Quick addition to my previous post. It is funny that sometimes I struggle to find a topic to write about, sometimes I read a piece and the urge to write comes out strong immediately: maybe it will not be funny for you, but for someone like me that spend his day on a quant, process driven job, this sprouts of spontaneity are a nice diversion.

Anyway, I was reading one of those p2p blogger monthly update and the guy was chronicling his experience with TFGCrowd (do not blame me if I spelled it wrong, I am too lazy to even google it now) and boy, the mot&%*F(cker got it so wrong. If the platform pays you with clockwork precision IT IS A SIGN that is a scam, not the other way around. The platform has to maintain the façade of being legit, they do not want you to lose any minimum dose of faith in it. That is why when Monethera (again, too lazy) decided to change their buyback policy I commented that maybe they are not a scam, because you show trouble when you have a shitty business plan but def not when you are running a joke.

Second useless element for NOT detecting if a platform is a scam is if you use it for less than five years, maybe even more. “I am investing since April 2018, always received interest on time, so far so good“. Scams can survive many years before running out of money, Madoff run one for like 30 years.

This reminds me of Nassim Taleb Thanksgiving turkey tale. Since the day it was born, the turkey received food (passive income?) without having to do any effort. Each passing day the turkey celebrates its blessed life and each day is more convinced than the day before that the party will not stop, and why it should? Until one day is Thanksgiving and…you get it. Taleb refers to this story for people that sell deep out of the money put, collecting pennies in front of a steamroller, he was not even thinking about financial scams. The longer you do not see any sign of risk / volatility, the bigger the trouble ahead you should expect; the absence of risk is no sign of risk-free.

I know that it does not have anything to do with a scam, but I also wanted to comment this, a ranking of internet p2p portfolios? what? … why??? Let’s put aside for a moment the fact that all these websites are un-audited and authors can input whatever figure they deem nice to report (in particular openly to tax authorities, like a football players once said: “it is not going to happen…but if it happens” I hope you have all your tax payment receipts in good order). I would (slightly) understand if someone wanted to rank portfolios by returns since inception, to at least give prominence to the best managers (again, it is super easy to forge numbers), but ranking them by amount? If you want to see a dick contest, I think there are already plenty of websites for that. Does the author lives in Dubai without a VPN?

End of the quick rant, if you like this stuff share it with your friends and follow me on Twitter @nprotasoni

Categories: P2P Lending