Lending Club Strategies

You could look into the basics of how CDOs are run and price based off those models.

Seemed to work right up to 2008

I don't think this is legal in the state of Tennessee, unfortunately. :(

Are all of these loans unsecured?

C and D ratings are the sweet spot for me. The 5 year notes are always disturbing because they are almost always carrying tight debt service.

A's aren't worth the trouble. The rates are way too low. B's have been over targeted recently because they are the "safest" with a real return. C's and D's (particularly D's) are being skipped over by both the safety seekers and the yield pigs. Fs and Gs are complete crapshoots, but even with the high rate, don't sufficiently reward you for the drastic decrease in credit quality. That means the yield pigs are in E's which has pinched the available supply. Going from C to E gives you less than a 1% increase in expected return.

I generally find it difficult to determine the difference between C's and D's by just looking at the credit metrics, which is why I lump them together.

Love the explanation Hidden Flask.

Very well said.

I don't think that's right.

Institutional buyer platforms don't have access to the same loans as those that are posted on the individual investor site.

Just a random mix.

They did it to avoid the hedge funds with algorithms gobbling up the best loans and leaving the consumer side with the scraps.

I don't sell. I haven't looked at it in the past year and a half, but the discounts used to be ridiculous. I just always buy very small chunks so that any given single loan default won't hurt me.