
picking up pennies
#6: December 31, 1969, 07:00:00 PM
I think this old thread has some relevance here:

Topic: Interest Rate, Yield to Maturty (YTM) and Service Fees
https://forum.lendacademy.com/index.php/topic,3979.0.html

I posted this in the "ytm vs. remaining payments thread as well.

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R
  • Posts: 2
picking up pennies
#7: December 31, 1969, 07:00:00 PM
Gain new knowledge
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