coogaruk
Hello everyone! Anyone remember me?
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Post by coogaruk on Sept 18, 2018 11:50:16 GMT
My earnings have grown by a 'whopping' 2.08% in that time. How has everybody else been doing?
(NB. I have not been partaking in new loans and have been letting my loan book run down since last September's changes took effect.)
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Stonk
Stonking
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Post by Stonk on Sept 18, 2018 18:40:03 GMT
I did the same thing -- I stopped using my account the day the regime changes took effect. The only transactions since then have been occasionally to withdraw accumulated cash.
I have suffered truly shocking levels of defaults. Out of my raw interest income, 89.1% (yes) has been lost in bad debt (that's 92.1% defaulted with 3.0% recovered). A further 7.5% went in fees. That left me with just 3.4% of my earnings intact (i.e., for every £100 of interest, I have retained £3.40), which equates to an AER of 0.4% on my average balance.
Can anyone beat that?
FC? Far Cue.
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markr
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Post by markr on Sept 19, 2018 17:26:00 GMT
Like many people here, in the pre-September FC I was applying a number of strategies to reduce the number of defaults that I saw. In my case it was a combination of property sold before the end date and, when property was being phased out, buying mainly C and D loans on the PM and selling them over the first six months or so. I was happy to stuff my portfolio with these riskier loans because I knew I could dump a good proportion of that risk onto someone else. The attached graph shows my bad debt and recoveries over this period. The massive increase in bad debt rate corresponds pretty much exactly with "black box day". However, a key point is that this uptick is nothing to do with the loan book getting worse, which I know because I have not had a single default of a loan formed post-September '17. Some of the defaulted loans were bought by the black box on the SM, but the majority were loans I had bought manually before the September change. In other words, that uptick is simply because I lost the ability to sell on my loan parts; it is just the loss rate my account would have been seeing, and should have been seeing, were I not dumping risk on some other poor sods. So, I suspect others here were in the same boat last September, i.e. having a riskier than average portfolio and suddenly being "responsible" for bearing all of that risk. This gives the appearance of the loan book suddenly taking a turn for the worse, which brings out the conspiracy theorists, but in actual fact the loan book is probably plodding along much as it always was. I hope I have gone some way to fixing this by switching my account to "conservative" for a while to rebalance the risk, but only time will tell.  |
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Stonk
Stonking
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Post by Stonk on Sept 20, 2018 8:42:07 GMT
I did used to manage my risk a bit in the way markr did, prior to the September 2017 changes.
In the month leading up to the Big Change, I sold all the loans that I would have sold according to that strategy. I then re-filled my portfolio with self-selected loans which I considered were lower risk and which I was happy to hold to completion.
So it is not the case that during the last year I have suffered the effects of risk that I built up earlier. But it is the case that my woeful level of defaults is due to loans that are at least a year old.
(I don't have an insight into defaults of loans less than a year old.)
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markr
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Post by markr on Sept 20, 2018 12:18:48 GMT
(I don't have an insight into defaults of loans less than a year old.)
Expand the "My Loan Parts" section, and select the "Loan Parts" tab. From the Status drop-down list select Bad Debt. Then click on the "Loan ID" column header to sort in descending order of ID. The September change occurred around ID 43000, so higher IDs than that are post-September, although for any particular loan you can click on it and look at the first repayment date which is usually 1 month after the day the loan was formed. While on a loan's page, if you look at the "My Orders" tab you can see if and when you bought the loan on the Primary Market. If there's no entry there, you acquired the loan from the Secondary Market, although there's no easy way to tell when except to trawl through your statements looking for the loan part ID (not the loan ID!)
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Post by Butch Cassidy on Sept 20, 2018 12:40:57 GMT
My seasoned self-select account is over 5 years old but I haven't ever used the auto invest system or sold any loans during the last year, just withdrawn cash as repayments have accrued.
My annualised dashboard return has dropped from 11.2% to 8.8% & my defaults have more than doubled over the last year, so now my net defaults are 1/3 of my lifetime earnings & the net value of my portfolio has dropped by over 10% after adjusting for the withdrawals, as current loans have been transferred to defaults.
