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Post by dan1 on Sept 11, 2018 20:45:19 GMT
I've added three traces to the chart of cumulative actual return to include Active Loans and Defaulted Loans overdue by at least 365 days ( cwah - the chart at the bottom shows loans overdue by 6 months, just for you!). For simplicity, I assume no interest is paid/recovered. The three traces show 100% capital paid/recovered, 50%, and 0%, respectively.   |
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09dolphin
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Post by 09dolphin on Sept 11, 2018 21:02:41 GMT
OMG. I really do hope you're wrong
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cwah
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Post by cwah on Sept 11, 2018 22:08:12 GMT
I've added three traces to the chart of cumulative actual return to include Active Loans and Defaulted Loans overdue by at least 365 days ( cwah - the chart at the bottom shows loans overdue by 6 months, just for you!). For simplicity, I assume no interest is paid/recovered. The three traces show 100% capital paid/recovered, 50%, and 0%, respectively. Dan, thank you so much for this much MUCH ACCURATE picture. As we can see, it looks like that depending on the resolution, we can easily go down to negative return but hopefully much more likely into 2-5% real return. It is definitely a MUST HAVE complementary graph reflecting the current situation. I wonder if we know the typical recovery rate of 180+ and 360+ days late loans? That would help us pinpoint what to expect overall. However just this shows that the TRUE return maybe be hovering around 2-5% if we get around 50% recovery
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technik
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Post by technik on Sept 12, 2018 8:14:26 GMT
Yes, very much appreciated! A similar analysis to what I was mentioning in the Real Returns thread, though there the initial post was asking for a £25 investment in each loan. This analysis is based on total amounts in the whole platform so would seem that is like investing an amount in each loan proportional to the total loan amount (smaller loans have smaller investments, larger loans have larger investments)? And hence also means the return shown is more sensitive to large loan defaults than the £25 per loan way of doing it, so let's hope FS can get their problematic larger loans sorted otherwise they will be tending towards the more pessimistic return curves on here! |
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adrian77
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Post by adrian77 on Sept 12, 2018 11:23:20 GMT
thanks for doing this - great work!
Looks to me it is critical that we see what these late performing loans actually come in at - I really expected the cinema to be one of them so got that one 100% wrong although there are plenty of other "interesting ones" Personally I think 50% recovery is quite a plausible figure.
Speaking of which I will be watching the Chiswick Auction this afternoon - I just don't have a clue what the "M R Bambino" will go for...
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Post by dan1 on Sept 14, 2018 21:29:24 GMT
Yes, very much appreciated! A similar analysis to what I was mentioning in the Real Returns thread, though there the initial post was asking for a £25 investment in each loan. This analysis is based on total amounts in the whole platform so would seem that is like investing an amount in each loan proportional to the total loan amount (smaller loans have smaller investments, larger loans have larger investments)? And hence also means the return shown is more sensitive to large loan defaults than the £25 per loan way of doing it, so let's hope FS can get their problematic larger loans sorted otherwise they will be tending towards the more pessimistic return curves on here! - the chart below assumes the same amount invested in every loan on the platform. It was generated from the same data as the total loan amount chart above - directly comparable, and to the same scale, but the data is a week old. 
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cwah
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Post by cwah on Sept 14, 2018 23:04:23 GMT
Yes, very much appreciated! A similar analysis to what I was mentioning in the Real Returns thread, though there the initial post was asking for a £25 investment in each loan. This analysis is based on total amounts in the whole platform so would seem that is like investing an amount in each loan proportional to the total loan amount (smaller loans have smaller investments, larger loans have larger investments)? And hence also means the return shown is more sensitive to large loan defaults than the £25 per loan way of doing it, so let's hope FS can get their problematic larger loans sorted otherwise they will be tending towards the more pessimistic return curves on here! - the chart below assumes the same amount invested in every loan on the platform. It was generated from the same data as the total loan amount chart above - directly comparable, and to the same scale, but the data is a week old. it looks good but I doubt it any serious investor would put only £25 on each loan. Because the default rate needs to be lower it will look better. Do you know if the chart would be the same if it was £100, £1000 or even £10,000 invested on each loan?
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technik
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Post by technik on Sept 14, 2018 23:55:25 GMT
Yes, very much appreciated! A similar analysis to what I was mentioning in the Real Returns thread, though there the initial post was asking for a £25 investment in each loan. This analysis is based on total amounts in the whole platform so would seem that is like investing an amount in each loan proportional to the total loan amount (smaller loans have smaller investments, larger loans have larger investments)? And hence also means the return shown is more sensitive to large loan defaults than the £25 per loan way of doing it, so let's hope FS can get their problematic larger loans sorted otherwise they will be tending towards the more pessimistic return curves on here! - the chart below assumes the same amount invested in every loan on the platform. It was generated from the same data as the total loan amount chart above - directly comparable, and to the same scale, but the data is a week old. Really nice, thank you! It's a bit late so can't quite get a certain grasp on it, but are these values likely to flatter FS because of the way their figures/structures deal with renewals? Thinking not as the actual return isn't affected by the recycling of old loans every 6 months even when not paid back and just renewed time after time. But the impact might be a more sudden falling away of the actual rates where non-recoveries start occurring what seems like more frequently? For instance a 2 year loan with 4 renewals that fails will leave the actual return figure unaffected for most of that period, until the point non-recovery takes place. So what was actually a bad loan decision 2 years ago looks like one now. Thinking if many loans all in this situation and as/when FS start getting tougher, rather than spreading out those drops the platform is going to appear more like it's having a total meltdown, and that the first few years where renewals were rolled will look like the golden age (which they were if you didn't keep renewing yourself and got out ahead of bad renewals coming home to roost).
