Well LTC just went through the $1 USD mark (and is well up vs BTC as well). So we're decently into loss for the week. Hopefully that continues - I'll happily take a small drop in NAV in return for a large rise in LTC.
Bid will obviously drop as LTC rises. This is the sort of loss I LIKE making (we are actually up 0.5% or so from trading but that's wiped out by the 30% rise in LTC).
Topic: [LTC-GLOBAL] LTC-ATF - page 6. (Read 25457 times)
WEEKLY REPORT
LTC fell vs BTC for most of the week but has risen towards the end, finishing very slightly above where it was last week. We made just under 2.5% profit this week - that would have been nearly 3% but for the small rise in LTC.
For much of the week we were at significantly higher profit - but then two apparent defaults occurred on Bitfunder wiping most of it out.
The single largest threat to our growth has always been default by asset issuers. I've mentioned a few times before that sooner or later one or more will default causing us significant loss - and this week it happened. This is bound to happen because a part of my strategy involves bids placed to catch panic sells. Those CAN be very profitable - but it also opens the door to shares being dumped on us when an operator defaults and decides to steal extra by selling shares. My view remains that the benefits of this far outweigh the downside to us - so long as we make a profit from it more often (and larger) than we make a loss it continues to be a viable and profitable part of our activity.
Whilst I don't usually disclose the securities we invest in, I think it only fair to disclose them when they incur significant loss for us. So here's the two that hurt us a bit this week.
BAKEWELL
Asset issuer has proven in the past to be somewhat less than honest, bad at dealing with problems and unreliable. In many ways that's made his asset perfect to trade in -as people panic sell, can't properly value it and the spreads are massive.
Recently he took out personal BTC-denominated loans (supposedly) to invest in some fiat-denominated business opportunity. With the massive rise this month in BTC he's obviously screwed. This week he dumped shares that belong to the company NOT him into low Bids - including some of ours. He hasn't shown his face since.
I don't believe he intended to scam/steal - just got in well over his head. But the end result is the same.
We pretty much dodged the bullet on this one. Although we got sold a bunch of shares, someone then placed up a Bid at well over what we paid. So we filled that, dumped the rest cheap and came out of it with only a small loss.
In the past we've made a LOT trading this share - including getting dumped shares at a stupidly low price that we sold off for a 900% profit.
If price drops low enough I may still buy back in.
ZIGGAP
A money-exchange website that clearly had serious problems and financial incompetence from the start. I've traded it pretty profitably for us previously - that someone is doomed isn't a reason not to trade it, just a reason to get out of it in time. I got the timing wrong on this. My calculations had indicated that the shit wouldn't hit the fan for them until at least mid-April. I was wrong - clearly there were non-visible factors I hadn't factored in (e.g. some share-sales were faked so didn't raise capital, they had other undiclosed debts etc).
This week someone dumped shares at tiny prices - including a good sized bunch into our orders. On quick investigation it was obvious it was the asset issuer. Their website had been non-functional for much of the week (unfortunately I hadn't realised this) and they missed a dividend payment at around the time of the dump. Dumping those shares was totally against the contract - which specified a minimum price for further shares to be sold at.
Issuer has logged in since but not posted.
The main reason our profits are depressed this week is because I applied a very large write-down on the value of these shares. The price hasn't totally collapsed yet - Asks are still well above what we paid, let alone what they're now marked down to. I would have written them down even further were it not for the fact that the website is now back up and functional and there's some signs of life. I don't believe this company will be viable as an investment (there's structural faults in their plan and a total lack of understanding of exchange-rate risk/mitigation) - but if they make ANY sort of positive announcement there'll be enough idiots around for us to get rid of our remaining holdings without further lossm probbaly at a profit to current book value and quite feasibly at a profit to what we actually paid.
Without the write-down of these, we'd have been up around 6-7% this week. If the issuer totally fails to return then profits will be reduced again next week by writing them down to near zero.
I'm less inclined to dump these for cheap as I did with the Bakewell ones - as issuer has some credibility in the community which they'll likely exploit to delay their collapse (and allow us to exit with profit). I expect some vague announcement about unspecified problems which are being resolved and an assurance that everything will be OK : which should generate enough Bids for our purpose.
ODDS AND ENDS
Trading on LTC-GLOBAL is especially tricky at present. LTC is rising vs both BTC and Fiat and the vast majority of securities on LTC-Global are effectively denominated (either in full or in large part) in one or the other of those. So profits there are slim at present. We're now very heavily into default country - the sharp price in both BTC/LTC vs USD has meant there'll be plenty of issuers around with debts denominated in BTC/LTC that were used for fiat purposes and are now very hard for them to repay. I'll be exercising more caution than usual in trading - and would advise everyone else to do the same.
Management fee this week is 1 unit.
Bid at : 62.2
LTC fell vs BTC for most of the week but has risen towards the end, finishing very slightly above where it was last week. We made just under 2.5% profit this week - that would have been nearly 3% but for the small rise in LTC.
For much of the week we were at significantly higher profit - but then two apparent defaults occurred on Bitfunder wiping most of it out.
The single largest threat to our growth has always been default by asset issuers. I've mentioned a few times before that sooner or later one or more will default causing us significant loss - and this week it happened. This is bound to happen because a part of my strategy involves bids placed to catch panic sells. Those CAN be very profitable - but it also opens the door to shares being dumped on us when an operator defaults and decides to steal extra by selling shares. My view remains that the benefits of this far outweigh the downside to us - so long as we make a profit from it more often (and larger) than we make a loss it continues to be a viable and profitable part of our activity.
Whilst I don't usually disclose the securities we invest in, I think it only fair to disclose them when they incur significant loss for us. So here's the two that hurt us a bit this week.
BAKEWELL
Asset issuer has proven in the past to be somewhat less than honest, bad at dealing with problems and unreliable. In many ways that's made his asset perfect to trade in -as people panic sell, can't properly value it and the spreads are massive.
Recently he took out personal BTC-denominated loans (supposedly) to invest in some fiat-denominated business opportunity. With the massive rise this month in BTC he's obviously screwed. This week he dumped shares that belong to the company NOT him into low Bids - including some of ours. He hasn't shown his face since.
I don't believe he intended to scam/steal - just got in well over his head. But the end result is the same.
We pretty much dodged the bullet on this one. Although we got sold a bunch of shares, someone then placed up a Bid at well over what we paid. So we filled that, dumped the rest cheap and came out of it with only a small loss.
In the past we've made a LOT trading this share - including getting dumped shares at a stupidly low price that we sold off for a 900% profit.
If price drops low enough I may still buy back in.
ZIGGAP
A money-exchange website that clearly had serious problems and financial incompetence from the start. I've traded it pretty profitably for us previously - that someone is doomed isn't a reason not to trade it, just a reason to get out of it in time. I got the timing wrong on this. My calculations had indicated that the shit wouldn't hit the fan for them until at least mid-April. I was wrong - clearly there were non-visible factors I hadn't factored in (e.g. some share-sales were faked so didn't raise capital, they had other undiclosed debts etc).
This week someone dumped shares at tiny prices - including a good sized bunch into our orders. On quick investigation it was obvious it was the asset issuer. Their website had been non-functional for much of the week (unfortunately I hadn't realised this) and they missed a dividend payment at around the time of the dump. Dumping those shares was totally against the contract - which specified a minimum price for further shares to be sold at.
Issuer has logged in since but not posted.
The main reason our profits are depressed this week is because I applied a very large write-down on the value of these shares. The price hasn't totally collapsed yet - Asks are still well above what we paid, let alone what they're now marked down to. I would have written them down even further were it not for the fact that the website is now back up and functional and there's some signs of life. I don't believe this company will be viable as an investment (there's structural faults in their plan and a total lack of understanding of exchange-rate risk/mitigation) - but if they make ANY sort of positive announcement there'll be enough idiots around for us to get rid of our remaining holdings without further lossm probbaly at a profit to current book value and quite feasibly at a profit to what we actually paid.
Without the write-down of these, we'd have been up around 6-7% this week. If the issuer totally fails to return then profits will be reduced again next week by writing them down to near zero.
I'm less inclined to dump these for cheap as I did with the Bakewell ones - as issuer has some credibility in the community which they'll likely exploit to delay their collapse (and allow us to exit with profit). I expect some vague announcement about unspecified problems which are being resolved and an assurance that everything will be OK : which should generate enough Bids for our purpose.
ODDS AND ENDS
Trading on LTC-GLOBAL is especially tricky at present. LTC is rising vs both BTC and Fiat and the vast majority of securities on LTC-Global are effectively denominated (either in full or in large part) in one or the other of those. So profits there are slim at present. We're now very heavily into default country - the sharp price in both BTC/LTC vs USD has meant there'll be plenty of issuers around with debts denominated in BTC/LTC that were used for fiat purposes and are now very hard for them to repay. I'll be exercising more caution than usual in trading - and would advise everyone else to do the same.
Management fee this week is 1 unit.
Bid at : 62.2
WEEKLY REPORT
Proft was a bit slimmer this week than it has been recently - 9.86% actual growth with an estimated 5.53% from trading and the rest resulting from LTC losing some ground vs BTC. There's a few reasons why trading profit is significantly down:
Still perfectly respectable results which I'd happily take every week if they were offered.
OP UPDATED
I've updated the OP with a current set of all results to date. I've also added in a summary section showing the overall performance of the fund to date - we've now been running for almost exactly 6 months.
This new table was prompted in part by the accusation (responded to slightly earlier in this thread) that I was out-pirating Pirate. The existing detailed results don't actually measure the real profit to date (there's no figures or averages in it showing post-fee returns) so I was interested to see just how close we were to matching the 7%/week Pirate offered. To date the fund has actually grown by MORE than 7% per week (in LTC) and if you were to consider how BTC invested at the start would measure up now, they'd have been making just under 11.5% per week.
Don't take the projected APR in that table seriously - whilst it IS the growth that would be delivered if historical growth rates continued that is NOT going to be the case. I don't pretend to be able to predict what growth we'll achieve in the future but I don't see ANY way it could continue at the current speed.
REPURCHASE UNITS / RESALE OF SAME
This week a further 134 units were sold back to the fund. I would guess these were sold back because the seller(s) wanted to cash out whilst LTC was high - a sensible move if they believed it likely to fall heavily vs BTC and/or USD. I think it's likely badly timed if so - the previous seller last week had much better timing in my view.
Where does that leave us in terms of capital?
Well, right now our bonds are equal to 62.5% of our NAV - so we're in great shape. And I don't see any likely need to issue a significant amount more bonds in the immediate future (we could maybe use another 10-15 BTC on BTC-E to maintain flexibility and ease currency balancing when the exchange-rate moves). The problem is that it's hard to tell which way LTC will move next - it's been making a half-hearted attempt to rise (on pretty low volume) but could equally easily fall back to .005 or lower (it dipped there briefly once in last few days).
We certainly don't need to reissue all those 134 units - but my view is that reselling some would be prudent to avoid any risk of needing to sell more or forcibly recall bonds in the event of a mini-collapse of LTC.
