There is very little literature on how to invest in peer-to-peer lending campaigns and I am pretty sure that very few financial bloggers who have a decent framework on peer-to-peer lending.
I am going to attempt to come up with a blueprint on how to size your bets when you are being offered a campaign on any lending platform.
This approach is based on the Kelly formula which is employed by gamblers in casinos. It is an optimization strategy which maximises long term returns. Based on what I know about the current state of lending platforms, the Moolahsense platform has enough data to facilitate this form of bet sizing.
I would leave the mathematical proof of this approach to the experts.
[ For the purposes of this article, this article only applies to lending projects and does not apply to equity crowdfunding campaigns. As I have a fairly personal bias ......