The signs of early spring are here and they include warmer weather, pollen and hay fever, putting the winter coats away, and TAXES.
Bitcoin investors and lenders, especially those in the US, have some quirky laws that they have to deal with in order to stay compliant. As I talked about in a previous post, Bitcoin is taxed like property in the US. This means that we have to do the same things with Bitcoin that we do with stock and bond investments and we have to track them the same way without Click Here To Continue
One of the fun things about following peer to peer/marketplace lending is that things are always changing. Sometimes they are good changes, sometimes they aren't. Sometimes they are just changes and we can't tell if they are good or bad either in the short or long term. Things are changing even more and faster in the Bitcoin lending market.
BTCJam has made 3 such changes that are worth noting.
5 Currencies Added to Locked Loans
Just like how BitLendingClub (BLC) added the Brazilian Real to Click Here To Continue
A huge announcement this morning from the Bitcoin lending platform, BitLendingClub. They announced on their blog that they have a new currency for linked loans other than the USD.
To review, USD loans used to be linked to Bitstamp and now they are linked to Bitfinex in order to lock in an exchange rate between USD and BTC for repayment. (Disclosure: I lend on Bitfinex as well although its a little different than standard BTC peer to peer lending). This means a US based borrower can lock in Click Here To Continue
Bitcoin, and specifically Bitcoin (BTC) based peer lending, is a prominent topic here.
A common misconception is that knowing and understanding all the technological and other underpinnings of Bitcoin's use as a medium of exchange and a currency is vitally important to lending in BTC.
It isn't. In fact, it is not important at all.
Here are five reasons why:
We Don't Understand the Underpinnings of the USD but use it anyway
The Federal Reserve regularly publishes information not just on Click Here To Continue
One of the biggest benefits to me personally for doing these monthly reports that I present to you is actually witnessing the changes in my returns in my loan portfolio for myself. I get to see how my Prosper, Lending Club and Bitcoin based returns vary from month to month. My Bitcoin returns in particular can vary quite greatly. January was a terrific month for my portfolio so let's take a look.
One final note, my new High Rate Portfolio did not start until February so my first report on it Click Here To Continue
Over a year ago, I did a post about big data and peer to peer lending. Big data was all the rage in terms of creating filters for loan selection, and still is for many small investors. Everyone was slicing and dicing the data including stupid things like if FL has more defaults than other states, then don't lend to FL residents. The 'logic' in this method means we are clearly excluding many outstanding FL borrowers. My 3 factors in this year old post of why not to be misled by big data still apply.
Now Click Here To Continue
Since Valentine's Day is this week, I thought I would adjust popular poem "How Do I Love Thee", otherwise known as Elizabeth Barrett Browning's Sonnet 43 and apply it to our industry.
Peer to Peer loans, How do I love thee? Let me count the ways.
I love thee to the depth of loans and breadth of loans and height (or at least number of them now available)
My interest rate goals reach, when feeling out of sight
For the ends of an ideal risk/reward ratio.
I love thee to the level of helping everyday Click Here To Continue
Earlier this week, I announced the creation of a new portfolio that I will be tracking: My High Rate Portfolio. I also outlined some of the filters and guidelines I'll be using. Per Lending Club's portfolio analyzer tools, here is what I have so far.
My weighted average rate of return is a full 18%, which if reached would far exceed my goal of 15%. Of course, we know that defaults will happen and the chance of me (or you) achieving 18% due to 100% repayment is virtually nil. However, this Click Here To Continue
As a commercial credit analyst by trade, my credit and investing philosophy is to control risk first and then maximize the return I can get for the risk that I am willing to take. Many of you know by now that I quantify this goal by trying to earn 1% per month which annualizes to 12%.
One of the most common questions I'm asked is that if my Credit analysis techniques are so good, why not use them to filter out bad loans and seek out the highest return possible? Since I take pride in sharing Click Here To Continue