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Messages - SLCPaladin

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Investors - LC / Cumulative ROI by Vintage Beginning 14Q1 - One Year Update
« on: February 08, 2019, 12:00:00 AM »
Thanks for compiling this Rob. I have always appreciated your thoughtful posts, along with Fred's. I have gone from about $125k in LC investments and I am now down to $20k. I wish LC had raised their interest rates enough so that ROI was high enough across all grades, but the difference in returns that I think I will get in returns between risk-free CDs (I recently opened up a 4% 5-year) and LC notes is not worth the risk premium, especially considering tax treatment. I still want to believe in LC, but I haven't deployed any new money for a very long time. I'm open to the possibility of doing so, but I would have to see the facts on the ground justify it.
Investors - LC / LC increases interest rates 11/8/2018
« on: December 31, 1969, 07:00:00 PM »
Too small indeed. I just saw that the highest yielding NCUA CD is at 4% for a 5-year term.
Investors - LC / Is LC no longer interested in retail investors?
« on: December 31, 1969, 07:00:00 PM »
There was a time when I had $100k+ in LC and Prosper. Now I'm down to about $20k as I let things run off. I think there are other long-time investors that are still using their special sauce to try and juice returns. I just don't have the time or expertise to try and outperform. My best CDs these days are paying 3.63%. Hard to get excited about the return with LC and Prosper once you take into account the tax penalty. They have been slow to increase rates and I've been frustrated that LC's business model derives the bulk of their revenue on the loan origination. This means that they care less about the loan performance over time than the investors. Not sure what LC could do since they have competition from other sources, like Goldman Sachs's Marcus platform. Maybe their cost of funding and their acquisition cost are structurally too high now.
Investors - LC /
« on: December 31, 1969, 07:00:00 PM »
Ryan, you've articulated much of my own sentiments. I never invested in the secondary market because I always dreaded what the tax implications was since my own personal tax situation has been relatively simple and I didn't want to add complexity with having to account for cost basis on hundreds of notes. At one point my investment in LC was over 100k and I'm now down to about $30k including all accounts. My main gripe has been that the interest rates are not high enough to offset the tax implications and the increased default risk that we've seen over the past few years. As I've drawn down my account, almost all of my funds have been going to 3.3% FDIC insured CDs.
Investors - LC / Higher Interest Rates
« on: December 31, 1969, 07:00:00 PM »
I agree with Fred's insights here 100%. Several banks and credit unions in my area are offering 3.25% CDs/share certificates. Lending Club's interest rate hike is better than a sharp stick in the eye, but it is not enough for me to jump back in. I think I would need a bit higher rate to compensate for the perceived risk I feel at this point in the business cycle and the taxable disadvantage of note charge-offs.
I just wanted to give everyone an update on my winding down of my Prosper and Lending Club IRA accounts. I decided that I didn't want to sell my notes on Folio, mainly because I felt like I would be better off letting them run out to maturity rather than progressively lowering the discount on each note in order to sell them. I've spent the last 3 weeks interacting with customer service from Strata and Equity (both custodians of my IRAs and Lending Club and Prosper, respectively). With some work, I finally got about $10k transferred into a 5-year CD at a local credit union at 3.2%. Keep in mind, my LC and Prosper IRA accounts are still open, so these were basically partial IRA transfers. The credit union that I'm using has their own form and I had to follow several steps in order to 1) Get free cash transferred from LC/Prosper to IRA custodian and 2) have the requesting IRA custodian pull the funds from the current one.

It has been mildly frustrating, but doable. The fee for Strata was about $20 for this transfer. I will repeat the process once or twice more as more notes in my IRA account are paid off in full. Prosper assured me that I wouldn't be assessed a low balance fee as I continually drain my IRA because I did at one time hit the $10k benchmark for having the fee reimbursed for them. Lending Club did not offer that assurance, but they said that they were moving to a new custodian anyway and migrating their customers over, so that any fee would likely be much lower than Strata is charging now (also, the CS rep said I could call back when the fee is assessed and see if I could have it waived, which I probably will do).
Investors - LC / Now, feel a little less bad about paltry returns
« on: May 18, 2018, 11:00:00 PM »
I would love to be able to borrow from the Fed at 1.69% and then turn around and make loans on Lending Club...
This is a general question for those of you who are selling IRA accounts to liquidate. Were you trying to clear out your entire IRA so you could do a one lump sum transfer of all idle cash from the IRA custodian (Millennial Trust) to another institution?

I looked at the fee schedule and, as best I can tell, it is a $150 fee to transfer out assets to a new custodian. I have a local credit union IRA in 5-year term deposits at 3.2% that I want to move my money too. The problem is that I have about $7k in idle cash in one of my Lending Club IRA accounts and I have about 400 other notes (approximately $4k) with some time to go before the notes will mature.

The dilemma I face is that I think I've already bitten the bullet for the worst of any defaults. So if I want to sell notes to get a clean IRA exit in one fell swoop, I'll probably have to discount those notes on Folio, some heavily. But I am reluctant to do this though because my reasoning is that I think what remains is has made it this far and the yields are pretty good (survivorship bias- most of the bad stuff is already charged off). However, if I keep pulling out money every so often out of the IRA, then I'll get nickel and dimmed by the IRA custodian for each asset transfer as far as I understand. So essentially I'm trying to figure out which will be less painful:

1) Do nothing: let idle cash sit in my LC account earning no interest while I'm waiting for the portfolio to wind down
2) Transfer out IRA money periodically without selling notes on Folio and get hit with IRA transfer fees each time
3) Take the losses that will occur by liquidating notes on Folio and get out in a one-and-done fashion

Any insight as to what you did and why would be appreciated.
Investors - LC / Loan Availability by Initial Listing Status, 17Q3
« on: February 11, 2018, 12:00:00 AM »
Very interesting Rob, thanks for sharing. I wasn't aware that retail investors get sloppy seconds (e.g. whole loans that institutions don't want). Talk about adverse selection. Thanks for enlightening me.
Investors - LC / Cumulative ROI by Vintage Beginning 14Q1
« on: January 07, 2018, 12:00:00 AM »
This is excellent insight Rob. If I read these tables correctly, would I be correct in assuming that loans that were originated in Q3 of 2017 would be "expected" to perform similar loans originated in Q4 of 2014? I know major economic shocks and external events would change the trajectory and of course nothing is guaranteed, but it seems like if early indications of the trajectory look like the loan quality has improved relative to what was originated during 2015 and 2016. Is that a fair conclusion?

I am specifically thinking about reinvesting in B grade notes of 36 month duration. I have run down about $120k to about $40k now.
Investors - LC /
« on: January 02, 2018, 12:00:00 AM »
As of 1/2/2018:

Adjusted Net Annualized Return:  6.83%
Weighted Average Interest Rate: 14.21%
Weighted Average Age of Portfolio: 33.4 mos
Number of Notes: 6415

A (10.7%) B (26.2%) C (23.6%)
D (18.1%) E (17.8%) F (2.9%) G (0.8%)

36 (39.8%) 60 (60.2%)

Side note: My blue dot finally made it off the "Understanding Your Returns" chart. Yay!
Investors - LC / Worst Loan of the Day Thread, Grades A - C
« on: December 21, 2017, 12:00:00 AM »
Much appreciated Rob L.
Investors - LC / Worst Loan of the Day Thread, Grades A - C
« on: December 19, 2017, 12:00:00 AM »
In addition to posting the duds of the day, I would love it if you also post why you think each loan is the biggest stinker. This would be good for me to understand how other people evaluate bad/risky loans.
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