That author citing LNKD as an example of an underperforming IPO looks pretty silly now given that it’s actually outperformed the SP500 from the date of the IPO.
There are a lot of different ways to slice the same set of IPO data. Here’s another perspective:
If you look at IPO performance for companies hitting the market when they ALREADY have sizable revenue streams (>$50MM) they significantly outperform the broader market. Even taking out the first day ‘pop’ when the public really doesn’t have access to the IPO price.
I personally have been in many IPOs and absolutely agree with bailing out early unless there is something particularly compelling about the company. MISC: Here’s a little tip about the IPO data publicly available - if you’re looking at a particular timeframe you’re usually missing the companies that were dissolved AS well as the companies that got snapped up by larger companies in that time frame. Off the top off my head, think Stratacom (STRM) which was a 50x+ bagger for those of us who held from the 1992 IPO to its acquisition by CSCO in 1996. Of course, that is offset by duds like Bertucci’s and Microprose. =)
IPOs are DEFINITELY not for the crowd that stresses about 3% default rates…
Can any of you detail your process for managing your existing notes? Until last month, I took a mostly hands-off approach, logging in for approximately 5 minutes once a week or so just to reinvest the available proceeds in new notes.
At 176 active notes and climbing (I purchase between 1 and 3 new notes a week at this point), I feel I have reached a threshold and now consider my current approach inefficient and have become a little overwhelmed. I also don’t have an effective process for evaluating notes going bad.
Perhaps I need to spend more than 5 minutes in my account and, if so, I would like to hear that too.
I don’t manage my existing notes. Never have. It’s not time-efficient. If you can’t do it in bulk, don’t do it. I always sell my notes as soon as they issue and the system auto-invests them for me. It’s an easy way to churn $15 a month or so.
If a note doesn’t sell in its first month, it almost always comes through. Then you can just relist it next month. I don’t think I’ve ever had to take 3 or more payments on a note before it sold.
I have 924 active notes. I reinvest available proceeds using Automated Investing. I do not monitor for loans going late - I don’t think it is worth my time. Once a month I look at any new charged off loans, then update my Lending Club account in Quicken to reflect a loss of those charged off loans and add in the interest earned in the month. So that is a few minutes a month, and I am making about 9%
That is true, I guess. I don’t have a reason to transfer funds out of my account, I just wanted to get an idea of what some of you folks are doing in this regard
As I am in a Foliofn only state, Automated Investing is not available to me, which is annoying.
So, what I am getting from the few of you who have responded to my questions is I should not be too concerned with monitoring bad-leaning loans.
[Quote=Chessic Sense]
If a note doesn’t sell in its first month, it almost always comes through. Then you can just relist it next month. I don’t think I’ve ever had to take 3 or more payments on a note before it sold.
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Interesting. If I could buy new notes within LendingClub instead of having to pick through all the discards in Foliofn, I would probably try this.
LC is back to mainly A’s with a few B’s and not many loans to begin with. Started with 400’ish loans available and then applied my filter. Out of 176 remaining, nothing C or lower and only 11 B’s. The rest were A’s. Is there something automated going on buying all C and lower loans? Just last week there were the normal 1000’ish loans available with a wide mix of grades.
That might explain why my Automated Investing has really slowed down over the last couple of weeks. I had accumulated over $450 in cash. An order was submitted for 7 loans today, leaving nearly $300 still uninvested.
Same today: 400 loans available, 170 after filter. There was 1 C in the remaining 170, about 15 B’s and the rest were A’s. Odd that this is happening again.
It’s just continuing on and getting worse. 420 loans available. Filter and it goes down to 157. Out of those, there is a grand total of ONE B and the rest are A’s. That’s it. Something changed.
It’s not quite as bad as it was for a bit earlier last year but yeah, the pickings can be a bit slim these days.
Update of sorts: I had one loan that quit paying back in August - a partial payment in September and nothing since then. Bizarrely, it was sent to collections in October and almost immediately recalled. No other updates, for 2+ months, until it went to charged off a few days ago. What the hell is with that??
Other than that, my loans are all remaining current.
I seem to be issuing 3-5 notes per month on average, based solely on repayments and the 20 bucks a month I add each month. Average interest seems to be between 25-30 dollars a month. I’m up to 115 loans right now plus a handful that are in funding.
My adjusted rate of return seems to be just under 10% though it’s hard to believe that - then again, with a total account value that has STILL not broken 2500 dollars, 25 a month adds up to 300 a year - so that may be a reasonable figure.
Life’s been so crazy here that several times, I’ve had 100 bucks sitting in the account, waiting for me to log in and pick some loans. That isn’t helping the income flow.
Obviously, I’m very small potatoes compared with some.
Forgot to ask: I noticed the “portfolio builder” link and clicked on it but my account is too small. What exactly is it?
I have never used it, but I played around with it just now. I don’t think you need an account of any particular size, but you do need to have cash in your account ready to invest. On entry, it gives you three options with different percentage returns. When I tried they were 9.62%, 12.96% and 18.15% Presumably this is before allowing for charge offs and fees, as these percentages are quite high.
You also get the usual filter options down the left. You can select filter options, then choose one of the three percentage options, and it will select notes that give an overall percentage to match the option chosen. If you change the filter settings, the percentage options will change - it is matching the options to the notes available after using your filter settings. So, for example, if I eliminate 60-month loans via the filter, the options change to 8.24%, 9.22% and 13.1%
If you do not like any of the percentage options presented, you can click on More Options and it gives you a slider control that you can use to set the exact percentage option you want.
I did not follow through and see what happens if I proceed with the portfolio builder. Presumably it submits an order for the bundle of notes it chooses to meet the percentage specified.
No experience, but you have lent money to a number of borrowers. There is nothing to “withdraw”. As cash accumulates from repayments from the borrowers, you can withdraw that. If you want to get back the money you have lent without waiting out the term of the loan, you have the option to sell the loan to someone else using the trading capability. A number of people who post here use buy loans through that mechanism because their state of residence does not permit direct investment in LC loans.
Yep - the hassle is mainly in that it can take some time to sell the loans, especially with the new wrinkle of not being able to list the loan when it’s near its payment date. It could take most of a month to liquidate everything.
Aside from that, I’ve not heard of any issues with withdrawing your idle cash from the account aside from core_dump’s account-freezing a few months ago.
Annoyance: I just logged in for the first time in a few days, and saw that a note just went into grace period. It was due on the 8th (Sunday), so it should have paid by Thursday or Friday at the latest. The borrower’s credit rating has been climbing lately: originally 720, had dropped to 690 nearly a year ago but has been steadily inching up.
AND, LC noted collections activity (attempted to contact, no message left) on January 18th, which was well before the due date. Anyone know why they’d do that? I mean, nothing would raise any red flags to me, do they do some Double Secret monitoring even of active, looks-good loans?
Strangeness: I don’t know if everyone was affected by the recent announcement that they were sending out updated tax forms. I downloaded mine, and all the sales proceeds dropped a bit - from 10 to 50 cents lower than before.
One of them dropped 63 cents.
Its original sales proceeds amount was 48 cents.
Yes, they reported sales proceeds of minus 15 cents.
This would seem to suggest that I paid THEM to take the note off my hands.
Needless to say, I’m not going to rush into filing taxes just now, simply because I don’t trust the numbers. Yeesh.