Author Topic: Give up some numbers.  (Read 43698 times)

turing

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Re: Give up some numbers.
« Reply #30 on: July 21, 2014, 12:26:15 PM »
Newbie so not much to show for this account right now.

Account only 1.5 months old.  My other account has more loans but all of them are 'issued' or 'in funding' and 0 months old (started about 2 weeks ago)

In Funding 4
Issued & Current 54
In Grace Period 0
Fully Paid 1
Late 16 - 30 Days 0
Late 31 - 120 Days 0
Default 0
Charge-off 0

JoeB

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Re: Give up some numbers.
« Reply #31 on: July 21, 2014, 10:18:34 PM »
Here are my numbers.  I only buy new loans and only sell non performing loans on the FOLIO platform.  For the first 4 years of investing I only did $25 per, but since the beginning of the year I had to increase to $50 per to keep up with reinvesting payments as well as being able to invest new funds.


In Funding - 176
Issued & Current - 18,068
In Grace Period - 83
Fully Paid - 4,525
Late 16 - 30 Days - 23
Late 31 - 120 Days - 47
Default - 2
Charged Off - 53


Grade breakdown is as follows:

A - 29.7%
B - 34.7%
C - 24.1%
D - 8.4%
E - 2.2%
F - 0.6%
G - 0.1%

LC says my NAR is 11.15%, but as I said I sell on the Folio platform so not 100% accurate.  My XIRR is 9.55% however it will typically take me over 30 days to invest new funds when I make large deposits, so XIRR is not 100% accurate as well as funds sit around for a while sometimes.  So my real return is between the two.  I really do not focus on those #'s as I like to look at actual $ return each month based on beginning of month o/s principle.

Well that's an eye opener! Would like to have 6 figures vested within a year or so. Going slowly. I started in early May of this year. I filter and then select manually. So far I'm confident in my choices. I sold 3 loans on Folio which had dropped 55 to 100 points predominately to see how it worked. Based upon what Circle stated above, it shows me that you can filter/pick manually and still maintain control over a large account.

It's been fun and I have a new hobby.   8)

Here's my showing:

My Notes at-a-Glance 435
o   In Funding 31
o   Issued & Current 403
o   In Grace Period 1
o   Fully Paid 0
o   Late 16 - 30 Days 0
o   Late 31 - 120 Days 0
o   Default 0
o   Charged Off 0

A (0.0%)
B (0.1%)
C (50.1%)
D (37.8%)
E (7.4%)
F (3.1%)
G (1.4%)

NAR = 15.77

I'm about 70/30 weighted in 36ers and currently only purchasing 36ers.
« Last Edit: July 21, 2014, 10:29:15 PM by JoeB »
Best to all,

JB

DLIFVOIP

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Re: Give up some numbers.
« Reply #32 on: July 22, 2014, 01:14:10 PM »
Issued & Current - 18,068
A   29.70%   5366
B   34.70%   6270
C   24.10%   4354
D   8.40%   1518
E   2.20%   397
F   0.60%   108
G   0.10%   18
Those are some very interesting numbers to get 10%. Lates thru Charge offs are pretty small so the folio sales are demonstrating that. ("LC says my NAR is 11.15% ... My XIRR is 9.55% ....  So my real return is between the two.")  Very impressive.


Here is screen shot from my excel file where I track the performance of my loans by grade.  As you can see I experience a loss rate quite a bit lower than the average based on loan grade (default rate is really loss rate for me, which includes defaults/charge offs as well as losses experienced when sold).  I think I do this via my process of loan selection as well as selling off non performing loans.  Just goes to show that you do not need to focus on higher risk loans to make a great return. 


JoeB

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Re: Give up some numbers.
« Reply #33 on: July 22, 2014, 01:44:21 PM »
Issued & Current - 18,068
A   29.70%   5366
B   34.70%   6270
C   24.10%   4354
D   8.40%   1518
E   2.20%   397
F   0.60%   108
G   0.10%   18
Those are some very interesting numbers to get 10%. Lates thru Charge offs are pretty small so the folio sales are demonstrating that. ("LC says my NAR is 11.15% ... My XIRR is 9.55% ....  So my real return is between the two.")  Very impressive.


