ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Feb 20, 2015 11:38:50 GMT
I'm only at 11.26 % and due to drop as I've more than I should have in the plumber. Upped my investment in it as a temporary store for month or 2 (or so I thought) as there was so little to reinvest in with the lack of loans coming through.
I'm curious did those with returns higher than 13% buy more of the defaulted loans once they were in default or is it due to being early investors in AC when rates were a bit larger ? In my case, yes - in fact I got into some of them because they were about to default or had already. I inhabit the riskier edges of life - you need nerves of steel for it though 
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mikes1531
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Post by mikes1531 on Feb 20, 2015 14:04:21 GMT
I'm curious did those with returns higher than 13% buy more of the defaulted loans once they were in default or is it due to being early investors in AC when rates were a bit larger ? I'm a relatively early investor who picked up parts of the now-problem bridging loans when they still were on time, and I stuck with them when they went into default and their interest rates increased. So my impressive looking average rate is a rate of accrual rather than a rate of earning which may turn out not to be real.
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bugs4me
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Post by bugs4me on Feb 20, 2015 14:42:32 GMT
I'm curious did those with returns higher than 13% buy more of the defaulted loans once they were in default or is it due to being early investors in AC when rates were a bit larger ? I'm a relatively early investor who picked up parts of the now-problem bridging loans when they still were on time, and I stuck with them when they went into default and their interest rates increased. So my impressive looking average rate is a rate of accrual rather than a rate of earning which may turn out not to be real. I thought the quoted rate was that actually earned and credited rather than the accrual which has yet to be paid. So if/when the accrual does not cough up which I have mentally written off, then presumably my rate shown will drop.
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merlin
Minor shareholder in Assetz and many other companies.
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Post by merlin on Feb 20, 2015 15:06:09 GMT
That puts a completely different slant on my 16.28% as all my loans are in trouble.
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bugs4me
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Post by bugs4me on Feb 20, 2015 15:32:21 GMT
That puts a completely different slant on my 16.28% as all my loans are in trouble. Maybe this needs clarification from chris perhaps. I've got a couple - with zero holding - Investments Paused - but £500 in Interest Accrued for them which I'm doubtful will ever materialise especially once costs etc are factored into the recovery. If that £500 is being counted then my Dashboard Average Interest is inaccurate IMO.
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pikestaff
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Post by pikestaff on Feb 20, 2015 15:35:06 GMT
I'm a relatively early investor who picked up parts of the now-problem bridging loans when they still were on time, and I stuck with them when they went into default and their interest rates increased. So my impressive looking average rate is a rate of accrual rather than a rate of earning which may turn out not to be real. I thought the quoted rate was that actually earned and credited rather than the accrual which has yet to be paid. So if/when the accrual does not cough up which I have mentally written off, then presumably my rate shown will drop. Chris has said that it's a simple weighted average. I think this must be a forward-looking accrual rate for the loans currently held, based on interest promised not received. This being so, I suspect that the non-payment of the accrual will not, of itself, change the rate. However, a change in the outstanding principal (whether from a repayment or a write-off) will change the weighted average simply because the principal has changed. There's an argument that the accrual of interest should be suspended when a default gets sufficiently bad, in which case the accrual rate on "bad" defaults would drop to zero, but that might be tricky to implement.
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agent69
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Post by agent69 on Feb 20, 2015 15:48:32 GMT
11.25 here. Plumby snagged me but otherwise reduced my holdings on most other problem ones before they became a problem. Compared to some of the above I must be guilty of a wimpy strategy but at least I sleep OK.
Add +1 to the wimps.
I'm just over 11% with just under 1% of my portfolio leaking away with the plumber. Managed to sell out of all the late paying bridges, just a bit of interest outstanding at Anglesey.
One of the few good thing s that I learnt in my short time at FC was to dump anyone that missed a payment. I know it's not a philosophy that some others follow, but it keeps me happy.
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baz657
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Post by baz657 on Feb 20, 2015 17:12:13 GMT
Another wimp here. Just under 11% but I've only been active since June last year so missed out on the earlier nice earners. Thought the plumbers would be a safe bet at least for the first six months so sunk a fair bit into that one, around 4% of my AC total (by far the largest %age for any loan anywhere in p2p land). Yet another lesson learnt.
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bigfoot12
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Post by bigfoot12 on Feb 20, 2015 17:55:49 GMT
So my impressive looking average rate is a rate of accrual rather than a rate of earning which may turn out not to be real. I think that is true for all of us for many loans. It is true that some loans have some interest withheld at draw down, but many are accruing the next payment. It might not arrive. In most cases it probably will. I think that the weighted average for the plumbers should be zero, but apart from that I'm not sure what else they can do.
