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Messages - SMWinnie

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Investors - LC / Re: New Platform
« on: July 08, 2018, 09:01:40 PM »
Well I, for one, love the new interface.

The landing page used to show me how much interest I have been paid and how much principal I have written off or down. Now I need to bounce from screen to screen to see that 71.4% of my interest has been burned off through writeoffs and writedowns.

Also, since the sortable list of notes no longer displays portfolio, I'm saving the time I used to waste characterizing loans as troubled, re-performing, etc. That should be a real time-saver!

2
Investors - LC / Re: Best way to measure true return?
« on: September 05, 2017, 08:31:12 AM »
My preference is XIRR (a spreadsheet function) using every cashflow in to and out from the account along with the current adjusted account value. 

If you want an intermediate value, treat it as though the account was created on the first of the month at the adjusted month beginning value, and add any relevant cash flows, and use the adjusted month end or month-to-date value.
With one adjustment, I use bluto's approach. Since I'm interested in IRR to me, I use actual cashflows, on the dates my bank reports them, between my bank and LC. For the current value, I use LC's Adjusted Account Value.

I also calculate with and without accrued interest. Since my account is only about a year old, the accrual adds 0.62% to the account IRR.

3
Investors - LC / Re: Lending Club Collection Actions
« on: May 26, 2017, 09:24:44 AM »
Apologies if I missed this, but does Lending Club provide any summary data on whether/when/how often it pursues defaulting borrowers and recovery rates?

I'm wondering if LC is starting to get a larger proportion of borrowers gaming them by borrowing before a planned default. It would be nice to see if default after 0/1/2 payments has increased through 2016 and into 2017.

4
Investors - LC / Re: NAR doesn't make sense
« on: March 03, 2017, 04:26:28 PM »
(*snip*)
If you look at the formula for ANAR...you will see that the numerator is just a sum of various payments and the adjustment amount.  It looks complicated, but if you cancel the Pi that's shown twice in the numerator, you see it is just a sum.
Thanks for the correction. Let me pick apart LC's ANAR formula and see if I have this right.

The inner term of the ANAR starts with a numerator of (all payments to the account minus fees, writeoffs and note status adjustments). The denominator is (running total of the N various monthly principal amounts).

Numerator/denominator isn't evaluated for each period and geometrically linked, so it's not a time-weighted return. The running total of principal weights makes the inner term a type of average monthly gain.

Then that gets annualized by [(1 + "avg monthly gain" inner term)^12] - 1.

Does that sound about right?

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Investors - LC / Re: NAR doesn't make sense
« on: March 03, 2017, 07:47:31 AM »
Link to a nice explanation for why a time-weighted rate of return can be negative for a gain or positive for a loss.

The basic idea is that time-weighted rates of return abstract away from account size. Put another way, a time-weighted rate of return presumes that you had the same amount invested at all times. If, for instance, one has good returns on a relatively smaller amount of money and then bad returns on a larger amount of money, one might have a dollar loss with a positive rate of return.

OP (mrwhizzard) indicates a single deposit. If there were no withdrawals and no Folio purchases, then my guess is that: (1) OP's portfolio had modest gains; (2) OP reinvested the gains; and (3) OP's portfolio then suffered losses on the larger balance that more than offset the original gains.

Here's a quick, extreme hypothetical for illustration:
  • Invest $1000.
  • Portfolio doubles in first year.
  • Portfolio loses 55% in second year.
  • New balance is $900 for a 10% loss...
  • ...but the time-weighted rate of return is a little over 20%.
LC's discussion of their formula suggests a couple of other anomalies, but the formula basically looks sound. It accounts for the real cash flows, including LC's fees, and excludes accrued interest.

6
Investors - LC / Re: Worst Month Yet
« on: December 06, 2016, 10:54:54 AM »
New "investor" here. I started an account with $8K of mad money about a month ago as an educational project. I wanted to see what a passive source of funds would experience, so I let LC auto-invest for me evenly split A/B/C/D.

I thought I would share the experience here, since this isolates mid-to-late October issuance. First month quality:

165  issued notes
  3  notes paid in full in first month
 22  notes have not reached 1st payment (or are processing/current)
  7  notes IGP

So, payment on 7 of the 140 notes which have come up on their first payment date failed.
Updating:

168  issued notes
  3  notes paid in full in first month, principal recycled into new notes included in 168 above
165  issued notes, net of bridge loans
 13  notes have not reached 1st payment (or are processing/current)
152  notes that reached 1st payment
  8  notes IGP
  3  notes (of 8 that ever went IGP) now Late 16-30
  3  notes (of 8 that ever went IGP) now Current
  2  notes (of 8 that ever went IGP) still IGP

7
Investors - LC / Re: Worst Month Yet
« on: December 04, 2016, 10:54:47 AM »
(Snip)
In the past month of my 596 current notes 32 of them went into grace with way too many of those being never lates. A few of those have came back current but no where near the amount I would have expected to pay  up in the past.
Of the seven mid-October notes that went IGP, one borrower has come current and two have slipped into the Late 16-30 bucket.

Along with anabio's experience, it would appear that: (1) there is a sharp, recent decline in credit quailty; and (2) it is a population issue, not just a vintage issue.

8
Investors - LC / Re: Worst Month Yet
« on: November 29, 2016, 12:49:49 PM »
There was discussion a couple years ago that LC automated investing had a selection bias in the sense it invests in what is left over. Not sure if this is true or not, but something to keep in mind.
Could anyone expand on this? I went looking for the LC allocation policy on Notes and didn't find it.

9
Investors - LC / Re: Worst Month Yet
« on: November 29, 2016, 09:52:37 AM »
Jesus, what is LC thinking with lowering their lending standards /underwriting so badly? Sure, you get a few quarters of increase loan volume/fees/revenue, but long term all the capital is going to leave...
My uninformed guess is that the standards haven't changed, but we're starting to see what those standards do when the market tightens a bit. (LC doesn't really have a history of PTP loans in a contracting credit environment.)

My real concern is servicing. If LC scaled that for credit performance in 2014, then increased volume times increased IGP/late/default means they will be woefully understaffed to get decent recovery rates.

10
Investors - LC / Re: Worst Month Yet
« on: November 29, 2016, 08:34:57 AM »
New "investor" here. I started an account with $8K of mad money about a month ago as an educational project. I wanted to see what a passive source of funds would experience, so I let LC auto-invest for me evenly split A/B/C/D.

I thought I would share the experience here, since this isolates mid-to-late October issuance. First month quality:

165  issued notes
  3  notes paid in full in first month
 22  notes have not reached 1st payment (or are processing/current)
  7  notes IGP


So, payment on 7 of the 140 notes which have come up on their first payment date failed.

Collection logs indicate most were NSF, but a couple of the logs showed no entry for the type of payment failure. One collection log is completely blank.

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