Topic: . - page 7. (Read 67411 times)

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trade:[email protected]:PPT.B:1342147145

trade:[email protected]:PPT.B:1342147144

trade:[email protected]:PPT.B:1342147144

trade:[email protected]:PPT.B:1342147143

 

Did someone's bot break? 1.2 (1.206 with fee) is a 6.1% return for a little over a 3 week investment. There's 76 shares of PPT.A available for 1.15 and it matures a week sooner.

Back when PPT bonds were selling down to 1.01 and FOO.PPT was selling for 1.05 immediately after the bond issue, it almost was free insurance even when you take into account compounding. You have to look at it from the investor's perspective; regardless of how the back end of the bonds work they are getting a partially insured bond. It doesn't matter whether the backers use their own money or defer some of their profits to cover it. If the return if the same as other passthroughs without insurance, it essential is free. Even now, you get a 23% monthly return which is in line with the 30% or so compounded return you can get with the uninsured bonds if they think Pirate has a decent chance of defaulting soon.

And in a sick way, somewhat entertaining. 

Nah, but it was confusing.

One Love? Sry about the free insurance imo post, so peace guys.

I agree.
It's very odd that we got to a point where we are thanking each other

Thanks - that's a bit odd.

Thank you for your question.
The concept came from this post: https://bitcointalksearch.org/topic/m.1010355
About 5 pages back in this topic.

Curious, where did the concept of "free" insurance come up?  I don't recall our (PPT) ever saying it was free, and the premium paid is pretty open.  Plus, all (let me say that again - ALL) of the premium is paid to the myriad holders of PPT.DIV and does not go to replace the backing fund.

PPT bonds are not a long term investment, they are cyclic running on a 28 day cycle, and also provide access for those with a few coins to invest rather than hundreds.  They have a degree of liquidity some of the other schemes do not posses, and they suit some people better than others.

So to repeat: In the event of a BS&T default, the payout is an agreed value of 0.32 BTC per bond payable from the fund established by the six founders.  The cost of this payout is paid for buy the buyers of the bonds.  The benefit of the premium goes to the holders of the PPT.DIV shares.

Either you invest your capital in BS&T - or you don't.
In a short term you can buy some pity 25% insurance, but considering BS&T as a long term investment, the whole insurance idea becomes just a bunch of crap.
After a few weeks you realize that investing in BS&T is all about risk management and paying for this "free insurance" is just not worth it.
Unless you are the pirate's alleged wife, in which case investing in BS&T is not about risk management

People are actually undervaluing the insurance. If you purchase bonds for 1.05, you are actually getting an effective interest rate better than investing directly with Pirate. I'm guessing you probably don't agree with the previous statement, but if you want to see the math behind it, read up on my posts around page 25 of this thread.

But, but, the free insurance  

Yeah, actually if we can go back to the subject.
I don't think that this business will keep. Not at 1.04+
Despite of all the attacks I've had on me, I still believe that people are not that stupid

I'm very glad that I took you're advise here, 6 days & a million someone's wrong on the internet posts later that thankfully I haven't been engaged in or even read (where's the Phew! smiley), congrats btw at placing all of the last PPT issue soon after launch with the new minimum bid limit.

Since it's either paid for for them directly or on profit from funds in BS&T, either way they are out of the insurance fund + interest on it from a BS&T deposit.

So far as they earned less than 7% weekly on the profits from compounded interest/shares sale.

They do get CLOSE to 7% monthly (x4 for the four active PPT which makes it almost 7% weekly) for that risked money, making them earn almost as much as BS&T if they risked the money their directly, making it a small negative for them. And investors lose close to 7% monthly while getting 32% insurance.

In the end, investors do kind of pay for the insurance (less profit, but less risk), but that isn't in any way giving anything good to PPT issuers according to current profit numbers. Unless they would get a full interest equivalent on the risked insurance, they pay for your insurance a bit too.

I'm not disagreeing with the fact the lower returns PPT shareholders get pay for their insurance, just that PPT issuers cannot be claimed to have it insured for free by now. They have less for the same risk incurred than if they invested for themselves. Thus it has not been free for them to insure it.

But it's not free for the investors either indeed, although they paid less than the full insurance (the premium plus lost compounded interest is slightly less than the insurance put aside). PPT issuers lose interest on that small extra insurance margin not covered by shares sale profits.

Yes, I know - I haven't forgotten that.
Obviously for the first few weeks they were 100% exposed to BS&T default risk while earning far less than 7% from their deposit (know as "the fund).
And I do understand that taking that extra risk gave them a right to make bigger profits now, comparing to what the other PPT businesses are making per every deposited BTC.
But let's not go crazy - it wasn't that much of a risk, especially if you keep in mind that thanks to this "very lucrative business" they were given with 9000 of PPT.DIV shares later on, many of which got sold at 1+ BTC price.

If you plan to keep your funds in BS&T for as long as possible, until Pirate dies, then risking it for first 5-10 weeks at a lower rate just to get a 100% risk free returns later - for me it's more like insuring your own investment, that just looks like insuring others... Though it is all relative.

Holy moly reading this thread is like watching Groundhog Day.

You have not to forget that they reimburse the insurance by keeping extra money in and thus extra money in BS&T. They reimbursed it on that 7% interest, the insurance they paid not being able to earn any interest since it must be kept aside.

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They got less than 7% weekly on the insurance fund from selling the shares at a premium + keeping compounded interests while it was at risk (since it's the insurance, they would have lost 100% in case of default). Risking it in BS&T directly would have earned them more for the same risk.

They get 7% weekly by keeping these lesser profits and even depositing extra into the fund, effectively risking the amount in full (again only the shares part is insured, not any extra they have in there). This balance slowly earns them 7% per week at the same risk as any regular BS&T deposit.

Once those 7% cover with the interests the amount needed to insure the bond, they remove it from PPT
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They earn less than 7% on their insurance while it's at risk. They earn a full 7% by risking their profit in BS&T at full risk until that 7% eventually cover the insurance needed. They now retrieve fund.

No matter how fast they can earn the insurance back by having more deposited in it (and thus risked in BS&T), they always lose on the possibility from having earned more interest weekly on that insurance for the same time risked by having a deposit in BS&T for themselves.

Any extra they earned by keeping their profits or depositing extra funds in PPT shouldn't be considered since that amount is not covered by insurance, risked in full, and earning them the same 7% as any regular BS&T deposit. It's not paying them their insurance back for free, they holded the extra risk to earn it back just as any BS&T deposit earnings.