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Topics - Deming

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Investors - P / Expected Future Annualized Return
« on: July 28, 2014, 01:57:03 PM »
I am trying to estimate my expected annualized return over the life of my Prosper account. All my cash proceeds are automatically reinvested into new loans and I plan to continue this over the next 5 years. Prosper currently shows my Seasoned Annualized Return at 12.59%,  Average Note Age of 318 days (10.45 months), allocation is roughly equal A, B, C, D.

LendingClub provides a chart showing how ALL portfolio's overall returns decline as Average Age of Portfolio increases. When "Average Age of Portfolio" is 24 months, nearly all accounts end up with annualized returns of 6-8%.

Prosper doesn't provide any stats on historical long term expected returns.

Is my current 12.5% return doomed to 6-8% annualized over a 5 year period?

Interest Radar / IR Platform not updating reports
« on: July 24, 2014, 05:40:13 PM »
I noticed that my IR report for a loan has not updated since May 2014, while the same loan in LC is showing payment updates thru July 2014.  I uploaded my most recent csv file to IR and logged off and back on. IR payment report still not updated.

Any ideas on how to fix this?

The top report is from IR and the bottom from LC for SAME Loan:

Foliofn - LC / Historical Sales Info
« on: July 24, 2014, 12:03:01 PM »
Where can I find historical FolioFN sales information?

FolioFN does not have an API and does not report any historical sales.

However, I noticed that InterestRadar reports the number of notes sold on previous day broken down by several stats.

Where are they getting this information?

Investors - LC / Advantage/Disadvantage of $50 chips vs. $500 chips
« on: July 19, 2014, 06:15:26 PM »
$50 Chips vs. $500 Chips
Suppose I am investing $50K.  What are the advantages/disadvantages of going with $50 notes versus $500 notes (over the SAME 100 loans)?

For this discussion, assume the choice is either:
a) 100 notes at $500 each, for 100 loans totalling $50K
b) 1000 notes at $50 each, over SAME 100 loans totalling $50K (multiples of same loan with smaller increments)

Here's what I think from reading the forums:
1. The LC buyer's fee of 1% fee has the same effect in both cases, so it's neither advantage or disadvantage.
2. FolioFN seller fee is 1% so has the same effect in both cases, neither advantage or disadvantage
3. If entire portfolio is held to maturity, then same effect in both cases, neither advantage or disadvantage
4. Same 100 loans, so the diversification is identical in both cases, , neither advantage or disadvantage
5. The $50 notes are much, much more liquid on FolioFN, so Advantage.

Other advantages/disadvantages?

Are funds really more interested in only buying $100 notes and larger on FolioFN?

I'm trying to understand LC NAR, IRR, and my account balance.

Suppose I have an account where I instantly reinvest all paid out principal and interest in new loans.  Assume my Adjusted Net Annualized Return (ANAR) is 17% with Average Age of Portfolio of 6 months.  Over the next 36 months, I continue this strategy of instantly buying new loans with paid out principal and interest until I finally reach an Average Age of Portfolio of 24 months with LC reporting ANAR of 7%.

1. Since I am reinvesting the paid out principal and interest, will it take longer than 18 months to for the Avg Age to go from 6 to 24 months? Is there some rule of thumb for this?
2. Assuming instant reinvesting of principal and interest (no cash drag), would the IRR and ANAR be about the same?
3. Did I earn about 17% for the first 6 months PLUS a declining rate from 17% down to 7% for months 6 thru 36?
4. OR did I only earn about 7% annualized over the entire 36 months?

Thank you for sharing your expertise.  :)

I am trying to fully understand the NAR explanation on LC site:

They say the "NAR calculation is the annualized measure of the return on all of the money invested over the life of an investment." 

Their example is:
A one time investment was made with realized interest rate of 12.80%.
Point #1 (1 month after purchase): After service fees, NAR is 12.34%
Point #2 (18 months after purchase):  Loan charge off decreases NAR from 12.34% to 9.11%
Point #3 (36 months after purchase): Another loan charge off decreases NAR from 9.11% to 8.28%

I understand so far.

Assuming the initial one-time investment was $1000, what is it worth in dollars at Point #3?

a) $1000 plus 8.28% over 36 months, about $1000 + ( 3 * $82.80) = $1248.40
b) $1000 plus 12.34% for 18 months PLUS 9.11% for 18 months MINUS dollars charged off
c) Both (a) and (b) are the same answer
d) Other, please explain using a simple dollars example

Thank you.

Interest Radar / CRITICAL: Strategy Shop IRR Reporting Error?
« on: June 22, 2014, 10:45:53 AM »
Yikes! I check the "Strategy Shop" Public Strategies every day and today was shocked to see the projected IRR for every strategy has dropped significantly by over 8%. About half of them are now reporting NEGATIVE IRR's.  The "D-G Top Score" was reporting about 10%-14% a few days ago, and now is reporting 5%-6%, a whopping drop of 8%.  See picture below.

Please tell me this is a glitch and not a permanent correction to the projected IRR table.  This is critical because I actually invest using these strategies and if they are now truly projected negative, then I need to get out quickly.

Thank you for your help.

Peer Lending Server / Order Logs: view_order_xxxx.html Error
« on: January 04, 2014, 10:48:02 AM »
When I goto my "Order Logs" tab and click on an entry containing "view_order_4871.html", a web page ("file:///home/user/pls/lc/orders/2014-01-02_17:02:44_view_order_4871.html") open and says "This website does not support this version of Internet Explorer. Please upgrade to the latest version for a better experience. Upgrade Now".  The web page has data on it but none of the links work. For instance the link "Notes" opens URL "file:///account/loans.action" with "Error - file:///account/loans.action"

When I click on the "Upgrade Now" link it says "Error - file:///public/web-browsers.action" .

I noticed the VM is running the "Midori 0.4.4" browser so I don't know why it is coming up with a message about Internet Explorer.

Do I really need to upgrade the browser or should I just ignore the upgrade warning?
If I need to upgrade, what are the steps?

Thanks!  :)

Peer Lending Server / Analytics: PLS vs. InterestRadar
« on: January 02, 2014, 06:25:42 PM »
First, thank you for your excellent PLS software, it is very impressive.

I was interested in how the PLS analytics compared to the InterestRadar (IR) software so I created a very basic filter for both which is:
Grade: E, F
Term: 36 months

In theory, one would expect the two services to report similar historical data for the same filter. However this is what I found:

PLS reports the following Analytics:
#Loans=7933, iRate=21.51%, iROI=6.31%, pROI=3.53%

Where as InterestRadar (IR) reports:
#Loans=11477, Interest 22.9%, Loss=10.3%, StdErr=0.7%, Avg IRR=8.4%, IRR(a=0.05)= 7% to 9.8%

IR has a historical look back period to Oct 2008. I don't know how far back PLS looks.

I think the iRate=21.51% is close to the Interest=22.9%. However, the pROI=3.53% is much different from the AvgIRR=8.4%.

I have repeated this test by applying the other filters to both PLS and IR and they are consistently reporting huge differences from one another.

Does anyone have an idea of why these should be so different? 

Peer Lending Server / Preset Filters : Age, Historical Look back period
« on: January 02, 2014, 01:51:59 PM »
What is the "Age" column on the "Preset Filters" window?  Its definition is missing from the Help file.

Also, how far back does the Historical Analysis look?


Peer Lending Server / API vs. Non-API
« on: December 30, 2013, 06:06:51 PM »
Can someone tell me the advantages/disadvantages of using the Configuration "Enable API" vs. not using it?  I would like to know so I can decide if I should have the API enabled for my LC account.  Thanks.

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