Author Topic: Current notes vs. late notes. insight?  (Read 7043 times)

Fayte

  • Newbie
  • *
  • Posts: 16
    • View Profile
Current notes vs. late notes. insight?
« on: September 22, 2016, 11:18:10 AM »
I have been investing here since may 09 2016. Still learning about my investment and what maybe in store for it.

ANAR primary 17.03%
ANAR Traded notes -77.03%
ANAR Combined -0.21%


I have 142 issued/current loans
2 Grace
5 late 16-30 days
2 late 31-120 days

It is looking like what I read about 8 months is when an account usually matures and the account takes a bit of losses is right. Wondering if this loss is a decent ratio or maybe a bit high and I need to change my strategies to improve profits.

It looks like my traded notes are what really is hurting me. I have been investing into notes that are cheaper then the balance due, that have nice information on it as well as no previous payment history problems.

Let me know what you guys think please?
Thanks in advance still learning.

fliphusker

  • Sr. Member
  • ****
  • Posts: 463
    • View Profile
    • Email
Re: Current notes vs. late notes. insight?
« Reply #1 on: September 22, 2016, 11:49:10 AM »
I started in March and feel your pain about taking losses early on a smaller account.

245 notes 107 which are FOLIO as I have moved there completely.
My 4 lates are all BK so they will also be charged off.  My 16-30 and most of my graces are ones that happen every month and have been bouncing back.  2 of those that will be charged off were perfectly good FOLIO with 9 months no issues that went BK out of the blue. 

ANAR Primary-7.32
ANAR Traded-4.25
ANAR combined-6.68

In Grace Period 5
Late 16 - 30 Days 1
Late 31 - 120 Days 4
Default 0
Charged Off 1

I have changed my strategy basically twice.  Once when I went strictly to FOLIO and the 2nd is how I buy on FOLIO.  I have never bought a note on FOLIO Am I disappointed with my returns?  Yes but I always tell myself that my account is small, that my account is not aged and that changing my strategies SHOULD pay off in the end. 

Fayte

  • Newbie
  • *
  • Posts: 16
    • View Profile
Re: Current notes vs. late notes. insight?
« Reply #2 on: September 22, 2016, 12:07:09 PM »
245 notes is quite a bit more then mine and still considered small. hmm.. When does a account move from small to large account? As well as I would like to know how big does an account really have to be before it is too big to fail if possible? I thought about bouncing to folio and just investing there but I am trying to play it alittle safer atm because my filter seems to be working on lending club where I have not found all the options to filter through on folio.

fliphusker

  • Sr. Member
  • ****
  • Posts: 463
    • View Profile
    • Email
Re: Current notes vs. late notes. insight?
« Reply #3 on: September 22, 2016, 01:29:09 PM »
What I have read is that an account that has 200 notes does not have much variance from an account that has 1k notes.  While I do have more notes most of my FOLIO are under $20 invested. 
I guess I see myself as being small compared to most here.  I think I will consider myself small until I get around $10k invested.  That is still probably small compared to many here.
Now when you talk about playing it safer and not being on FOLIO, that is the reason I went to FOLIO in the first place.  The notes I buy have a solid history of payments.  Sure I have bought a number who have gone IGP at some point, but not in the past 12 months.  It is not that I worry about LC not being safe, I just would rather have notes with a payment history behind them.  As long as those notes have the YTM that I desire. 
Too big to fail?  Nah, more like having a few charge-offs does not move the needle much will be nice. 

Fayte

  • Newbie
  • *
  • Posts: 16
    • View Profile
Re: Current notes vs. late notes. insight?
« Reply #4 on: September 22, 2016, 06:49:44 PM »
That is true guess I wasn't thinking about the history of payments at the time I posted the last response.

well im slowly working towards that 200 mark, maybe ill slowly put some more money to folio as it gets paid back, and be very picky about what I buy. It just seemed like about a 3rd of my traded notes where the ones that where failing.

rawraw

  • Hero Member
  • *****
  • Posts: 2757
    • View Profile
Re: Current notes vs. late notes. insight?
« Reply #5 on: September 24, 2016, 06:51:27 AM »
I'd recommend using LendingClub's automated investing.  You are too dangerous to your returns

Fayte

  • Newbie
  • *
  • Posts: 16
    • View Profile
Re: Current notes vs. late notes. insight?
« Reply #6 on: September 24, 2016, 09:27:37 AM »
That maybe the case.

fliphusker

  • Sr. Member
  • ****
  • Posts: 463
    • View Profile
    • Email
Re: Current notes vs. late notes. insight?
« Reply #7 on: September 24, 2016, 07:34:33 PM »
That is true guess I wasn't thinking about the history of payments at the time I posted the last response.