I will therefore be listing 50 of them on the market at a markup of around 25% above NAV/U. As we have no urgency to sell them there's no reason to sell them cheap. If LTC does fall sharply then I can always lower the price. If they don't sell and LTC doesn't fall much (or at all) then I can take them down once we've grown enough more that there's no longer a useful function served by selling them.
Even if they sell, we'll still have less units outstanding than BEFORE I sold the 100 a few weeks back : our growth since then has meant we no longer need the entirety of that expansion, so it's all working out rather well for us.
To be crystal clear, the units sold back to the fund were NOT mine. I've never sold units back to the fund (only small numbers of units at high markups via Asks). At present I own over 50% of the fund. I do NOT intend to buy the 50 units being reissued myself - with LTC's big rise I don't really want to reduce my BTC position to increase my LTC position (if anything I'd prefer to balance in the opposite direction). That said, if LTC falls and I have to reduce the price of the units then I WILL buy them if noone else does.
SOFTWARE DEVELOPMENT
This week I'm going to make a serious start on developing a bot/user-interface to make the trading I do easier - as well as allow some options that at present aren't practical. I had a part-finished application for this on GLBSE. Here's some of the main objectives of it:
Initially I'll be programming just for BTC.CO/LTC--Global (in part because we need the functionaility more there and also becasue Bitfunder hasn't published their API yet afaik). But the intention is definitely to integrate Bitfunder as well - and the design will be such as to allow exchanges (both of securities AND of currency) to be added in fairly easily.
Don't expect this software to be finished in a week or two - it'll take a while for a few reasons:
I'll try to post updates here each week on how it's going - with screen-shots once some decent functionaility gets added. Some parts of it I won't be able to show of course.
ODDS AND ENDS
Management fee this week is 4 units (rounded down from 4.17) and will be transferred shortly.
Bid currently at 61
Proft was a bit slimmer this week than it has been recently - 9.86% actual growth with an estimated 5.53% from trading and the rest resulting from LTC losing some ground vs BTC. There's a few reasons why trading profit is significantly down:
- As mentioned in last week's report, the higher value of LTC drives down the value of BTC profits meaning the same BTC profit (as an amount) results in a much lower percentage growth.
- S.MPOE and S.DICE (mainly this) fell in price - hitting the value of the surplus we hold of them to back the pass-throughs.
- I had to mark down some securities I'd bought as a hedge against LTC crashing. LTC didn't crash so we made a small loss on the books (they may still sell at a profit - but it's less likely unless LTC falls a lot.
Still perfectly respectable results which I'd happily take every week if they were offered.
OP UPDATED
I've updated the OP with a current set of all results to date. I've also added in a summary section showing the overall performance of the fund to date - we've now been running for almost exactly 6 months.
This new table was prompted in part by the accusation (responded to slightly earlier in this thread) that I was out-pirating Pirate. The existing detailed results don't actually measure the real profit to date (there's no figures or averages in it showing post-fee returns) so I was interested to see just how close we were to matching the 7%/week Pirate offered. To date the fund has actually grown by MORE than 7% per week (in LTC) and if you were to consider how BTC invested at the start would measure up now, they'd have been making just under 11.5% per week.
Don't take the projected APR in that table seriously - whilst it IS the growth that would be delivered if historical growth rates continued that is NOT going to be the case. I don't pretend to be able to predict what growth we'll achieve in the future but I don't see ANY way it could continue at the current speed.
REPURCHASE UNITS / RESALE OF SAME
This week a further 134 units were sold back to the fund. I would guess these were sold back because the seller(s) wanted to cash out whilst LTC was high - a sensible move if they believed it likely to fall heavily vs BTC and/or USD. I think it's likely badly timed if so - the previous seller last week had much better timing in my view.
Where does that leave us in terms of capital?
Well, right now our bonds are equal to 62.5% of our NAV - so we're in great shape. And I don't see any likely need to issue a significant amount more bonds in the immediate future (we could maybe use another 10-15 BTC on BTC-E to maintain flexibility and ease currency balancing when the exchange-rate moves). The problem is that it's hard to tell which way LTC will move next - it's been making a half-hearted attempt to rise (on pretty low volume) but could equally easily fall back to .005 or lower (it dipped there briefly once in last few days).
We certainly don't need to reissue all those 134 units - but my view is that reselling some would be prudent to avoid any risk of needing to sell more or forcibly recall bonds in the event of a mini-collapse of LTC.
I will therefore be listing 50 of them on the market at a markup of around 25% above NAV/U. As we have no urgency to sell them there's no reason to sell them cheap. If LTC does fall sharply then I can always lower the price. If they don't sell and LTC doesn't fall much (or at all) then I can take them down once we've grown enough more that there's no longer a useful function served by selling them.
Even if they sell, we'll still have less units outstanding than BEFORE I sold the 100 a few weeks back : our growth since then has meant we no longer need the entirety of that expansion, so it's all working out rather well for us.
To be crystal clear, the units sold back to the fund were NOT mine. I've never sold units back to the fund (only small numbers of units at high markups via Asks). At present I own over 50% of the fund. I do NOT intend to buy the 50 units being reissued myself - with LTC's big rise I don't really want to reduce my BTC position to increase my LTC position (if anything I'd prefer to balance in the opposite direction). That said, if LTC falls and I have to reduce the price of the units then I WILL buy them if noone else does.
SOFTWARE DEVELOPMENT
This week I'm going to make a serious start on developing a bot/user-interface to make the trading I do easier - as well as allow some options that at present aren't practical. I had a part-finished application for this on GLBSE. Here's some of the main objectives of it:
- Allow trading on multiple exchanges in a single window - so securities on LTC-Global, BTC.CO and later, hopefully, Bitfunder as well would all be in the same list.
- Only show securities I'm interested in - at present on ALL exchanges there's a bunch of dead/dieing/inactive/worthless junk that clutters my screen up needlessly.
- Integrate with BTC-E so I can see prices in all of LTC/BTC/USD for securities.
- Maintain bids/asks based on a currency other than the one the security is listed in. This would allow, for example, me to maintain a bid-wall on our LTC-ATF.B1 bond at just under face-value of 0.01 BTC with the bot repricing it in LTC as/when the LTC/BTC exchange-rate moved.
- Bot-maintained top Bid / Lowest Ask. Automatic order updating to outbid others - with multiple defined ranges (priced in any currency), exposure per range, minimum size to outbid etc.
- Automatic currency balancing on execution. If we buy back LTC-ATF.B1 then the bot should immediately convert some BTC to LTC to cover it and keep exposure the same.
- Automated cash-stripping from badly designed bots. There's already at least 1 bot running on BTC.CO - at present just doing tiny bids/asks. If bots start trading decent sums then taking cash off them becomes attractive. That needs multiple orders placed (and removed) fast - which is something best done by software rather than manually.
- Some other nice stuff. There's some other functionality needed to allow my next intended expansion of operations. More info on that if/when we reach the point of implementing it.
Initially I'll be programming just for BTC.CO/LTC--Global (in part because we need the functionaility more there and also becasue Bitfunder hasn't published their API yet afaik). But the intention is definitely to integrate Bitfunder as well - and the design will be such as to allow exchanges (both of securities AND of currency) to be added in fairly easily.
Don't expect this software to be finished in a week or two - it'll take a while for a few reasons:
- I'm fairly rusty at programming. Whilst I have a LOT of experience (it was my job for a fairly long time) I haven't coded much in anger recently.
- I have zero experience of OAUth. I'll be programming in C++ so it'll take a fair bit of effort to get that sorted quite likely. If it proves impractical to do it in C++ then I'll have to spend a few days learning like something like Python to do it.
- BTC.CO and LTC-Global heavily cache shit. It's entirely likely that to get decent responsiveness I'll have to scrape current data from web-pages rather than retrieve it via the API. This is going to especially be a pain with transactions - as it's nigh on impossible to get immediate info on when an order has filled. If not properly handled this could lead to a bot placing multiple orders as it had no way to find out that one had filled. If you've ever seen your balance go up/down then struggled to work out what happened you'll see the problem.
- I don't always have a lot of spare time to devote a decent period to development. I can check and update market orders in a spare 5 minutes - I can't do ANYTHING of use in software development in 5 minutes.
I'll try to post updates here each week on how it's going - with screen-shots once some decent functionaility gets added. Some parts of it I won't be able to show of course.
ODDS AND ENDS
Management fee this week is 4 units (rounded down from 4.17) and will be transferred shortly.
Bid currently at 61
Keep up the good work Deprived dont worry about trolls 
CRITICISMS OF / QUESTIONS ABOUT THE FUND
Earlier today I received a PM expressing some ciriticism of (and asking some questions about) this fund.
I do NOT respond in depth, by PM, to such messages - I prefer all such discussion to be public. This is for two reasons:
1. By answering in public I avoid having to address the same issue repeatedly in PM to multiple individuals.
2. I have nothing to hide - so why would I want it done in private? If I'm wrong about something I've no problem whatsoever with it being pointed out and me acting to resolve whatever the issue is.
I therefore asked whether the person PMing me would be willing for me to respond in public to their comments but without revealing their identity (so as not to embarass them). They were fine with that. I have no problem at all with someone PMing me questions/criticism and me responding to it in public without revealing their identity. In many ways it's actually a hood way to do things - as by not revealing their identity I am forced to address the issues they raise rather than attack the questioner. I will not reveal the identity of anyone who wants to raise issues in this way - nor will I confirm or deny whether such posts are any specific person unless someone is accused of being the PMer, denies it in public AND asks me to confirm that it wasn't them (when I'll honestly say whether or not it was them).
The below quotes are from the PM without any modification from me. I have excluded some parts of the PM which did not deal with LTC-ATF and hence would not be of relevance if addressed in this thread.
Hopefully this at least provides some light entertainment for readers.
FABRICATING NAV/U
This refers to the values in the spreadsheet in the OP of this thread - not to the values given in the weekly reports. The PMer simply hasn't read (or hasn't understood) the explanatory notes below the spreadsheet there.
The period in question is the one ending 10th March 2013 (the week LTC massively rose from .003 to .00725.
Column 4 is the NAV/U of the fund at the end of the week before deduction of any management fee. This is the actual NAV/U (before fee) the fund had - and is what management fee is based on. There's a subtle clue this is the actual NAV/U in the use of the word "ACTUAL" above the column.
Column 8 is the one that our mysterious friend takes great exception to. Despite us having made a loss for the week it shows a very significant increase from the value at the start of the week. How can this be so?
Well, column 8 is a crude esitmate of what NAV/U would have been had the exchange-rate not changed. As the exchange-rate DID change (very much so) this is a lot different to the actual result at the end of the week. Do note, first off, that this value is NOT used when calculated management fee. It is NOT used when calculating buy-back price. It is NOT used as the starting point for the next week (that is, of course, the actual NAV/U after deduction of management fee). Nowhere is it claimed that this IS the actual NAV/U nor is it used anywhere AS the actual NAV/U.
