Topic: [BTC-TC] Deprived Mining Speculation (DMS) - page 76. (Read 198958 times)

Main argument I've seen from him is that it has more price volatility - by which I assume he means its price is more likely to drop to realistic levels because people who don't already hold shares can push it down.  But that's irrelevant to actual investors - who buy for the dividends (which are unaffected by its price) - and in fact is beneficial for them as if they believe the price is already good then if it gets pushed lower they get to buy more at an absolute bargain price.

Where MINING isn't so good is for those who want to rely on the price not dropping as dividends pay out (logically with difficulty increasing the price of MINING should fall - slower than dividends pay if it's profitable, faster if it's unprofitable).  But those are speculators not investors - they're gambling on market behaviour rather than relying on the underlying value of the asset.

And logically if the price of MINING falls and that of other PMBS doesn't then there's no actual extra value being retained in the other PMBs - just a longer window in which the current holders can pass on the over-priced element (be it less profit or more loss) to new ones.  Eventually some poor sod is going to lose out by the amount by which the PMB was over-priced compared to MINING - it just changes who from the current owner to the next.  The investment remains equally as bad (compared to a cheaper MINING) for ALL owners of it added to together - it just distributes the loss (or reduced profit) from overpaying less equitably.

I always get a kick out of Furuknap's borderline absurd explanations of what supposedly makes DMS.Mining so much different than other mining bonds....to paraphrase "it pays the same and acts the same, but its different because people can bet against it." (which in this case really means that its actually secured by funds to pay >1 yr of divs)

Yes, curious timing for shopping on mining securities ...

Lots of buys on Mining today, even. 24h Vol is ~1800 and most of those are Market Buys...

More amusing is that people still buy other PMBs/similar for even more than MINING.

Remember that there's no increase in difficulty that makes MINING (or any PMB) worthless - people just have to find the right price to buy at.  Is the current price a fair one?  That's for people to decide themselves - in general those buying think it is and those selling think it isn't (and some in both categories probably don't think at all - they just click buttons effectively at random and hope they end up with profit).

Difficulty is going up of about 20% within a few days.
SELLING dividend coming, i bet.

That said, people still buy MINING ...

Right on both points.

Yesterday was second time I (briefly) noticed that trades in the direction you point out were profitable (or arbing in other direction made no sense).

There have also been a few occasions when it was cheaper to buy a SELLING+MINING than to buy a PURCHASE (of course PURCHASE still sold despite that) - which would also automatically meet the condition of buying SELLING making more sense.  Such opportunities don't tend to last long of course.

Whilst theoretically buying PURCHASE gives a small increase compared to arbing, that difference is absolutely minimal (as its split between 30k+ shares) so can be discounted for practical purposes.

Curiously, for the first time since I've made this spreadsheet, the arbitrage on buying PURCHASE and selling MINING over buying directly SELLING is negative (i.e. it is more convenient to just buy SELLING).

However this is not taking into account that buying PURCHASE increases a small bit the total assets, which is something you want if you plan to hold SELLING, right?

Understood! 

Thanks for explaining.

Yes - all profits from investments are included in NAV and add to the next SELLING dividend.  When we made 3 BTC on J-D yesterday that added 3 BTC to the total amount of dividend SELLING will receive in a few days (it looks safe to assume SELLING will get a dividend).

You can see how this has effected things from the daily reports.

After last SELLING dividend NAV was exactly (to a few decimal palces anyway) 400 days of MINING dividends.
There have been 9 days of MINING dividends since then.
But NAV/U at present is still 395.94 days of MINING dividends - its only fallen by 4.06 days not by the 9 it would have fallen by were it not for our investments (and the profit from selling new PURCHASE).

That means that the next dividend per share for SELLING will be 4.94 MINING dividends larger than it would have been if it wasn't for the various profits.  That's 0.0005822284 SELLING will get in its dividend that it wouldn't get without investments/markup on PURCHASE.  Or an extra 20.6 BTC in total that will get paid out.  I can't give the exact breakdown easily, but I'd say just over half of that is from investments and the rest from the markup on PURCHASE.

No matter if they're in the BTC-TC balance or not, the NAV/U is calculated using Total Assets across all invesements/BTC balances.

