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Old 05-11-2016, 06:08 AM   #41
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A number of people on various forums have put their Lending Club loan portfolios up for sale in the secondary market. It will be interesting to see if they sell and if so for what price. In light of the haircut the equity has taken and the now widespread understanding that these loans are not secured by the underlying paper, I would guess sellers would have to accept a discount.
Like any bond with a fixed coupon, when yield's rise the price falls. You can't have a ~30% hit to your stock price without also having your credit spreads blow out too.

So yeah. If there were a liquid market for these loans, you'd expect their price to have fallen (yields rise). Illiquidity is another investing risk even though most of the time it gives you the illusion of price stability.
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Old 05-11-2016, 07:03 PM   #42
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Quote:
Originally Posted by Another Reader View Post
A number of people on various forums have put their Lending Club loan portfolios up for sale in the secondary market. It will be interesting to see if they sell and if so for what price. In light of the haircut the equity has taken and the now widespread understanding that these loans are not secured by the underlying paper, I would guess sellers would have to accept a discount.
There really has not been any major changes on the secondary market. People are reporting they are not seeing loan notes being dumped (ie. current notes with decent FICOs ... mostly just the same 'bad' ones).
LOANS
Code:
2016-05-11 - 57,106
2016-05-10 - 56,078
2016-05-09 - 58,569
2016-05-08 - 64,917
2016-05-07 - 60,112
2016-05-06 - 53,056
2016-05-05 - 52,314
2016-05-04 - 53,992
2016-05-03 - 48,560
2016-05-02 - 47,196
2016-05-01 - 60,637
2016-04-30 - 59,909
2016-04-29 - 54,511
2016-04-28 - 55,225
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Old 05-11-2016, 07:22 PM   #43
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Annualized return of 12.38%.

That is all.
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Old 05-11-2016, 09:50 PM   #44
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Investor since 2007.

Annualized return of 12.38%.

That is all.
Yeah I had similar returns when I was investing there.

Again my concern was the low liquidity and potential strong correlation between loans.

Even though an A and a D rating are very different my concern (which is more just a feeling ) is that something can happen that narrows the risk gap substantially... interest rates going up sharply, bubble in P2P lending, etc. Maybe paranoia.

In that situation it's going to be very hard to take the assets out because the loans are spread out across hundreds of people over a many year period. Since P2P is new-ish and hasn't had a crisis I don't know what will happen. It FEELS similar to CDOs except the general public can invest directly.

In order to get enough return for it to matter to my retirement I'd have to invest quite a bit, so I just stopped .

My general anxiety is that people see the highly marketed 12+% interest rate, the diversified risk and underestimate the potential for substantial downside. I wouldn't be OK with losing 50% of my P2P portfolio with no history of how that recovers but I am OK with losing 50% in the market because there's at least a decently long history of recovery as well as some institutional protection.

I'm also worried that there are very smart, very greedy institutions that are going to see that return and somehow milk the best stuff and "trick" the rest of us... somehow... again... paranoia.

What happens if the default rate on LC goes to 50% and LC goes bankrupt? I don't know.



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Old 05-11-2016, 10:47 PM   #45
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Originally Posted by Onward View Post
Investor since 2007.

Annualized return of 12.38%.

That is all.
Good news, but would be nicer to hear more details if you are comfortable with it.
example: put in 5k in x types of loans, defaults were less/more than I thought.
Reinvested the earnings , or increased my investment after a year.

It gives us a feel for your tracking and interest.
Like RenoJay certainly had commitment with a 250K investment, wow.
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Old 05-12-2016, 07:20 AM   #46
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I put in $10k 2-3 years ago.

Since then I've reversed course for many of the same reasons Petershk mentions. I'm currently showing a 9.95% return but have been transferring money out on a regular basis. So far I've taken $10k back out and have $4k left invested. It will take another 3 years before the last of my 5 year loans matures.