Why is this value reported at all? Well there's two reasons why it's reported:
1. The actual results in any week (profit or loss) depend upon two factors :
a) How I do in trading,
b) How the LTC/BTC exchange-rate moves - if LTC increases then our NAV/U will drop and if LTC decreases vs BTC then our NAV/U will increase.
This column gives an estimate of what my trading performance was when the impact of exchange-rate movement was discounted. In the week in question I made a killing trading - but that was still not quite enough to compensate for the loss in NAV/U caused by LTC's steep rise vs BTC. Hence the massive discrepancy between the actual NAV/U and this number. If you look at weeks where LTC fell vs BTC you'll see the opposite - that this column is lower than the actual growth for the week.
2. This column is used to calculate the maxium rate we could safely offer on bonds based on past performance. The capital raised by bonds and the liability incurred in respect of them cancel one another out in terms of exposure to exchange-rate variations. Because of that, when calculating what rate we can safely offer, we have to look at profits recalculated to at least approximate removal of exchange-rate variation. Imagine a situation where every week I made a loss trading but LTC fell steeply vs BTC. In that scenario clearly I shouldn't be selling bonds at all - as trading isn't making a profit - yet the actual NAV/U of the fund would rise giving the illusion that the bonds were doing well for us.
A comparison which may help understand this is to think of Satoshi Dice. If you look at graphs of its performance you'll see two lines - a red one (showing expected profit based on the odds) and a black line showing actual profits. When assessing the value of the share you SHOULD be looking at the red line (exception being if you believe any variance is down to double-spend attacks). Our actual NAV/U is the black line - it's what we actually got. Column 8 is the red line - which IS what matters when looking at the rate for bonds: as capital raised from bonds is NOT subject to the difference between the red and black lines caused by exchange-rate movement.
This was all explained anyway in the notes below the spreadsheet.
A PONZI?
Not sure what to say to this other than thanks - though of course the 67 figure is NOT the actual NAV/U (if LTC falls much further it probably will be).
If it would make investors more comfortable I am, of course, fine with taking a one-time bonus of say 30-40 LTC per share so they don't have to share the stigma of having made ponzi-like returns. And if you want it to be really scary you should look at the returns that have been made if the units were to be valued in BTC or USD.
More seriously, if LTC-ATF is a ponzi then it has to be the first one that rarely sells any new units and constantly has a bidwall up at a few % under the stated value of the shares.
If anyone has serious concerns that the claimed funds belonging to LTC-ATF don't exist then it's actually pretty easy for me to prove otherwise. Most of the time 80%+ of the assets managed by the fund are in cash. I can, at any time, show all of that cash by placing pre-agreed bids on the various sites I trade on (it's a bit of a pain on Bitfunder - as have to cancel my other bids to do it).
Additionally, ANYONE can ask the operators of exchanges where I trade to conform ANY statement I make about our assets or trades. I've stated it before - and repeat it again. If I say I have X BTC on Bitfunder/BTC.CO/LTC-Global then Ukyo/burnside have my permission to confirm that without any further reference to me. If I say I have assets worth Y BTC/LTC on sites the same applies. This blanket permission only extends to confirming the truth of statements I've made - not to revealing further information that I haven't disclosed.
I'm fine with taking ANY reasonable action to confirm that the fund holds the assets (with the value) that I claim in my reports. However any requests for such verification by ME MUST be made in public and then the fact that I was correct confirmed afterwards (you can ask exchange operators to confirm things privately without involving me - so I don't care about that). I will NOT reveal details of securities held but, if someone seriously makes such a request, will see if I can find a way to prove it without doing so (ideally get the exchange operator to confirm it in public).
Logically there's actually no need for me to prove all assets exist anyway. If I can show 80% + exist as cash and another 5% exist as shares in assets we run pass-throughs to (those are already disclosed anyway) then we're already at 85% of assets. It would be a stretch of even the most hostile critic's imagination to believe I could have made a 300% growth whilst holding absolutely no securities at all (300% is roughly what growth would have been if the securities I say we hold don't exist - just the cash and pass-through shares).
Anyway, apologies to all offended by the fund's profitability.
LTC-ATF.B1 - FATALLY FLAWED?
Although not explicitly stated, the following points relate to LTC-ATF.B1, not to the fund itself.
Oh dear - we have a bad case of lack of understanding here.
If the fund wants to sell bonds and there's sufficient demand to do so, then we do not raise the rate paid.
If the fund wants to sell bonds but noone is willing to buy then we do raise the rate paid.
We do NOT sell shares (bonds) to meet demand unless we can actually use the funds raised. Similarly we will NOT raise rates unless we are unable to sell bonds without doing so.
The idea that "we will increase dividend to meet demand" is just horrible. We do exactly the opposite of that. Dividend will be raised if (and only if) there's no demand to meet. Dividend is NOT increased to MEET demand - but to CREATE demand when none exists. To date there's been plenty of demand and so absolutely no reason to raise dividends.
This is all explained in the contract - in the very first overview section where it says:
" Bonds will initially be offered paying a 0.6% per week dividend - then the rate will be gradually increased as necessary until demand meets supply. "
Demand has never yet fallen below supply - so there's never been a need to increase it. Rather trivially, if demand is already above supply (which it is - as we have no bonds we're stuck trying to sell) then raising the rate could only move demand FURTHER away from supply and not any nearer to the two meeting. I'll admit I'm a bit surprised that we haven't had to raise the rate yet - but I'm not going to complain.
I can only speculate on why our correspondent thought the rate would be raised when demand was clearly already at or above supply level.
As for the idea that selling at below NAV/U would line my own pocket - that's just dumb beyond belief. The bonds can be sold back to the fund on request at 99% of face value. It would be terminally stupid of me to sell them at under that - as it would be trivially exploitable by people buying them then immediately cashing them back in causing a loss for me. The right to do that was reserved explicitly in case the rare situation arose where a significant profit could be made immediately if extra capital were available. That situation has yet to arise - and likely will never do so.
Further, the value of each bond is exactly 0.01 BTC regardless of who buys how many at what price. NOTHING I do can lower that. Yes - the market price CAN be lowered by me selling more bonds but short of never selling any there's no way around that. And it can't fall far below 0.01 - as the fund is committed to buying back any priced at .0099 BTC or less anyway. To the extent that I can I DO try to protect existing bond holders. So I'm tending now to sell into bids rather than place asks (as we have no urgent need for cash) so as not to bid down the asks of investors who want to sell. And sales of new bonds are pretty much done for now anyway.
If you view the bonds as some investment that will grow in price then you're looking at them wrong. They're issued at will by LTC-ATF and SHOULD always trade not too far from 0.01 BTC when the LTC/BTC exchange-rate is stable. They're a way to gain BTC exposure whilst generating a modest but predictable and reliable return - not some speculative growth thing.
BONDS NOT SUSTAINABLE?
Well IF I were investing in stuff you may have a point. But LTC-ATF does NOT invest in stuff. We trade stuff. You're looking at LTC-ATF as though we were one of the failed GLBSE funds - that bought crappy mining securities at market rates then sat on them whilst they lost value. We just don't do that. There's a reason most of our assets are always cash - I mainly buy stuff when I expect to be able to sell it at a profit quickly. So most of our assets are cash committed to buy orders that rarely fill - and when they DO fill, we don't sit on them waiting for them to lose value, we sell them for a profit, rinse and repeat. There have been a few exceptions to this - ASICMINER which we held for a long time then sold for a 600%+ profit and DMC which we held for a few weeks then sold for a 100-200% profit.
If we buy something and I can't sell it at a profit then I sell it at break-even or a loss. I don't sit on it watching it drop in value (not for too long anyway).
Yes - a lot of the stuff I trade in HAS crashed in price. But most of the time it hasn't crashed enough to prevent us selling at a profit. Timing is the key - and understanding the way in which most investors (over)react to certain things.
The key value determining whether we can continue paying 0.6% on LTC-ATF.B1 is whether our growth/week adjusted to remove exchange-rate variation falls below a certain value. If we were maxed out on bonds then that value is around 2%. As we're not even near maxed out, at present trading profit would need to fall below about 1.5% per week for me to start becoming concerned. Whilst I don't expect profits to continue at 10%+ with LTC higher vs BTC I don't see any danger of them dipping that low.
We need to be careful not to conflate two different things:
a) That there's no logical reason for us to make a profit.
b) That I'm lieing about our assets.
When you seperate those two you should actually realise that I absolutely CAN afford to pay the rates as ONE of the following is true. Either:
1. My reports ARE (at least approximately) correct in terms of our assets - and hence we're very clearly making sufficient profit to pay the cost of capital. That you can't understand how it's done or duplicate it is YOUR problem, not mine. I'll take any reasonable steps to prove that we HAVE made this profit - but don't expect me to write a detailed How-To guide on it.
OR
2. I'm totally wrong/lieing when I report our assets (with most being cash it would pretty much HAVE to be lieing) in which case I'm running a ponzi/scam and so also CAN afford the rates.
There's NO scenario in which the rates can't be paid. The issue of whether this is a PONZI was addressed earlier.
GLBSE ASSETS NOT WRITTEN OFF?
OBSI.HRPT was marked down to zero value right after GLBSE closed. It continued to be listed in the weekly reports for a while - but at a value of exactly 0. That accurately reflected the fact that we still (at least morally) owned those shares - and also that they had no likely value whatsoever. Writing them off does NOT mean that we abandon all claim to them should Obsi suddenly show up with a van full of cash and hand it out to his shareholders. The value of 0 reflected the fact that I assigned no meaningful likelihood to that actually happening.
Not sure what's at all contentious with that - if I'd claimed to write them off but left them on the books with a non-zero value then you'd have a point. But that ain't what happened.
The only other GLBSE assets we had were ASICMINER and Bitbond. ASICMINER we sold last week for a very good profit on the .1 each we paid for them. Bitbond I sold very shortly after they relisted - we managed to sell them for more than I had them on the books for (and, in fact, more than we originally paid for them). We were one of the very few who managed to sell our shares before it became obvious to everyone that Rando was just another scammer.
As a final note - please be aware that I am NOT going to engage in relaying a stream of PMs debating/discussing my response to questions. I'll take questions - and answer them here anonymously. But if you want to debate/discuss my answers then I'm afraid you have to man up and put your name on it.
Earlier today I received a PM expressing some ciriticism of (and asking some questions about) this fund.
I do NOT respond in depth, by PM, to such messages - I prefer all such discussion to be public. This is for two reasons:
1. By answering in public I avoid having to address the same issue repeatedly in PM to multiple individuals.
2. I have nothing to hide - so why would I want it done in private? If I'm wrong about something I've no problem whatsoever with it being pointed out and me acting to resolve whatever the issue is.
I therefore asked whether the person PMing me would be willing for me to respond in public to their comments but without revealing their identity (so as not to embarass them). They were fine with that. I have no problem at all with someone PMing me questions/criticism and me responding to it in public without revealing their identity. In many ways it's actually a hood way to do things - as by not revealing their identity I am forced to address the issues they raise rather than attack the questioner. I will not reveal the identity of anyone who wants to raise issues in this way - nor will I confirm or deny whether such posts are any specific person unless someone is accused of being the PMer, denies it in public AND asks me to confirm that it wasn't them (when I'll honestly say whether or not it was them).
