Tuesday, April 27, 2010

My latest Lending Club investment loan has been issued

Overnight my latest Lending Club investment loan reached 100% funding and was issued. I now have no loan orders outstanding. This loan was funded with cash flow (interest and return of principle) from my existing portfolio of loans.  Within a week or so my account will accumulate enough additional cash from interest and return of principle to fund yet another loan.

This is still just an experiment for me (less than a year) since I have no prior experience with this type of investment, but so far in has been very encouraging.-- Jack Krupansky

Friday, April 23, 2010

Last loan of my recent batch of Lending Club investment loans has been issued

Overnight the last loan in my latest batch of Lending Club investment loans reached 100% funding and was issued. My new order to reinvest accumulated interest and return of principal in yet another investment loan note is now 47% funded with a little less than seven days to get fully funded.

Meanwhile, my Net Annualized Return has moved up to 15.34%, which puts me up at the 89% percentile with only 11% of Lending Club investors earning a higher return than me. I'd like to get that up into the low 90's. I have a total of 52 notes, plus the new one from yesterday that is still in funding.

Even with this doubling of my total portfolio size, my Lending Club investment is still a modest size experiment. Even doubled again it would still be modest size. If all goes according to plan (not that I actually have a plan), by the end of the year I should finally have a real investment in Lending Club loans.

My goal continues to be a 15% return, but I figure I need a little buffer so that repayments (and maybe even defaults) don't push me below my goal too frequently. I may in fact keep pushing upwards with loans in the 16% to 18% range until I get my return up to 16% and then gradually work the average back to 15.5%.

So far, my Lending Club portfolio has been perfect, with no delinquencies or even late payments. I started investing with Lending Club back in June 2009.

This is still just an experiment for me since I have no prior experience with this type of investment, but so far in has been very encouraging. I intend to double the size of the experiment in June or July (assuming my work income continues.)

-- Jack Krupansky

Wednesday, April 21, 2010

Still have one more Lending Club investment loan to get issued

All but one of my latest batch of Lending Club investment loans were issued as of Monday. Somehow I had made a mistake and inadvertently selected a loan that was not already "Approved", which means that although it had reached full funding, it failed to be issued due to a lack of final documentation from the borrower. I was out for a few days, but I just placed a new order for a new "Approved" investment loan.

I also had accumulated enough interest and return of principal to make yet another new loan investment.

Together, the two new loans average 18.67% return, with a historical default rate of 5.95% and a service charge of 0.73%, resulting in a projected return of 12%.

Meanwhile, my Net Annualized Return has inched up to 15.19%. I have a total of 51 notes, pus the two new ones from today that are still in funding.

Even with this doubling of my total porfolio size, my Lending Club investment is still a modest size experiment. Even doubled again it would still be modest size. If all goes according to plan (not that I actually have a plan), by the end of the year I should finally have a real investment in Lending Club loans.

My goal continues to be a 15% return, but I figure I need a little buffer so that repayments (and maybe even defaults) don't push me below my goal too frequently. I may in fact keep pushing upwards with loans in the 16% to 18% range until I get my return up to 16% and then gradually work the average back to 15.5%.

So far, my Lending Club portfolio has been perfect, with no delinquencies or even late payments. I started investing with Lending Club back in June 2009.

This is still just an experiment for me since I have no prior experience with this type of investment, but so far in has been very encouraging. I intend to double the size of the experiment in June or July (assuming my work income continues.)

-- Jack Krupansky

Thursday, April 15, 2010

All but a few of my latest Lending Club investment loans have been issued

Just a week ago I placed orders to invest in a new batch of Lending Club investment loans and already 75% of them have been fully funded and issued. And of the remaining five, two have reached full funding and are awaiting final review. The remaining three are about 75% to 80% funded and likely to be funded and issued by Monday.

Somehow I made a mistake and inadvertently selected a loan that was not already "Approved", which means that although it has reached full funding, it could still be declined if the borrower does not finalize proof of income. I should be okay on this one (as I have been for most such loans in the past), but it does add some uncertainty.

It has been ten days since I started this investment batch by initiated a transfer of funds to my Lending Club account from within the Lending Club web site. Assuming the remaining loans are issued on Monday, that will have been a two-week investment cycle, which is about what I would expect with a moderate size batch of loans, a bunch of which were less than 50% funded when I selected them, and includes the time for the transfer of funds from my bank account to settle in my Lending Club account.

Meanwhile, my Net Annualized Return has inched back up to 15.08%. I have a total of 52 notes (assuming the latest batch all get funded.)