well im slowly working towards that 200 mark, maybe ill slowly put some more money to folio as it gets paid back, and be very picky about what I buy. It just seemed like about a 3rd of my traded notes where the ones that where failing.
There are probably thousands of different stratagies for FOLIO for different people.  When I first moved to FOLIO I used my filters I was using on LC there as I had backtaested them.  Well Anil beat it into my thick head that I was wrong to do it that way.  Does it matter anymore if a note is 2 years old that it had inquiries or that it is for a wedding or vacation?  Well no as long as they have a steady history of payments.  But I still do not buy notes from sand states, 5k/mo income and no BK.  Are those silly to have when looking at a 2-year-old stable note or one that has 12 payments and an up FICO?  Ya maybe, but it is still something I do.  Not going to say that an UP FICO is crucial, but I am absolutely not going to buy a note that has dropped 50 points in the past couple of months.  Does it matter if a note was in IGP 12 months ago or 16 months ago?  I prefer to stay away from those notes as can generally find solid notes
Here is an example of a note that I refer to.  High YTM, perfect payments, meets my normal filters and stable FICO.  Would I have touched this note if it was available on LC?  Absolutely not.  Rents, DTI is way-way high, initial FICO is too low and low income.  Would others here buy it, dunno, but I would.  Sure I am getting under its original YTM, but I am getting it at a discount which is going to pay for the fees.  I am not even worried that he will pay off that note because of the discount I snagged it for. 
https://www.lendingclub.com/foliofn/browseNotesLoanPerf.action?showfoliofn=true&loan_id=40634352&order_id=113355597&note_id=71170520

While you are having some tough issues on FOLIO I will absolutely tell you it is not an easy place to learn and invest.  99% of all notes listed there are listed incorrectly for what I believe they should be.  As far as filters on LC lots of different sites tell you to stay away from the sand states, inquiries and DTI over 20%. 
Did you do backtesting on NSR?
I am no genius and honestly not sure if what I am doing is the right way.  Only about another 6 months will tell me if I am doing things right or I have made a mess of it.  I have got a ton of great advice here though. 

Fayte

  • Newbie
  • *
  • Posts: 16
    • View Profile
Re: Current notes vs. late notes. insight?
« Reply #8 on: September 24, 2016, 10:00:42 PM »
I am still learning a bit some of the lingo you are using I would have to look up before knowing what it means like FICO and BK. I also don't know to much about back testing. I watched a video at one point in time and tried to do it but I believe I failed at doing so.

I will say that the ones that I am currently (possibly) going to take the losses on I am still trying to figure out why they are failing..Maybe they hit a snag in life. I am not quiet sure. I did look into the location of each of the notes. All being in seperate states. I also looked at credit score and what not. None of which was changing much at the time. All had nice history on their payments.

I am still learning about investing. Being 28 and still new to the investing world (something that I always wanted to do). I am using this as a learning experience. The only way to learn investing in my current situation is to ask questions. OR make mistakes. I am not fond of the idea of leaving it to automatic investing. Do not think I will learn as fast as if I just make my own mistakes and take losses.  I will admit that my ignorance is probably a part of the losses that will most likely take in effect. But that is why I am here to learn, ask questions, and maybe one day I will profit even if it takes me longer then others.

justice42

  • Newbie
  • *
  • Posts: 25
  • small fish
    • View Profile
    • Email
Re: Current notes vs. late notes. insight?
« Reply #9 on: September 24, 2016, 11:03:58 PM »
... I am still trying to figure out why they are failing..Maybe they hit a snag in life. I am not quiet sure. I did look into the location of each of the notes. All being in seperate states. I also looked at credit score and what not. None of which was changing much at the time. All had nice history on their payments.

I wouldn't spend too much time on that, any common thread you find in your notes will be a coincidence. You would have to analyze thousands of notes to find anything significant.

If you don't know what a FICO score is you should definitely google it.   

BK = Bankrupt, they won't be paying their debts.

Good luck!. I'm also under 30 and new to LC. Made my first deposit a year ago. Now I've got around 330 notes. ANAR at 14.28%.   
« Last Edit: September 24, 2016, 11:06:19 PM by justice42 »

Fayte

  • Newbie
  • *
  • Posts: 16
    • View Profile
Re: Current notes vs. late notes. insight?
« Reply #10 on: September 25, 2016, 08:08:14 AM »
How does one look at someones FICO score? Or do you look for people with mortgages and or own their home and look at the credit score and see how they are doing with it?

