nick
Member of DD Central
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Post by nick on Apr 21, 2016 18:44:02 GMT
The defaults on the tile now reflect your probable loss. The modal shows you the total defaults and the probablility of recovery. There is a missing period in the series for most users, which is the most recent. We've provided the ability for you to download your CSV data, so you can perform your own analysis. There is a positive jump in return for most users, since we're now including the benefit of compounded returns and not considering defaults to be a complete loss, since this money is still owed to you and is expected to eventually be recovered on some loans. If you want us to anslyse or explain a specific part in calculating your Net Return, I'd be happy to look into if for you. The old "default" figure should continue to be provided so that we can continue to reconcile our account from the dashboard and the net funds deposited on the platform. Otherwise it becomes very difficult to reconcile movements.....
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Post by danraj on Apr 22, 2016 9:10:58 GMT
It is available in the modal, you just need to click to see more details to get the full figure.
Once we have the Performing / Non Performing separation, you'll be able to reconcile, at a glance.
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baldpate
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Post by baldpate on May 1, 2016 16:34:38 GMT
We've recently updated the way we calculate the Net Return figure, but we're still refining it for various user cases. You can read more about the update here: www.rebuildingsociety.com/new-net-return-formula-works-harder/We have added the ability for you to download your returns series data click (Export CSV) each line in your series represents a change in capital employed, i.e. a day you added or withdrew funds. Its an improvement on what we had, but its imperfect in different ways for different users. If you email support@rebuildingsociety.com with your user ID (reference when adding funds) we will look into your individual calculation and see about reviewing your data. One known issue, is that we still need to review the dates of defaults because the default may be reflected too early in your series (i.e. when you loaned to the business, and not when the default actually occurred) This artificially brings forward the loss, which carries forward. We'll be realigning the default dates on microloans and for each loan we adjust, we'll potentially adjust your net return. Also, if you had a promotional credit early on and have reinvested this money repeatedly then the compounding effect may show a considerably higher return than it was with the previous calculation. : I think you should get your people to take another look at the formula on the "new net return formula" page ( www.rebuildingsociety.com/new-net-return-formula-works-harder/ which you linked to above). I'm sure it isn't correct as it stands - to demonstrate this, you need only test it by entering the simplistic case of a single period of 365 days where £10K capital is employed throughout for a net gain is £1K - you'll see that the answer it gives is quite wrong! Average Net Return formula compressed.pdf (106.83 KB) I have uploaded and attached this PDF document which contains what I believe is the correct formula, and it's derivation. I'm pretty sure this, or something equivalent, is what you actually use in your calculation, because I've checked it by computation in Exel against my own downloaded dataset & it gives exactly the result published on my dashboard.
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brianlom1
Member of DD Central
He's not the Messiah, he's a very naughty boy!
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Post by brianlom1 on May 1, 2016 21:19:48 GMT
I fully agree with Butch Cassidy, please revert to the original calculation (and include all loans that are at least 2 months overdue). The only returns used to calculate the average returns figure should be ones that have been returned to lenders' accounts.
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Post by danraj on May 3, 2016 12:05:23 GMT
Thanks baldpate for the worked example - I'll get the formula reviewed. brianlom1 - We believe that the recovery process (and subsequent success) will become a significant factor in differentiating platforms... We generally take combined forms of security on a loan and so we forecast that our performance on recovery will be better than the industry average. As you know, defaults are not necessarily a loss, since it is still money owing to you. So unless you are asking to forego the recovery of you debt, it would be inaccurate to fully discount it in the calculation of your net return. Instead of counting the full monies owed, we are adjusting for the estimated probable loss, so that we may arrive at the most accurate calculation of the Net Return figure. As the probabliliy changes, so too will your Net Return. We have made your series data available to you, so you may adjust the Estimated Loss (in the defaults column), to reflect whatever amount if you wish, this will allow you to perform your own calculation of your Net Return figure. We realise we have something to prove in the recoveries process, but as one of the longer established platforms, we are confident that this will transpire to be a strength of the business. |
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Post by danraj on May 3, 2016 13:29:32 GMT
Its an estimate that gets adjusted as the process ensues. We considered that it would be prudent to estimate low initially and to adjust upwards than vice-versa. However I take your point. On the next review of this feature, we will look to set the initial estimate to be commensurate with our recovery record, given each security type.
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