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[Hedgemaster]

... on Lendingstat's Estimated ROI.

I'd like to take this opportunity to let everyone know about my upcoming seminar "How to Lend Successfully on Prosper", based on my soon-to-be published book, "Make 'em Pay."

PM me for payment details.

[j9359]

Except you stopped bidding 9 months ago.  Is that the secret to your success
john.
 

[onthefence]

http://www.lendingstats.com/lenders/Hedgemaster

Estimated ROI1: 15.42%
93 loans, 9 late, 5 defaults
Avg. Loan Age (days)      504.8

OK.  Your portfolio has street cred.  It looks like you successfully gambled a good ROI.  Lates & Defaults were balanced off of high interest rate loans.  Starting off early (without much available extended credit information) suggest you are good a reading people.

You also stopped lending in July of '07.  Which also suggests that either you don't think you can continue to earn 15.42% ROI in Prosper's current climate or you think you can invest better elsewhere.

CONGRATULATIONS, you won Prosper!!!!

Side question for the rest of our group... with the number of portfolios out there , shouldn't we see some people (who aren't completely stupid about lending) getting lucky on their ROI?

[Urbi_et_Orbi]

Diversification vs over-diversification?

[Beachey]

poof

[NewHorizon]

So Hedgemaster is definitely outside the distribution which would imply more than just luck.

So it's less than luck for those outside the OTHER end of the distribution? 

[Beachey]

poof

[traveler505]

I'd better brag today, since I've got a herd of <15 lates that will probably knock me out of the Top Ten (temporarily, I hope) next week.  I'm #7 right now, with 15.70%

[traveler505]

So Hedgemaster is definitely outside the distribution which would imply more than just luck.

So it's less than luck for those outside the OTHER end of the distribution? 

Anything outside the distribution implies a reason other than just random variation.

Since the possible outcomes of ROI on Prosper vary from a high of 35% to a low of <-100% (principle plus expected return).  The observed distribution is on the high end of those possible outcomes. What the distribution implies is that an average lender using the tools available should be seeing a ROI between -0.85% and 13.19%.

Those above the distribution have some additional ability to pick loans (read minds, insider info, ?) which allows them to outperform.

Those below the distribution have a lack of ability to pick loans.  In most cases, this is easier to explain and generally would fall in using a poor loan picking strategy (lack of diversification, failure to use the information provided).

In summary, if you are in the distribution, you probably did what everybody else did and got a statistically similar result.

If you are not, then there is likely a reason why either good or bad.

But, presumably, there is some element of skill involved in determining whether an in-distribution lender is at -0.85% or 13.19%.  To establish a purely luck-based distribution, wouldn't you need to use a set of data based on lenders who selected listings at random as the basis for your bell curve?

[Staneslav]

a

[bamalucky]

I know exactly what Stan is saying..There was once a man in Vegas who won every $5000 chip(i think it was 5k) the casino owned rolling dice over a period of 3 years with a negative expectation EVERY time he played.He KILLED the casino for years.

but his luck turned...I'll try to find  a link on the net..

[bamalucky]

Still looking,but heres a BJ tale..

"A smelly bum, whose wife has just kicked him out of the house, cashes in his $400 Social Security check and proceeds to win between 1.3 and 1.6 million dollars in a week-long orgy of good luck at the blackjack tables. The folks who deal to him and the folks who serve him say he is the rudest, crudest, but luckiest bastard they ever saw -- with the emphasis on the "b" word. At the height of his winning he alienates just about everyone he comes into contact with at Treasure Island. When he finally blows his incredible bundle (oh, yes, he loses just about all of it back to the casino), Steve Wynn steps in and has him escorted out into the neon night and into the dawn of a new Las Vegas legend."

http://www.casinocitytimes.com/article.cfm?contentandcontributorid=249

[bamalucky]

"Of course we gave Archie the respect a winner of this type would be expected to get. We catered to him pretty good. Archie had his own table, and he would call and let us know. It might be several hours until he arrived, but his roped off table would be waiting for him. Archie didn't want anybody sweating him. I guess Archie was ahead of us for over 18 months. He won all the $5,000 chips in the casino, and we had to mint a bigger $25,000 chip to get him to cash the $5,000 chips in!"

"No other gambler had ever done that to us before. Of course, in the end Archie lost, but it is worth repeating, Archie had more gamble in him than anybody I've ever seen. Archie was going to either win the Horseshoe or go broke. He took a good run at it; I will say that for him!" http://www.pokernews.com/news/2008/03/sextons-corner-39-archie-karas-part-9.htm

This is part 9..There is a whole lot more to this guy..

ETA: part 1 where it starts  http://gamblingblg.com/2008/02/11/sextons-corner-vol-31-archie-karas-the-worlds-biggest-gambler-part-1/

[Beachey]

<poof>

[bamalucky]

He's also at over 10% late loans,right in line with most lenders..Just by guessing,i's say most lenders with 9 months or so average are running between 10-15% late or default.

Anytime you see a lender with 50 or more loans with 300 day average & under 10% late or default,is a very good lender.

ETA I'd also like to point out his whatif http://www.ericscc.com/lenders/Hedgemaster/whatif

He's also proving my theory that most people need to stick to first instincts & not chase loans.(A good loan at 10% is a hell of a lot better than the one you chased at 25% after you were bumped off the 10% one.).Notice how he's almost never outbid?

When you go looking for things to bid on is when you get in trouble.