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Thread: Harmoney

  1. #2911
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    Quote Originally Posted by icyfire View Post
    Only a few of the dodgy loans get mentioned on here. I come across similar loans information that simply doesn't make sense on a regular basis. Hopefully Harmoney fixes this problem as lenders will start loosing trust in their platform.
    Some 'Of Us' already have ;-)

  2. #2912
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    Quote Originally Posted by Saamee View Post
    Some 'Of Us' already have ;-)
    And went on to earn lower returns at other P2P providers

  3. #2913
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    Quote Originally Posted by Investor View Post
    And went on to earn lower returns at other P2P providers
    @investor > I'm sure you must be speaking for yourself ( but not for me! )

    My HM Rar is 11.74% where as over at LC it is 12.65% ( this month ) as I posted over at LC on 19 Dec 17

  4. #2914
    yeah, nah
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    LC NAR: 14.01% (no longer investing - various reasons)
    HM RAR: 17.84% (now have a second account for further investing)

    Everyone invests differently and makes different returns...even when people invest in the same 'grades' of loans the outcome will be very different...

  5. #2915
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    On Platform 1.5 I'm 12.8% RAR after just over 4 months.

    I have no trust in XIRR, so calculate my own adjusted version of RAR, which is at 11.87%:

    Number of individual units ($25 blocks) months paid: 504
    Number of unit months missed payment: 8
    Nominal interest rate (using WA) of those units: 18.34% (includes payment protect)
    Compound interest rate of those units: 19.96%
    Harmoney charges (currently @20%): -4.0%

    Expect defaults:
    -I have 8 arrears between 1-30 days, although HM only records 1. This includes a 10 day buffer (I ignore payments 0-10 days late). Zero 31-60 days.
    -Estimate the probability of default as 20% on 1-30; 70% on 31-60%; 100% 61+ days. This is applied against the outstanding sum (not the missed payment).
    - Giving expected defaults of: $220 (outstanding principal on missed payments) x 20% = $44
    Expect default RAR impact: - 4.1%

    19.96%-4%-4.1% = Overall 11.87%


    Will be interesting to see how it pans out, I've increased my risk mix (more CDEFs), so expected return on all loans with or without payments calculates to 22.7% compounded. With the likelihood of increased arrears I'm hoping my adjusted RAR can stay above 12%

  6. #2916
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    Quote Originally Posted by leesal View Post

    I have no trust in XIRR
    lol wtf

    Xirr is the best measure of almost any investment, especially here. Its literally when your money goes in vs when it comes out.
    Its especially good for Harmoney when your deposits and withdrawals and tax returns can be at random intervals.

  7. #2917
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    Quote Originally Posted by alistar_mid View Post
    lol wtf

    Xirr is the best measure of almost any investment, especially here. Its literally when your money goes in vs when it comes out.
    Its especially good for Harmoney when your deposits and withdrawals and tax returns can be at random intervals.
    Ok if you put it like that I'm calculating it the wrong way. Will try another

    Download the latest statement "transaction detail". Dates in one column, cash outflows in the other, total balance at the end. Gives 11.70% If I factor in an estimate of defaults from arrears 8.2%.

    Does that sound right?

  8. #2918
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    Tomorrow is my 2-year anniversary in the platform. I put $75,500 in there and I keep pretty much exactly that in there, pulling out any profit to put into LC for diversification (currently at 14.1% there with no losses).
    So you can compare:
    2900 loans (no auto-invest)
    Just over $200,000 of loans funded
    $6900 written off
    $163 in arrears
    $46 recovered...hopefully selling the debt might improve that
    $31600 interest received
    14.9% at the moment (was as high as 17% about 8 months ago and has been down as low as about 14.4%).
    I was investing in all grades (selectively) but now don't. My target is 15% gross.
    Actual return (excluding writing off the losses) is around 8.8% nett, not counting the 3 months it took me to get the whole $75k invested.

    I'm happy with the platform, despite the losses. It's just a portion of my overall investments, not the whole shebang.

    I claim my losses as I treat it like a business, evaluating and manually investing, and my accountant is comfortable with that.

  9. #2919
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    Quote Originally Posted by leesal View Post
    Ok if you put it like that I'm calculating it the wrong way. Will try another

    Download the latest statement "transaction detail". Dates in one column, cash outflows in the other, total balance at the end. Gives 11.70% If I factor in an estimate of defaults from arrears 8.2%.

    Does that sound right?
    Yeah that sounds pretty legit

  10. #2920
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    Quote Originally Posted by darrenc View Post
    Tomorrow is my 2-year anniversary in the platform. I put $75,500 in there and I keep pretty much exactly that in there, pulling out any profit to put into LC for diversification (currently at 14.1% there with no losses).
    So you can compare:
    2900 loans (no auto-invest)
    Just over $200,000 of loans funded
    $6900 written off
    $163 in arrears
    $46 recovered...hopefully selling the debt might improve that
    $31600 interest received
    14.9% at the moment (was as high as 17% about 8 months ago and has been down as low as about 14.4%).
    I was investing in all grades (selectively) but now don't. My target is 15% gross.
    Actual return (excluding writing off the losses) is around 8.8% nett, not counting the 3 months it took me to get the whole $75k invested.

    I'm happy with the platform, despite the losses. It's just a portion of my overall investments, not the whole shebang.