Here is screen shot from my excel file where I track the performance of my loans by grade.  As you can see I experience a loss rate quite a bit lower than the average based on loan grade (default rate is really loss rate for me, which includes defaults/charge offs as well as losses experienced when sold).  I think I do this via my process of loan selection as well as selling off non performing loans.  Just goes to show that you do not need to focus on higher risk loans to make a great return.

Those are extremely impressive results. Not to over analyze this but it appears that $500k invested can generate approximately $4k per week in revenue for reinvestment. What filter specs are you utilizing which generate sufficient results to pick from; if you don't mind of course.

A friend has been using LC for a year with no defaults and I've been using his same strategy. I'm quite happy with it. I've been wondering if you can make a small hobby/business out of this with $250k to $500k and you answered my question. The only problem is to figure out the filtering strategy to generate a sufficient amount of 'safe' loans to choose from.
Best to all,

JB

DLIFVOIP

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Re: Give up some numbers.
« Reply #34 on: July 22, 2014, 04:55:00 PM »
Issued & Current - 18,068
A   29.70%   5366
B   34.70%   6270
C   24.10%   4354
D   8.40%   1518
E   2.20%   397
F   0.60%   108
G   0.10%   18
Those are some very interesting numbers to get 10%. Lates thru Charge offs are pretty small so the folio sales are demonstrating that. ("LC says my NAR is 11.15% ... My XIRR is 9.55% ....  So my real return is between the two.")  Very impressive.


Here is screen shot from my excel file where I track the performance of my loans by grade.  As you can see I experience a loss rate quite a bit lower than the average based on loan grade (default rate is really loss rate for me, which includes defaults/charge offs as well as losses experienced when sold).  I think I do this via my process of loan selection as well as selling off non performing loans.  Just goes to show that you do not need to focus on higher risk loans to make a great return.

Those are extremely impressive results. Not to over analyze this but it appears that $500k invested can generate approximately $4k per week in revenue for reinvestment. What filter specs are you utilizing which generate sufficient results to pick from; if you don't mind of course.

A friend has been using LC for a year with no defaults and I've been using his same strategy. I'm quite happy with it. I've been wondering if you can make a small hobby/business out of this with $250k to $500k and you answered my question. The only problem is to figure out the filtering strategy to generate a sufficient amount of 'safe' loans to choose from.

As much as I would love to share my filters and picking criteria, I can not.  I do actually do this for a living.  I manage my own funds as well as have 12 other accounts I manage.  The account which I have provided the data is about 4.5years old has over $500k invested/outstanding principle, has less than 20K of loans over $50 per loan (did an experiment) and produces around 24k a month of cash flow.

So yes, it is possible to do this with large dollars and only investing "safe" loans.  You just have to give up the idea of returns over 10%, it is pretty hard to invest large dollars and have an IRR over 10% with any consistency.


JoeB

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Re: Give up some numbers.
« Reply #35 on: July 22, 2014, 06:00:48 PM »
Issued & Current - 18,068
A   29.70%   5366
B   34.70%   6270
C   24.10%   4354
D   8.40%   1518
E   2.20%   397
F   0.60%   108
G   0.10%   18
Those are some very interesting numbers to get 10%. Lates thru Charge offs are pretty small so the folio sales are demonstrating that. ("LC says my NAR is 11.15% ... My XIRR is 9.55% ....  So my real return is between the two.")  Very impressive.


Here is screen shot from my excel file where I track the performance of my loans by grade.  As you can see I experience a loss rate quite a bit lower than the average based on loan grade (default rate is really loss rate for me, which includes defaults/charge offs as well as losses experienced when sold).  I think I do this via my process of loan selection as well as selling off non performing loans.  Just goes to show that you do not need to focus on higher risk loans to make a great return.

Those are extremely impressive results. Not to over analyze this but it appears that $500k invested can generate approximately $4k per week in revenue for reinvestment. What filter specs are you utilizing which generate sufficient results to pick from; if you don't mind of course.

A friend has been using LC for a year with no defaults and I've been using his same strategy. I'm quite happy with it. I've been wondering if you can make a small hobby/business out of this with $250k to $500k and you answered my question. The only problem is to figure out the filtering strategy to generate a sufficient amount of 'safe' loans to choose from.

