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Messages - jz451

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31
Foliofn - LC / Re: Best Tool for FOLIO Selling
« on: December 05, 2016, 04:01:27 PM »
Peercube is a good option if you're willing to pay for a monthly membership, as well as NSR. Both let you do the similar things in regards to backtesting, buying, and selling.

32
Investors - LC / Re: Worst Month Yet
« on: November 20, 2016, 02:28:23 PM »
If you read the whole article it says that subprime auto loans are at a six year high for defaults, so it's not just a P2P thing, but an industry wide problem. In any case won't stop me or many others to continue to lend.

I'm giving up on P2P unless the interest rate on C loans and below increase 10%+. Same underwriting standards but going to earn ~0% net of losses. Disappointed.

http://247wallst.com/banking-finance/2016/11/16/surge-in-online-loan-defaults-sends-shockwaves-through-the-industry/

33
Investors - LC / Re: Worst Month Yet
« on: November 18, 2016, 06:03:48 PM »
I have a spreadsheet will different info of each note bought/sold for tax purposes.

How did you check that?
I just checked what my disocunt/premium for the notes I bought and the min is -2% and max is 4%, soon to be 5.5%, and a median of 1.25%. Not bad I would say.


I'm the same way- I don't buy anything more than 3%, and that's actually rare. I find many of the notes I want at discount, sometimes significantly discounted.
My purchasing spread is usually -3% to around 2%, with most being at 0-1%

At the risk of sounding bad, when people get scared and dump their notes, I can't buy them fast enough.

As much as I would rather not sell the notes, if someone is willing to pay 9-10% for them, I'll sell them and continue buying others.

34
Investors - LC / Re: Worst Month Yet
« on: November 18, 2016, 11:36:40 AM »
I just checked what my disocunt/premium for the notes I bought and the min is -2% and max is 4%, soon to be 5.5%, and a median of 1.25%. Not bad I would say.


I'm the same way- I don't buy anything more than 3%, and that's actually rare. I find many of the notes I want at discount, sometimes significantly discounted.
My purchasing spread is usually -3% to around 2%, with most being at 0-1%

At the risk of sounding bad, when people get scared and dump their notes, I can't buy them fast enough.

As much as I would rather not sell the notes, if someone is willing to pay 9-10% for them, I'll sell them and continue buying others.

35
Investors - LC / Re: Worst Month Yet
« on: November 17, 2016, 11:30:46 PM »
I'm one of those who early on realized that buying at a premium is not that big of a deal when I'm mainly buying E-G notes. I've limited it to 2.5%.
I second this as well.  Guess people are ok with paying a premium for their certain YTM on notes. 


36
Investors - LC / Re: LC's home page shows the collapse
« on: November 12, 2016, 11:36:17 AM »
I'de more preferrably sell my notes once they go IGP, but I've gone back and forth in my head that it doesn't matter if a note goes IGP or note, because if I plan to sell it now for a 30% discount I'm getting my 70% back. Conversely if I let the 30% of notes that are to go bad, go into late status or default I'm still at 70%. It's all a matter of perspective. It's obviously easier for me to keep track of my notes since I only have like 90 notes, but I'de still prefer to sell my bad notes just to make me feel better inside, and move on from those notes.

My portfolio is one of the smallest of the posters here, 290 notes, I know how my ANAR swings wildly during the month due to IGP or later notes.  No doubt some have left LC because of the swings with small accounts.  My FOLIO ANAR just came positive because of holding the same note twice, went BK after 1 payment. 
How many of the 1% did zero backtesting when they jumped in?
I am currently rolling with my IGP notes as almost all have settled into the trend of paying on the same late date monthly.  Am I dumb for this?  Time will tell.  Sure there are plenty who go IGP or later and default, but how many of those do not?  I see it time and time again with FOLIO notes that the borrower went IGP in the 1st month and never again, so far at least.  So you would not buy a 60-month note that went IGP during the first few months and made every payment with a stable FICO 2 years later?
I do not think 101 is enough to diversify and even maybe 200.  Sure defaults are up, (had a perfectly good FOLIO with 13 payments left just go BK yesterday with a 720 unchanged FICO) but should not be up that much that people can actually get negative returns.  I would be curious to see if the number of investors who are below 0 sold out after LP day on FOLIO and took massive losses. 

