A user's post mortem to P2P Picks:
Started using P2P Picks buying LC notes in May 2013 furiously pounding my mouse at feeding times. Think I had the initial $100k manually invested through the web interface within 3-4 months. Can you imagine doing that now? Back then there were four loan bins; Top 1%, 5%, 10% and 25%. Relatively late in my initial investment cycle (fortunately) I had the bright idea to scale note size to loan bin ($100 to 1%, $75 to 5%, $50 to 10% and $25 to 25%). That did not work out very well. There were not enough 1% loans to get much diversification and they were the highest risk (variance); typically Grade F. Bryce must have come to the same conclusion as he combined the 1% and 5% bins, eliminating 1%. It was clear my note size scaling idea was a loser. The D's and E's were performing well so I began investing $25 per note in those in the the top 5% and 10% bins. Later I went to $50 notes, and finally I added $25 notes in the 25% bin to keep the cash invested. As competition heated up for high interest rate notes I was lucky enough to have the the rudimentary programming skills needed to auto buy selections from the P2PP web page and then auto-invest them with LC using their SOAP API. As the arms race accelerated P2P Picks provided an API and LC moved to a REST API; I went with the flow.
Basically I now think there are quite a number of real dog loans out there in every release and then everything else. Avoid the dogs and things will work out just fine. At least that's my hope.
And, oh yes, diversify.
So, for the record, here's one P2P Picks user's results on the closing day of the P2P Picks web site; hope you find it interesting:
Chart by Interest Radar
Chart by Interest Radar
Note the PMAX 1 portfolio didn't (hasn't) worked out well.
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