The below quotes are from the PM without any modification from me. I have excluded some parts of the PM which did not deal with LTC-ATF and hence would not be of relevance if addressed in this thread.
Hopefully this at least provides some light entertainment for readers.
FABRICATING NAV/U
Quote from: anonymous
Your recent report stated actual profit is down by 4.82%. Yet you fabricated an 8.57% increase in NAV from 61.83 to to 67.13. That makes no sense.
This refers to the values in the spreadsheet in the OP of this thread - not to the values given in the weekly reports. The PMer simply hasn't read (or hasn't understood) the explanatory notes below the spreadsheet there.
The period in question is the one ending 10th March 2013 (the week LTC massively rose from .003 to .00725.
Column 4 is the NAV/U of the fund at the end of the week before deduction of any management fee. This is the actual NAV/U (before fee) the fund had - and is what management fee is based on. There's a subtle clue this is the actual NAV/U in the use of the word "ACTUAL" above the column.
Column 8 is the one that our mysterious friend takes great exception to. Despite us having made a loss for the week it shows a very significant increase from the value at the start of the week. How can this be so?
Well, column 8 is a crude esitmate of what NAV/U would have been had the exchange-rate not changed. As the exchange-rate DID change (very much so) this is a lot different to the actual result at the end of the week. Do note, first off, that this value is NOT used when calculated management fee. It is NOT used when calculating buy-back price. It is NOT used as the starting point for the next week (that is, of course, the actual NAV/U after deduction of management fee). Nowhere is it claimed that this IS the actual NAV/U nor is it used anywhere AS the actual NAV/U.
Why is this value reported at all? Well there's two reasons why it's reported:
1. The actual results in any week (profit or loss) depend upon two factors :
a) How I do in trading,
b) How the LTC/BTC exchange-rate moves - if LTC increases then our NAV/U will drop and if LTC decreases vs BTC then our NAV/U will increase.
This column gives an estimate of what my trading performance was when the impact of exchange-rate movement was discounted. In the week in question I made a killing trading - but that was still not quite enough to compensate for the loss in NAV/U caused by LTC's steep rise vs BTC. Hence the massive discrepancy between the actual NAV/U and this number. If you look at weeks where LTC fell vs BTC you'll see the opposite - that this column is lower than the actual growth for the week.
2. This column is used to calculate the maxium rate we could safely offer on bonds based on past performance. The capital raised by bonds and the liability incurred in respect of them cancel one another out in terms of exposure to exchange-rate variations. Because of that, when calculating what rate we can safely offer, we have to look at profits recalculated to at least approximate removal of exchange-rate variation. Imagine a situation where every week I made a loss trading but LTC fell steeply vs BTC. In that scenario clearly I shouldn't be selling bonds at all - as trading isn't making a profit - yet the actual NAV/U of the fund would rise giving the illusion that the bonds were doing well for us.
A comparison which may help understand this is to think of Satoshi Dice. If you look at graphs of its performance you'll see two lines - a red one (showing expected profit based on the odds) and a black line showing actual profits. When assessing the value of the share you SHOULD be looking at the red line (exception being if you believe any variance is down to double-spend attacks). Our actual NAV/U is the black line - it's what we actually got. Column 8 is the red line - which IS what matters when looking at the rate for bonds: as capital raised from bonds is NOT subject to the difference between the red and black lines caused by exchange-rate movement.
This was all explained anyway in the notes below the spreadsheet.
A PONZI?
Quote from: anonymous
Another issue is that at 67, LTC-ATF has enjoyed ponzi-like returns of 600% over the last 6 months. Congratulations, you are beating pirate at his own game.
Not sure what to say to this other than thanks - though of course the 67 figure is NOT the actual NAV/U (if LTC falls much further it probably will be).
If it would make investors more comfortable I am, of course, fine with taking a one-time bonus of say 30-40 LTC per share so they don't have to share the stigma of having made ponzi-like returns. And if you want it to be really scary you should look at the returns that have been made if the units were to be valued in BTC or USD.
More seriously, if LTC-ATF is a ponzi then it has to be the first one that rarely sells any new units and constantly has a bidwall up at a few % under the stated value of the shares.
If anyone has serious concerns that the claimed funds belonging to LTC-ATF don't exist then it's actually pretty easy for me to prove otherwise. Most of the time 80%+ of the assets managed by the fund are in cash. I can, at any time, show all of that cash by placing pre-agreed bids on the various sites I trade on (it's a bit of a pain on Bitfunder - as have to cancel my other bids to do it).
Additionally, ANYONE can ask the operators of exchanges where I trade to conform ANY statement I make about our assets or trades. I've stated it before - and repeat it again. If I say I have X BTC on Bitfunder/BTC.CO/LTC-Global then Ukyo/burnside have my permission to confirm that without any further reference to me. If I say I have assets worth Y BTC/LTC on sites the same applies. This blanket permission only extends to confirming the truth of statements I've made - not to revealing further information that I haven't disclosed.
I'm fine with taking ANY reasonable action to confirm that the fund holds the assets (with the value) that I claim in my reports. However any requests for such verification by ME MUST be made in public and then the fact that I was correct confirmed afterwards (you can ask exchange operators to confirm things privately without involving me - so I don't care about that). I will NOT reveal details of securities held but, if someone seriously makes such a request, will see if I can find a way to prove it without doing so (ideally get the exchange operator to confirm it in public).
Logically there's actually no need for me to prove all assets exist anyway. If I can show 80% + exist as cash and another 5% exist as shares in assets we run pass-throughs to (those are already disclosed anyway) then we're already at 85% of assets. It would be a stretch of even the most hostile critic's imagination to believe I could have made a 300% growth whilst holding absolutely no securities at all (300% is roughly what growth would have been if the securities I say we hold don't exist - just the cash and pass-through shares).
Anyway, apologies to all offended by the fund's profitability.
LTC-ATF.B1 - FATALLY FLAWED?
Although not explicitly stated, the following points relate to LTC-ATF.B1, not to the fund itself.
Quote from: anonymous
Second to this, your contract contains dangerous flaws. For example, you state you will sell shares to meet demand, but you also state you will increase dividend to increase demand. Which is it? The way you present yourself looks very nice (we will increase dividend to meet demand) but the reality is you are doing a bait and switch on your investors since you sell shares into the market to satiate demand. And what's worse you have a clause which allows you to sell shares below NAV, screwing over your existing investors to line your own pocket.
Oh dear - we have a bad case of lack of understanding here.
If the fund wants to sell bonds and there's sufficient demand to do so, then we do not raise the rate paid.
If the fund wants to sell bonds but noone is willing to buy then we do raise the rate paid.
We do NOT sell shares (bonds) to meet demand unless we can actually use the funds raised. Similarly we will NOT raise rates unless we are unable to sell bonds without doing so.
The idea that "we will increase dividend to meet demand" is just horrible. We do exactly the opposite of that. Dividend will be raised if (and only if) there's no demand to meet. Dividend is NOT increased to MEET demand - but to CREATE demand when none exists. To date there's been plenty of demand and so absolutely no reason to raise dividends.
This is all explained in the contract - in the very first overview section where it says:
" Bonds will initially be offered paying a 0.6% per week dividend - then the rate will be gradually increased as necessary until demand meets supply. "
Demand has never yet fallen below supply - so there's never been a need to increase it. Rather trivially, if demand is already above supply (which it is - as we have no bonds we're stuck trying to sell) then raising the rate could only move demand FURTHER away from supply and not any nearer to the two meeting. I'll admit I'm a bit surprised that we haven't had to raise the rate yet - but I'm not going to complain.
I can only speculate on why our correspondent thought the rate would be raised when demand was clearly already at or above supply level.
As for the idea that selling at below NAV/U would line my own pocket - that's just dumb beyond belief. The bonds can be sold back to the fund on request at 99% of face value. It would be terminally stupid of me to sell them at under that - as it would be trivially exploitable by people buying them then immediately cashing them back in causing a loss for me. The right to do that was reserved explicitly in case the rare situation arose where a significant profit could be made immediately if extra capital were available. That situation has yet to arise - and likely will never do so.
Further, the value of each bond is exactly 0.01 BTC regardless of who buys how many at what price. NOTHING I do can lower that. Yes - the market price CAN be lowered by me selling more bonds but short of never selling any there's no way around that. And it can't fall far below 0.01 - as the fund is committed to buying back any priced at .0099 BTC or less anyway. To the extent that I can I DO try to protect existing bond holders. So I'm tending now to sell into bids rather than place asks (as we have no urgent need for cash) so as not to bid down the asks of investors who want to sell. And sales of new bonds are pretty much done for now anyway.
If you view the bonds as some investment that will grow in price then you're looking at them wrong. They're issued at will by LTC-ATF and SHOULD always trade not too far from 0.01 BTC when the LTC/BTC exchange-rate is stable. They're a way to gain BTC exposure whilst generating a modest but predictable and reliable return - not some speculative growth thing.
BONDS NOT SUSTAINABLE?
Quote from: anonymous
I'm also worried about what the BTC price spike has done to your fund and it's bond. You invest in stuff. BTC price has gone up 600% too. That means the stuff you invested in crashed. That means there is no logical way you can continue paying 0.6% a week on LTC-ATF.B1. I think you're going to have to show us your books. Because if this is not sustainable you need to come clean NOW before you screw over people's lives with a fraud-in-progress.
Well IF I were investing in stuff you may have a point. But LTC-ATF does NOT invest in stuff. We trade stuff. You're looking at LTC-ATF as though we were one of the failed GLBSE funds - that bought crappy mining securities at market rates then sat on them whilst they lost value. We just don't do that. There's a reason most of our assets are always cash - I mainly buy stuff when I expect to be able to sell it at a profit quickly. So most of our assets are cash committed to buy orders that rarely fill - and when they DO fill, we don't sit on them waiting for them to lose value, we sell them for a profit, rinse and repeat. There have been a few exceptions to this - ASICMINER which we held for a long time then sold for a 600%+ profit and DMC which we held for a few weeks then sold for a 100-200% profit.
If we buy something and I can't sell it at a profit then I sell it at break-even or a loss. I don't sit on it watching it drop in value (not for too long anyway).
Yes - a lot of the stuff I trade in HAS crashed in price. But most of the time it hasn't crashed enough to prevent us selling at a profit. Timing is the key - and understanding the way in which most investors (over)react to certain things.
The key value determining whether we can continue paying 0.6% on LTC-ATF.B1 is whether our growth/week adjusted to remove exchange-rate variation falls below a certain value. If we were maxed out on bonds then that value is around 2%. As we're not even near maxed out, at present trading profit would need to fall below about 1.5% per week for me to start becoming concerned. Whilst I don't expect profits to continue at 10%+ with LTC higher vs BTC I don't see any danger of them dipping that low.
We need to be careful not to conflate two different things:
a) That there's no logical reason for us to make a profit.
b) That I'm lieing about our assets.
