Crypto Currency – An Interesting Value Proposition

By |November 9th, 2017|

With all the recent Crypto Currency hype with BitCoin, Ethereum, Monero, etc, it got me thinking about the value of different assets in society and what ownership really means.


What is the distinguishing factor that allows 1 person to own something and another person not to own it? One person can claim something is his, but if someone else claims they own it as well, who is right? In our society, assets of significant value like Real Estate have a document that is filed with the government that states that X person owns this piece of land and the improvements upon it. The entire position of ownership is based upon the fact the government, with all its legal force, will allow you to own the property and all rights that go with it. If the government was not present, someone could come in with some weapons and claim the property as their own if the landowner is unwilling to put up a fight.

The entire value of the property in this case comes from the fact that the government will enforce property ownership rights. This comes with its own set of problems. The government does not do this for free. They expect the land owner to pay a fee (taxes) to the government for this right as well as many other services that may not be of interest to the landowner. This can cause the property’s value to fluctuate significantly if there are changes in government policy. Let’s imagine that the local government decides to raise taxes from 1% of the property’s value to 5%, this will very likely cause property values to drop significantly.

If you go on and begin look at other types of assets such as physical currency, bonds, business equity, these assets also tend to have their ownership [...]

My Lending Club Filters

By |January 5th, 2014|

In my last post about Lending Club, I talked about how I built a lending club bot to autoinvest in loans so I didn’t have to do it manually.  Here, I’ll be telling you how the bot actually makes a decision about what types of loans to invest in.

Look at historical data

There is loads of historical data available on past Lending Club loans and there are even sites that have aggregated this data and built tools around analyzing it. My favorite of these sites is Nickel Steamroller. You can individually look at various criteria such as loan purpose, loan length, employment length, home ownership, etc and see the historical performance of notes.

What criteria to look for

So, there are 2 crucial components to look at when trying to figure out what kinds of loans to invest in: 1) the historical ROI (return on investment) and 2) the total number of loans that have been funded.  Look for loans that have high historical ROIs and a large number of loans that are funded. If there isn’t a large number of loans funded, it is not a large enough sample size to make a good bet on if future loans will perform well.

lending club stats


If you take a look at the data above, it shows the historical data on loans based on the type of home ownership the person has. If you take a look at ownership type none, the ROI is really high and around 12.19% but there have only been 50 loans of that type funded meaning the data isn’t meaningful enough to actually bet on the performance of future notes.

The Criteria I use

I don’t mind taking a decent amount of [...]

I built a Lending Club bot

By |October 22nd, 2013|

Since, I haven’t posted on here in a while, you probably didn’t even know that I was using Lending Club, but now you know!

What is Lending Club?

I’ll give  you a brief intro on Lending Club if you are unfamiliar. Lending Club is a site that facilitates peer to peer lending.  Here is a common loan story on lending club:

John has got himself into a situation where he owes a lot of money at high interest rates on his credit cards. He has decided that he wants to take control of his life and pay off his credit card debt, but a bank won’t give him a loan to pay it off. He goes online to Lending Club and requests a loan from his peers that is much lower than the interest rate on his credit cards. His online peers can choose to invest in his loan in increments as small as $25. He pays off all his credit cards and now only has 1 monthly payment to Lending Club at a lower interest rate than he previously had.

peer to peer

This is a very common situation on Lending Club, but people can actually get loans for all kinds of reasons such as home improvement, starting a business, etc.

So what is this bot for?

Anyway, Lending Club has grown in popularity over the past few years since I started investing. Large institutional investors have started dumping millions of dollars into these loans and have started acquiring the best loans as soon as they are available for investors to put money in. Since the loans were getting snatched up so quickly, I was left with all of the loans that historically performed the worst. (I will [...]