Quote Originally Posted by permutation View Post
It certainly is OUCH!!
Not questioning your numbers, but I'll put a quick example together that you might be able to poke holes in - a lot of assumptions I know:

95 loans at E and F - lets say on average 25% interest annually and $100 on each loan for simplicity.

Total investment 95 x $100 = $9500

13 defaults - lets ignore interest gained prior to the default, which could be significant:

13 x $100 = $1300 principal lost

Assume average payout is only 2 years - could be significantly more or less?

95 - 13 = 82 loans
82 loans at @25% per year for 2 years = (82 * $100) * 25% * 2 yrs = $4100 interest

Less lost principal from above = $4100 - $1300 = $2800 gain over 2 years

$2800 gain over 2 years from initial investment of $9500 = $2800/$9500/2 = 14.7% return (ignoring fees and tax)

Not an ouch? I must be missing something fundamental?