As much as I would love to share my filters and picking criteria, I can not.  I do actually do this for a living.  I manage my own funds as well as have 12 other accounts I manage.  The account which I have provided the data is about 4.5years old has over $500k invested/outstanding principle, has less than 20K of loans over $50 per loan (did an experiment) and produces around 24k a month of cash flow.

So yes, it is possible to do this with large dollars and only investing "safe" loans.  You just have to give up the idea of returns over 10%, it is pretty hard to invest large dollars and have an IRR over 10% with any consistency.

Thank you for all that. You confirmed my suspicions and $24k a month was more than I calculated but either way it would be sufficient. You certainly have a job there picking almost 1,000 loans a month.  Thanks for the info.
Best to all,

JB

cfb

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Re: Give up some numbers.
« Reply #36 on: July 22, 2014, 08:35:38 PM »
So yes, it is possible to do this with large dollars and only investing "safe" loans.  You just have to give up the idea of returns over 10%, it is pretty hard to invest large dollars and have an IRR over 10% with any consistency.

My problem with figuring out rates of return is that I'm too lazy to break out the stuff I bought before I knew anything at all about p2p investing, the chunk I let lending club invest for me with the "pick a risk level" and what I bought after I educated myself more.  My 2.5 year old account is showing an adjusted LC return of just under 10%.  After looking at all the charts and data of larger accounts, seems like aside from a few outliers that are even rarer than stock market picking 'geniuses' you're getting 5-10% for long term (2-3 year old) accounts.  And the difference is almost entirely whether you picked A-B loans, C-D loans, or E-G loans.  I'm actually surprised at how many B loans I've had default with very high credit scores, long employment and very low risk evaluations.  Even some A's that were pretty blue chip rolled over.

Really annoyed at how many pulled a loan, made 0-3 payments and then declared bankruptcy.  They knew they were going to do it when they got the loan.

Just by eyeballing it, looks like my worst default was for the hunk of loans I gave them 10K to invest for me with the mid level risk band.  I think with that batch I got what everyone else passed on.

All that having been said, once you get past the loan grade and credit scores and a few other things I'm not sure all the backwards looking filtering makes that much difference after 3 years.  You just don't know what someone is going to do and trying to gauge sudden impending unemployment, illness, divorce or other major financial crisis from a credit report doesn't really work.

All in all I've been happy with my investment but I don't think I could put another 60k in without it turning into a full time job.  It was interesting to learn about, it was a bit of fun here and there, and getting 10% return on my cash for 3 years+ didn't suck.

Rob L

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Re: Give up some numbers.
« Reply #37 on: July 22, 2014, 09:47:18 PM »
In Funding - 176
Issued & Current - 18,068
In Grace Period - 83
Fully Paid - 4,525
Late 16 - 30 Days - 23
Late 31 - 120 Days - 47
Default - 2
Charged Off - 53

Grade breakdown is as follows:
A - 29.7%  B - 34.7%  C - 24.1%  D - 8.4%  E - 2.2%  F - 0.6%  G - 0.1%

If I added right that's 22,801 loans, except those in funding.
That would be a loan grade total based on the percentages of about:

A - 6771, B - 7912, C - 5495, D - 1915, E - 502,  F - 137 and G - 23

From it's inception through 3/31/2014 LC has issued the following numbers of loans:
A - 45430,  B - 88434, C - 72531, D - 42241, E - 19129, F - 8145, G - 1904

Percentage owned / ever issued is:
A - 14.9%,  B - 8.95%, C - 7.58%, D - 4.53%, E - 2.62%, F - 1.68%, G - 1.21%

Quite interesting. I very much like your approach to putting a pretty sizeable amount of money to work.

Since you are selling on Folio it's presumably not tax deferred.
How do you deal with that capital loss limitation tax problem I've read so much about?

rawraw

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Re: Give up some numbers.
« Reply #38 on: July 23, 2014, 07:48:54 AM »
So yes, it is possible to do this with large dollars and only investing "safe" loans.  You just have to give up the idea of returns over 10%, it is pretty hard to invest large dollars and have an IRR over 10% with any consistency.