My biggest concern is that the economy is going well now and defaults are still a regular issue (about 10% of my notes have defaulted - mostly C/D level). If the economy were to go down again I think that would go a lot higher and my returns could turn negative quickly.
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Anyone familiar with Lending Club as an Investment
Old 05-14-2016, 07:53 PM   #47
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Anyone familiar with Lending Club as an Investment

Perhaps this crisis has created a unique value opportunity to jump in as others run for the exits. That's what Buffett would do...

I'd be interested to put in $10-25K from my gambling account which is now sitting in cash... Into some high quality 5 year loans that I can get on the cheap via secondary market.

Even a 7% yield seems like a good yield in today's interest rate environment.

To get 5 years at 12%? 14%? Wow.

Who can advise how to sign up and get a look at secondary offerings ?

Never done the P2P lending thing, although I stayed at a holiday inn once..
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Old 05-14-2016, 09:21 PM   #48
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Perhaps this crisis has created a unique value opportunity to jump in as others run for the exits. That's what Buffett would do...

I'd be interested to put in $10-25K from my gambling account which is now sitting in cash... Into some high quality 5 year loans that I can get on the cheap via secondary market.

Even a 7% yield seems like a good yield in today's interest rate environment.

To get 5 years at 12%? 14%? Wow.

Who can advise how to sign up and get a look at secondary offerings ?

Never done the P2P lending thing, although I stayed at a holiday inn once..
If you can put it in a ROTH IRA that is best because otherwise you get 1099-OID which is taxed at "regular income" tax.

I changed some of my filters to only get the "better" quality notes and am still getting plenty. May be more available now and in the future if this has caused some to start pulling money.
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Old 05-14-2016, 10:03 PM   #49
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Yeah I had similar returns when I was investing there.

Again my concern was the low liquidity and potential strong correlation between loans.

Even though an A and a D rating are very different my concern (which is more just a feeling ) is that something can happen that narrows the risk gap substantially... interest rates going up sharply, bubble in P2P lending, etc. Maybe paranoia.

In that situation it's going to be very hard to take the assets out because the loans are spread out across hundreds of people over a many year period. Since P2P is new-ish and hasn't had a crisis I don't know what will happen. It FEELS similar to CDOs except the general public can invest directly.

In order to get enough return for it to matter to my retirement I'd have to invest quite a bit, so I just stopped .

My general anxiety is that people see the highly marketed 12+% interest rate, the diversified risk and underestimate the potential for substantial downside. I wouldn't be OK with losing 50% of my P2P portfolio with no history of how that recovers but I am OK with losing 50% in the market because there's at least a decently long history of recovery as well as some institutional protection.

I'm also worried that there are very smart, very greedy institutions that are going to see that return and somehow milk the best stuff and "trick" the rest of us... somehow... again... paranoia.

What happens if the default rate on LC goes to 50% and LC goes bankrupt? I don't know.



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That sounds more like a rational analysis than paranoia to me!


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Old 05-16-2016, 02:34 AM   #50
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That sounds more like a rational analysis than paranoia to me!


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I'm glad you think so.
My refined investment method is as follows
1) imagine worst case

2) do I have confidence that I think I know what might happen. If no... don't invest. If yes then...

3) can I live with that potential worst case to get the potential gain. If no don't invest if yes...

4) is the risk of the down side loss smaller than the risk of inflation etc eating it. If yes invest. If no. Don't.

Over simplified but basically the combination of being ignorant and avoiding innovation invalidates most of the investing universe.

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Old 05-16-2016, 05:10 AM   #51
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Being concerned mostly with return of capital is usually a better approach than return on capital
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Old 05-17-2016, 10:28 PM   #52
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I looked into Prosper when it came out but decided against getting involved because:

A). It didn't seem passive enough for me
B). It didn't seem liquid enough to me and it's easier to get into things than out of them
C). I had no reason to think I could analyze good loans from bad ones better than professional loan officers
C). It seemed like I would be chasing yield rather than managing risk and being patient

That's where I came down but YMMV.
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