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technik
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Post by technik on Sept 14, 2018 23:59:51 GMT
technik - the chart below assumes the same amount invested in every loan on the platform. It was generated from the same data as the total loan amount chart above - directly comparable, and to the same scale, but the data is a week old. it looks good but I doubt it any serious investor would put only £25 on each loan. Because the default rate needs to be lower it will look better. Do you know if the chart would be the same if it was £100, £1000 or even £10,000 invested on each loan? Again, late in the evening, but pretty sure that the £ value of each loan makes no difference, just the proportion of £ put into each loan. The first charts were a proportion of total loan value, these ones are 1:1:1 (£25 in each). So multiply by 4 to get £100 or 400 to get £1000, actual return % will not be affected. (£25 in each is hypothetical anyway, but to get £1,000 or £10,000 in each you would depart even further from reality - due to loan restrictions and some loans not even being worth those amounts - but that's just minor details really)
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Post by dan1 on Sept 15, 2018 9:07:24 GMT
technik - the chart below assumes the same amount invested in every loan on the platform. It was generated from the same data as the total loan amount chart above - directly comparable, and to the same scale, but the data is a week old. it looks good but I doubt it any serious investor would put only £25 on each loan. Because the default rate needs to be lower it will look better. Do you know if the chart would be the same if it was £100, £1000 or even £10,000 invested on each loan? The charts are intended to show returns based on the assumptions that I've tried to make clear as concisely as possible. They show trends and direction of travel for returns with at one extreme the same investment per loan and the other an investment weighted according to the loan amount. In reality, actual investors portfolios will lie somewhere inbetween on a subset of loans depending on time on the platform, whether currently active, opportunities, loan limits, SM activity, etc. The chart assumes the same investment per loan so will be the same irrespective of actual investment assuming that was possible which is only practical at £25 per loan due to restrictions on low value bling.
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Post by dan1 on Sept 15, 2018 9:21:42 GMT
technik - the chart below assumes the same amount invested in every loan on the platform. It was generated from the same data as the total loan amount chart above - directly comparable, and to the same scale, but the data is a week old. Really nice, thank you! It's a bit late so can't quite get a certain grasp on it, but are these values likely to flatter FS because of the way their figures/structures deal with renewals? Thinking not as the actual return isn't affected by the recycling of old loans every 6 months even when not paid back and just renewed time after time. But the impact might be a more sudden falling away of the actual rates where non-recoveries start occurring what seems like more frequently? For instance a 2 year loan with 4 renewals that fails will leave the actual return figure unaffected for most of that period, until the point non-recovery takes place. So what was actually a bad loan decision 2 years ago looks like one now. Thinking if many loans all in this situation and as/when FS start getting tougher, rather than spreading out those drops the platform is going to appear more like it's having a total meltdown, and that the first few years where renewals were rolled will look like the golden age (which they were if you didn't keep renewing yourself and got out ahead of bad renewals coming home to roost). Likewise it's a bit early to engage my brain! I'm comfortable with the renewal situation so long as interest is paid and investors are able to exit positions, but I'll reconsider if/when renewals are enforced. Renewals that are increased to fund interest improve the non performing loan statistics because no payment has been received from the borrower. You'd hope that's balanced by partial payments of capital/interest held on account by FS but not yet distributed to investors but I guess only time will tell. I agree that renewals are partially an act of can kicking to artificially improve stats and the reason why I've put this analysis together.
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Godanubis
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Post by Godanubis on Sept 15, 2018 10:05:08 GMT
With Mark Carney suggesting 25% drop in property prices with "Hard Brexit" should we be buy renewing property loans or buy new loans with >50% LTV
How would that drop affect the graphs.
Gret work thanks.
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Post by fisherman on Sept 15, 2018 10:19:02 GMT
Thanks for all your hard work dan1. I started the Real returns thread and the work you have done answers, as far as is possible, the question I asked. As you have probably guessed I picked a £25 investment per loan to include loans with bidding restrictions.
Thanks again.
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benaj
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Post by benaj on Sept 15, 2018 11:37:40 GMT
With Mark Carney suggesting 25% drop in property prices with "Hard Brexit" should we be buy renewing property loans or buy new loans with >50% LTV
How would that drop affect the graphs.
Gret work thanks.
The drop is possible, but I think it really depends on the region. www.hometrack.com/uk/insight/uk-cities-house-price-index/According to this, Belfast was badly affected after 2007, more than 67% drop, but not so much in London.