My problem with figuring out rates of return is that I'm too lazy to break out the stuff I bought before I knew anything at all about p2p investing, the chunk I let lending club invest for me with the "pick a risk level" and what I bought after I educated myself more.  My 2.5 year old account is showing an adjusted LC return of just under 10%.  After looking at all the charts and data of larger accounts, seems like aside from a few outliers that are even rarer than stock market picking 'geniuses' you're getting 5-10% for long term (2-3 year old) accounts. 
That's incorrect.  You should read the discussion of NAR in the other thread.  It's a 5-10% NAR, but that is not a 5-10% return  Remember that the 2-3 year old accounts are inactive because if they were reinvesting, the age wouldn't be that high.  Remember that even YTM calculations have implicit assumptions about reinvestment into the same yield as before.   When you stop reinvesting, the number drops.

DLIFVOIP

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Re: Give up some numbers.
« Reply #39 on: July 24, 2014, 09:23:13 AM »
In Funding - 176
Issued & Current - 18,068
In Grace Period - 83
Fully Paid - 4,525
Late 16 - 30 Days - 23
Late 31 - 120 Days - 47
Default - 2
Charged Off - 53

Grade breakdown is as follows:
A - 29.7%  B - 34.7%  C - 24.1%  D - 8.4%  E - 2.2%  F - 0.6%  G - 0.1%

If I added right that's 22,801 loans, except those in funding.
That would be a loan grade total based on the percentages of about:

A - 6771, B - 7912, C - 5495, D - 1915, E - 502,  F - 137 and G - 23

From it's inception through 3/31/2014 LC has issued the following numbers of loans:
A - 45430,  B - 88434, C - 72531, D - 42241, E - 19129, F - 8145, G - 1904

Percentage owned / ever issued is:
A - 14.9%,  B - 8.95%, C - 7.58%, D - 4.53%, E - 2.62%, F - 1.68%, G - 1.21%

Quite interesting. I very much like your approach to putting a pretty sizeable amount of money to work.

Since you are selling on Folio it's presumably not tax deferred.
How do you deal with that capital loss limitation tax problem I've read so much about?

Below is a screen shot of the portfolio's page from the account that I have been providing my numbers.  The data on my average rate and loss rate was probably from the beginning of the year as I really only update that spreadsheet once a year as I can pretty much tell from the $ return each month how things are going.  You can also already see the effect on average interest rate per grade as a result of LC lowering the rates.

The "100 Test" and "50 Test" portfolios are part of an experiment I am doing to see if I only pick loans which I consider to be perfect, will they out perform how I normally pick.  It has only been about 3 months so no verdict yet.  But basically wanted to see how long it would take to get $20k invested at $100 per loan in what I considered perfect loans compared to how much I could invest at $50 per during that time, know that $10k of the $100 per loan bucket would be in the $50 per loan portfolio as well.

Anyway, here are my portfolios.  Expected payments are only adding up to $18.6k, but per my June stmt I received $24.2k. 

More than happy to keep answering questions (that I am willing to answer, lol). 

Rob -  Your numbers are pretty close on the amount of loans held.  This account has been in a very fortunate position for the last 2 - 2.5 years in that it has never ran out of cash (between new funds and the reinvestment of monthly payments), I have been able to purchase every loan that has been issued over that period that meets my criteria.  It is nice because I get to apply the data and numbers from this account to the other 12 I manage.

Yes this is not a tax deferred account, I have those also, but this is my biggest account under management.  Last year this account experienced just over $5,829 of capital losses from sales.  So $3k of it is easily covered.  The other is used to offset other capital gains or is simply a carryforward.

« Last Edit: July 24, 2014, 09:34:58 AM by CircleT009 »

trevor

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Re: Give up some numbers.
« Reply #40 on: July 24, 2014, 03:07:11 PM »
Circle, I have a general question about your loan selection. Do you prefer to invest in safer notes (A-C) throughout the majority of your managed Lending Club accounts, or just mainly for your primary account that has 500k invested?


Also, when did you get the confidence to start investing large amounts of cash into P2P lending?