Right - there's no such thing as unrealised profits with Just-Dice (in any meaningful sense).

Our balance there gos up when the house wins (and down when it loses) - profit isn't stored or treated any differently than your initial investment (minor exception in how its treated for dooglus taking own cut but I move our profits out and back in to remove that effect which is theoretically slightly -EV for us but makes the accounts more accurate).

Unrealised profits doesn't refer to a changing cash balance - but to an asset which has a higher value than you bought it for, but where there's no guarantee of that higher price remaining available if you don't sell.  That's not the case here OR with Coinlenders.

Consider we have a balance of 107 BTC at J-D - of which 100 is our initial deposit and 7 is profit.
If we withdrew that 7 profit to our wallet then redeposited it in J-D as fresh investment what would have changed?  Absolutely nothing - as there's no process of 'realisation' associated with the balance that makes the profit element any less (or more) secure than the capital element.

The same's true with Coinlenders - our CD is displayed with a value which is our initial capital + interest due to date.  NONE of that can be withdrawn (until the end date of the CD - at which point ALL of it can be taken out).  All of it is equally at risk (CP exposure) but none of it is unrealised (as there's no action I can take to 'realise' or 'unrealise' the profit).

If, for example, I could sell LTC-ATF.B1 on the market for 10% over face value then that 10% profit WOULD be unrealised profit - as we have no entitlement to it just an opportunity to realise that profit if we choose.  Nothing DMS holds is valued including unrealised profit of that nature.  I don't even mark holdings of LTC-ATF up for unrealised profit other than on pass-throughs (where I need to reflect market prices in my spread-sheet for management of the pass-throughs themselves) and VERY rarely (once or twice in 9+ months of operation) for holdings that are explicitly disclosed as being long-term in nature.

With J-D you could correctly argue that the profits are exposed to risk beyond just C-P risk (they can be lost if the house loses),  However that is NOT because they're unrealised - but because we've chosen to continue to expose them to the same risk (and potential gain) as our initial deposit there.

Thats obvious. Question is, if we made a profit at just-dice, should we pay it out to ourselfes at some specific point? (Not the whole investment, only the profit)

Won't the profit be included in the coming SELLING dividend?

Pretty sure the profit is already factored in, which explains why the just-dice and coinlenders numbers have grown from their respective 100 and 200 BTC numbers.

But if you would cash out the profit, it adds to our balance (and that's your wallet not someone else's).

Everything we have is unrealised all the time it's sitting in someone else's wallet.

Do you cash out just-dice profits in a specific interval or is this unrealised profit?

Sold   1279
Swapped   0
Total   1279
Price   0.048994
Total   62.663326
Less Fee   62.53799935
Man Fee   1.87613998

BTC Balance (BTC-TC)   1253.41577
12600 LTC-ATF.B1    126.00000000
Coinlenders CD    201.24372250
Just-Dice Balance    106.95438926
TOTAL ASSETS    1,687.61388221
   
Outstanding MINING   35437
Outstanding SELLING   35437
Outstanding PURCHASE   637
Effective Units   36074
   
Block reward   25
Difficulty   21,335,329
Hashes per MINING   5000000
   
Daily Dividend    0.00011786
50 days (Min Liquid)    0.00589288
100 days (Forced Close)    0.01178577
365 days (Buyback)    0.04301806
405 days (IPO)    0.04773236
400 days (Post SELLING div)    0.04714308
410 days (Pre SELLING div)    0.04832165
   
NAV Post MINING Div    1,683.36228392
NAV/U Post MINING Div    0.04666414
Days Dividend Post Div   395.94
SELLING Dividend    -         
NAV Post SELLING Div    1,683.36228392
NAV/U Post Selling Div    0.04666414
PURCHASE selling price    0.04899735
PURCHASE buy-back price    0.04573086

Thanks to high profits on Just-Dice, sale of 500 more LTC-ATF.B1 at a profit and high sales of PURCHASE we actually grew in NAV/U today (albeit by a tiny amount) even after paying the MINING dividend.

Thank you for the explanation!  Now I know how Coinlenders works.
I learn someting from you everyday in the forum.Thank you again, Deprived.

It shouldn't be too hard to use the API and build an auto transfer bot.