Lend Academy Network Forum

Lending Club Discussion => Investors - LC => Topic started by: jheizer on August 06, 2015, 11:06:49 PM

Title: Quarter end skew
Post by: jheizer on August 06, 2015, 11:06:49 PM
Anyone else getting to the point where end of the month + ACH settlement time = HUGE payment amounts?  Since my account is pretty young I am starting to develop a pretty large bias.  Todays payment total was about 1/5 of my monthly total.
Title: Re: Quarter end skew
Post by: Fred93 on August 06, 2015, 11:33:59 PM
A shockingly large amount of money popped into my account today.  Do you understand what caused this?
Title: Re: Quarter end skew
Post by: jheizer on August 06, 2015, 11:37:00 PM
Yeah.  Multiple quarter ends now having massive volume with most of them issuing in the end at the same time.  Usually a day or two after the quarter ends. In my case with my account only being ~7 months old It has a larger effect than others since it is fresh, but has gone through the surge twice now.
Title: Re: Quarter end skew
Post by: lascott on August 07, 2015, 12:47:53 AM
Yes, happened in both my few month old account and my 1.5 yrs old account.  Probably 1/6th of my monthly amount.

Doesn't line up with the cash flow expectations per day of month via LendingRobot, BlueVestment, or InterestRadar.
Title: Re: Quarter end skew
Post by: Fred93 on August 07, 2015, 04:58:23 AM
Yeah.  Multiple quarter ends now having massive volume with most of them issuing in the end at the same time.  Usually a day or two after the quarter ends.

Ah, so you're saying ... the quarter-end effect where they hold off during the last 2 weeks of the quarter, then issue a huge number of loans on same day then makes my portfolio have a huge # of loans that have their payments due on the same day of the month.

Interesting what oddball things occur.
Title: Re: Quarter end skew
Post by: jheizer on August 07, 2015, 09:31:52 AM
Next payment day for my loans. 
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fwww.lendacademy.com%2Fforum%2Findex.php%3Faction%3Ddlattach%3Btopic%3D3353.0%3Battach%3D1027&hash=2c8f09c9d8f3b5d7a20bd65e27a9ff0f)

Edit: Y axis = number of loans if it wasn't obvious.
Title: Re: Quarter end skew
Post by: lascott on August 07, 2015, 10:36:26 AM
I don't think the quarter end explains what happened yesterday. It happened to both my accounts. My daily graphs are not anything like yours.

Here is my 1.5 yr account.

Image: http://i.imgur.com/8o0m0Ts.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F8o0m0Ts.png&hash=9c1cca3a31c442bb7ac14ffe7be423a0)
Title: Re: Quarter end skew
Post by: BruiserB on August 08, 2015, 07:35:43 PM
A shockingly large amount of money popped into my account today.  Do you understand what caused this?

Thursdays are always the highest payment day since LC credits the money to our accounts 3 business days after they withdraw it from the payers' accounts.  They don't take money from the payer until Monday if the payment due date fell over the weekend.  So Thursdays' payments are always made up of payments that were due on the previous Saturday, Sunday and Monday.  In the case of this past Thursday, those were also loans that were due on the 1st, 2nd, and 3rd of August.  I haven't done the math on when my loans are due, but I have seen several quarter ends where no loans issue the last 10 days of the quarter and then there is a deluge on the first few days of the month, so I am sure that many of us have a concentration of due dates in the first 3 days of the month.  This month all of those payments were credited to us on Thursday the 6th.  In months where the first few days don't fall on a weekend, this phenomenon isn't so obvious....you still get higher payments over a few days, but you don't get 3 high payment dates all credited at once.
Title: Re: Quarter end skew
Post by: Fred93 on August 08, 2015, 08:29:59 PM
From my portfolio...
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FLC-day-of-month-note-issue.png&hash=e9f27d0c662d6f42afd07e9338d3dad0)
I have over 3000 notes so these stats should be pretty good.  Days 1,2,3 clearly win.

So when a Thursday falls on the 6th of the month, then that Thursday's payment will include payments due on all 3 big days (1st, 2nd, 3rd) of the month.  This produces a payment of about 15% of the month total, vs the normal daily payment which averages around 3.2% of the month total.  On the average, each Thursdays should pay about 9.7% of a months total.

Great detective work BruiserB.
Title: Re: Quarter end skew
Post by: Fred93 on August 09, 2015, 12:29:38 AM
Darn, I did that wrong.  Its the payment date that matters, not the issue date. 

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FLC-Day-Of-Month-Stuff.png&hash=722a07937ef82d3c611265bb58458c98)

Now this has me confused again, because the orange dots don't fit the theory we've been discussing.  The orange dots have some pretty interesting things going on.  I wonder why people select those payment dates.  Maybe a lot of people get paid in the middle of the month?
Title: Re: Quarter end skew
Post by: storm on August 09, 2015, 05:36:52 AM
I wonder why people select those payment dates.  Maybe a lot of people get paid in the middle of the month?

