Harmoney

[IntheRearWithTheGear]

Current stats out of interest by dollar value.

Arrears	1845	2.03%	58
Current	85121.1	93.67%	2210
Hardship	3362.36	3.70%	76
Protect Waiver	545.48	0.60%	13
	90873.94		2357

[joker]

Current stats out of interest by dollar value.

Arrears	1845	2.03%	58
Current	85121.1	93.67%	2210
Hardship	3362.36	3.70%	76
Protect Waiver	545.48	0.60%	13
	90873.94		2357

Interesting figures...what is your charge-off $ as a percentage of gross interest $?

[IntheRearWithTheGear]

20k gross write offs / 93 gross interest received so far. Theoretical Rar of 11.6%. I dont claim the write offs in regards to tax.

[joker]

20k gross write offs / 93 gross interest received so far. Theoretical Rar of 11.6%. I dont claim the write offs in regards to tax.

Thanks IRWTG. That's 21.5% of gross interest lost to charge-offs.
Mine is $3,273 charge-off v $23,219 gross interest so 14.1% of gross interest lost to charge-offs. RAR 11.96%. I claim the write-offs against tax.

Personally and compared to industry expectations, this level of charge-offs is most unusual. Higher interest rates may cover some of it but now that investing in Harmoney has stopped, loans are getting older with more still to be charged-off but no fresh investments to haul the figures back (remember that generally loans last 6+ months before recording as charged-off). My RAR has been falling slowly but steadily since investing stopped and I suspect the trend will continue until all loans are repaid/charged-off.

By comparison, my Lending Crowd loan book (which I stopped all new investments in March) shows a gross interest lost to charge-offs (including collection fees) of 5.1% and a RAR of 12.32%.

[IntheRearWithTheGear]

In my case my idea was to get the money into the system and diversify it across as many loans as possible, and to keep any returns bouncing from loan to loan, as harmony loans never seemed to go fill term (people prepay etc). So i never had a large cash balance at hand.

Having money sitting around waiting for "ideal" loan - was not my plan. Near the end of harmony - they just did not have
enough inventory of loans over different ratings to invest in (available to "retail" that is).

A good majority of loans should be 1 year ++ for me - as harmony really did slow down near the end for at least a year or so - so defaults should
be flushed through the system as such.

Harmony to me was a diversification strategy as im invested in real estate, shares etc. Ie too risky put more into housing, too risky to put more into shares, so what else was there. Lending crowd were late to the party - hence i never looked at them (maybe good/maybe bad - i dunno). I had a look at squirrel, but too complex. Too me harmony had first to market advantage.

At the end of the day, i dont know what harmony will bring, but most likely it will be better than bank interest rate (obvious higher risk).

Obviously with the grey swan(not black but grey) event - everything changes, and maybe i will be lucky if i get some of my monies back - given that they (harm) appear to want to sharemarket list - it looks good.

[myles]

Interesting to see the difference due to different strategies.

My strategy was a little different again.
Gross Interest: 76.5K Net Charge-Off: 14.4K So 18.8%
However, my RAR has remained reasonably stable and is still at 15.02%.

The difference is that I believe I took a fair portion of better (more likely to repay), higher interest rate loans, so expected a higher Charge-Off rate, but with a higher return overall. So far this appears to be the case when comparing to you two? I've said before on a few occasions - you can not just compare Gross Interest vs Charge-Off between loan sets for this reason.

[IntheRearWithTheGear]

I dont think you can judge better than the harmony system - who will pay or not. (given that you got 15.02% kinda proves me wrong) - so i dont know, but in general i dont think its possible - when dealing with large amounts of loans - its purely a numbers game.

The system has more data points than they exposed to us - perhaps credit rating etc - which we dont get to see through the front end ( you could always right click and see it though) - how can you make a better decision with less information?.

As i said before the textual note information provided by the borrower is possibly not calculated in their algorithm - so perhaps that's the human advantage in prediction of which loans go belly up based on borrowers loan description notes - and maybe accounts for extra 3% - but its not game changing.

I think harmony just had a large corpus of finance company data which they sliced and diced into various loan categories each giving an expected range of returns - which they then creamed off the top for providing the service - so long as a punters took a diversified portfolio of those loans we would all end up at the same place. Kinda like how a casino wins.

the chart on this page seems to point that way ?

https://www.harmoney.co.nz/investors...ace-statistics

there is very little spread once you get over a certain loan number.

[myles]

when dealing with large amounts of loans - its purely a numbers game.

I think this only holds true when, to keep up to a large $ investment in loans, you have to select ALL of the loans - then you get the average.

I approached it differently, keeping to a choice of loans, the ones I believed where 'better', and increasing the amount invested in each loan. I suspect many started taking on loans that they were not happy to take on, to keep $'s invested, rather than increasing the amount in those loans they were happy to take?

I think my results show that you can indeed beat the house if you can work out how to play the system?

[Toukshare]

I think my results show that you can indeed beat the house if you can work out how to play the system?

Or rather than beating the house, you just have to beat the other investors.... a bit like the old saying "when in a group chased by a bear, you don't have to outrun the bear, just outrun the slowest runner".

If your RAR is better than the average, and your charge-offs are better than the average, then it proves you have done better than the other investors (on average).

[BJ1]

Attachment 11925
Just for comparison. I topped out at $120k and been falling away rapidly since Harmoney started refinancing retail loans for themselves. Currently getting $4,000 per month cash back.