angrysaveruk
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Say No To T.D.S
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Post by angrysaveruk on Nov 9, 2017 10:42:08 GMT
Sorry typo! Santander 1.5% plus cash back and £5 a month fee. Works well if you have £20,000 invested. You can have 2 per person allowing you to deposit upto £40000. It is where I keep my short term cash. Although they were even better when they paid 3% 
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p2pmark
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Post by p2pmark on Nov 9, 2017 10:51:11 GMT
Assuming the 4-5% figure is accurate, this implies some people are getting 10%+. Assuming a normal (or at least symmetrical) distribution, which may not be the case. I would have thought that the CLT applies over such a large sample?
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Post by newlender on Nov 9, 2017 12:05:40 GMT
I've just had 2 Collections in my ISA. Ha ha, I thought, so much for new Z+. But no, they're an A and B borrower in Core - probably a DD glitch  . |
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amphoria
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Post by amphoria on Nov 9, 2017 14:37:10 GMT
I've just had 2 Collections in my ISA. Ha ha, I thought, so much for new Z+. But no, they're an A and B borrower in Core - probably a DD glitch . You wish. I have 2 A borrowers in Arrangement and 4 B borrowers in Collections. These are Z+ but Zopa have never said that they have changed the risk rating of each market, just the %age of D and E loans given to each lender.
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Post by newlender on Nov 9, 2017 14:54:52 GMT
Just had a quick look. In my ISA (1830 loans) I have 10 E and 26 D borrowers. 3 Collections and 1 Arrangement (all from Core). My portfolio is 15% Z+ and 85% Core.
How are other forumites splitting their £20K? I'll start a new thread to ask that question so please reply there.
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Post by GSV3MIaC on Nov 9, 2017 16:15:16 GMT
Assuming a normal (or at least symmetrical) distribution, which may not be the case. I would have thought that the CLT applies over such a large sample? It should do, yes, but unless we know what the distribution looks like (what is sigma, for instance .. assuming we know the avg value to be 4.5%) we can't draw rash conclusions coz we don't know where we are on the tails .. i.e. the existence of a point at (avg -4 sigma) does not imply there must be a matching point at (avg +4 sigma) .. 'eventually should be' perhaps, but not 'is'. If the average really is 4.5%, and someone got -2%, then sigma is either huge and/or sample sizes 'not nearly big enough' or else they are unlucky enough to make the Guinness book of records.
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p2pmark
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Post by p2pmark on Nov 9, 2017 17:05:11 GMT
By sample size, I mean the number of lenders, not number of loans per lender. I think that's what's relevant here, as my original post was implicitly referring to the distribution of returns across lenders.
Having said that, you're right that this could be an extreme outlier and the tails may not be symmetrical unless the sample size is ridiculously large.
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aju
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Post by aju on Nov 9, 2017 18:50:40 GMT
Ah CLT (Central Limit Theorum, I'm guessing) a bit too hard summy for me.
Come back John (Nash),please, all is forgiven ;-)
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zlb
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Post by zlb on Nov 21, 2017 18:56:49 GMT
Ah CLT (Central Limit Theorum, I'm guessing) a bit too hard summy for me. Come back John (Nash),please, all is forgiven ;-) I'm trying to catch up with this thread. I've heard of CLT a long time ago. My ISA earnings tend to go up - I'm not calculating it though, but I do presume that 'earnings' relates to %, and not loan repayments. I should check this against their weekly email target %. I'm not re-investing in the investment main product (diversifying-out of product), and the repayments here are very small and slow on most occasions. Also my earnings in the 'investing' side of things seems more or less stuck. It's as if, when re-investing is off, earnings are lumped into the 'holding' account, and therefore aren't calculated. ... So basically, when Z announce an interest rate that they are aiming for in emails, this is just an average, and that an individual's income is entirely down to the luck of the draw - especially in plus?
