Originally Posted by
Cool Bear
You are right. It is like investing in the stock market. Every one try to beat the index but the index is the sum average of everyone's performance.
Harmoney RAR is that sum average.
I think I have a wonderful set of criteria for choosing loans. But everyone else investing in Harmoney think the same too. So, all our individual RARs will much depends on Harmoney RAR with in turn is largely affected by the interest rate they set and the number of defaults in the end. So, their system of approving of loans and assigning of grades to each borrower (thereby setting the interest rate) is the most important factor in all our performances.
So, those investors that have just a few hundred loans may have RARs that are much greater or lower, but if you have 1000's of loans, it will be hard to be very different from that mean.