I had one employer that paid on the 1st and 15th of the month, so I imagine there are a few like that out there.  Mortgage and rent payments are almost always due on the 1st of the month, so, personally, I try to stagger out my other payments the rest of the month if possible.
Title: Re: Quarter end skew
Post by: Fred on August 10, 2015, 01:54:55 AM
Darn, I did that wrong.  Its the payment date that matters, not the issue date. 
....

Now this has me confused again, because the orange dots don't fit the theory we've been discussing.  The orange dots have some pretty interesting things going on.  I wonder why people select those payment dates.  Maybe a lot of people get paid in the middle of the month?

Try to change your x-axis to day-of-week (Mon-Sun).  My account shows large payments on Thursdays.

It's probably due to LC operations process.
Title: Re: Quarter end skew
Post by: lascott on August 10, 2015, 02:04:58 AM
Using my method to calculate actual amount from this thread: http://www.lendacademy.com/forum/index.php?topic=3345.0
I created this google calendar.  You can see the formula I used above to build the data rows for the attached HTML.
100% is relative to each months maximum payment. Should be clear from looking at the legend in the calendar chart.
NOTE: Calendar is read vertically!  Weeks are horizontal.

Image: http://i.imgur.com/RNqpucM.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FRNqpucM.png&hash=5d8cfa6d69fe8a35fe8b9ea26dd176b1)

NOTE: Calendar is read vertically!  Weeks are horizontal.
Image: http://i.imgur.com/8k2SLkQ.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F8k2SLkQ.png&hash=ca3d7696d2d5509ec2865e69b88c1cde)

Attachment is the HTML file I used to create the calendar ( https://developers.google.com/chart/interactive/docs/gallery/calendar )
Title: Re: Quarter end skew
Post by: Fred on August 10, 2015, 02:18:36 AM
... in progress ... need to rebuild graph below ...

Nice.  Didn't know that you can do this with Google Calendar.  Good to know!

Just to keep the discussion around payment, could you also graph payment (instead of payoff) vs day-of-week?
Title: Re: Quarter end skew
Post by: Fred93 on August 10, 2015, 02:22:51 AM
Try to change your x-axis to day-of-week (Mon-Sun).  My account shows large payments on Thursdays.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FLC-day-of-week-payments.png&hash=810a5c005516da3758421e25d7e00368)

Mine too.

This is a histogram of the day-of-week of the "next payment date" provided by the LC API for each of my notes.  The NPD provided by the API is adjusted for when LC will pay me, unlike the NPD in the LC notes web page, which is when the borrower pays LC.
Title: Re: Quarter end skew
Post by: lascott on August 10, 2015, 02:25:15 AM
... in progress ... need to rebuild graph below ...
Nice.  Didn't know that you can do this with Google Calendar.  Good to know!
Just to keep the discussion around payment, could you also graph payment (instead of payoff) vs day-of-week?
I corrected it. I meant to do payments ("Actual amount") in the first place and accidentally did payoffs. Keep manipulating my spreadsheet as I was playing.

BTW, I had know idea you could do this either. I just started playing with it a few hours ago after doing searches for calendar and charts/graphs.
Title: Re: Quarter end skew
Post by: Fred on August 10, 2015, 02:29:00 AM
Try to change your x-axis to day-of-week (Mon-Sun).  My account shows large payments on Thursdays.
...

Mine too.

Thanks.  Looks like BruiserB theory is right.

Now off we go to implement a "bang-hard-on-weekend" strategy. ;-)
Title: Re: Quarter end skew
Post by: lascott on August 10, 2015, 02:35:30 AM
A shockingly large amount of money popped into my account today.  Do you understand what caused this?

Thursdays are always the highest payment day since LC credits the money to our accounts 3 business days after they withdraw it from the payers' accounts.  They don't take money from the payer until Monday if the payment due date fell over the weekend.  So Thursdays' payments are always made up of payments that were due on the previous Saturday, Sunday and Monday. <snip>
To your underlined point, look at Memorial day.

Image: http://i.imgur.com/pMK3BPM.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FpMK3BPM.png&hash=314914bd3fcc3572ca35972f06e51786)
Title: Re: Quarter end skew
Post by: lascott on August 10, 2015, 10:39:01 AM
I wonder why people select those payment dates.  Maybe a lot of people get paid in the middle of the month?

My calendar also visually shows that as well (just past middle point of month is biggest payment week).

Image: http://i.imgur.com/BMB5bna.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FBMB5bna.png&hash=dafab78dbbbe1c129bdc971bde7ca611)
Title: Re: Quarter end skew
Post by: BruiserB on August 10, 2015, 01:53:52 PM
I wonder why people select those payment dates.  Maybe a lot of people get paid in the middle of the month?