When you seperate those two you should actually realise that I absolutely CAN afford to pay the rates as ONE of the following is true. Either:
1. My reports ARE (at least approximately) correct in terms of our assets - and hence we're very clearly making sufficient profit to pay the cost of capital. That you can't understand how it's done or duplicate it is YOUR problem, not mine. I'll take any reasonable steps to prove that we HAVE made this profit - but don't expect me to write a detailed How-To guide on it.
OR
2. I'm totally wrong/lieing when I report our assets (with most being cash it would pretty much HAVE to be lieing) in which case I'm running a ponzi/scam and so also CAN afford the rates.
There's NO scenario in which the rates can't be paid. The issue of whether this is a PONZI was addressed earlier.
GLBSE ASSETS NOT WRITTEN OFF?
Quote from: anonymous
There are many other problems with what you are doing. You claim to have written off GLBSE failures back in October. But you had OBSI.HRPT on the books just a few weeks ago. And so on.
OBSI.HRPT was marked down to zero value right after GLBSE closed. It continued to be listed in the weekly reports for a while - but at a value of exactly 0. That accurately reflected the fact that we still (at least morally) owned those shares - and also that they had no likely value whatsoever. Writing them off does NOT mean that we abandon all claim to them should Obsi suddenly show up with a van full of cash and hand it out to his shareholders. The value of 0 reflected the fact that I assigned no meaningful likelihood to that actually happening.
Not sure what's at all contentious with that - if I'd claimed to write them off but left them on the books with a non-zero value then you'd have a point. But that ain't what happened.
The only other GLBSE assets we had were ASICMINER and Bitbond. ASICMINER we sold last week for a very good profit on the .1 each we paid for them. Bitbond I sold very shortly after they relisted - we managed to sell them for more than I had them on the books for (and, in fact, more than we originally paid for them). We were one of the very few who managed to sell our shares before it became obvious to everyone that Rando was just another scammer.
As a final note - please be aware that I am NOT going to engage in relaying a stream of PMs debating/discussing my response to questions. I'll take questions - and answer them here anonymously. But if you want to debate/discuss my answers then I'm afraid you have to man up and put your name on it.
Exchange-rate : .0093
Adjusted NAV/U : 60.907
Bid at : 59
Just a brief mid-week update. LTC has fallen vs BTC since my last report - which has obviously manifested itself in some NAV/U growth. Before projected management fee NAV/U is up by 6.8% so far this week - but the bulk of that is due to the exchange-rate movement with actual trading profits so far only at about 2.3%.
Adjusted NAV/U : 60.907
Bid at : 59
Just a brief mid-week update. LTC has fallen vs BTC since my last report - which has obviously manifested itself in some NAV/U growth. Before projected management fee NAV/U is up by 6.8% so far this week - but the bulk of that is due to the exchange-rate movement with actual trading profits so far only at about 2.3%.
Oops - somehow managed to edit last week's report instead of this weeks when making a minor change. Will fix shortly.
EDIT: Both fixed. Luckily all major posts are duplicated on LTC-talk, so was easy enough to copy the correct ones across.
EDIT: Both fixed. Luckily all major posts are duplicated on LTC-talk, so was easy enough to copy the correct ones across.
WEEKLY REPORT
Another week of LTC rising sharply - but, much to my surprise, we managed to make a profit anyway. In fact we've almost exactly made back last week's loss (I've been watching the NAV/U as I updated for changes - and am intentionally doing the report just after we got back to where we were). My spreadsheet indicates trading profits of a bit over 16%, however that's overestimating it slightly - I converted some LTC into BTC at the second peak (after hitting $.75 then dropping and rebounding) as that was clear sign LTC wouldn't go through $.75 again in the short-term. That tend to exaggerate trading profts as the crude calculation used assumes the conversion into BTC occurred gradually when it didn't.
Profits were helped by people panicking on LTC-Global: selling down too low when LTC rose then buying back too high today after it looked like LTC was going to dive. The fund picked up a bunch of stuff cheap during the rise - and sold a fair bit off it off for a nice profit, especially last night/today. Not everything went so smoothly of course - there were a few buy orders I left up too long which had to be marked down immediately. But some failed trades is the price you have to pay to get a bunch of good ones.
I've held off for now on my next expansion plans - as there's a significant possibility I may be very busy with work for 2-3 days in the coming week. I have, however, sold more of our bonds whenever I've seen bids up at a good markup to face-value (in general looking for around 6% over face so the first 10 weeks of interest are already paid by the purchaser, giving more than ample time to get the bonds into profitable use).
All the ratios are in good shape for us - bonds are only about 1/3 of NAV, meaning if LTC stayed at current area we could potentially issue around 300 BTC more of them safely. I'm not confident enough in LTC's stability in this range to do that - nor could we usefully use anything like that much more capital now anyway. But having the capability is great - and it would take a pretty huge drop in LTC price for us to need to sell more units.
Our ASICMINER shares have now been sold on the pass-through on BTC.CO. They definitely justified being my first pick of shares to hold long-term. The sharp rise in LTC means their sale hasn't had the sort of impact on NAV/U that it otherwise would have - which brings me to a more general point. The recent trading profits of 10%+ per week are just not going to be sustainable with LTC having risen so much. Normally the overwhelming bulk of out profits comes from BTC (this week was an exception with the irrational behaviour of some investors to the price swings in LTC). With LTC having risen to around 5 times what it was a few weeks back, each BTC of profit now has 1/5th the impact on NAV/U. We made around 5 BTC profit selling our ASICMINER shares. Not too long ago that would have been the best part of a 10% rise in our NAV/U. With our growth and the huge increase in LTC value, a 5 BTC profit is now not much over a 1% rise in NAV/U.
A further factor is that a lot of the growth from LTC's rise is tied up in LTC that aren't in use (having said that, a few days back we actually had nearly 25% of the fund invested in securities on LTC-Global - over half of which have now been sold at a profit). We've gone from having nearly 100% of NAV matched by .B1 bonds to only 32.4%. In practice that means a much smaller percentage of the NAV/U backing each unit is actively being used. There's no simple solution to that - as there just aren't the range of liquid, viable securities on BTC.CO/Bitfunder to deploy three times our current BTC-denominated capital whilst maintaining what I consider to be a reasonable risk profile. I can't just do three times the volume of the same things I do already - as there's not enough volume on a lot of what I do to do more than I already do.
To get a 10% growth in NAV/U next week (assuming no change in LTC price) would require a profit of about 42 BTC - the best part of $2000. I don't see me being able to consistently deliver that. Before the rise in LTC price it would only have taken 1/5th that - far more manageable. I know I've said it before (and been wrong) but this time I really don't see double figure growth/week continuing. Obviously I hope I'm wrong (I get about half of growth with my near 50% holding of units plus management fees).
Both LTC-Global and Bitfunder have released option trading (with BTC.CO following shortly). I'll be buying, writing and rewriting options a bit - but I don't see it becoming a major part of our activity. Very few securities have the kind of profile where I'm willing to commit to holding them for a period of time just to make an option fee writing CALLs - and writing PUTs isn't attractive to me as it ties up funds for what is likely a low rate of return with a significant down-side. Writing options is more for long-term investors happy with a few percent per month. Buying options, on the other hand, is something I'm fine with doing - if the price is right of course. For accounting purposes if we buy options then the fee we pay will just be deducted from NAV immediately - and any profits from executing the option added in full if/when we actually execute. I won't make any effort to value options we hold. If we write CALLs then I'll ensure the backing securities are on the books at under the strike price - so no drop to NAV/U is possible from the buyer executing the option. I'd say it's highly unlikely we'll write PUTs at all - unless to hedge a position: when I'd have to enter and maintain a liability onto the books equivalent to the difference between strike price and highest bid. Essentially, as with the way I value our normal holdings, I'll err on the side of undervaluing rather than overvaluing.
The last two weeks may not have made any overall profit - but I view them as the best two weeks of trading I've done for the fund. We've managed to come through a five-fold increase in LTC's value with the entire value increase maintained - total justification (in my view) of our decision to be valued in LTC and to issue the .B1 bonds to keep BTC exposure down.
No management fee taken this week (rounded down from next to nothing).
HWM will be updated slightly to the new adjusted NAV/U.
Bid up at 55.5
Another week of LTC rising sharply - but, much to my surprise, we managed to make a profit anyway. In fact we've almost exactly made back last week's loss (I've been watching the NAV/U as I updated for changes - and am intentionally doing the report just after we got back to where we were). My spreadsheet indicates trading profits of a bit over 16%, however that's overestimating it slightly - I converted some LTC into BTC at the second peak (after hitting $.75 then dropping and rebounding) as that was clear sign LTC wouldn't go through $.75 again in the short-term. That tend to exaggerate trading profts as the crude calculation used assumes the conversion into BTC occurred gradually when it didn't.
Profits were helped by people panicking on LTC-Global: selling down too low when LTC rose then buying back too high today after it looked like LTC was going to dive. The fund picked up a bunch of stuff cheap during the rise - and sold a fair bit off it off for a nice profit, especially last night/today. Not everything went so smoothly of course - there were a few buy orders I left up too long which had to be marked down immediately. But some failed trades is the price you have to pay to get a bunch of good ones.
I've held off for now on my next expansion plans - as there's a significant possibility I may be very busy with work for 2-3 days in the coming week. I have, however, sold more of our bonds whenever I've seen bids up at a good markup to face-value (in general looking for around 6% over face so the first 10 weeks of interest are already paid by the purchaser, giving more than ample time to get the bonds into profitable use).
All the ratios are in good shape for us - bonds are only about 1/3 of NAV, meaning if LTC stayed at current area we could potentially issue around 300 BTC more of them safely. I'm not confident enough in LTC's stability in this range to do that - nor could we usefully use anything like that much more capital now anyway. But having the capability is great - and it would take a pretty huge drop in LTC price for us to need to sell more units.
Our ASICMINER shares have now been sold on the pass-through on BTC.CO. They definitely justified being my first pick of shares to hold long-term. The sharp rise in LTC means their sale hasn't had the sort of impact on NAV/U that it otherwise would have - which brings me to a more general point. The recent trading profits of 10%+ per week are just not going to be sustainable with LTC having risen so much. Normally the overwhelming bulk of out profits comes from BTC (this week was an exception with the irrational behaviour of some investors to the price swings in LTC). With LTC having risen to around 5 times what it was a few weeks back, each BTC of profit now has 1/5th the impact on NAV/U. We made around 5 BTC profit selling our ASICMINER shares. Not too long ago that would have been the best part of a 10% rise in our NAV/U. With our growth and the huge increase in LTC value, a 5 BTC profit is now not much over a 1% rise in NAV/U.
A further factor is that a lot of the growth from LTC's rise is tied up in LTC that aren't in use (having said that, a few days back we actually had nearly 25% of the fund invested in securities on LTC-Global - over half of which have now been sold at a profit). We've gone from having nearly 100% of NAV matched by .B1 bonds to only 32.4%. In practice that means a much smaller percentage of the NAV/U backing each unit is actively being used. There's no simple solution to that - as there just aren't the range of liquid, viable securities on BTC.CO/Bitfunder to deploy three times our current BTC-denominated capital whilst maintaining what I consider to be a reasonable risk profile. I can't just do three times the volume of the same things I do already - as there's not enough volume on a lot of what I do to do more than I already do.