Lovinglifestyle

  • Hero Member
  • *****
  • Posts: 898
    • View Profile
    • Email
Re: Current notes vs. late notes. insight?
« Reply #11 on: September 25, 2016, 09:17:53 AM »
The FICO score is one of the column headings listed on the Browse page.  A "credit score" can be different from FICO (the average of 3 companies' scores), but FICO is the best.
« Last Edit: September 25, 2016, 06:56:47 PM by Lovinglifestyle »

Rob L

  • Hero Member
  • *****
  • Posts: 2028
    • View Profile
Re: Current notes vs. late notes. insight?
« Reply #12 on: September 25, 2016, 10:43:37 AM »
I am still learning about investing. Being 28 and still new to the investing world (something that I always wanted to do). I am using this as a learning experience. The only way to learn investing in my current situation is to ask questions. OR make mistakes. I am not fond of the idea of leaving it to automatic investing. Do not think I will learn as fast as if I just make my own mistakes and take losses.  I will admit that my ignorance is probably a part of the losses that will most likely take in effect. But that is why I am here to learn, ask questions, and maybe one day I will profit even if it takes me longer then others.

Although Folio may not be the most efficient marketplace in the world, there are some questions you have to ask yourself. Whether buying or selling you've gotta establish what you believe to be the value of any note you want to trade. When you buy there's always a seller, and when you sell there's always a buyer. The individuals you transact with have established what they believe to be the value of the note. They will only buy when your sales price is less than their value and will only sell when you offer more than they believe the note is worth. So, you must stop and ask yourself the question why you believe you are able to price notes more accurately than those with whom you are trading. I can say with confidence that there are individuals and even perhaps small institutions that have invested years of time and effort using very sophisticated techniques to best establish the value of the Folio notes they buy and sell. They are very fast, very smart and you (me too) are at a very significant disadvantage to them. Would you shoot pool or play poker against a professional for money? Kinda of the same thing.

fliphusker

  • Sr. Member
  • ****
  • Posts: 463
    • View Profile
    • Email
Re: Current notes vs. late notes. insight?
« Reply #13 on: September 25, 2016, 12:06:15 PM »
You have got to pause your investing.  FICO score is one of the most important aspects to anything credit related.  And IMO is the 2nd most crucial aspect besides payment history on FOLIO.  The first thing when I pull up a note on FOLIO is to see its FICO trend.  If it has a steep decline on it FICO I do not care about its payment history.  Huge dips mean they have something going on that I do not want to be a part of.  Please please hold off on investing for a few weeks.  What you have done is sat down at a poker table and not knowing what the game is or what the rules of the game are.  You are making bets without ever seeing your cards. 
I do not have much time now but will post more links later today or tomorrow.
NSR for backtesting. 
https://www.nsrplatform.com/app/#!/stats/lendingclub//
Peer Cube article by Anil.  I can not say strongly enough to read everything on PC that you can.  Anil rocks.  And dig through the forums and read all you can.
https://www.peercube.com/blog/post/fico-score-trends-and-defaults-for-lending-club-loans
I will post more, but seriously until you understand some of the terminology and what to really look for, I really recommend pausing any investing.  While I was waiting for my money to transfer to LC I read everything here and asked a zillion questions.  I felt comfortable investing after that week but still was a complete nub.  Hell, in some aspects I am still a noob here. 
I am still learning a bit some of the lingo you are using I would have to look up before knowing what it means like FICO and BK. I also don't know to much about back testing. I watched a video at one point in time and tried to do it but I believe I failed at doing so.

I will say that the ones that I am currently (possibly) going to take the losses on I am still trying to figure out why they are failing..Maybe they hit a snag in life. I am not quiet sure. I did look into the location of each of the notes. All being in seperate states. I also looked at credit score and what not. None of which was changing much at the time. All had nice history on their payments.

I am still learning about investing. Being 28 and still new to the investing world (something that I always wanted to do). I am using this as a learning experience. The only way to learn investing in my current situation is to ask questions. OR make mistakes. I am not fond of the idea of leaving it to automatic investing. Do not think I will learn as fast as if I just make my own mistakes and take losses.  I will admit that my ignorance is probably a part of the losses that will most likely take in effect. But that is why I am here to learn, ask questions, and maybe one day I will profit even if it takes me longer then others.

Fayte

  • Newbie
  • *
  • Posts: 16
    • View Profile
Re: Current notes vs. late notes. insight?
« Reply #14 on: September 25, 2016, 07:46:30 PM »
Thanks guys I'll def be reading up on this stuff. At least I have somewhere to start now.