Topic: Gauging interest: PuppyBear bearish investment fund - page 2. (Read 2502 times)

I agree with your concerns, which is why I also dont expect to be shorting all that much all the time, but that should not stop us from trying.

Also, I think we can alleviate the perceived risk by finding a truly trustworthy escrow. I dont mean a reputable forum member (or it would have to be someone like Gavin himself), but didnt Tangible Cryptography offer escrowing services? Something like that is what I would want to use. Or Usagi. (j/k).

As for your third point; I kinda doubt it. Some investors might see the light of course, but its rather clear to me that most of them are easily blinded by high dividend payments, or they wouldnt be investing in the first place,  and if we offer even higher ones with a completely trustworthy escrow, there will be customers. Worst case, we find none at all, and we still end up with not losing a penny and therefore outperforming most other stocks

Those three reasons are part of why General Credit Corp exists.

However, GLBSE assets you'll be shorting seem likely to be such mindbogglingly worthless shares that even GCC might prefer not to actually have any on hand to loan. They might maybe though be interested in picking them up afterward if they can pick up >50% of the shares for less than the price of registering an asset, if owning a majority of the shares confers effective ownership/control of the asset. (Which I am not sure it does; I get the impression assets tend to dissolve instead of being picked up as cheap ready-to-run-with corps...?)

I guess the thinking that led to GCC figuring on owning lots of "worthless" altcoins maybe doesn't carry over to its also being potentially useful to own lots of "worthless" shares...

-MarkM-

I'm interested - but I think that the problem will be trying to find investors willing to loan their shares so as to short.

The problem is three-fold:

1.  You have to convince them that the deal is safe enough for them to take part in it.
2.  They believe you're wrong in shorting (or they'd sell the shares not loan them) and so they'll strongly believe it to be a scam.
3.  When you offer to borrow their shares to short (AND pay them for the privilege) the (luckily few) smart ones may look again at the share, realise why it's an obvious short and sell it rather than lend it.

Unlike most 'businesses' on here I can actually see profit potential in this one.

Im not too concerned by that. Remember, we would generally be short in GLBSE assets, and our actual assets would be bitcoins, most of them in escrow elsewhere or cold storage. If GLSBE would go tits up or get closed down, it would probably be the best thing that could happen to us. And if Nefario for whatever reason freezes only our account, there wont be much in it anyway.

That said, I do have a fair level of confidence in Nefario. He has made his mistakes, but generally I think of him as reasonable and fair. And I dont see why he would object to this project, it should help correct inflated prices and help provide early warnings for scams, thats not against his interests at all.

Not if it might miff "His Nibs"...

-MarkM-

I hadnt heard of it yet, I will check it out. But since the assets we would be most interested in  are traded on GLBSE, and we would need to sell them there anyway, it seems logical to host it there, no?

Is GLBSE really a platform you want to issue your asset on?

Sure it is a great place to short stuff, but need you base your own shares there?

A corp that specialises in shorting things sounds like a great potential customer for General Credit Corp; shorting is something I have been exploring for a while.

-MarkM-

Hi all,

Im gauging interest in a GLBSE bearish fund. This fund would be run on the assumption that nearly  everything currently on GLBSE will, in the long run, produce a negative ROI, as almost all the assets are overpriced, insolvent, a scam or (indirect) passthroughs to (other passthroughs to) overpriced assets, insolvent assets or scams.

The reason I believe this to be the case is that everyone is trying to “make his coins work for him” by investing and searching for the highest possible APR at a perceived risk level they deem acceptable, but the reality is that almost none of the companies listed on GLBSE create any added value that could sustain these returns.

Think about it, which company listed there offers products or services you are willing to pay for? Precious few. The vast majority (including mining bonds and companies)  only produce promises to generate you more coins than you put in. That obviously cant work, and therefore, a few small exceptions aside, the only ones that create "added value", create it for themselves, either as plain scams, or by issuing bonds/shares and taking their cut before their investors lose their principal due to their own or other assets crashing or defaulting.

Now, if you also believe thats true, you may wonder why do I start a fund and how on earth could it profit?  Bearmarkets are an opportunity too, especially if you are one of few to realize it and act on it. PuppyBear will try to short assets by borrowing them from other investors, provided there is enough liquidity to make it feasible and provided we can find willing investors to borrow them to us on acceptable terms. This would be our primary business.

PuppyBear will also try to identify small windows of opportunity to invest in, should they arise, even high risk ones, but we will generally hold most or even all of our assets in bitcoins, either as collateral for shorting or ready to be used  if/when an opportunity arises. Puppybear willl not try to invest in “the best of the worst” as all other investment funds seem to do. Puppybear realizes that its far better to have bitcoins and 0% APR  than a crappy investment that pays high dividends but ends up losing 10% per month. If there is nothing worth buying, we wont buy "nothing" (but we will try to sell short overpriced assets if we can).

Trying to preempt some questions.

Q What ROI  do you expect to achieve?
Let me put it this way: In the long run, I am convinced  we will provide a better ROI than ~98% of all other GLSBE assets. If you think thats a bold statement, its not and this fund is probably not for you, as  Im fairly sure that a cold wallet would have provided a better ROI than 98% of all investments on GLSBE over the past year. If we can beat a cold wallet, I will consider it a success. I am not going to guess by how much we can beat it, but I will take 1% APR over -10%.

Q will you run off with the coins?
Nope. I will get fully verified on GLBSE, and Ill be as transparent as I can be. If we short shares, the collateral will probably be put in a trusted escrow service. Im also thinking cold wallet bitcoin storage addresses will be provided to shareholders or made public.

Q What makes you think you are qualified?
It wont just be me, I assume anyone investing in this will  be “like minded”, so I will gladly listen to and consult with my shareholders to identify opportunities, whether it is for investing or shorting, or doing nothing. Unlike many other "CEO's", I realize the coins actually belong to you, the shareholder, so you will have your say. But never having been scammed once so far,  realizing whats going on GLBSE, and being able to perform first grade arithmetic with very few errors already gives me a clear leg up over 99% of the other “fund managers”. Iif you think Im not qualified, dont invest.

Q How would you structure the IPO, how would you structure dividends? What will the contract state?
I havent quite thought this through yet, and I wont until I see sufficient positive response. Im open to suggestions, though I certainly would avoid a never ending IPO like DMC. As for dividends, as I see it, dividends will only be paid if there are substantial and sustained profits, and after shareholders approval. Dividends will be the exception, like after we completed a very successful shorting, it wont be the rule, they wont happen daily or weekly.
Same goes for issuing new shares, only if shareholders approve it, and in a way that rewards early shareholders, rather than dilute them.

Q what will your cut be?
Up for debate.  Whatever it is, it will be humble and most of it should be performance dependent.  I dont think I should get paid a fat fee for losing your coins, most of you are quite capable of doing that yourselves without my help .