To get a 10% growth in NAV/U next week (assuming no change in LTC price) would require a profit of about 42 BTC - the best part of $2000. I don't see me being able to consistently deliver that. Before the rise in LTC price it would only have taken 1/5th that - far more manageable. I know I've said it before (and been wrong) but this time I really don't see double figure growth/week continuing. Obviously I hope I'm wrong (I get about half of growth with my near 50% holding of units plus management fees).
Both LTC-Global and Bitfunder have released option trading (with BTC.CO following shortly). I'll be buying, writing and rewriting options a bit - but I don't see it becoming a major part of our activity. Very few securities have the kind of profile where I'm willing to commit to holding them for a period of time just to make an option fee writing CALLs - and writing PUTs isn't attractive to me as it ties up funds for what is likely a low rate of return with a significant down-side. Writing options is more for long-term investors happy with a few percent per month. Buying options, on the other hand, is something I'm fine with doing - if the price is right of course. For accounting purposes if we buy options then the fee we pay will just be deducted from NAV immediately - and any profits from executing the option added in full if/when we actually execute. I won't make any effort to value options we hold. If we write CALLs then I'll ensure the backing securities are on the books at under the strike price - so no drop to NAV/U is possible from the buyer executing the option. I'd say it's highly unlikely we'll write PUTs at all - unless to hedge a position: when I'd have to enter and maintain a liability onto the books equivalent to the difference between strike price and highest bid. Essentially, as with the way I value our normal holdings, I'll err on the side of undervaluing rather than overvaluing.
The last two weeks may not have made any overall profit - but I view them as the best two weeks of trading I've done for the fund. We've managed to come through a five-fold increase in LTC's value with the entire value increase maintained - total justification (in my view) of our decision to be valued in LTC and to issue the .B1 bonds to keep BTC exposure down.
No management fee taken this week (rounded down from next to nothing).
HWM will be updated slightly to the new adjusted NAV/U.
Bid up at 55.5
WEEKLY REPORT
Well - it's been an interesting week to say the least. LTC has well over doubled in value vs BTC. Even with out BTC exposure heavily limited by our bonds we still ended up making a 4.82% loss on the week. My spreadsheet indicates a trading profit of around 17% - it's hard for me to work out whether thats correct or not as the change is so dramatic that the precise timing of when we made the BTC-denominated profits which kept our percentage exposure roughly unchanged is of massive importance. I know actual profit from trading was somewhere in that general area (it was over 10% before the last big spike and we've had more profit since including some from actually trading LTC/BTC on the two most obvious drops back down).
During the big jump today, an investor sold back 46 units to the fund at 55.3. As I was afk when the spike happened they actually managed to sell back at slightly above NAV/U (which I'd guesstimate to have been around 53.5-54.5 at the time). On the face of it that's bad news - in fact, given we already showed we can sell units at over 10% above NAV/U it's no problem at all. If investors would prefer it, I'm happy to take those units off the fund's hands at 60 LTC each - otherwise I see no reason or need for the fund to sell them at all. With LTC having risen so much we're no longer anywhere near our limit for bond-selling - so I believe the increased share of profits for all investors is worth far more than the ~0.1-0.3% drop in NAV/U caused by the sale being slightly over NAV/U. As we aren't near our bond limit and don't use most of our LTC, the sale back of some units has zero impact on the amount of profit we can generate but increased the growth/unit per week week by about 5% or so of what it would otherwise be. i.e. one week of making 5% growth then everyone left in the fund is better off than if those units had not been sold back.
This week I've started trading a bit more aggressively on LTC-Global. I just haven't been trading big batches at a time recently - my sizing of Bids has fallen well below where it should be given our growth. This sunk in when, at one stage this week, we had holdings in TWELVE different securities on LTC-GLobal - yet in total it amounted to under 5% of our NAV. I've been placing Bids worth 100-200 LTC when I should be placing ones worth 500-1000 LTC : simply because I just haven't properly adjusted to the fund being worth over 5 times what it used to be. This won't solve the issue of our LTC stockpile but will make a start on it.
I've referred a few times to a proposal for using our LTC. There's actually two things I have in mind - one of which I can't discuss until it's ready to go. The other one is that I'm giving serious consideration to offering LTC loans - and would welcome feedback on this (especially from investors - though potential borrowers' views are also definitely welcome). They key points to it are:
1. All loans would be very solidly secured - with no exceptions. This would be done by requiring securities to be provided as collateral - with them valued very low for the purpose of collateral.
2. Each loan would use a diffierent account - into which the securities would be transferred, so zero confusion over dividends etc (on repayment I'd change the password and they borrower could then access the account and verify all dividend history themself).
3. Only a small subset of securities would be valid for collateral - ones where there was a long enough (and solid enough) history to make default a low risk.
4. Only individuals with a significant history and/or contribution to the community would be eligible for loans.
5. Surrendering the collateral instead of paying off the loan would NOT be a valid option for lenders - doing so would be explicitly defined as scamming. Hence the only way we don't get repaid is if the securities default AND the borrower defaults. With pretty tght selection criteria on both that should be extremely unlikely.
6. Rates would be very competitive. I'd be looking at a minimum loan size of 1K LTC with a 1% arrangement fee then interest at about 0.14% per day compounded - just under 1% per week.
7. Repayment terms could be anything (reasonable) borrowers wanted - from gradual pay back to payment in full at a specific date.
8. Borrower would NOT have to disclose any personal ID or even provide the reason for the loan.
9. Details of loans would be published - minus the identity of the borrower (that would be provided only if they defaulted).
10. In the event of late or non-payment we'd have the right (but not obligation) to immediately sell collateral into the market to reduce or totally pay off the debt owed. In practice I'd be reasonably flexible with this - all the time that the collateral more than adequately covered the debt. But obviously any piss-taking or trying to f*ck around and the collateral just gets dumped into bids and they get whatever change is left over.
I think we could safely lend out somewhere around 15k LTC with zero impact on our trading and bring in an extra 150 LTC (which is now 1 BTC or around $40-$50) profit per week (plus the 1% arrangement fees). Too much effort for too little reward? I believe the risk to be absolutely minimal - as I just wouldn't loan unless I was certain about the collateral (e.g. I wouldn't take over 50% being one security with exception of LTC-ATF - meaning multiple defaults necessary to realise any real loss).
I think the number of people valid for such a loan AND needing one would be small - but there's a few obvious circumstances where it could be useful: one of which being to buy MORE of the securities being used for collateral : where obviously they can't sell them to raise the funds (if they believe the securities will rise in value by more than a few percent per week then this makes perfect sense).
I also have another project in the works - hopefully I'll be in a position to disclose this and put the securities for it up within the next week or so. I won't be progressing the loan idea further until this other project is done - so there's plenty of time to discuss it and it's by no means certain that we'll go the loans route at all.
For now I've shelved running an ASICMINER passthrough. Aside from anything else, it's not a great idea to start a new pass-through whilst LTC is so volate - I'd have to be glued to the screen to leave any orders up. And with pass-throughs already on Bitfunder/BTC.CO at near zero fees there's no real need for one. Our own 10 ASICMINER shares should be getting transferred to the BTC.CO pass-through in the next few days - whilst there's no urgent need to sell them, I'd like the option to do so if/when I can get the price I'm looking for (or if events make me revise that price down).
There's no management fee this week. As per the revised contract the HWM is NOT adjusted down (under original contract it would have been). So no management fee will be taken on growth up to last week's ending adjusted NAV/U. Looking again at BTC-E, LTC seems to have dropped back a bit since I made the spread-sheet - as HWM is not adjusted this has zero impact (we're still not in profit) hence me not worrying about posting the spreadsheet immediately whilst it was up to date (which I had to do last week as the exchange-rate altered what units were taken as management fee).
Bid for now is at 52 (and quantity at 50) - I'm being cautious as the exchange-rate has been moving a lot. If anyone DOES want to sell back, try to PM me - I'm always willing to work out a more accurate (and almost certainly higher) one based on the exact rate at the time. Once LTC settles back into a new range I'll put more competitive rates and the usual quantity of 100 up. Right now the fund could buy back every unit except my own with cash on hand and STILL have sufficient backing for the bonds - so I've no objection at all to buying back any number of units at a fair price.
Spreadsheet in OP has been updated with all results up to and including this week's.
Well - it's been an interesting week to say the least. LTC has well over doubled in value vs BTC. Even with out BTC exposure heavily limited by our bonds we still ended up making a 4.82% loss on the week. My spreadsheet indicates a trading profit of around 17% - it's hard for me to work out whether thats correct or not as the change is so dramatic that the precise timing of when we made the BTC-denominated profits which kept our percentage exposure roughly unchanged is of massive importance. I know actual profit from trading was somewhere in that general area (it was over 10% before the last big spike and we've had more profit since including some from actually trading LTC/BTC on the two most obvious drops back down).
During the big jump today, an investor sold back 46 units to the fund at 55.3. As I was afk when the spike happened they actually managed to sell back at slightly above NAV/U (which I'd guesstimate to have been around 53.5-54.5 at the time). On the face of it that's bad news - in fact, given we already showed we can sell units at over 10% above NAV/U it's no problem at all. If investors would prefer it, I'm happy to take those units off the fund's hands at 60 LTC each - otherwise I see no reason or need for the fund to sell them at all. With LTC having risen so much we're no longer anywhere near our limit for bond-selling - so I believe the increased share of profits for all investors is worth far more than the ~0.1-0.3% drop in NAV/U caused by the sale being slightly over NAV/U. As we aren't near our bond limit and don't use most of our LTC, the sale back of some units has zero impact on the amount of profit we can generate but increased the growth/unit per week week by about 5% or so of what it would otherwise be. i.e. one week of making 5% growth then everyone left in the fund is better off than if those units had not been sold back.
This week I've started trading a bit more aggressively on LTC-Global. I just haven't been trading big batches at a time recently - my sizing of Bids has fallen well below where it should be given our growth. This sunk in when, at one stage this week, we had holdings in TWELVE different securities on LTC-GLobal - yet in total it amounted to under 5% of our NAV. I've been placing Bids worth 100-200 LTC when I should be placing ones worth 500-1000 LTC : simply because I just haven't properly adjusted to the fund being worth over 5 times what it used to be. This won't solve the issue of our LTC stockpile but will make a start on it.
I've referred a few times to a proposal for using our LTC. There's actually two things I have in mind - one of which I can't discuss until it's ready to go. The other one is that I'm giving serious consideration to offering LTC loans - and would welcome feedback on this (especially from investors - though potential borrowers' views are also definitely welcome). They key points to it are:
1. All loans would be very solidly secured - with no exceptions. This would be done by requiring securities to be provided as collateral - with them valued very low for the purpose of collateral.
2. Each loan would use a diffierent account - into which the securities would be transferred, so zero confusion over dividends etc (on repayment I'd change the password and they borrower could then access the account and verify all dividend history themself).
