Author Topic: Lending Club Portfolio Score  (Read 8610 times)

RomanLegend

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Lending Club Portfolio Score
« on: February 06, 2018, 12:40:15 PM »
Hey All,

LC Picks upgraded quite a bit from just an engine that spits out the best loans to purchase.  One thing we have been really working on is the overall portfolio score (portfolio health, if you will).  I was wondering if anyone would mind creating their account and posting their LC Picks Portfolio Score.  There is a 2 week free trial with the software and we do not ask for any payment information.

www.lcpicks.com

Thanks in advance for your help!

-Chris


sensij

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Re: Lending Club Portfolio Score
« Reply #1 on: February 06, 2018, 01:39:31 PM »
I like what you are doing with this.  I just put in my D-G grade account, as built (mostly) by BlueVestment.  64 charged off loans so far, distributed as shown below.  Overall score on this is 44.6/82.



RomanLegend

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Re: Lending Club Portfolio Score
« Reply #2 on: February 06, 2018, 02:00:11 PM »
Very interesting.  Thanks for posting!

sensij

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Re: Lending Club Portfolio Score
« Reply #3 on: February 06, 2018, 02:18:09 PM »
Very interesting.  Thanks for posting!

It will take some more work, but I'll try to give that chart some more useful context...  at least show % of defaults within the population of that score, maybe with a 3rd dimension for age at default, or something like that.

RomanLegend

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Re: Lending Club Portfolio Score
« Reply #4 on: February 06, 2018, 02:33:51 PM »
Yea, that would be great.  Thanks for the effort.  The more information I can get around the topic will help me to improve the whole process/tool.

Fudgenut

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Re: Lending Club Portfolio Score
« Reply #5 on: February 06, 2018, 02:56:08 PM »
Taxable account
53.3/82 (winding down taxable account, sold most of the good notes on folio a while ago)

SEP IRA
53.3/82  (winding down IRA, sold most of the good notes on folio a while ago)

ROTH IRA
53.5/82  (stopped reinvesting recently, didn't sell notes on folio)

jd

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Re: Lending Club Portfolio Score
« Reply #6 on: February 06, 2018, 03:37:16 PM »
I've been using LC picks since I bought my first loan (09-15-17). My LC ranking is 71/82.  The weighted average of my portfolio is 12.61%


RomanLegend

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Re: Lending Club Portfolio Score
« Reply #7 on: February 06, 2018, 05:01:40 PM »
I've been using LC picks since I bought my first loan (09-15-17). My LC ranking is 71/82.  The weighted average of my portfolio is 12.61%

71 / 82 is the highest portfolio score I've seen yet.  Great job!  I'd be interested to see your loan distribution by grade.

RomanLegend

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Re: Lending Club Portfolio Score
« Reply #8 on: February 06, 2018, 05:02:33 PM »
Taxable account
53.3/82 (winding down taxable account, sold most of the good notes on folio a while ago)

SEP IRA
53.3/82  (winding down IRA, sold most of the good notes on folio a while ago)

ROTH IRA
53.5/82  (stopped reinvesting recently, didn't sell notes on folio)

These are pretty good numbers.  Do you have a large volume of notes in each?

RomanLegend

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Re: Lending Club Portfolio Score
« Reply #9 on: February 06, 2018, 11:44:14 PM »
I like what you are doing with this.  I just put in my D-G grade account, as built (mostly) by BlueVestment.  64 charged off loans so far, distributed as shown below.  Overall score on this is 44.6/82.



The LC Picks strategy is really to invest in scores of 66+ to average 9-12% returns.  If that principal was followed you would have only realized ~6 charge offs.  Allowing more of your money to work longer.   

Fudgenut

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Re: Lending Club Portfolio Score
« Reply #10 on: February 06, 2018, 11:55:16 PM »

Taxable account
53.3/82 (winding down taxable account, sold most of the good notes on folio a while ago)

SEP IRA
53.3/82  (winding down IRA, sold most of the good notes on folio a while ago)

ROTH IRA
53.5/82  (stopped reinvesting recently, didn't sell notes on folio)

These are pretty good numbers.  Do you have a large volume of notes in each?

Note totals:

1836 (394 Issued/Current)
3968  (648 Issued/Current)
5577 (2401 Issued/Current)

jd

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Re: Lending Club Portfolio Score
« Reply #11 on: February 07, 2018, 09:13:50 AM »
Quote
71 / 82 is the highest portfolio score I've seen yet.  Great job!  I'd be interested to see your loan distribution by grade.

My grade breakdown:

Grade   %
A        19.20%
B        34.40%
C        26.40%
D        16.00%
E        4.00%

kuhnrl30

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Re: Lending Club Portfolio Score
« Reply #12 on: February 07, 2018, 10:16:11 AM »
One thing we have been really working on is the overall portfolio score (portfolio health, if you will).  I was wondering if anyone would mind creating their account and posting their LC Picks Portfolio Score. 

Chris-  can give a little more background on the portfolio score?  I'm curious what you are measuring and how to best use it.  Undoubtedly there are aspects that you cannot share and I wouldn't ask for the algorithm, but can you give us a short sales pitch on why to use it?

RomanLegend

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Re: Lending Club Portfolio Score
« Reply #13 on: February 07, 2018, 12:03:55 PM »
One thing we have been really working on is the overall portfolio score (portfolio health, if you will).  I was wondering if anyone would mind creating their account and posting their LC Picks Portfolio Score. 

Chris-  can give a little more background on the portfolio score?  I'm curious what you are measuring and how to best use it.  Undoubtedly there are aspects that you cannot share and I wouldn't ask for the algorithm, but can you give us a short sales pitch on why to use it?


Sure thing.  The basic premise is that the higher the score of a note the less likely the loan is to default (we've shown <2% default rate).  What we've derived is that if you invest in only loans with a score of 66+ you can easily get ANAR of 9.7%+.  We've seen as high as 12.5% but 9%-10% seems to be very repeatable.

From there, we realized that most clients will already have existing portfolios with many loans in them.  So we also wanted to score every loan that a user has already purchased. Which can get a bit tricky considering vintage, etc...  So now, you can see how likely your portfolio is susceptible to defaults by seeing how close you are to 66+.

If your score is 59 then we would suggest investing in the higher end scoring (70+) until you can get your whole portfolio score up to the mid 60's.  If your score is already really good say 70's, then you can be a little more liberal in buying slightly lower ranked loans if it has a desirable/higher interest rate (15%+, etc...) to maximize your overall portfolio return.
« Last Edit: February 07, 2018, 01:54:01 PM by RomanLegend »

RomanLegend

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Re: Lending Club Portfolio Score
« Reply #14 on: February 08, 2018, 03:17:41 AM »
Quote
71 / 82 is the highest portfolio score I've seen yet.  Great job!  I'd be interested to see your loan distribution by grade.

My grade breakdown:

Grade   %
A        19.20%
B        34.40%
C        26.40%
D        16.00%
E        4.00%

Can you do the avg score by grade as well?  Thanks.