Now you are implying that we should all buy 5 million dollar worth of notes just to make the LC's statistical assumption work?? :-) 200 notes is pretty reasonable, wouldn't you think?

About using FolioN/secondary market, you know what? A paradox: I was getting better returns when giving course to my gut feeling of bad payers (in grace status etc) and liquidating them fast and even at a loss. Now lately, I decided that it was too much work to track them all and be ultra-passive and do nothing instead. And guess what - defaults started to pile up and overall return rate massively decreasing!

I was making this rule myself: didn't matter to me that a certain note/borrower was in a grace period only for a short period and then s/he got back with all the payments. On contrary, I was keeping track of those specifically, and made it a rule to sell them ASAP as soon as they recovered from "in grace" or "late 30 days" status. And that strategy never failed me - someone who is lazy or ignorant ONCE, will be again soon...

But now I've got sick of these games and time needed to be spent for this. Waiting for my existing notes to mature and ... Au revoir LC!

37
Foliofn - LC / Re: One of your notes cannot be sold. Note ID: 54785846.
« on: November 06, 2016, 11:10:44 PM »
I've had the icon that blocks the check box, when the note is still in payment processing and in grace period, but not that.

38
Investors - LC / Re: New to LC investing
« on: November 06, 2016, 12:02:01 PM »
Overall investing in all loan purposes does not make a big different in performance so it's up to you to only invest in only debt consolidation/credit card payoffs.



1. investment objective:
a. to earn better interest returns than what I would receive from a bank.
b. to be diversified in a number of different investments;  stocks, real estate, debt notes.
c. a steady positive ROI.

2. Risk:
a. I'm not looking to invest in risky notes.   
b. I would consider myself a conservative investor especially when it comes to investing in debt.


Investing in only debt consolidation and cc refinancing notes diversified enough or should I also invest in other types of loans?

39
Investors - LC / Re: New to LC investing
« on: November 05, 2016, 12:37:01 PM »
I'de recommend when investing the rest of your money to stay away from A grade it returns only about 5% and B grade returns almost 7% and that is without any filtering. Since you're new I'de recommend going to nsrplatform.com create an account and play with their backtesting filters to optimize note selection for what you are comfortable with. Since you're already heavily invested in A grade loans it would be better to invest in a breakdown something like 10% A, 30% B, 50% C, 10% D, or    10% A, 40% B, 40% C, 10% D.

40
Investors - LC / Re: Worst Month Yet
« on: November 03, 2016, 05:32:44 PM »
You bring up a point that is always on the back of my mind that we won't know until the economy reverses itself, which is why in addition to the limited supply of quality low grade notes on Folio I'm moving toward the higher grades. Now do you think that as a whole if I invested in a market portfolio of notes that my returns will be better or worse during a recession than if I invested stocks, mutual funds, and ETFs?


I guess I'm one of those irrational/select few. I stopped investing in Jan 2015 because of an interpretation error...but I'm glad I did. As I have said before, I don't believe all the problems are caused by LC relaxing their standards. I am having notes fail that were purchased in 2014 and have 25+ payments.

Then again, maybe those you label as irrational might just be the most rational of all...only time will tell. I know there are those who belittle those of us who believe a recession is coming. I can't see how the chewing gum/bailing wire/duct tape that has been going on since 2008 can hold the finger in the dike much longer. There will either be a recession or rampant inflation as the government tries to print it's way out of the mess it has created.

Remember, LC has not really been through  a recession. They (and we) have no idea about how bad defaults will get during a recession. I know LC was around in 2008 but with a very limited role...they even suspended operations for a part of that year. So for all practical purposes LC has NOT weathered a storm. I think (and you could disagree with me) that there will be he-doubleL to pay when the recession does hit sometime in the next year. I think we are starting to see the precursors of that recession right now.

Remember, LC's clientele are not anywhere near the cream of the crop. There will be "bookoo" defaults and it will hit the riskier (D/E/F/G...) loans real heavy.