Even with this doubling of my total porfolio size, my Lending Club investment is still a modest size experiment. Even doubled again it would still be modest size. If all goes according to plan (not that I actually have a plan), by the end of the year I should finally have a real investment in Lending Club loans.

My goal continues to be a 15% return, but I figure I need a little buffer so that repayments (and maybe even defaults) don't push me below my goal too frequently. I may in fact keep pushing upwards with loans in the 16% to 18% range until I get my return up to 16% and then gradually work the average back to 15.5%.

So far, my Lending Club portfolio has been perfect, with no delinquencies or even late payments. I started investing with Lending Club back in June 2009.

This is still just an experiment for me since I have no prior experience with this type of investment, but so far in has been very encouraging. I intend to double the size of the experiment in June or July (assuming my work income continues.)

-- Jack Krupansky

Friday, April 09, 2010

Finished investing my new Lending Club money in more investment loans

This morning and this afternoon I invested in the last two investment loans (notes) to complete the investment of my latest infusion of money into my Lending Club account. One was at 18.30% and the other at 17.56%, so I think my average for the new batch should be roughly at 15%, give or take. I had hoped to be up at 15.5% or even 16%, but 15% is fine.

Two of the batch of 20 loans have already been fully funded and issued. Three more have reached full funding and should be issued on Monday. The rest are all "Approved" but in various stages of funding. A couple of them might not reach full funding by the two-week deadline, but overall they are in great shape to get issued within the next week to ten days. My work is done (unless some of them fail to get fully funded). I'll check up on their funding status every couple of days (just for fun, actually), but otherwise my account is on auto-pilot.

It was only Monday that I initiated the transfer from my bank account in Lending Club. I didn't even expect to be starting the loan selection process until Monday. being ahead of the game is quite satisfying.

The only other comment I would make is that I would have been done yesterday if I had doubled or somewhat increased my loan slice size to minimize the number of loans I needed to select. Twenty is a lot to do all at one. Sure, the Lending Match feature can be used to do a batch of automatically selected notes all at once, but I prefer to carefully vet each note and to select only those that are already "Approved."

Meanwhile, my Net Annualized Return has moved back up to 15.07%. I have a total of 52 notes (assuming the latest batch all get funded.)

Even with this doubling of my total porfolio size, my Lending Club investment is still a modest size experiment. Even doubled again it would still be modest size. If all goes according to plan (not that I actually have a plan), by the end of the year I should finally have a real investment in Lending Club loans.

My goal continues to be a 15% return, but I figure I need a little buffer so that repayments (and maybe even defaults) don't push me below my goal too frequently. I may in fact keep pushing upwards with loans in the 16% to 18% range until I get my return up to 16% and then gradually work the average back to 15.5%.

So far, my Lending Club portfolio has been perfect, with no delinquencies or even late payments. I started investing with Lending Club back in June 2009.

This is still just an experiment for me since I have no prior experience with this type of investment, but so far in has been very encouraging. I intend to double the size of the experiment in June or July (assuming my work income continues.)

-- Jack Krupansky

Rate of innovation headed for technological Dark Ages

Here's an interesting article that posits that our true rate of innovation is declining:

One of the strangest portents of the end of progress is the recent discovery that humans are losing their ability to come up with new ideas.

... "The number of advances wasn't increasing exponentially, I hadn't seen as many as I had expected — not in any particular area, just generally."

... the rate of innovation peaked in 1873 and has been declining ever since. In fact, our current rate of innovation — which Huebner puts at seven important technological developments per billion people per year — is about the same as it was in 1600. By 2024 it will have slumped to the same level as it was in the Dark Ages, the period between the end of the Roman empire and the start of the Middle Ages.

Huebner's insight has caused some outrage. The influential scientist Ray Kurzweil has criticised his sample of innovations as "arbitrary"; K Eric Drexler, prophet of nanotechnology, has argued that we should be measuring capabilities, not innovations. Thus we may travel faster or access more information at greater speeds without significant innovations as such.

Huebner has so far successfully responded to all these criticisms. Moreover, he is supported by the work of Ben Jones, a management professor at Northwestern University in Illinois. Jones has found that we are currently in a quandary comparable to that of the Red Queen in Through the Looking Glass: we have to run faster and faster just to stay in the same place. Basically, two centuries of economic growth in the industrialised world has been driven by scientific and technological innovation. We don't get richer unaided or simply by working harder: we get richer because smart people invent steam engines, antibiotics and the internet. What Jones has discovered is that we have to work harder and harder to sustain growth through innovation. More and more money has to be poured into research and development and we have to deploy more people in these areas just to keep up. "The result is," says Jones, "that the average individual innovator is having a smaller and smaller impact."

