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Messages - mchu168

[1] 2
Investors - LC /
« on: March 18, 2017, 11:00:00 PM »
If you start with unrealistic expectations, you will surely be disappointed in the end.

Long run equity returns are expected to be mid to high single digit (5-8%). Most people expect longer-duration fixed income assets to have negative returns over the next couple of years. Real estate prices are in bubble territory in many markets.  What do you expect from P2P loans?

I used to think investing was about pushing all assets into one or two bets to maximize returns. 100% tech stock, 100% junk bonds, etc. But I've learned that being wrong with such concentrated bets can/will lead to disaster. So a better approach is to spread the risks around to many asset classes. Most will have positive returns over time and hopefully generate decent long-run risk adjusted returns. Trying to time any market is perilous and will almost always lead to regret and disappointment.  Diversification says I don't have to make the right bets all the time but I will be right in the long run.

P2P lending is definitely in a soft patch right now but therefore isn't this the right time to raise allocation to a struggling asset?  I don't have the answers and I'm not going to try to time this market either. But with diversification I can afford to be a little wrong in the short run...  :)

Investors - LC / Western Asset Management story
« on: August 03, 2016, 11:00:00 PM »
I'd rather see LC deal with these guys vs. the cast of unsavory characters that Prosper is facing according to the wsj....
Investors - LC / Lending Club Loan Demand
« on: June 09, 2016, 11:00:00 PM »
I will chime in that it's a bad idea for LC to buy and hold notes.  If they're holding notes for 30 days or whatever as inventory so that they can sell a bundle of notes to an investor, then maybe that's ok. 

Like I said before, with LC's cost of capital probably in the teens or higher, they have no business whatsoever investing their cash in notes that earn 7-8%.  Period, end of story. 
Is it just me or does this strike anyone else as a really strange deal?  I guess idea is that buying loans (probably using very cheap borrowed money) will drive LC stock price higher.  With warrants (basically call options issued by the company) the hedge funds get the levered upside in the stock which they are essentially pushing higher by buying the notes.  Seems a little ponzi-ish to me but will probably work for a short term gain.

Dealing with the likes of third point, etc is akin to dealing with the devil, which seems like a last resort measure imo.  Are things really that dire? I'd be a lot happier if they could work something out with Morgan Stanley (unless Mack somehow makes a deal impossible) to sell notes through the adviser network or structure some products for pension, endowment type investors. I think LC will be glad they didn't have to deal with the hedge funds in the end.
Investors - LC / You have to love Wall Street
« on: June 06, 2016, 11:00:00 PM »
Putting the guy who was lax on compliance back in charge of this business would be a big mistake.  Isn't this obvious?  :-
Investors - LC / Email from Lending Club
« on: June 04, 2016, 11:00:00 PM »
For all of you scared away from investing in LC loans, please continue to stay on the sidelines.  I'm having a much easier time finding loans nowadays, and LC now seems to have more incentive to make the returns attractive for investors going forward vs. the days where any crappy loan was getting funded in 250ms.

As for the risks, I think well informed people can make their own judgement. I certainly didn't come here looking for deep insight and I haven't been disappointed.  It does boil down to a bull-bear debate for me, because as is always the case there are some who have negative biases on a story and some who see the glass half full.  If a newbie comes here and reads 50 negative posts from "bears" they will leave here with an unrealistically "bearish" view.  Thank goodness for Fred93 (a voice of reason among the herd).  Anyways, I think it's useful to understand posters' biases...

This is rich. Nothing that the company has said or done warrants concern about bankruptcy or imminent collapse and people want the CEO to come out on TV and say say as much?  Why on earth would the company do this?  As someone already said, the stock is going down in concert with Ondeck, so the sell off is being driven by speculators shorting the industry, most likely.

Put it this way, nothing the company says right now will soothe a few hysterical investors who have very active imaginations (you know who you are).  My advise to LC, better to keep calm and carry on the business of running the company and wait until the fear subsides on its own.
Interest Radar / No auto investment for 4 days
« on: June 30, 2015, 11:00:00 PM »
Yep, I noticed this too.  Hopefully it gets resolved soon as cash is piling up!
I recommend people get help from a good financial/tax planner for advice on these questions.  The advice here is frankly pretty bad.
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