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zlb
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Post by zlb on Nov 21, 2017 22:20:27 GMT
Assuming the 4-5% figure is accurate, this implies some people are getting 10%+. Assuming a normal (or at least symmetrical) distribution, which may not be the case. Could one not at least expect it to be the case with proper diversification (eg all in £10 pieces) across a larger deposit, e.g. over what? something like £10000? Is this sounding like premium bonds? I'm not a probability expert. My ISA and ordinary invest have very different returns for October, which shouldn't really be explained by lack of diversification, nor value invested, so it sounds like luck - but how else can it be explained? I've not looked at the whole year though.
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Post by GSV3MIaC on Nov 22, 2017 10:14:32 GMT
Were these two sets of loans drawn from the same underlying population though .. IIRC (I no longer lend with Z) they have been moving the goalposts somewhat recently (or less recently?) in therms of the risk (and rate) mix of borrowers?
In general I'd hope that 1000*£10 parts would be enough diversification to give something close to average return, if they were being drawn at random from a fixed overall population .. how different was 'very different'?
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angrysaveruk
Member of DD Central
Say No To T.D.S
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Post by angrysaveruk on Nov 22, 2017 13:17:28 GMT
I did some calculations on my results on Zopa+ and there is no way they can occur by chance (bad luck or random fluctuation) if you assume the expected default rates. One explanation for the results some of us have had is they have been trageted by a wave of people who had no intention of paying back the loans and some of us got caught up in this wave.
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Post by wyndstryke on Nov 23, 2017 11:51:53 GMT
... So basically, when Z announce an interest rate that they are aiming for in emails, this is just an average, and that an individual's income is entirely down to the luck of the draw - especially in plus? To some extent they try to smooth out the fluctuations by giving more lucrative loan chunks to people who have had worse-than-average luck getting them previously, and vice-versa. But the practical effect of this is fairly small, so, 'mostly yes'.
But the bigger problem is that if you only have a few hundred loan chunks, you are highly exposed to bad luck / good luck in terms of the loans which subsequently go bad.
The final factor is that risk is calculated on the current economic outlook, if there is a significant macroeconomic shock then it would affect everyone in the P2P world. The readjustment a few months ago is an example of a fairly gentle macroeconomic change, it could easily be an order of magnitude worse. This is why I think provision funds are worthless / misleading - they only work as expected when the economy is steady.
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zlb
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Post by zlb on Nov 23, 2017 20:51:22 GMT
... So basically, when Z announce an interest rate that they are aiming for in emails, this is just an average, and that an individual's income is entirely down to the luck of the draw - especially in plus?
But the bigger problem is that if you only have a few hundred loan chunks, you are highly exposed to bad luck / good luck in terms of the loans which subsequently go bad.
The final factor is that risk is calculated on the current economic outlook, if there is a significant macroeconomic shock then it would affect everyone in the P2P world. The readjustment a few months ago is an example of a fairly gentle macroeconomic change, it could easily be an order of magnitude worse. This is why I think provision funds are worthless / misleading - they only work as expected when the economy is steady.
yes I agree - I think the '% of that exact deposit allocation' could be made more clear for new people. There's a thread on AC about 4thway saying AC and Z 5/10 same risk rating, referencing the provision fund. I'm interested in what factor of trust in longevity there is. Does anyone know what happened in Z in the 2008 dip that is frequently referenced? Was that a suitably macroeconomic point? They had a PF then.
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Post by wyndstryke on Nov 23, 2017 22:54:35 GMT
Ignoring 'Zopa Listings'* which was a bloodbath, there was a lot of red ink, but in the long run it was basically OK ... earnings lost but not significant capital. Keep in mind that interest rates were a lot higher back then since the treasury wasn't doing QE yet, so there was more of a buffer.
I don't recall there being a provision fund at that time - safeguard was a lot later (primarily to get around the tax-on-losses issue IMO). Losses were on us. I suspect that if Safeguard had existed at that time it would have been wiped out in a week.
* Listings was a super high risk option with no diversification, no credit checks as far as I could tell. What it reminded me of was those adverts asking for money in the back of Private Eye. I stayed well clear of it - it was like a Z++++.
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