See: http://www.timesonline.co.uk/tol/life_and_style/article575370.ece

I would summarize the problem as that our main focus is to be extremely good at repackaging and repurposing old wine in new bottles.

In my view, we have far too much "fake innovation". Even worse, we place far to great a value on fake over true innovation.

To make my point: Here we are a whole decade into the 21st century and NOBODY is knocking on my door or accosting me on the street and demanding that I should do some true innovation. Nobody. Oh, sure, some people want to cure cancer or prevent climate change and such, but nobody wants to pursue, for example, ... "progress of the human mind" (Kurzweil seems to want to eliminate it as if it were a form of cancer.)

-- Jack Krupansky

Thursday, April 08, 2010

Invested most of my new Lending Club money in more investment loans, averaging 14.88%

My latest infusion of money into my Lending Club account became available today, a day earlier than I expected. It was only Monday that I initiated the transfer from my bank account in Lending Club. I was pleasantly surprised to see the email message from Lending Club in my inbox when I got back from my noon walk.

I decided to keep the size of each slice of investment in any individual loan relatively small, at $50. I started out with the goal of shooting for a return of about 16% on these loans, but there simply weren't enough of them that were already "Approved" which is a personal criteria that I use to assure quality and increase the odds that the loans will be issued and in a timely manner. About half of my new loans are above 15% and half below 15%, averaging 14.88%. That is below my ultimate goal of 15%, but I actually held back 10% of the new money so that I could try on another day to get a couple of loans up in the 18% range to see if I could move the average above 15%. After all, new loans are appearing on Lending Club every day.

Some of these loans were mostly funded so I should see them issued within the next couple of days. Others were fairly new and may take a week or more to become fully funded.

Here's a hoot: One is for debt consolidation for an investment banker at Citigroup here in NYC who has a six-digit salary. Excellent! Competing with Wall Street on Wall Street -- that's the way to stick it to the banks for all of the pain they caused so many of us. Yeah!

Even with this doubling of my total porfolio size, my Lending Club investment is still a modest size experiment. Even doubled again it would still be modest size. If all goes according to plan (not that I actually have a plan), by the end of the year I should finally have a real investment in Lending Club loans.

My goal continues to be a 15% return, but I figure I need a little buffer so that repayments (and maybe even defaults) don't push me below my goal too frequently. I may in fact keep pushing upwards with loans in the 16% to 18% range until I get my return up to 16% and then gradually work the average back to 15.5%. I was briefly above 15% a couple of weeks ago, but then I fell back to 14.88%. Yesterday I finally crept back up to 14.99%.

So far, my Lending Club portfolio has been perfect, with no delinquencies or even late payments. I started investing with Lending Club back in June 2009.

This is still just an experiment for me since I have no prior experience with this type of investment, but so far in has been very encouraging. I intend to double the size of the experiment in June or July (assuming my work income continues.)

-- Jack Krupansky

Wednesday, April 07, 2010

Doubling my Lending Club portfolio size (again)

As I had been hinting in recent posts about Lending Club, I am going ahead and doubling the size of my investment loan portfolio since my work started up again at the beginning of April. I also switched banks, so I had to wait to verify the new bank before initiating the funds transfer on Monday. According to Lending Club the money should be available for investment sometime on Friday or Monday. I am actually using money from my federal tax refund.

I still need to decide whether to invest in $50 or $100 loan slices. The larger amount means fewer loans which is easier to vet and manage but greater exposure to risk of any loan, while the smaller amount means more effort but less risk. Or, I could pick a number in the middle. What I really need to do is think about what investment activity I expect in the future so that these investments are consistent with that goal. I'll probably double my portfolio again within three or four months, so I am leaning towards the larger loan size.

Even with this doubling my Lending Club investment is still a modest size experiment. Even doubled again it would still be modest size. If all goes according to plan (not that I actually have a plan), by the end of the year I should finally have a real investment in Lending Club loans.

My goal continues to be a 15% return, but I figure I need a little buffer so that repayments (and maybe even defaults) don't push me below my goal too frequently. I may in fact keep pushing upwards with loans in the 16% to 18% range until I get my return up to 16% and then gradually work the average back to 15.5%. I was briefly above 15% a couple of weeks ago, but then I fell back to 14.88%. Yesterday I finally crept back up to 14.99%.

So far, my Lending Club portfolio has been perfect, with no delinquencies or even late payments. I started investing with Lending Club back in June 2009.

This is still just an experiment for me since I have no prior experience with this type of investment, but so far in has been very encouraging. I intend to double the size of the experiment in June or July (assuming my work income continues.)

-- Jack Krupansky