From what I've seen as well, many people use automatic investing and then aren't happy when they have so many loan defaults because they don't look at who they're lending money to.

huh

@Deleted User I've run about $20K through lendingclub and gotten a 5.4% return so far. It will probably go down a few more percentage points by the time my existing notes conclude.

I've been happy with it, but I'm not doing automatic investing or putting any additional capital into it. I've read too many negative things about it.

@ThisIsChris congrats on the nice gains. i wouldn't leave anything on the table that youre not comfortable with losing. i wish i could be more optimistic about BTC but i have no way of valuing this currency so i have no way of telling if its over or undervalued. if this were a company we could do a discounted cash flow analysis or compare its PE ratio to peers and have a better understanding as to its valuation. i was talking to @Deleted User about this earlier but i believe BTC is rising off of the "Greater Fool Theory" also look up the Holland Tulip Mania. I would not be surprised if it plays out similarly. We shall see

@here Sunday the 10th at 9PM Eastern, I will give a short seminar explaining options on the "voicechat" channel. My goal is that anyone listening will come away understanding what options are, the difference between a call and a put, the meaning of "strike price," "expiration," and "exercising," and the basics of how options are priced on the open market. If you understand these you'll be able to understand an options chain, and you'll have a solid foundation to understand sophisticated options trading strategies. I'll try to make it interesting, informative, and fun.

I've been very satisfied with Lending Club, I have automatic investing set up, and the returns have been good. I've used it for years now.

What's your rate been if you don't mind sharing?

The market obviously would have done far better, but the interest from Lending Club has always been solid. Yeah just a minute let me go get an accurate number.

5.92 for me.

nice!

Which is rather lower than it was.

It was up in the mid sixes.

So now I'm a bit chapped.

I was over 10% for the first six months

I don't look at it much, it just makes money.

and then....

@Deleted User i got into lending club back in 2014. I stopped buying notes about 2-3 years ago because i had an inordinate amount of defaults. i used a screen on what used to be called nickelsteamroller.com that showed very low default rates. the defaults in my portfolio exceeded what i thought i should have had by a lot. my return was about a 6% or so (according to them - which is higher than what it actually should be). with the risk of fraud and abuse, the understanding that the company makes money off of originations (incentive to make loans at any cost - even to those who shouldn't get loans), and lack of liquidity(I need a higher return than 6% for the lack of liquidity) I have decided to discontinue investing in LC notes. If you are looking for a 6% or so yield with good liquidity i can point you to some preferred stock

What tranches do you primarily invest in? @Why Tea

Point me at some preferred stock then.

@Zyzz That's exactly why I stopped automatic investing.

@Why Tea CLNS-J, AHT-I, TWO-C. Those are all the ones I am in.. they all yield ~7%

Thanks for the tip, @Zyzz

So Lending Club loans are financed by masses of Lending Club investors?

Correct

A loan is split up into $25 segments called "notes"

So you buy a bunch of $25 pieces of different loans @Rick

@Rick So if one loan goes bad, it doesn't hit you very hard if you own many notes because it's a very small fraction of your portfolio.

It's similar to investing in a bond fund.

except you're tapping into consumer lending, not corporate or municipal lending

@Zyzz Thanks I think there's definitely a lot to that Greater Fool Theory. I've thought for a long time about how one might price bitcoin, and here is my swing at it: Bitcoin's main use is as a transaction network. If you want to transfer money to someone you could use one of several networks, like bank networks etc, or you can use Bitcoin. If you want to transfer money and decide to use the Bitcoin network, you first buy bitcoin and then send it to someone who sells the bitcoin. Now on your end you are trying to pay the amount owed plus a transaction fee, on the other end someone wants to get the amount owed. To simplify let's say the transaction is instantaneous (otherwise let's add a bitcoin volatility premium to the amount of bitcoin you want to send). So as someone looking to use the Bitcoin network as a service, you don't really care what the price of bitcoin is, you are trying to settle something in dollars and you are merely using bitcoin as a medium. I made the simplifying assumptions the transaction is instantaneous and let's say both buyer of bitcoin and seller of bitcoin can and do immediately exchange the dollar for bitcoin and then bitcoin for dollars.

So then to the people using bitcoin as a transaction network it doesn't really matter to them what the price of bitcoin is under these conditions, since it's only a medium for them to get dollars from one place to another.

But there are other people on the sides of that bitcoin for cash exchange, the guy selling the transferer the bitcoin, and the guy buying back the bitcoin from the transferee. Let's simplify the assumption that it is some how the same person.

So this guy holds bitcoin until people want to use his bitcoin for their transaction

You have to pay him to not hold cash

and he makes his money on the difference between what you pay for X bitcoin and what he pays out for X bitcoin to the other person

So the guy who holds bitcoin makes money by selling bitcoin high to the transferer and buying it low to the transferee. And the thing that stops him from just screwing over the transferee by not buying back the bitcoin is that there are other people who want to get in and provide this same transfering money service using bitcoin

So in the end owning bitcoin winds up sounding like owning a substrait of the infrastructure of a payment network.

So even though it's not perfect I think of bitcoins as like shares of american express or something

@Deleted User Interesting. I have seen a few Lending Club loans on credit reports. Never know that's what it was, though.

@ThisIsChris i certainly understand the demand for wanting to transact in crypto currencies but it just seems like a lot of buying and selling. i know very little about the FOREX markets and have a very rudimentary understanding of what causes currency appreciation and depreciation. But people must store their wealth in certain currencies (not everyone is going to hold 100% gold) and those currencies are usually of more stable countries (USD, Euro, GBP, JPY, CHF). I do not see BTC as stable. If you want to liken it to commodities, metals in particular, you have gold which central banks will hold and individuals will hold as a store of value. there is clear demand for long term ownership as it is agreed gold is a store of value. take an industrial metal like copper or silver. these metals have an end use. ie: they are consumed. Also new supply is important to consider as well. How is BTC created?

@Zyzz I totally agree with you that it is mostly buying and selling, I've just been trying to create a "fundamental analysis" of bitcoin to see how to think of it having an intrinsic value.

Bitcoin is created as a reward for "miners" who provide all the computing power to keep the Bitcoin network going.

@Zyzz The explanation I've heard is that BTC is computational proof of work. Not sure how that confers value but that's the response I've gotten.