| A bit more courtesy would have been welcome. You sound very condescending. And I hope you talk to your clients in a different way! Let me address your methodology comments nonetheless, which are for the most part unfounded. * I don't have any finding about annual income. I don't think it is mentionned anywhere in my conclusions. * "delinquencies and public records has a big impact on returns as newer loans are not aged enough": because I average across vintage, and because I don't average based on volume on the platform, I account for the aging biais. * "Time is not risk [..] kurtosis etc.": I don't say that time is risk. I suggest the reader to look at the return series through time. Essentially to look at the volatility of the returns ( without pronouncing the word volatility to keep the content accessible to a novice reader). I essentially encourage the reader to visually assess his Sharpe ratio. Which is a good universal risk measure. * "reconsider average across vintage": averaging across vintage is a first approximation. I acknowledge the fact that a better methodology would be to take a weighted average that matches the amortization profile of a loan. * I maintain that any statistics you compute in 2006, 2007 or 2008 is less reliable (statistically). Yes it is an important period to have because of the crisis. And this is why I put on the chart. However, you can't compute very reliable returns when you have a dozen of loans to average across. Anyway, I happy to exchange with you in PM on methodology if you would like to continue the discussion |
Once again, I will stress, you need to reconsider your methodology if you want to learn.