Why I Am Starting to Lose Interest in P2P Lending

"Losing interest" is a half pun because I am both losing interest (desire) and losing interest (yield). This is what happens to a peer-lending model as the portfolio ages and the defaults start to take over.

12% was the original pre-default target and 8-9% the post default target.  5% is more or less a hurdle rate. It is where I lose interest and start to think I have other options in the systematic alt world which I probably do.  The returns (blue line) are not simple arithmetic annualized returns, though that would have been easier and would have given a marginally rosier picture (not by very much). Returns, rather, are compounded month-over-month change in account value, that result projected to an annual horizon, and then that result mapped to linear returns at the end.  I may be wrong but I believe that is the right way to do it (per Meucci anyway).  The black line is a 12 month SMA. Any way you cut it I am losing steam....or maybe getting steamed.

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