DLIFVOIP

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Re: Give up some numbers.
« Reply #41 on: July 24, 2014, 05:42:00 PM »
Circle, I have a general question about your loan selection. Do you prefer to invest in safer notes (A-C) throughout the majority of your managed Lending Club accounts, or just mainly for your primary account that has 500k invested?


Also, when did you get the confidence to start investing large amounts of cash into P2P lending?

Trevor,

Believe it or not interest rate is not one of my criteria in my filters I use for selecting notes.  I use other indicators to pick what I consider quality loans.  I will never not buy an A1 if it meets my requirements and at the same time I will never not buy a G5 that meets my requirements.  It just so happens that A, B and C grade loans tend to meet my requirements. 

I will say in the accounts that I manage where I am really only reinvesting payments, I will always buy the note with the highest interest rate that meets my requirements.  Meaning if I only have $25 to spend in a day, then I will try to buy the higher interest rate loan that meets my requirements. 

Managing smaller accounts and larger accounts is very different.  I strongly believe in diversification, so even though I know (based on my own data) that I make more money on B than A and C than B and D than C, etc etc, I do not believe it is worth the added risk to simply start buying larger portions of these loans.  My clients are happy with there returns and they love that they never lose money and have a steady return they can count on.  I fully explain on day one that I am not trying to hit homeruns, I like singles and doubles.

It took a bit of time before I was comfortable dealing with large dollars.  The account you guys are seeing was started in Dec 2009.  It started with $500 a month for about six months, then went to $1000 a month for a while.  At the end of 2 years and being super conservative and making over 10% (used to get deposit bonuses and interest rates were higher), it was decided that it was time to get serious.  So all the data was crunched, trends looked at and it was a big green light.  I do not want to give full details on the cash inflow, but it has been very steady for the last 2.5yrs.

I will say that right now (assuming typical volume of loans is available on LC), I am very comfortable investing an average of $1,600 - $2,000 a day at $50/loan.  If an account is not planning on having a steady stream of new funds on a monthly basis I stay at $25/loan.

Rob L

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Re: Give up some numbers.
« Reply #42 on: July 24, 2014, 06:05:42 PM »
And I was wondering how you got 30 G string, / no, scratch that /, G notes in your portfolio(s).
Must have been really slow days.
My own "unsubstantiated opinion" is that F's and G's are darts at the board.
Even LC cannot underwrite them appropriately.

DLIFVOIP

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Re: Give up some numbers.
« Reply #43 on: July 25, 2014, 09:09:55 AM »
And I was wondering how you got 30 G string, / no, scratch that /, G notes in your portfolio(s).
Must have been really slow days.
My own "unsubstantiated opinion" is that F's and G's are darts at the board.
Even LC cannot underwrite them appropriately.

I just bought a G this morning.  Again if they meet my requirements I do not care what the interest rate.  Obviously they are not as strong as the A's, B's and C's, but it is definitely not because it was a slow day.  0% return is better than a loss.

hoggy1

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Re: Give up some numbers.
« Reply #44 on: August 09, 2014, 08:05:24 PM »
More than happy to keep answering questions (that I am willing to answer, lol). 

Hey CircleT,

I followed this post for the first couple of pages and your initial post. Can't believe this thread died so soon after you have been so forthcoming. So I have some more questions I think you might answer:

A. How much do you charge to manage an account?
B. Are the other 12 accounts you manage all P2P accounts? LC accounts? Prosper or other accounts?
C. Can you (will you) tell us how many loans (from the account you have been referring to) you have sold on Folio?
D. What is you pricing strategy for Folio sales? Do you offer deep discounts for quick sales or what?
E. Over 22.5K loans have been in this account (18K current and 4.5K fully paid). But only 208 have ever been troubled on LC (grace, late, long late, default, and write offs). That's less than 1% in any distress. But you show a table by loan grade of defaults (losses?) going from .94% for A to 7.32% for Fs. These figures include capital losses and expenses on Folio?
F. In talking about this account, you state it is about $500K and spins $24K/month in cash flow. Even if all the loans were 36 month I can't figure that cash flow for IRRs near 10%. Can you reconcile this for me?

Thats off the top of my head and ought to do for starters. This was a long thread and I am clearly not the only one interested in your story. Please pick up where we left off if you will.

Thanks,
Steve
Steve