Author Topic: Are things improving?  (Read 2544 times)

rj2

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Are things improving?
« on: March 24, 2018, 12:19:27 AM »
I signed up for LC in June 2015 which I think was really not a great time to sign up. As you all know, LC had some serious issues with loan quality in 2015 and 2016. While LC initially presented my account as having a 10% return, what I actually experienced over the following two years was less than a 4% return. Mostly due to excessive charge-offs. For context I was mostly invested in C/D/E with a few F/G loans and a WAIR of around 18% or so.

Recently though I've seen my returns ticking up. My overall return has risen from a low of 4% to 5.5% and seems to be climbing. I'd guess if current trends continue it's going to get to 6.5% or so, maybe even 7%, which while not the 10% I originally expected, is also not the 4% I saw over the last couple of years.

On my side, two things have changed. I've become more conservative in my automated investing, investing only in B/C/D. I've also started making use of Folio, where I target seasoned loans that have a rising credit score and never late. My folio buying has a WAIR of 19% but my automated buying of new loans has a WAIR of 12%. Overall that's giving me a WAIR on newly invested loans of around 17% vs a historically higher WAIR in 2015/2016, so I've become slightly more conservative.

However, my gut says that my increased return is not because I've become slightly more conservative, or that I'm suddenly better at picking notes. My guess is that the underlying return on the platform has just generally improved by a couple of percentages and that rising tide is floating my boat.

I am curious to see what other's have experienced.
« Last Edit: March 24, 2018, 12:32:38 AM by rj2 »

bluto

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Re: Are things improving?
« Reply #1 on: March 26, 2018, 02:45:34 PM »
I've been in mostly C, D, and E notes since 2009, and didn't stop reinvesting repayments through the 2015 credit cycle.  I haven't noticed an increase (my returns have stuck around 5.5% for about a year, but I have noticed that while the distressed notes are moving slowly out like a pig in a python, newly delinquent notes started decreasing in November, and have nearly stopped as of late February (suggesting that by May/June delinquencies and returns could be closer to normal as early as May/June). 

One big difference that I didn't notice is most years I get an increase in delinquencies starting in December or January that often lasts to April, and that didn't happen this year. 

MarinBB

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Re: Are things improving?
« Reply #2 on: March 27, 2018, 09:57:29 AM »
Yes, recent notes that I purchased after mid-2017 seem to be much firmer than previous vintages.

Rob L

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Re: Are things improving?
« Reply #3 on: March 27, 2018, 10:14:15 AM »
I can only add that my summary page ANAR has ticked up a few basis points in the past month or so.
For some reason ANAR has seemed to me to be a sensitive barometer and its been a very long time since I've seen any upward movement.

Also my delinquencies were down last month. See:
https://forum.lendacademy.com/index.php/topic,3551.msg43133.html#msg43133

larrydag

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Re: Are things improving?
« Reply #4 on: March 27, 2018, 08:36:13 PM »
I only started investing in March 2017 but my returns got as low as 2%.  Now it is at 8%.  So yes I believe there has been an improvement.  I'm guessing the improved economy has helped some folks out on making payments.

AnilG

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Re: Are things improving?
« Reply #5 on: March 28, 2018, 03:23:00 AM »
What do you think might be reason for ANAR uptick? If delinquencies are down, yes it will cause ANAR to go up as fewer notes will be adjusted for potential future losses.

Are delinquencies down because of improved underlying borrower profile or LC not marking loans delinquent quickly enough (for ex: term extension, repayment modifications etc.)?

I can only add that my summary page ANAR has ticked up a few basis points in the past month or so.
For some reason ANAR has seemed to me to be a sensitive barometer and its been a very long time since I've seen any upward movement.

Also my delinquencies were down last month. See:
https://forum.lendacademy.com/index.php/topic,3551.msg43133.html#msg43133
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Rob L

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Re: Are things improving?
« Reply #6 on: March 28, 2018, 06:25:18 PM »
What do you think might be reason for ANAR uptick? If delinquencies are down, yes it will cause ANAR to go up as fewer notes will be adjusted for potential future losses.

Are delinquencies down because of improved underlying borrower profile or LC not marking loans delinquent quickly enough (for ex: term extension, repayment modifications etc.)?

I can only add that my summary page ANAR has ticked up a few basis points in the past month or so.
For some reason ANAR has seemed to me to be a sensitive barometer and its been a very long time since I've seen any upward movement.

Also my delinquencies were down last month. See:
https://forum.lendacademy.com/index.php/topic,3551.msg43133.html#msg43133
I just don't know. Could be any or all of the above. The movement has been very slight.