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Post by dan1 on Oct 15, 2018 8:53:35 GMT
Capital LossesThe table below lists the capital losses from loans marked as Completed. The data has been extracted from the individual loan listings except where additional recoveries have been achieved as documented in the footnotes (the return has been increased accordingly). The lost capital to date stands at £1,003,074. The figure provided on the Loan Statistics page of £948,754 was last updated for September and does not yet include the capital losses from the disposal of the Neath Property. | Reference | Title | Rate | Loan | LTV | Repaid | Lost | Return | Bonus | End Date | Completed | Late | | 572782847 | Two Rings | 13% | £2,200 | 69.84% | £1,688 | £512 | -23.3% | No | 12 Nov 14 | 16 Feb 15 | 96 | | 654474218 | Lubin Paintings | 13% | £13,000 | 40.63% | 1£9,100 | £3,900 | -30.0% | No | 26 Nov 14 | 14 May 15 | 169 | | 2002084876 | Lubin Paintings | 13% | £20,000 | 66.67% | £14,000 | £6,000 | -30.0% | No | 31 Aug 15 | 15 Sep 15 | 15 | | 1922610905 | Scottish Boatyard | 13% | £250,000 | 62.50% | £216,441 | £33,559 | -13.4% | No | 15 Jan 16 | 18 Aug 17 | 581 | | 6742133163 | Wind Turbine | 12% | £1,000,000 | 63.86% | 2£319,036 | £680,964 | -68.1% | No | 23 Aug 16 | 2 Oct 17 | 405 | | 1355651457 | Name plate and Trains | 13% | £8,000 | 228.58% | £2,000 | £6,000 | -75.0% | No | 2 Mar 17 | 17 Jul 18 | 502 | | 3867743062 | Knaresborough - 2nd | 16% | £100,000 | 63.00% | | £100,000 | -100.0% | No | 3 Mar 17 | 16 Aug 18 | 531 | | 1411851665 | Railwayana 3 - Partial Rep. | 13% | £3,943 | 58.42% | £2,000 | £1,944 | -49.3% | No | 11 Mar 17 | 16 Jul 18 | 492 | 1213701687
| Mixed Use Property,
Liverpool - Renewal
| 13%
| £625,000
| 65.79%
| £440,500
| £184,500
| -29.5%
| Yes
| 18 Mar 17
| 7 Dec 18
| 629 | | 2286673307 | Railwayana 5 - Renewal | 13% | £3,100 | 51.67% | £1,300 | £1,800 | -58.1% | No | 30 Apr 17 | 16 Jul 18 | 442 | | 5257926445 | The Lodge | 13% | £190,000 | 69.09% | 3£141,400 | £48,600 | -25.6% | Yes | 14 Jul 17 | 16 Apr 18 | 276 | | 3057909038 | The Riding School | 13% | £238,500 | 68.14% | 4£177,400 | £61,100 | -25.6% | Yes | 14 Jul 17 | 16 Apr 18 | 276 | | 2027812507 | Neath Property | 13% | £116,000 | 70.30% | £75,305 | £40,695 | -35.1% | Yes | 19 Sep 17 | 12 Oct 18 | 388 | | 2125032158 | Peter Howson Painting | 10% | £10,000 | 33.33% | £5,625 | £4,375 | -43.7% | No | 26 Sep 17 | 11 Apr 18 | 197 | | 1291079105 | Neath Property - Supp. | 13% | £10,000 | 70.00% | | £10,000 | -100.0% | No | 12 Oct 17 | 12 Oct 18 | 365
| 8526896902
| Property in Skewen - Renewal
| 12% | £46,000
| 65.71%
| £40,422
| £5,578 | -12.1%
| No | 13 May 18 | 17 Oct 18 | 157 | 3046618699
| Collection of Rings - Renewal
| 12% | £8,000 | 61.54%
| £4,775
| £3,225 | -40.3%
| No | 17 Jun 18 | 22 Oct 18 | 127 | 2127087124
| Diamond Earrings - Renewal
| 12% | £3,000 | 60.00%
| £2,600
| £400 | -13.3%
| No | 17 Jun 18
| 22 Oct 18
| 127 |
Please let me know of any errors or omissions, in particular my derivation of the additional return for the Wind Turbine, see footnote 2.
1 20 Apr 15: "The total sale proceeds amount to £1,880. All active investors will shortly receive a capital repayment in proportion to the amount invested." 2 18 Jul 18: "A further (small) amount has been recovered and will be distributed shortly." - £14,465.27 (derived from the Loan Statistics lost capital of £948,754 minus the sum of lost capital excluding the Neath Property). Represents an additional 1.45%, which is almost consistent with the reported 1.5%, see here. 3 7 Jun 18: "A further amount of £3,900 has now been recovered - representing approximately an additional 2.1% return of capital, which will shortly be distributed to all investors accounts proportionately." 4 7 Jun 18: "A further amount of £4,900 has now been recovered - representing approximately an additional 2.1% return of capital, which will shortly be distributed to all investors accounts proportionately."
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