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duck
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Post by duck on Feb 20, 2015 18:35:31 GMT
chris Does the average rate calculator show the average stated rate or the average IRR, which would be considerably higher? BTW my average is a lowly 10.72% which unfortunately includes the plumber. I didn't code that figure so I'd need to double check but I believe it's just a simple weighted average of your current holdings. There are plans to add an XIRR figure to the dashboard but there have been other higher priorities to deal with first. Yes it is a simple weighted average of current holdings. My spreadsheets do an identical calc and I have never had any discrepancies so from my point of view this calc has always been working correctly. I've got a small exposure to the plumber in both personal and business (less than 2%). 'Interesting' to see the effect of the different treatment for tax of projected loss.
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Post by chris on Feb 20, 2015 18:53:35 GMT
So my impressive looking average rate is a rate of accrual rather than a rate of earning which may turn out not to be real. I think that is true for all of us for many loans. It is true that some loans have some interest withheld at draw down, but many are accruing the next payment. It might not arrive. In most cases it probably will. I think that the weighted average for the plumbers should be zero, but apart from that I'm not sure what else they can do. We could supply two XIRR numbers that lenders can choose to include on the dashboard. One including accruals to date and one excluding it, which I think would give a over estimate of true XIRR and an underestimate. I'm not a financial analysis type person though so there may be better ideas out there. I know Stuart has some XIRR thoughts / plans that he'll brief me on once the fund raise is settled.
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Post by mrclondon on Feb 20, 2015 20:34:40 GMT
I think that is true for all of us for many loans. It is true that some loans have some interest withheld at draw down, but many are accruing the next payment. It might not arrive. In most cases it probably will. I think that the weighted average for the plumbers should be zero, but apart from that I'm not sure what else they can do. We could supply two XIRR numbers that lenders can choose to include on the dashboard. One including accruals to date and one excluding it, which I think would give a over estimate of true XIRR and an underestimate. I'm not a financial analysis type person though so there may be better ideas out there. I know Stuart has some XIRR thoughts / plans that he'll brief me on once the fund raise is settled. XIRR with and without accruals would be brilliant. My spreadsheet defaults to without, but I do occaisonally manually add back the accrued figure to see the potential upside. I have significant stakes in the deferred interest loans on here (e.g. Wrexham Dev), TC, and W&Co to defer tax liability until post retirement which the without figure obviously ignores. Although, as per previous comments, until the unusually large pool of drastically overdue bridges is resolved the with accruals figure is almost certainly an over estimate for many lenders.
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tonyr
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Post by tonyr on Feb 20, 2015 22:24:27 GMT
Thanks for all the replies guys; very useful to know. It looks like the average rate here is higher than FC which is promising. Currently going through all the investor info on the website as I'm going to pull all my uninvested money from FC as the loans coming out there are pish at the moment and may well chuck it here. I'm at 10.36% which is probably the lowest of all the replies you've had. A few years ago I was one of FC's biggest lenders, it took a huge amount of time to buy/sell lots of fiddly small parts and I was very lucky to walk away with very few defaults (okay, I wrote my own analysis of the FC loanbook which halved the default rate - you can make some luck). What I really like about AC is the asset backing, there are many crooks and otherwise desperate people out there and if the loan is small then nobody can afford to do decent due diligence - it's just not economic. In my mind AC have got this right, I'm not expecting to get a much higher rate than I got with FC, but it does take me a lot less time and I do sleep better as I'm sure there are both less risks from the underlying loans but also less platform risks (when FC introduced minimum bid rates they really cocked it up). Anyway, if you can show me anywhere else you can get 10% p.a. with AC level of risk I'll listen to you - I certainly don't know a better place for savings, pension and (hopefully soon) ISAs.
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tonyr
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Post by tonyr on Feb 20, 2015 22:34:39 GMT
The Dashboard says 11.30%, no furniture, no plumbers, no frozen bridges (anymore), just a couple of paused ones. It was around 11.5%, but I rejigged my holdings recently, and still have 4% uninvested waiting for the shrapnel to gain weight. I think that you are right - you need some small percentage uninvested to pick up the shrapnel. I must say that I made a few mistakes with the "new" (Autumn 2014) website and I wasn't happy at first, but now it feels very comfortable. What is missing is the ability to prevent the autoinvest consuming all available cash with loan parts that have been available for while and leave a little bit for shrapnel. I really hope the API gets published soon. I'm sure there are many people out there with a background in Financial Engineering who'll come up with really good algorithms for this. I'm certainly chomping a the bit and I'll put all my savings and pension behind whatever I write.
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tonyr
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Post by tonyr on Feb 20, 2015 22:39:12 GMT
One of the few good thing s that I learnt in my short time at FC was to dump anyone that missed a payment. I know it's not a philosophy that some others follow, but it keeps me happy.
Dead right. However good the excuse the right thing with FC is if they ever were more than a few days late then it was time to find a bigger fool.
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