Sunday, July 24, 2011

Cars That Drive Themselves!

I can’t wait until I can get in the driver’s seat of a car, input my destination into the GPS, and then take a nap as my car drives me there.  This sci-fi future, I believe, is closer than many people think.

Americans won’t just accept a fully autonomous self-driving car from out of nowhere.  It will have to happen piece by piece, where AI takes over one small thing then the next.  And indeed, this is what we find happening. 

In 2006, Lexus introduced a car that could parallel park itself.  That feature is becoming more and more common.  Intelligent braking if the driver is not acting is another recent example of cars driving themselves.  This feature has been extolled by the Insurance Institute for Highway Safety.  In a recently released report, IIHS announce that this intelligent braking outright prevents 25% of low-speed crashes in the vehicles in which it is installed.

It’s better that computers will eventually drive.  Humans just aren’t good at it.  The World Health Organization estimates that around 1.2 million people are killed in car crashes each year with around 45,000 of those deaths taking place in the US.  Almost all of these are due to human error, something that will be eliminated with self-driving cars. 

But how far away are cars that completely drive themselves?  Well, I can’t go out and buy one today.  But check out this TED talk.

Self-driving cars are already here!  Google’s self-driving cars have logged 140,000 miles across cities and highways through both day and night without an accident.  And if you think that Google accomplished this feat by relying on their cars driving meekly and 20 mph less than the speed limit, here’s one of their cars screeching tires and hauling ass through an obstacle course.

Once cars are completely driving themselves, even more opportunities open up.  Scientists in Italy are working on software that allows cars to talk to each other, with the end goal of connecting every single car on the road.  What would this system be used for? 

When a car in an accident experiences a sudden change in acceleration, this change would be captured by the sensor and alert cars and drivers approaching the same spot.

In addition to preventing accidents in the first place, self-driving cars will better react to accidents when they do occur, preventing even more accidents.  This double whammy, I believe, will have an incredibly dramatic effect on the number of deaths and injuries from auto accidents each year.  Once self-driving cars are widespread a 95% reduction of traffic deaths is within the realm of possibility.

One last bit of good news: traffic will also be lessened once self-driving cars are the norm.  Every time I sit in a traffic jam, I dream that self-driving cars are already here.  There aren’t any idiots switching lanes to try to get ahead only to end up slowing everyone down.  There are no rubberneckers braking to stare at the gore of an auto accident.  There is no one suddenly accelerating and then stopping, disrupting the flow of traffic.

Instead, there are thousands of self-driving cars proceeding at a quick and steady clip on the highway.  People now get to their destination much sooner and rush hours have been greatly alleviated, in some places entirely eliminated.  Self-driving cars are following each other closer than would be possible if driven by humans.  No one brakes for no reason.  There is no road rage.  When a two-lane highway merges into one lane, the cars evenly space themselves and merge while barely losing any speed, like a zipper being zipped.  Everything is beautiful.  Nothing hurts.

So how will this paradise come about?  I expect cabs and buses might be the first early adopters, for economic reasons.  Maintaining a mass-produced AI will be cheaper than paying individual drivers.  There would be some differences, sure.  Video surveillance would have to be used to prevent and prosecute hooligans.  But in the end, we’d be much better off with self-driving cars.  And I believe (or at least want to believe) that I will ride in my first self-driving car before 2020.

My Complete Lending Club Strategy


For future reference, I’m going to chronicle my initial Lending Club posts into one article.  Without further ado:

Part 1: a quick introduction to the concept of P2P lending

Part 2: why I decided to use Lending Club over Prosper

Part 3: the final filters that I apply to find the best loans to fund

Part 4, Part 5, Part 6, and Part 7: the primary filters that I apply to weed out borrowers first

I will also continue my monthly updates on my Lending Club return, to see if these filters really work.

The information available at Michael Grabowski is for your general information only and is not intended to address your particular requirements.  This information is not any form of advice by Michael Grabowski and is not intended to be relied upon by users in making any investment decisions.  Michael Grabowski is not liable for any loss or damage which may arise directly or indirectly from use of or reliance on such information.

Sunday, July 17, 2011

A Club for Lending (Part 7): Advanced Strategery 4


This will be my final post on Lending Club filters (except for the summary immediately following this)!  As in all the other posts, items in bold and red are filters that the Lending Club website itself cannot perform, but can be performed with downloaded loan data from the website.

13.  Remove loans not yet approved by Lending Club

Interestingly enough, you can invest in loans that are not yet approved by the Lending Club credit department.  If these loans end up not being approved by Lending Club, the money that you have invested is returned to your account.  I don’t want to bother with this, so I just avoid loans that have yet to be approved.

14.  Remove loans of borrowers with income less than $30,000

The vast majority of Lending Club loans are for over $6,000.  If you make $30,000 and take out a Lending Club loan, your debt-to-income (explained in one of my previous posts) is 20% just from your Lending Club loan.  I use this income filter in addition to my debt-to-income filter to be consistent.

But that’s not to say I just want ultra-high income borrowers.  Basically, I just want to understand the borrower’s financial situation.  If I see a borrower that makes $60,000 and has $10,000 in credit card debt at 23% interest, it makes sense to me if he wants to take out a Lending Club loan for $10,000 at 15% interest.  He’ll come out ahead of the game with the Lending Club loan and I can understand that.

On the other hand, I recently saw a borrower asking for a $25,000 loan to build a pool.  The borrower had a verified income of more than $25,000 per month (more than $300,000 per year).  This situation I didn’t get.  Couldn’t this borrower just tighten his belt for a few months to pay for the pool with cash?  Why does he want to take out a 5-year loan if he has this type of cash flow?  It didn’t add up to me so I didn’t fund the loan.

15.  Remove loans already invested in

Pretty simple filter here: I invest in loans that pass all my tests, but I don’t want to double down on the same loans again and again.  So I remove loans from my search that I’ve already invested in.

The information available at Michael Grabowski is for your general information only and is not intended to address your particular requirements.  This information is not any form of advice by Michael Grabowski and is not intended to be relied upon by users in making any investment decisions.  Michael Grabowski is not liable for any loss or damage which may arise directly or indirectly from use of or reliance on such information.