Upstart. A longer view.

This may be off topic, so delete if it is not valuable.

First, this is a macro economic view of lending and macro economics is an excellent way to make a small fortune

. . . out of a large one.

While lending and leverage can be hazardous, like picking up nickels in front of a stream roller, easy money until it isn’t, lending, banking and risk management in general is what creates wealth, wealth on a worldwide scale. Upstart is in this business, picking up nickels in front of a stream roller. Their business model lets them get a little closer to the wheel and see and grab nickels that everyone else leaves behind.

This is an amazing and scary business model. However, it is a business ,(As much as I love to hate banksters) that is critical for economic growth. When I look out into the world that is “not America*” I see a lot of unbanked people and I see that their societies are forming up in ways that allow them to be banked. Upstart has the business model to reach out to them, outside of the U.S. centric credit scoring system.

As such, I am inclined to at the very least allow at least a small part of my oversized position remain in Upstart for a long time. At this time I am not reducing my position, but even if the time comes that it is no longer a board darling, I will probably retain a small position due to its fundamental necessity within the world economy.

Cheers
Qazulight

* So, today we’re going to learn why the green areas of not-America didn’t copy us. All right, so as Americans may dimly remember from history classes, the Constitutional system we’ve been living under since 1788, the year of the first Presidential election, was not the original American government.

John Green

http://www.mrwilg.us/transcript-crash-course-us-history-8/

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While lending and leverage can be hazardous, like picking up nickels in front of a stream roller, easy money until it isn’t, lending, banking and risk management in general is what creates wealth, wealth on a worldwide scale. Upstart is in this business, picking up nickels in front of a stream roller. Their business model lets them get a little closer to the wheel and see and grab nickels that everyone else leaves behind. – Qazulight

The “nickels in front of a steam roller” analogy is a popular one and certainly CAN be associated with a lot of endeavors.

I argue that it does not apply to Upstart.

Why?

Because the risks associated with that steam roller… the risks that sank the S&L industry, for example, are for the companies holding bad loans.

KEY POINT: Upstart only holds enough loans to gather data for their models, not enough loans (even if they go bad) to sink them. Their direct CUSTOMERS (the banks) are the ones picking up the nickels, not Upstart.

Rob
Rule Breaker Home Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

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