3. Only a small subset of securities would be valid for collateral - ones where there was a long enough (and solid enough) history to make default a low risk.
4. Only individuals with a significant history and/or contribution to the community would be eligible for loans.
5. Surrendering the collateral instead of paying off the loan would NOT be a valid option for lenders - doing so would be explicitly defined as scamming. Hence the only way we don't get repaid is if the securities default AND the borrower defaults. With pretty tght selection criteria on both that should be extremely unlikely.
6. Rates would be very competitive. I'd be looking at a minimum loan size of 1K LTC with a 1% arrangement fee then interest at about 0.14% per day compounded - just under 1% per week.
7. Repayment terms could be anything (reasonable) borrowers wanted - from gradual pay back to payment in full at a specific date.
8. Borrower would NOT have to disclose any personal ID or even provide the reason for the loan.
9. Details of loans would be published - minus the identity of the borrower (that would be provided only if they defaulted).
10. In the event of late or non-payment we'd have the right (but not obligation) to immediately sell collateral into the market to reduce or totally pay off the debt owed. In practice I'd be reasonably flexible with this - all the time that the collateral more than adequately covered the debt. But obviously any piss-taking or trying to f*ck around and the collateral just gets dumped into bids and they get whatever change is left over.
I think we could safely lend out somewhere around 15k LTC with zero impact on our trading and bring in an extra 150 LTC (which is now 1 BTC or around $40-$50) profit per week (plus the 1% arrangement fees). Too much effort for too little reward? I believe the risk to be absolutely minimal - as I just wouldn't loan unless I was certain about the collateral (e.g. I wouldn't take over 50% being one security with exception of LTC-ATF - meaning multiple defaults necessary to realise any real loss).
I think the number of people valid for such a loan AND needing one would be small - but there's a few obvious circumstances where it could be useful: one of which being to buy MORE of the securities being used for collateral : where obviously they can't sell them to raise the funds (if they believe the securities will rise in value by more than a few percent per week then this makes perfect sense).
I also have another project in the works - hopefully I'll be in a position to disclose this and put the securities for it up within the next week or so. I won't be progressing the loan idea further until this other project is done - so there's plenty of time to discuss it and it's by no means certain that we'll go the loans route at all.
For now I've shelved running an ASICMINER passthrough. Aside from anything else, it's not a great idea to start a new pass-through whilst LTC is so volate - I'd have to be glued to the screen to leave any orders up. And with pass-throughs already on Bitfunder/BTC.CO at near zero fees there's no real need for one. Our own 10 ASICMINER shares should be getting transferred to the BTC.CO pass-through in the next few days - whilst there's no urgent need to sell them, I'd like the option to do so if/when I can get the price I'm looking for (or if events make me revise that price down).
There's no management fee this week. As per the revised contract the HWM is NOT adjusted down (under original contract it would have been). So no management fee will be taken on growth up to last week's ending adjusted NAV/U. Looking again at BTC-E, LTC seems to have dropped back a bit since I made the spread-sheet - as HWM is not adjusted this has zero impact (we're still not in profit) hence me not worrying about posting the spreadsheet immediately whilst it was up to date (which I had to do last week as the exchange-rate altered what units were taken as management fee).
Bid for now is at 52 (and quantity at 50) - I'm being cautious as the exchange-rate has been moving a lot. If anyone DOES want to sell back, try to PM me - I'm always willing to work out a more accurate (and almost certainly higher) one based on the exact rate at the time. Once LTC settles back into a new range I'll put more competitive rates and the usual quantity of 100 up. Right now the fund could buy back every unit except my own with cash on hand and STILL have sufficient backing for the bonds - so I've no objection at all to buying back any number of units at a fair price.
Spreadsheet in OP has been updated with all results up to and including this week's.
Exchange-rate : .00533
Adjusted NAV/U : 56.7897
Bid at : 55.3
Been giving more updates this week so investors have an idea what's happening with the large LTC exchange-rate movements. Don't expect me to keep doing this when exchange-rate stabilises - normally I'll only give mid-week updates if something major has happened (though you can get an idea how NAV/U is moving from what my Bid is at - as I update that after any decent sized change).
LTC has risen further against both BTC and USD - meaning we're still in loss for the week (though significantly less so than on my previous update). At present we're down about 1% on the week - with about 12% trading profits if exchange-rate movements were factored out. I think this very clearly shows the benefits of the policy with our BTC-denominated bonds - when LTC fell we made very nice profits and when it rises sharply we only make small losses (and the value of our units in BTC or USD has gone through the roof). You'll struggle to find ANY other fund which delivers this (a price that's fairly stable even with major exchange-rate movements against another currency in which it holds very significant investments) - as it's essentially impossible to do without hedging vs currency movements in one way or another.
It's touch and go whether we'll end the week in profit or not. I COULD put us in profit immediately (there's holdings we have which could be sold to realise an immediate profit - and our ASICMINER shares could be marked up significantly from 0.25 BTC) but I'm not going to change my valuation policies just to make the figures look better this week. A 1% loss with a 100% rise in the value in BTC and 200% in USD would hardly be a disaster after all. We just need one or two half-decent trades to go through to end in profit anyway.
Investors should also be aware that LTC rising is likely to DECREASE our profit anyway. That's because the majority of our profit comes from BTC-denominated trading. If LTC is twice as strong vs BTC then we need to make twice as many BTC to get the same percentage rise in LTC-denominated NAV/U as we did before the rise. Taking that into account I'm actually very pleased with a ~12% trading profit this week.
Weekly report will be tomorrow (later today in some time-zones) as usual.
Adjusted NAV/U : 56.7897
Bid at : 55.3
Been giving more updates this week so investors have an idea what's happening with the large LTC exchange-rate movements. Don't expect me to keep doing this when exchange-rate stabilises - normally I'll only give mid-week updates if something major has happened (though you can get an idea how NAV/U is moving from what my Bid is at - as I update that after any decent sized change).
LTC has risen further against both BTC and USD - meaning we're still in loss for the week (though significantly less so than on my previous update). At present we're down about 1% on the week - with about 12% trading profits if exchange-rate movements were factored out. I think this very clearly shows the benefits of the policy with our BTC-denominated bonds - when LTC fell we made very nice profits and when it rises sharply we only make small losses (and the value of our units in BTC or USD has gone through the roof). You'll struggle to find ANY other fund which delivers this (a price that's fairly stable even with major exchange-rate movements against another currency in which it holds very significant investments) - as it's essentially impossible to do without hedging vs currency movements in one way or another.
It's touch and go whether we'll end the week in profit or not. I COULD put us in profit immediately (there's holdings we have which could be sold to realise an immediate profit - and our ASICMINER shares could be marked up significantly from 0.25 BTC) but I'm not going to change my valuation policies just to make the figures look better this week. A 1% loss with a 100% rise in the value in BTC and 200% in USD would hardly be a disaster after all. We just need one or two half-decent trades to go through to end in profit anyway.
Investors should also be aware that LTC rising is likely to DECREASE our profit anyway. That's because the majority of our profit comes from BTC-denominated trading. If LTC is twice as strong vs BTC then we need to make twice as many BTC to get the same percentage rise in LTC-denominated NAV/U as we did before the rise. Taking that into account I'm actually very pleased with a ~12% trading profit this week.
Weekly report will be tomorrow (later today in some time-zones) as usual.
Exchange-rate : .005
Adjusted NAV/U : 55.244 (as it's below last week's HWM it's same as unadjuested NAV/U of course)
Bid at : 52.5 (can't change it as LTC-Global not functioning)
LTC dropped a bit but has now gone back up above where it was when last I reported. As you'll notice, our NAV/U has grown from then anyway - though is still about 3.6% down on where it started the week. Ignoring the impact of exchange-rate movement we're up a bit over 7% from trading so far this week. I'd settle for losing 3.6% of NAV and LTC rising by 2/3 in value EVERY week if given the choice.
Trading has been painful this week - with BTC-E down a lot of the time, issues with MPEx (CoinBR not reporting proper market data for most of yesterday and now reporting MPEx as offline for insfratructure upgrades) and now LTC-Global unusable for last 10 hours. But we'll soldier on - and hopefully end the week at break-even or better on NAV/U but with a much more valuable LTC than we started the week.
The issues with BTC-E and MPEx have seriously crippled my ability to properly make is (and investors in our pass-throughs) money from buying/selling with the movements of LTC. Luckily I've found some decent spots for trading on BTC.CO/BitFunder/LTC-Global - though have also had a few cases of buying with bad timing (inevitable with massive exchange-rate moves - but no big deal so long as the occasions I buy with good timing continue to outweigh them heavily).
Adjusted NAV/U : 55.244 (as it's below last week's HWM it's same as unadjuested NAV/U of course)
Bid at : 52.5 (can't change it as LTC-Global not functioning)
LTC dropped a bit but has now gone back up above where it was when last I reported. As you'll notice, our NAV/U has grown from then anyway - though is still about 3.6% down on where it started the week. Ignoring the impact of exchange-rate movement we're up a bit over 7% from trading so far this week. I'd settle for losing 3.6% of NAV and LTC rising by 2/3 in value EVERY week if given the choice.
Trading has been painful this week - with BTC-E down a lot of the time, issues with MPEx (CoinBR not reporting proper market data for most of yesterday and now reporting MPEx as offline for insfratructure upgrades) and now LTC-Global unusable for last 10 hours. But we'll soldier on - and hopefully end the week at break-even or better on NAV/U but with a much more valuable LTC than we started the week.
The issues with BTC-E and MPEx have seriously crippled my ability to properly make is (and investors in our pass-throughs) money from buying/selling with the movements of LTC. Luckily I've found some decent spots for trading on BTC.CO/BitFunder/LTC-Global - though have also had a few cases of buying with bad timing (inevitable with massive exchange-rate moves - but no big deal so long as the occasions I buy with good timing continue to outweigh them heavily).
Thanks for the update.
Exchange-rate : .0049
Adjusted NAV/U : 54.063
Bid at : 52.5
The massive jump in the price of LTC has taken into loss so far for the week. We're down 5.7% - all of it from the exchange-rate movement (if exchange-rate is factored out then we're up about 3.4% from trading - in line with the results of recent weeks).
The above exchange-rate is only an estimate as BTC-E has been down most of the time today for me. This has stopped me properly trading our pass-throughs as I can't do the currency conversion I do as part of every set of trades. Whenever I buy or sell on one of our pass-throughs I (nearly) simultaneously execute a trade in the other direction on CoinBR and a currency conversion. This removes all risk from us - as we just take our cut whilst being immune to currency/price movements (exception being if the orders I'm trying to fill vanish right at the second I try to fill them - but that pretty much never happens and I do the riskiest one first).
LTC seemed to be peaking out last time I was able to actually see the BTC-E trade screen briefly. So long as it doesn't rise much more I'm fairly confident I can trade us back to at least even for the week.
We would have been not quite so badly off had I not somehow failed to cancel some gold buy orders (which were very low when placed) and ended up buying gold shares at what shortly became over the going rate.