I don't know if I'll still be watching this board in a year; most of my loans will be gone by next May...but if I am I will be the first to admit I was wrong if a recession did not come...but I will be among the first to say "I told you  so" if it does.

41
Investors - LC / Re: Worst Month Yet
« on: November 03, 2016, 03:57:01 PM »
Piggy backing off of what CircleT009 has said I want to say that grade and loan selection is a big determining factor of portfolio performance. I suspect that people who are saying they want to stop investing are weighted more in lower grade notes E-G, maybe even being too weighted in D, which is causing lower returns due to losses. If this is the problem then being able to optimize grade distributions, which I'm trying to do by using an efficient frontier model (If anyone has seen my post about that earlier in the week and can lend a hand that would be great.) to reduce portfolio variance.

You all must think I'm crazy to say the following but my returns have been relatively stable the past seven months when I started investing and any drop in performance is easily explained. As a warning I've only invested in Folio so my returns will be higher than others due to selecting older notes vs investing in new notes. The attached pictures show my weights for each grade as well as performance since I've started. My weights are broken down as (5.5% D), (28.1%, E), (37%, F), (29.5%, G) and steadily heading toward the higher grade notes as I get away from F-G. Over these seven months I've averaged between 18-20% returns with the only drops being from an influx of $500 for a 50% increase of funds I invested in July, and selling 1 out of my 89 notes at a 90% loss in October.

Now my question to you all is are you going to do something about to improve your returns as I assume most will as rational investors, or for the select few will you just say that everything is falling apart and there is nothing you can do to improve your situation and withdraw from Lending Club?
Guys, I will admit that I have not read every post in this thread, but I am shocked to be reading that people are losing money on monthly basis.

What kind of loans are you buying that you are experiencing default/charge off rates that are greater than 10% (hard to believe anyone has average interest rate lower than 10%). 

Seems to me that you are being greedy and focusing most of your investment into riskier loans.  I am also thinking that those that are losing money are not investing an appropriate amount of $ to achieve the correct diversification.

The most important thing about investing in LC is diversification.  But not just diversification in the number of loans you hold, but also diversification over time. 

If you have $5,000, to invest you can not invest that in a 1-2 week period (even at $25 per loan) and expect solid returns.  You have to spread your investment over a longer period of time and be really picky about the loans you purchase.  Especially if you can not hold/buy a significant amount of loans.  LC and several other sites will talk about a magic number of loans to hold to achieve diversification, to me that number is a min. of 1,000 $25 loans. 

Last month was my best month ever regarding $ return.  Yes, my net return has decreased from 10.xx% to 8.28% over the last 2-3 years, but it has been a very slow decline and cannot imagine losing money.  I have an average interest rate of  11.49% and per LC have a Combined Return NAR of 8.28%.  I know of 21 LC accounts with positive returns, lowest Combined Return NAR is 7.95%.

Maybe I am missing the bigger picture of this thread, as I have not read every post, but seems like those who are losing money are making big mistakes in how they are deploying their funds.  I am not saying LC has not done things to hurt their investors, but I do not think anything they have done would cause investors to be losing money.

I do not say any of this to say I am better than anyone else or anything like that, I am just shocked people are losing money.  Attached is the breakdown by grade of my portfolio.

42
Investors - LC / Re: Worst Month Yet
« on: November 01, 2016, 05:45:45 PM »
I'm having a similar situation myself where I've had 4 loans go bad out of 89 active notes. One I sold in the beginning of the month which went bad in September for 90% off when it went Late 16-30 days. Another is also Late 16-30 days but went on a paymen plan, which is frustrating me since it doesn't pay until 11/30, 55 days past due. The other two are IGP but were notes I just bought off Folio, one which is hasn't paid but shows no contact log, and is in payment processing for the past eight days, so I can't sell it, the other is also on a payment plan, for three months. Luckily for me none of my notes in my seven months of investing have gone bad, luckily by selling them once they go IGP.