I am still confident of significant returns from most of my defaults, as many already repay & FC remain the best P2P chasers, but am concerned that the current IPO sales push that has been growing in strength for at least 18 months (currently running media adverts across TV, Radio & presumably social media too) just means they will give away lenders money to anyone who asks & it is storing up some horrific future default numbers, so I think I will avoid the share offering on that basis.
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rogerthat
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Post by rogerthat on Sept 20, 2018 13:31:09 GMT
My seasoned self-select account is over 5 years old but I haven't ever used the auto invest system or sold any loans during the last year, just withdrawn cash as repayments have accrued.
My annualised dashboard return has dropped from 11.2% to 8.8% & my defaults have more than doubled over the last year, so now my net defaults are 1/3 of my lifetime earnings & the net value of my portfolio has dropped by over 10% after adjusting for the withdrawals, as current loans have been transferred to defaults.
I am still confident of significant returns from most of my defaults, as many already repay & FC remain the best P2P chasers, but am concerned that the current IPO sales push that has been growing in strength for at least 18 months (currently running media adverts across TV, Radio & presumably social media too) just means they will give away lenders money to anyone who asks & it is storing up some horrific future default numbers, so I think I will avoid the share offering on that basis. I thought the comment by jimbo (page link underneath) was insightful and has convinced me to stand back and concentrate on managing my not insignificant capital already invested in P2P rather than increasing my stress levels any further. My last real interest in offerings were back in the heady days of privatisation, which was not exactly memorable if memory serves. As he pointedly states, once the dust has settled and those at the top table have got their pieces of eight, there will be plenty of time to buy in, should one wish. p2pindependentforum.com/thread/11952/funding-circle-filing-ipo?page=2
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markr
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Post by markr on Sept 20, 2018 13:43:46 GMT
Let me clarify a bit as well.
Before the change, I reckon that around 80+% of my portfolio was more-or-less risk free(*), because I was actively managing it using the well documented risk-shedding techniques. The remaining part was mainly leftovers from bidding days and loans I'd decided to keep a small lump in.
I suspect that most forum users were using a similar strategy, so on change day nearly everyone's portfolios went from "essentially no risk" to "some risk" instantly regardless of what they'd done in the weeks before to prepare. And this was not because of some sudden change to the loan book, but simply because our ability to offload the risk to others had gone. These defaults were happening all day every day (well, all day every Thursday) before and after the change, it just that before the change we weren't holding them when the music stopped.
My mistake, possibly, was to not predict this and rebalance, so my line is probably steeper than many (although of course my return before defaults will be higher), but everyone in a similar situation will have a upward kink like mine!
(*) I was caught by a handful of very early failures, but they amount to fractions of a percent of my portfolio.
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blender
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Post by blender on Sept 20, 2018 14:21:14 GMT
Let me clarify a bit as well. Before the change, I reckon that around 80+% of my portfolio was more-or-less risk free(*), because I was actively managing it using the well documented risk-shedding techniques. The remaining part was mainly leftovers from bidding days and loans I'd decided to keep a small lump in. I suspect that most forum users were using a similar strategy, so on change day nearly everyone's portfolios went from "essentially no risk" to "some risk" instantly regardless of what they'd done in the weeks before to prepare. And this was not because of some sudden change to the loan book, but simply because our ability to offload the risk to others had gone. These defaults were happening all day every day (well, all day every Thursday) before and after the change, it just that before the change we weren't holding them when the music stopped. My mistake, possibly, was to not predict this and rebalance, so my line is probably steeper than many (although of course my return before defaults will be higher), but everyone in a similar situation will have a upward kink like mine! (*) I was caught by a handful of very early failures, but they amount to fractions of a percent of my portfolio. Exactly so. I had a wonderful couple of years enjoying a 10% return without risk, thanks to FC's property venture combined with autobidders on the SM. Such an unfair system was never going to last. The magic has gone as The Box of Delights has become The Box of Defaults. A year on, we should put some flowers on the grave and walk away.
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