More test cases

New notes are added to Lending Club 4 times a day. Some of these disappear very quickly. So quickly, that it is obvious that they are being selected by some automated software. As we see in test case 3, one such advisor LCPicks, can react very quickly and has a model for rating the newly released loans. One can assume there are other such investors out there doing precisely the same thing. Further each one of these probably uses a different model for selecting the loans. So using a concept that has been successful in sports wagering, I decided to take advantage of this.

I download the new notes shortly after another release and only look at the newly added notes. I wrote a program that does some calculations and sorts. I then piggyback on those notes that are going quickly on the assumption that they are the collective wisdom of the other investor’s models.

Test case 5 is made up of notes that had over 90% of their initial amount purchased in a short period of time. While implementing this I noticed that this was mainly made up of smaller notes because investment moved up their percentage rapidly. So I also added test case 6 which included notes with funding over 50% and the amount funded over $10,000.

Test case 7 is a control group. It was intended to be made up of those selected by Automated Investing. But as indicated in a previous post, I screwed that up so elected to select notes for this group randomly based on the last 2 digits of the note number. This then leaves us with the following 7 test cases.

Test Case 1 – Buy notes on FOLIOfn finishing in 2017.

Test Case 2 – Buy notes on FOLIOfn with less than 12 months to go.

Test Case 3 – Use an advisory service, LC Picks.

Test Case 4 – Use my Zip/Grade screening process.

Test Case 5 – Acquire new notes selling fast by percent invested.

Test Case 6 – Acquire new notes with lots of earl $ invested.

Test Case 7 – Control group of randomly selected notes.

I will be developing a reporting mechanism on the progress of these tests. Follow me on Twitter, @billlanke, to be notified when my next post appears.