My calendar also visually shows that as well (just past middle point of month is biggest payment week).

Image: http://i.imgur.com/BMB5bna.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FBMB5bna.png&hash=dafab78dbbbe1c129bdc971bde7ca611)

Yes, when there are holidays on Monday, we get the big payout on Friday and it is a combined payment of loans that were due on on the previous Saturday, Sunday, Monday and Tuesday.  A Friday holiday causes a larger payout on Thursday as you get loans that were due on the previous Friday, Saturday, Sunday and Monday.

What happens to loans with payment dates of the 31st?  Do these get collected on the 30th in short months, or on the following 1st?  The end of February should generate a large payment as well since loans that come due on 29th, 30th and 31st will either get collected on the 28th or on the 1st of March. (EDIT: Just looked back and the 28th of Feb and 1st of March fell over a Saturday/Sunday this year....hence why your first Thursday in March payment was larger than the one later in the month)
Title: Re: Quarter end skew
Post by: BruiserB on August 10, 2015, 02:03:31 PM
I noticed the Thursday big payment thing a while back and it always kind of irked me.  We get the big payout after the last note drop on Thursday, so we only get a chance to re-invest it on Friday with normal loan activity.  Loans seem to usually drop off over the weekend, so it often takes me until the following Tuesday/Wednesday to get caught up on re-investing.
Title: Re: Quarter end skew
Post by: BruiserB on August 10, 2015, 02:18:30 PM
I wonder why people select those payment dates.  Maybe a lot of people get paid in the middle of the month?

I had one employer that paid on the 1st and 15th of the month, so I imagine there are a few like that out there.  Mortgage and rent payments are almost always due on the 1st of the month, so, personally, I try to stagger out my other payments the rest of the month if possible.

My company pays bi-monthly on 14th and day before last day of month (29th or 30th...or 27th in February!).  It works well when my main credit card has a due date in the second half of the month so that mortgage gets covered with the end of month paycheck and credit card gets covered with mid month paycheck.  So I can imagine that's why some LC loan holders ask to move their due date to the second half of the month.
Title: Re: Quarter end skew
Post by: lascott on August 10, 2015, 11:10:22 PM
<snip>
What happens to loans with payment dates of the 31st?  Do these get collected on the 30th in short months, or on the following 1st?  The end of February should generate a large payment as well since loans that come due on 29th, 30th and 31st will either get collected on the 28th or on the 1st of March. (EDIT: Just looked back and the 28th of Feb and 1st of March fell over a Saturday/Sunday this year....hence why your first Thursday in March payment was larger than the one later in the month)

Thanks for the added info. Yes, I see in Feb and July that the last day of the month was on a Friday ... then the next months 1st Thur is a big payout.

February also had Presidents' Day in it so it shows a large payout on Friday that week. That is your point about the 3 business days.

Added as much as February as I could since I could only go back 6 months using my current method.
Image: http://i.imgur.com/QCMPNDk.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FQCMPNDk.png&hash=dd0b6f2c57eec30682457be7b6b5f3f1)
Title: Re: Quarter end skew
Post by: lascott on August 11, 2015, 06:49:09 AM
My previous charts (and the quoted one) are a percentage (0-100%) and each months max is used for each day within that month to determine the shade -- hence the title: % monthly payment by day

The bottom chart below is simply by payment. I am still investing in this account but to the OPs point the Aug payment was quite a bit bigger than previous ones. See the red arrow.

Image: http://i.imgur.com/QCMPNDk.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FQCMPNDk.png&hash=dd0b6f2c57eec30682457be7b6b5f3f1)

Image: http://i.imgur.com/0kq11M0.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F0kq11M0.png&hash=80cb042bb4c820d9b1b9e4c872ca1755)
Title: Re: Quarter end skew
Post by: lascott on November 01, 2015, 05:04:07 PM
Got around to updating my spreadsheet and google calendar HTML page. New quarter was a big "payday".

Taxable --
Image: http://i.imgur.com/B0YbVZ8.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FB0YbVZ8.png&hash=cb745b27ea6a13f247bb64686bc1dd8c)

ROTH --
Image: http://i.imgur.com/qudyn10.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2Fqudyn10.png&hash=a1087fed3fc67825070bf6c2de55c19e)
Title: Re: Quarter end skew
Post by: lascott on January 09, 2016, 07:00:11 PM
Note: Thur 1/7/2016 was a very big payment.

Got around to updating my spreadsheet and google calendar HTML page. Here is how holidays looked on the calendar for my two account (new (ROTH) and old (Taxable)).

Taxable --
Image: http://i.imgur.com/jBIjlqH.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FjBIjlqH.png&hash=7125075f733b511dd29b4c1965f5e2ee)

ROTH --
Image: http://i.imgur.com/YM2fxm2.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FYM2fxm2.png&hash=04347ca57c06a5d71dfbeb04deaef60e)