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Messages - brycemason

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Investors - LC / Finally had my first defaut—
« on: April 17, 2013, 11:00:00 PM »
Some defaults are just a random process. You're going to get a few.
Investors - LC /
« on: December 31, 1969, 07:00:00 PM »
The number of loans is lower on the platform because they get invested fully so quickly--especially in the first week of a month. Looking at the loans on the platform is like looking at a picture of a river. You get absolutely no sense of how fast the water is moving.

I use my website to pounce on loans the moment they become available. Unlike Blue's work, which requires the customer to pick a filter, we take the approach that there are many people out there who want to be provided the strategy, too. Automated investment with said strategy is in the works (realistically a few months away), but for now subscribers have to pop on within a few minutes after the magic hours at LC to get the best selection.
We may care, but what can we do about it?
Investing - General (not P2P) / A growth market waiting to explode
« on: December 31, 1969, 07:00:00 PM »
That's 25 thousand dollar Alpaca! You blot that shit!
Investors - LC /
« on: December 31, 1969, 07:00:00 PM »
AmCap, what an informative and thorough post! Well done!

Wine time.
With my site up and running, it's been fascinating to watch how fast the picks get gobbled up. Roughly half of the picks are 70% funded within 3-5 minutes, and almost all of them are gone before the next upload. Weekend / night is slower, consistent with this.
It's called the Blue-Sky exemption.

By virtue of a Securities and Exchange Commission (SEC) order in January 1998 that designates NYSE Arca Tier I listed securities as covered securities for the purposes of Section 18(a) of the Securities Act of 1933, Tier I listings are afforded Blue Sky exemption from state securities laws in all 50 states (SEC Release No. 3-7494, January 2, 1998). Under the SEC's order, Section 18(a) preempts any state registration and fee requirements that would otherwise apply to Tier I listings.
LC does not issue you anything for the charge offs. I remember reading something in the prospectus that they reserve the tax advantage. But I'll claim it anyway, because that doesn't seem fair.
P2P-Picks / Expected and stated yield to maturity (annualized).
« on: December 31, 1969, 07:00:00 PM »
A fair enough criticism. This was operationalized by the "Top" column, with the 1% picks being in the historical top 1% of expected yield, and so on. However, in reality, anything in the top 10% I've found performs about equally. Honestly, I'm considering dropping the "Top" column anyway.

Just as you are unbothered by the loan purpose going undisplayed, so should you be unbothered by the absence of interest rate and expected yield. The model already compares the interest rate vs. the risk, and identifies those in the historical top 10% of risk vs. reward. If loan quality was consistently horrible across the platform, the model would not identify any picks (and you could unsubscribe).

That said, I will take under consideration the inclusion of the stated interest rate / expected default (as LC does, but with my own model). Eager to hear from others about this.

P2P-Picks / Suggestions Thread
« on: December 31, 1969, 07:00:00 PM »
Thanks for the feedback! I will take some notes on these things as we continue with the beta and get feedback from all users.

Did you know that you can view your entire picks history under your account tab? A unique identifier could be included there without much trouble.

We use some technology on the picks list to filter out loans in which you have already invested, so that's why when you "Go" it disappears from that page; I want to ensure that you don't get billed twice for something you already paid for. If you were somehow unable to use the link, you can "Go" again for free on your account history page.

My primary goal is to keep things simple and powerful for the user. There's not much reason to worry about the sub-grade or even the actual interest rate, because if two loans are on the picks list, they are expected to perform roughly the same. If one is a D4 it probably has a little more risk than a D1, so that if you owned hundreds of each kind, the returns would be expected to be equal across both sub-grades.

Similarly, because loan purpose is already in the model, there's not much reason to stress further over it, either. The very rare small business loan that's on the list is expected to perform about the same as any other pick. When I need to buy into 50 loans, I just buy every pick on the list (with some very rare exceptions).

P2P-Picks / Model Questions
« on: December 31, 1969, 07:00:00 PM »
I suggest that it's not a big deal, because loan purposes that are statistically significantly related to default are absolutely included in the model. Admittedly, certain categories under- and over-perform. However, if many other characteristics about the loan suggests repayment, then sometimes even a small business loan can meet the expected return criteria (it's definitely more rare than just picking randomly off the platform).

This is an example of a fundamental difference between a multi-dimensional, simultaneously estimated model and a filter. In a filter, it's unilateral. The other (my) kind of of model allows us to use shades of gray. For example, if a small business loan was at 1000% interest, it might be worth the risk. There are a lot of moving parts.

Thanks for the question. I hope the answer was helpful.
P2P-Picks / Out camping, will return 2/19
« on: February 18, 2013, 12:00:00 AM »
I'll check out all of these questions when I return home :). Death Valley has very little net access!
Investors - LC / Beta is Live
« on: February 14, 2013, 12:00:00 AM »
Hi forum goers! As colleagues in the P2P lending space, I wanted to share that my website is up and currently in beta. For the last year I have been creating statistical models to drive my LC investments ($38k so far) and working on a nice interface to give subscribers access to my research. I invite you to visit my site and ask questions or provide any feedback here. I'm eager to hear the thoughts of people. Also, if you would like to be a beta user (while things are still free to use), just drop me a line (sending me a pm here will do) and tell me your name and email address.

Bryce Mason
Investors - LC / Feedback on Lending Club Business
« on: December 31, 1969, 07:00:00 PM »
15% without one default is amazing. I'd love to know how you think about picking, as well as how old your average note is. Welcome to the forum!
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