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Messages - bluto

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1
Investors - LC / New Platform, Part 2
« on: December 31, 1969, 07:00:00 PM »
I've been shocked since the beginning that a note can only be in a single portfolio.  I'd love to be able to assign notes to multiple portfolios.  As an example, I'd have a set of portfolios for vintage, and another set for performance.  So 2018 purchases go in one portfolio and all ever late loans also go in another portfolio. 
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Investors - LC / LC interest rates updated 5/8/2018
« on: December 31, 1969, 07:00:00 PM »
Banks are likely interested because they can easily buy a geographically diverse portfolio of consumer debt that even at LC's current yields is above their average earning asset of 3.73%, and above the average consumer focused bank's average rate on earning assets of 4.02% (and those are gross yields, before financing costs and bad debt expenses).

https://www.fdic.gov/bank/analytical/qbp/2017dec/qbp.pdf

Leveraged up with ultra low rate deposits, and they can get a very nice Return on Equity from the A grade notes (the increase would add nearly a full point to bank RoE). 
3
Investors - LC / ROI vs YTM
« on: May 02, 2018, 11:00:00 PM »
Your return calculation is ignoring the income you could earn from reinvesting the repayment of principal during the year.  Presuming you can reinvest it in similar notes (and assuming the borrowers make their scheduled repayments should close the gap between ROI and YTM. 
4
Investors - LC / Are things improving?
« on: March 25, 2018, 11:00:00 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. 
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Investors - LC / LC Email: "The Next Generation Credit Model"
« on: September 12, 2017, 11:00:00 PM »
If LC's model improves, that should usually mean less loans for us active filterers to find, either because they improved their model to fix a grading error that we exploit with filters, or because they updated their model to exclude some class of risky loans that weren't being identified previously. 
6
Investors - LC / Best way to measure true return?
« on: August 08, 2017, 11:00:00 PM »
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. 



7
Banks return on assets was an annualized 4% last quarter, so banks don't need to be getting the cream of the crop for Lending Club's average loan to look favorable compared with most bank assets. 
8
Investors - LC / The identiy fraud repayment promise
« on: March 21, 2017, 11:00:00 PM »
I had a late loan get credited by lendingclub a few years ago.  It was classified as "Adjustments/Credits" on the cash details page and shown under miscellaneous under the transaction log with the description "credit for ineligible loanID 26048338".  After the transaction it doesn't show up in my notes (as a prepaid loan) it's gone as though I sold it. I can't seem to find any other records for it. 
9
Investors - LC / What loan purpose to avoid?
« on: February 08, 2017, 12:00:00 AM »
In back testing, for the grades of loans I purchase, the only types I do are Debt Consolidation+Refinancing, Home Improvement, and Wedding (that last one took quite a few months of back testing review before I trusted it), all the other categories resulted in significantly higher default rates relative to those four.  Keep in mind that of the loans I actually buy, the vast majority are Consolidation and Refinancing types, but the other two do pop up on occasion. 
10
Investors - LC / Spike in IGP this month?
« on: January 14, 2017, 12:00:00 AM »
October and November were horrid for me (worst credit months since 2009) but December and January both improved from the prior low base (still under the last 3 year credit average but better than the last two months. 
11
I have a few very old charge offs (2008 and 2009 vintages).  It sure looked like the Weighted Average Age of Portfolio was being impacted by these (which had a high weight because they were principle balances that are now 60-70+ months old).  Perhaps lending club noticed this. 
12
On the first day I got a sub penny recovery on my oldest note (I think it defaulted in 2011 and dated back to 2008).  I'm impressed they collected anything from it. 
13
Investors - LC / Are LC Grades Completely Random?
« on: August 24, 2016, 11:00:00 PM »
It's entirely possible I don't recall correctly, but once upon a time LC had an interest rate calculator/grade predictor on the public portion of their site, and the two things that most surprised me were going from 36 months to 60 months added at least a full letter grade (ie from B1 to C1 or C2 or C3) and an increase in the amount (especially increases above $30,000) had a similarly large effect on the grade.  It surprised me and after learning of those two escalators, I started investing in much lower grade notes. 

Given that the after default returns on the notes only increase slightly, LC's grades don't appear to be too far off. 
15
Investors - LC / What are late notes worth?
« on: August 03, 2016, 11:00:00 PM »
Back when my account was relatively new, I looked at the recovery rate of late notes compared with the discounts being offered and attempted to speculate on a few "bargain" falling knives.  One note ended up with positive performance, and it took 6 years (I got a surprise settlement long after it had been written off). 
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