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Ready to Begin: but no C-E notes

Started by Peter, August 03, 2016, 11:00:00 PM

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So I read through a fair amount of information on this forum and blogs about Lending Club note selection.  Was about to begin with some basic filters but there seem to be basically no notes of grade C, D, or E.   It's all A, B, F.   Is this common?  Or a temporary thing?   I understand good notes go quickly- is it that investors know historically the returns of these notes have performed so they get grabbed quickly?   Thanks- I'm new to marketplace lending and Lending Club.


OK, this screenshot from one of the automated tools may be the answer to my question." alt="" class="bbc_img" />


Loans are added four times per day.  Check back shortly after the next feeding time, and then again after the next, etc.  The stuff you want won't necessarily be sitting there waiting for you at any random time.

fliphusker" class="bbc_link" target="_blank">
While your looking at Lending Robot and the notes that drop at the last time, Peer Cube lets you see the times if you are unfamiliar with the times. 
Only around 860 notes available, this can vary greatly.  There are automated pickers from a number of different sites that will allow you to grab notes right away.  I will warn you, be ABSOLUTELY SURE that your filter is set right if you are going to go automated.  Sucks buying notes that do not meet your criteria. 
I am about four months in and have learned just a ton here.  Lots of very helpful people.  Still feel like I am a nub at times, but reading things here, I am less of a nub than I was yesterday." alt=":)" title="Smiley" class="smiley" />  If you have questions, just remember, there is never a dumb question.  (I have asked dozens and dozens of questions.)
Good luck to you!!!


Flip- cool; thanks for the heads up on checking the results on automation before scaling it up.  Good to remember 'automation' doesn't mean you can mentally check out- but still need to actively review if the bot is doing what you want.    I'm looking at automated lending at the moment.  Have been looking at NSR and Lending Robot.  What is PeerCube like?  I have a demanding day job so I don't really have time to fully optimize the investment; I noticed NSR had fully-managed accounts (so does LR).  Hard to find accounts from people as far as what lift they've seen in using the automation tools.  I'd be very curious on what added returns they've seen from using automation. 


From someone who is heavily automated- always keep an eye on it. What you automate today may not be the strategy you want 6 months from now. I'm on my 3rd major strategy revision since I started, and probably will not be my last change. And I've been in LC for almost 6 years.

It is easy to screw it up and if you don't catch it fast you will lose quickly as others will take advantage when they see it before you do.

Edward Reid

bdonovan is right: something very strange is going on this week. At 6:30 AM PDT this morning, there were 751 loans available. All were A, B, and F, and there were plenty of each. There were no -- as in absolute zero -- C, D, or E loans. This is NOT the normal daily or hourly variation.

I don't use automated investing, either LC or third party. I won't criticize those who do, but I would not recommend it to a friend. You do not need a boatload of notes unless you are investing so much (like two million dollars or more) that you cannot invest it all in 200 loans. Look at the numbers: up to about 200 notes, your risk decreases with more notes. Above about 200, there's no noticeable decrease in risk. I think most investors will be better off studying each loan application carefully, aiming to get to 200 notes over a period of a few weeks, and then buying additional notes as payments come in or as they wish to invest more. They should take their intended investment, divide by 200, round down to the nearest $25, and buy notes in that amount. (Hence the "two million" above: there are few loans issued for less than $10,000.)

I started out allowing LC to invest for me. I stopped that real fast, after only 14 notes. Then I went through the lists, picking another 153 notes pretty quickly -- over a week or two IIRC. Then I started being more careful, and after about three months came up with my private criteria that I've been using for the past 11 months. I'm up to 319 notes -- more than 200, partly from using payments to buy more notes, but mainly because I decided to increase my investment.

Of those 319 notes, 12 are charged off, 7 are 31-120, and 2 are grace. Every one of those 21 notes are from those first 3 months, when I was less careful about what I accepted. A few of the later notes have gone grace or 16-30, but those caught up. Not a single one of my "private criteria" notes is currently in the slightest trouble. I'm sure of my "private criteria" notes will eventually sour, but the contrast has been fairly dramatic. (The class distribution is basically the same in the two sets.)

Hence my advice: don't be in a big hurry, and don't aim to buy more than 200 notes initially. You will likely feel that your money is lying idle too long while you are finding the right loans -- I know I did. (And then it lies idle several days between placing your order and the loan being issued.) Just keep reminding yourself that a single charge-off hurts your return a lot more than a couple more weeks of investment helps it.



And this morning, still the strange distribution. 300+ A loans, 400+ B loans, 50+ F loans, zero C, D, E.

I suppose someone *could* be snarfing up all the C-E loans, but AFAIK someone investing that much would be taking whole loans. And in a year of watching (I know, not that long) I've not seen such an odd distribution.



I agree that this is a strange distribution of available notes. Fortunately some of the F's look attractive. In the meantime I have a small pile of cash building up while I wait for more variety.


So I know above people were noticing the same thing as myself in regards to almost no D-E notes. Wondering if anyone found out anything. Is this the new normal? 60% of my portfolio is D and E and this two week low is really slowing down my reinvestment.


I have been saying/noticing this for months.. C-E notes are disappearing, either within minutes or there is just no supply, which I don't get since I keep reading articles how there isn't enough demand for LC.


I suspect the individual investors with a filter that targeted C-F loans (I get the impression that the institutions were major players in the A & B markets) were the main client group that stayed through the troubles, so no the reduced loan activity across all grades means the C-F loans are underserved (demand didn't drop as much as loan origination did) while there's a surplus in A & B (and G) loans. 

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