    I claim my losses as I treat it like a business, evaluating and manually investing, and my accountant is comfortable with that.
    whats your Xirr purely of the timings of money in and money out?

  11. #2921
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    Platform RAR dips below 11%. Reflective of lax credit performance (quality control!) and v1.5...

  12. #2922
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    Still have issue with XIRR:

    Unfunded pp shouldn't be included, likewise WHT. RAR has a common methodology, aiding comparison between portfolios. Those putting up XIRR returns cannot be consider reliable unless methods can be verified.

    XIRR doesn't correctly handle part period, accrued income. eg below gives XIRR of 7.2% (should be 11%).... XIRR incorrectly assumes returns for loan1 generates zero cash for 8 days, loan2 nothing for 21 days


    1/1 30/1 15/2 28/2 8/3
    loan 1
    principal -1000 23.93 24.13
    int 10% 8.33 8.13
    princ out 951.93
    loan 2
    principal -1000
    int 10%
    princ out 1000
    cashflow -1000 32.26 -1000 32.26 1951.93
    Last edited by leesal; Yesterday at 10:19 AM.

  13. #2923
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    Why do you think it should be 11%?

    What are you doing with the returned principle - reinvesting, holding, or withdrawing?

    You have 1000 invested for 66 days ($16.46 return) and 1000 invested for 21 days (no return). If you weight that out for an annual return for both it comes to around 7%? XIRR is probably not the best thing to use for such a small sample...

  14. #2924
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    Quote Originally Posted by leesal View Post
    Still have issue with XIRR:

    Unfunded pp shouldn't be included, likewise WHT. RAR has a common methodology, aiding comparison between portfolios. Those putting up XIRR returns cannot be consider reliable unless methods can be verified.

    XIRR doesn't correctly handle part period, accrued income. eg below gives XIRR of 7.2% (should be 11%).... XIRR incorrectly assumes returns for loan1 generates zero cash for 8 days, loan2 nothing for 21 days


    Its like you are living in the upside down world from stranger things.

    Xirr cannot be verified? I don't think you know what IRR or XIRR does and what it measures.

    Harmoney can tell you that you have a certain RAR, you can get all confused with money you have put into loans and then the dead period of the money being in there but not recieving an interest payment yet, all that stuff.

    Xirr on the other hand is the simplest most legit measure there is. Its simply the timing of cash in vs cash out. Nothing more nothing less. Thats as real as it will ever get despite what Harmoneys internal reporting might try and tell you.

    my RAR is 14.5%, my Xirr is 7%. I trust the Xirr.

    The only issue is how to handle the outstanding principle. I just treat it as an outgoing cash as at the last date.

    {edit} the example is an old one when I had a good XIRR, its now gone to ****e as I have had a lot of my E's defaulting. As I said my Xirr is now 7%, and the calc is too big to screen shot
    Attached Images Attached Images
    Last edited by alistar_mid; Yesterday at 11:07 AM.

  15. #2925
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    Quote Originally Posted by alistar_mid View Post
    Its like you are living in the upside down world from stranger things.

    Xirr cannot be verified? I don't think you know what IRR or XIRR does and what it measures.

    Harmoney can tell you that you have a certain RAR, you can get all confused with money you have put into loans and then the dead period of the money being in there but not recieving an interest payment yet, all that stuff.

    Xirr on the other hand is the simplest most legit measure there is. Its simply the timing of cash in vs cash out. Nothing more nothing less. Thats as real as it will ever get despite what Harmoneys internal reporting might try and tell you.

    my RAR is 14.5%, my Xirr is 7%. I trust the Xirr.

    The only issue is how to handle the outstanding principle. I just treat it as an outgoing cash as at the last date.

    {edit} the example is an old one when I had a good XIRR, its now gone to ****e as I have had a lot of my E's defaulting. As I said my Xirr is now 7%, and the calc is too big to screen shot
    If your E's are defaulting, I'm completely screwed - 60% DEF in my portfolio.

    Thanks for that example. Unfortunately it confirms to me the knowledge on IRR (or excel XIRR) here is not good. No disrespect. Your figure of 7% is not reliable, and I am 100% certain of it.

    Rather then explain what you are doing wrong, it's easier to provide a tool to calculate your actual XIRR.

    Instructions

    1. Download your transaction statement(s). It should contain everything back to your very first deposit. Copy across your full "transaction history" into cells A to J in chronological order
    2. Drop the formula's in column K:O down (highlighted in green)
    3. In cell R1 - enter an estimate of your mid month outstanding principal - eg if you are downloading transactions to dec17 use the outstanding principal figure as at 15-Dec
    4. In cell R2 - enter your average interest rate (grossed up for PP interest if you like). A rough estimate would probably be fine here.
    5. Cell R3 - enter any additional provision you wish to make for the $ value of outstanding premiums in arrears that you believe will turn into charge-offs. If you don't know what to do here, just enter 0.

    Simple and your XIRR will be displayed in cell R4.

    What this will provide, is a XIRR that is tailored to Harmoney. ie strips out WHT, properly accounts for PP and correctly accrues period income.

    FYI, my XIRR as at 31-Dec is 12.3% (or 14.8% if provision for arrears to default is set to 0).
    Attached Files Attached Files

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