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House/condo is an option
It's a market in consumer debt, and it's even more dangerous as it's not bundled. A1 is returning 12% in what are basically individual junk binds
Idk what speaking too much grammar means, but the premise is fundamentally unsound. Do you, but statistically you are incurring far more risk than you should for the returns you are generating
Sure, people win the lottery too, doesn't mean the risk reward is there
I invest it in taxes. Hoping to receive a big check from IRS when I retire
@dd1 that 12% return is bs, no investment in existence that averages that over the one ton. A1 has probably had 3 good years. Not indicative of long term returns. Nothing beats risk reward of diversified funds, etfs, and bonds long term.
Max 401k (funds)
Max IRA (individual stocks / REITs)
Max HSA (funds)
10% portfolio cash (savings acct)
Surplus to brokerage (individual stocks, REITs, etc)
LendingClub.com I average an annualized return of about 12%
But what lendingclub is is essentially a peer to peer lending service for individuals who can't qualify for regular personal loans. So not only is the average profile worse, it's also not bundled, which significantly increases the risk premium without increasing the returns. That's not an "inefficiency" it's a system that very deviously preys on both unsophisticated borrowers and lenders while the company essentially takes a risk free premium on top. Will some people make money...of course. But the vast majority won't or will see lower returns than the good through a number of more conventional vehicles.
A1, for real? I have a personal debt consolidation loan through them at about 8%, arbitrage opportunity you think?
Accenture 1: how risky is lending club? and how is the liquidity?
McK1, LendingClub is an internet bank, they have nothing in the markets. They are a short term annuity model, basically.
*bonds
DD1, yes. I typically invest in high risk loans, knowing well that I'll have a couple of defaults. Weighted, I find out I get the most ROI than focusing on lower risk loans.
McK1, you're speaking too much grammar. I'm on my third year in and I've had north of 12% ROI, at least so far. I even reinvest everything. It's worked so far and it's okay money, so if I lose it, no big deal.
In efficient markets, yes McK1, but I can't say that applies here. Not saying you're wrong, just saying people make consistent outsized returns in small pockets all the time. Even Buffet has commented on how easy it would be for him to earn massive returns if he didn't have much money to invest.
Local bookie, some say the ROI borders on usury.
It's not about risk/reward, it's about finding inefficiencies where "big money" has incorrectly evaluated the risk or reward because the niche is more nuanced than it seems from the outside, and/or the opportunity is too small for them to get involved.
😂 Badideas, very appropriate username for that comment.... or is it?
Can't speak to lendingclub - I agree with you there by default. Was more objecting to the claims that "no investment exists" and "nothing beats risk/reward of diversified funds, etc." They aren't easy to find, exist in weird/unknown areas, and aren't generally available to everyone, but they absolutely exist.