I'm not convinced it is an LC problem. Everyone has been talking about problems with 2016 loans...but I am seeing very similar results in my loans, all of which were funded in 2014. I have not invested since Jan, 2015.

It might be partly LC's problem because of that 2016 miscalculation, but that does not explain why I am having loans that have 27-30 months worth of payments going IGP and late 16-30...a lot of them with no missed payments or only 1 grace since inception. And mind you, all my loans are in A-B-C buckets, about equal in quantity.

Two weeks ago I had 12 out of 630 active notes go IGP (none of which had less than 22 payments; most had between 25-30 payments). So far only 3 of them have paid. 8 went 16-30 late and the other one SHOULD have gone 16-30...it's 17 days late (same as another two notes who DID go 16-30) but for some reason LC hasn't popped it over to 16-30 yet.

Last week I had 9 notes go IGP. So far none of them have paid up. They are still in IGP but are getting close to 16-30 territory.

I can't remember ever having this many IGP notes not paying up; usually a big majority (supposedly around 66%) of IGP notes pay up. What has changed? Could it be too many people in oil have lost their jobs? or could it be the big R rearing its ugly head...or something else???

43
Investors - LC / Re: LC FICO vs Loan Grade
« on: October 31, 2016, 12:30:34 PM »
I wonder if trying to determine an n level of FICO drop of each month for each grade would be a better determining factor, so say a loan is 6 months old w/ an a score at origination of 670, at month 7-n what would the score have be to indicate a possible default?
Funny, but I just happened to run an interesting test yesterday that seems to be relevant here. It was a quick and dirty test and may have been flawed so take the result with that in mind! Caveat Emptor. Still ...

The hypothesis tested was that a drop of N FICO points below FICO edit of previous month for a Never Late loan could serve as a leading indicator to sell that loan. Since the loan is Never Late it should be possible to sell it on Folio at a discount no worse than -9% and avoid a potentially much larger loss if/when the loan charged off. From the pmthistall.csv file I extracted all vintage 2013 Q1, grade D term 36 month loans. All are fully matured now (either Fully paid or Charged off). Bottom line was that I could find no value for N that resulted in improved profitability. I did not search for a sales discount less than -9% that would make this a profitable strategy and think it unlikely one exists. It wasn't even close.



44
Investors - LC / Re: Portfolio Efficient Frontier
« on: October 30, 2016, 11:06:06 PM »
Which is what was what Lending Robot did. But just like if doing a matrix for other asset returns all you need is the returns for a given set of periods. I'm just using the data easily available since I can assume backtested returns are accurate. I, just like you, am sure you don't intend to take the time to go through the massive loan files and calculate for each loan for each grade.

I believe you actually need to compute from numbers for individual loans.

45
Investors - LC / Re: Portfolio Efficient Frontier
« on: October 30, 2016, 09:03:45 PM »
Yes, I'de expect the diagonals to be larger and it's odd in general that the outputs are so small. Below is the returns I gathered from NSR with my filters for each grade. Hopefully all I need more data, either quarterly or monthly. There is also a possibility that the small variance of returns by grade is resulting in this occuring, unlike a portfolio of stock, bonds, funds, ETFs, etc where returns fluctuate.

year               A                B                 C        D                 E       F               G
2012   7.40%   12.48%   14.88%   17.60%   19.60%   21.22%   22.95%
2013   7.71%   12.12%   15.28%   18.04%   20.71%   22.49%   23.53%
2014   7.29%   11.37%   13.85%   16.63%   19.01%   22.43%   24.24%
2015   6.87%   10.33%   12.87%   15.74%   17.72%   20.47%   21.17%

st dev   0.30%   0.82%   0.94%   0.89%   1.08%   0.85%   1.14%



I didn't say they "would help".  I'm not even an advocate of this particular approach.  I was trying to answer your original question of whether someone had done this efficient frontier vs credit grades thing. 

One of the blogs gives an example covariance matrix, which doesn't look like yours, so that's one piece of your puzzle.  Of course he's doing a complex calculation to come up with these covariances, and you're likely taking a different approach.

In your matrix ...  Wouldn't you expect the elements on diagonal be larger than the other elements on their row or column?

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