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Roundup of Social Lending News – May 26, 2012

Roundup of Social Lending News – May 26, 2012

Peter Renton·
News
··1 min read

Every Saturday I bring you the latest news from the world of peer to peer lending. These are the best of the news articles and blog posts from around the web that I shared on Twitter this past week.

We had some really great articles this week from a variety of sources. I already mentioned the Seeking Alpha article in my post yesterday. One of the most important articles this week was by Jeff Crowe on his Norwest Venture Partners blog. Crowe is hardly an impartial bystander – he is on the board of Lending Club and his company has invested VC money in Lending Club – but I found it very interesting to get the perspective of someone in his unique position. The Finovate interview with Renaud Laplanche was also noteworthy. Hope everyone has a great Memorial Day weekend.

Tradestreaming – 9 Ways To Improve Your Investing Performance In P2P Loans

Brave New Life – Lending Club Update: May 2012

Random Thoughts – Lending Club Loan Interest Rate and Return – Do Defaults Matter?

Short Road to Retirement – Peer to Peer Lending, Good Investment?

Finovate – CEO Interview: Renaud Laplanche of Lending Club

Seeking Alpha – Why I’m A Converted Believer In Investing In P2P Loans

Resilience Economics – A Revolution in Peer-to-Peer Investing

Thomas DeLong – Everyone can’t own the good loans: why indexing P2P lending is different than indexing stocks

NVP Blog – Grass Roots Capitalism: P2P Lending

Lucrative Lending – Credit Report Inquiries can be Warning of High Risk Personal Loans

The Independent (UK) – How peers can solve borrowing headaches

Peter Renton head and shoulders

Peter Renton is the chairman and co-founder of LendIt Fintech, the world’s first and largest digital media and events company focused on fintech.

LendIt Fintech conducts three conferences a year for the leading fintech markets of the USA, Europe, and Latin America. LendIt also provides cutting-edge content all year long via audio, video, and written channels.

Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series.

Peter has been interviewed by the Wall Street Journal, Bloomberg, The New York Times, CNBC, CNN, Fortune, NPR, Fox Business News, the Financial Times, and dozens of other publications.

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Louis Lamoureux
Louis Lamoureux
May. 26, 2012 5:54 am

Does the Thomas DeLong blog post actually say anything? it appears to be gobbledygook to me. He doesn’t explain what he means by indexing. What index is he trying to match? Then he says in the future active managers will quickly fund all the higher yielding notes leaving only lower yielding notes (a future which played out already on prosper and from what your blog has reported has been fixed to an extent). Then he says to wait for higher yielding better quality notes. Hallelujah! he figured out the secret, find the best quality high yielding notes for better returns.

OMG I’m turning into a grumpy curmudgeon like DanB
Lou

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Dan B
Dan B
May. 26, 2012 8:35 pm

Hey, without a 🙂 , that could be construed as a personal attack Louis! (Peter, are you reading this? )
Though I’m flattered to hear that my writing represents a standard to be emulated, I can’t help but think that yours still lacks that certain je ne sais quoi before you can hope to reach my level of panache.

Seriously though, your point about Thomas is well taken. Rather than suggesting that he’s saying nothing, I’m more comfortable believing that my mind just isn’t wired in a way that enables me to understand what in the hell he’s talking about.

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Peter Renton
Author
Peter Renton
May. 28, 2012 3:55 am

@Lou/@Dan, I think the main point Thomas was trying to make is that it is very difficult to create an index-type investment with p2p lending because many of the loans get snapped up quickly. I actually disagree with the main premise, because with enough money you could setup an automated quick invest to invest in every loan, thereby creating an index fund of all Prosper notes. I included this article because the concept of indexing in p2p lending has rarely been discussed and I think it is a useful thing to consider.

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Dan B
Dan B
May. 28, 2012 4:41 am
Reply to  Peter Renton

Last week both you & I argued against some similar point (or so I thought) only to have him come back & say that both of us misinterpreted him & that it wasn’t what he was saying at all. That’s 15 minutes of my life I’ll never get back. Therefore, as a seasoned gambler I’ve decided to cut my losses on this one & just walk away.

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Learner
Learner
May. 31, 2012 11:17 pm

Why would you want to buy an index fund of p2p? The transparency of say LC allows me to use LS to weed out adverse risk and maximize returns…this is one thing we will NEVER be able to do with NASDAQ.

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Peter Renton
Author
Peter Renton
Jun. 3, 2012 11:37 pm
Reply to  Learner

@Learner, The reason why an index fund of p2p is attractive is for the same reason that S&P 500 index funds are popular. It allows people to invest in the market without having to choose any individual companies. Many people have neither the time nor the inclination to study the loan history on Lendstats. And index funds are already being used in Lending Club’s private placement funds for the institutional investors – they already have over $100 million invested in them further proof that the concept is popular.

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