If LTC manages to stay anywhere near where it is, then we won't be needing to sell more units for quite a while. The bonds : NAV ratio (which was at 100 prompting me to sell the last 100 units) is currently sitting at just under 50%. And that's AFTER I dropped 500 more into overpriced buys in the market - on average they were 8% over face value meaning the profit on selling them has paid the first 3 months of their interest. As I was planning to sell more bonds later this week anyway, there was no way I was passing that up. At current exchange-rate we could issue another 80 BTC worth of bonds before needing to stop (can't see me actually wanting to sell more than another 10 BTC worth this week - and I'd prefer to make sure LTC isn't going to plummet straight back down before even selling those).
Adjusted NAV/U : 54.063
Bid at : 52.5
The massive jump in the price of LTC has taken into loss so far for the week. We're down 5.7% - all of it from the exchange-rate movement (if exchange-rate is factored out then we're up about 3.4% from trading - in line with the results of recent weeks).
The above exchange-rate is only an estimate as BTC-E has been down most of the time today for me. This has stopped me properly trading our pass-throughs as I can't do the currency conversion I do as part of every set of trades. Whenever I buy or sell on one of our pass-throughs I (nearly) simultaneously execute a trade in the other direction on CoinBR and a currency conversion. This removes all risk from us - as we just take our cut whilst being immune to currency/price movements (exception being if the orders I'm trying to fill vanish right at the second I try to fill them - but that pretty much never happens and I do the riskiest one first).
LTC seemed to be peaking out last time I was able to actually see the BTC-E trade screen briefly. So long as it doesn't rise much more I'm fairly confident I can trade us back to at least even for the week.
We would have been not quite so badly off had I not somehow failed to cancel some gold buy orders (which were very low when placed) and ended up buying gold shares at what shortly became over the going rate.
If LTC manages to stay anywhere near where it is, then we won't be needing to sell more units for quite a while. The bonds : NAV ratio (which was at 100 prompting me to sell the last 100 units) is currently sitting at just under 50%. And that's AFTER I dropped 500 more into overpriced buys in the market - on average they were 8% over face value meaning the profit on selling them has paid the first 3 months of their interest. As I was planning to sell more bonds later this week anyway, there was no way I was passing that up. At current exchange-rate we could issue another 80 BTC worth of bonds before needing to stop (can't see me actually wanting to sell more than another 10 BTC worth this week - and I'd prefer to make sure LTC isn't going to plummet straight back down before even selling those).
At the time of posting the spreadsheet in previous post, highest bid (on LTC/BTC) was at .00298 and lowest ask at .0032 giving a rate of .003. By time I finish this post it may well have moved significantly in either direction.
We've ended this week with growth of 13.83%. I'd estimate trading profit (ignoring exchange-rate movement) at around 18-19% (my spreadsheet says 21.27% but I know the assumptions it's based on aren't correct). Final adjusted NAV/U is 57.333 - it was over 59 before LTC started to move up and we've definitely made profit since then.
The sale of new units was responsible for around 2% of growth - with the rest being from our usual trading. DMC shares are no longer listed as long-term : with their price rising and there still no easy way to directly convert them into ASICMINER (as no trading platform) I have sold some of them and will sell the rest assuming I can get the right price. We'll have made over 100% profit on them in the few weeks we've held them. Around 8% of trading profit this week came from sales of part of our holding of them - with another nice chunk still to come.
The sale of new units went smoothly and so did the sale of 1k new bonds shortly afterwards. At present I'm in the middle of selling a further 200 bonds (last part of it is taken down for now - so I can type this without having to keep checking exchange-rate). This week the timing worked out much better for us than it did last week - the sharp rise in LTC didn't happen until after the units/bonds had been sold (and a portion of the proceeds converted to BTC). That meant that our percentage exposure to BTC was lower than it had been for the last weeks - just in time for the LTC rise.
It's not at all clear (to me) where the LTC price will go now. I may sky-rocket or it may fall back to (or below) where it was until earlier today. Until I get a clear view of what's happening I'll just be keeping us in my target range of 15-20% BTC exposure (we can't fall much below that due to our commitment to ensure proper backing for bonds). If the LTC price stays where it is then I don't see there being a need to issue new units for at least a few weeks - for the coming week my expectation is that I'd only consider issuing more units if LTC falls back below .0025.
S.BBET and S.MPOE have both been paid their small dividends for this month - the (much larger) S.DICE one should arrive within the next day or so. Trade has been sluggish on all the pass-throughs - with the main activity being when LTC rose sharply and I was suddenly able to fill some orders (and with LTC falling back down a bit those purchasers can now likely sell at a profit). I've also managed to buy back some more S.BBET - the fund has actually made enough profit just from buying back units of that to more than cover its ticker cost.
With ASICMINER pass-throughs now starting on both BitFunder and BTC.CO, as well as a few fairly active (trading wise) new companies on Bitfunder we don't look like running short of trading possibilities for a while.
The main concern for us now should be the mountain of largely unused LTC we're building up. I have an idea or two how to deal with that which I'll hopefully post about later in the week.
Tomorrow (Monday - actually today now for me) I'll be out nearly all day on business. With the LTC price currently in flux I won't leave orders up on the pass-throughs. I'll be back around and conducting business as usual from Tuesday (I WILL be around for an hour or two on Monday but not my usual active self).
Management fee for this week is 7 units (rounded down from 7.79) which will be transferred shortly.
Bid at : 55.5 (a bit wider than usual due to the exchange-rate volatlity).
We've ended this week with growth of 13.83%. I'd estimate trading profit (ignoring exchange-rate movement) at around 18-19% (my spreadsheet says 21.27% but I know the assumptions it's based on aren't correct). Final adjusted NAV/U is 57.333 - it was over 59 before LTC started to move up and we've definitely made profit since then.
The sale of new units was responsible for around 2% of growth - with the rest being from our usual trading. DMC shares are no longer listed as long-term : with their price rising and there still no easy way to directly convert them into ASICMINER (as no trading platform) I have sold some of them and will sell the rest assuming I can get the right price. We'll have made over 100% profit on them in the few weeks we've held them. Around 8% of trading profit this week came from sales of part of our holding of them - with another nice chunk still to come.
The sale of new units went smoothly and so did the sale of 1k new bonds shortly afterwards. At present I'm in the middle of selling a further 200 bonds (last part of it is taken down for now - so I can type this without having to keep checking exchange-rate). This week the timing worked out much better for us than it did last week - the sharp rise in LTC didn't happen until after the units/bonds had been sold (and a portion of the proceeds converted to BTC). That meant that our percentage exposure to BTC was lower than it had been for the last weeks - just in time for the LTC rise.
It's not at all clear (to me) where the LTC price will go now. I may sky-rocket or it may fall back to (or below) where it was until earlier today. Until I get a clear view of what's happening I'll just be keeping us in my target range of 15-20% BTC exposure (we can't fall much below that due to our commitment to ensure proper backing for bonds). If the LTC price stays where it is then I don't see there being a need to issue new units for at least a few weeks - for the coming week my expectation is that I'd only consider issuing more units if LTC falls back below .0025.
S.BBET and S.MPOE have both been paid their small dividends for this month - the (much larger) S.DICE one should arrive within the next day or so. Trade has been sluggish on all the pass-throughs - with the main activity being when LTC rose sharply and I was suddenly able to fill some orders (and with LTC falling back down a bit those purchasers can now likely sell at a profit). I've also managed to buy back some more S.BBET - the fund has actually made enough profit just from buying back units of that to more than cover its ticker cost.
With ASICMINER pass-throughs now starting on both BitFunder and BTC.CO, as well as a few fairly active (trading wise) new companies on Bitfunder we don't look like running short of trading possibilities for a while.
The main concern for us now should be the mountain of largely unused LTC we're building up. I have an idea or two how to deal with that which I'll hopefully post about later in the week.
Tomorrow (Monday - actually today now for me) I'll be out nearly all day on business. With the LTC price currently in flux I won't leave orders up on the pass-throughs. I'll be back around and conducting business as usual from Tuesday (I WILL be around for an hour or two on Monday but not my usual active self).
Management fee for this week is 7 units (rounded down from 7.79) which will be transferred shortly.
Bid at : 55.5 (a bit wider than usual due to the exchange-rate volatlity).
Posting the spreadsheet then will do rest of writeup in a second post. I want the spreadhseet to be posted whilst the quote exchange-rate is roughly right (this is third try - the previous two times the rate move a mile whilst I was preparing the screen-shots).
Just a quick note that I'm holding off on doing the weekly report until the LTC/BTC exchange-rate settles down a bit.
I don't want to produce a report that could be off by a few % by the time I've finished writing it (and I don't want to take a management fee then LTC rises further and by time I submit the post I'm no longer entitled to the fee).
Even with the large rise in LTC, NAV was still above where it was at after selling the extra units yesterday. We've made tradng profit since then and have pretty low exposure to BTC right now.
I WILL do the report before I go to bed tonight.
I don't want to produce a report that could be off by a few % by the time I've finished writing it (and I don't want to take a management fee then LTC rises further and by time I submit the post I'm no longer entitled to the fee).
Even with the large rise in LTC, NAV was still above where it was at after selling the extra units yesterday. We've made tradng profit since then and have pretty low exposure to BTC right now.
I WILL do the report before I go to bed tonight.
LTC rose very slightly causing a tiny drop in NAV/U. No trade occurred in the last 40 minutes.
At time of sale:
Exchange-rate : .00242
Adjusted NAV/U : 56.4266874
The 75 units sold into market were in theory placed at : 62.06935614
In practice they sold a bit higher into a single existing bid:
Received Ask Order: 75 @ 62.0694 LTC
Sale 75 @ 67.25 LTC Complete.
Looked to me like there were at least two people trying to place bids at last minute - well done whoever won.
The 25 units bought by myself were transferred for 56.99095427 each (a total of 1424.77385677 LTC)
Weekly payment has now been made on our bonds (the funds for this were already put aside when calculating NAV/U).
Adjusted NAV/U is now 57.2767 - the increase being due to the premium paid on the freshly sold units.
1000 new bonds are being placed on the market.
Weekly report, as usual, tomorrow.
At time of sale:
Exchange-rate : .00242
Adjusted NAV/U : 56.4266874
The 75 units sold into market were in theory placed at : 62.06935614
In practice they sold a bit higher into a single existing bid:
Received Ask Order: 75 @ 62.0694 LTC
Sale 75 @ 67.25 LTC Complete.
Looked to me like there were at least two people trying to place bids at last minute - well done whoever won.
The 25 units bought by myself were transferred for 56.99095427 each (a total of 1424.77385677 LTC)
Weekly payment has now been made on our bonds (the funds for this were already put aside when calculating NAV/U).
Adjusted NAV/U is now 57.2767 - the increase being due to the premium paid on the freshly sold units.
1000 new bonds are being placed on the market.
Weekly report, as usual, tomorrow.
Release of the 75 units is about 40 minutes away.
Exchange-rate : .002395
Adjusted NAV/U : 56.544
No real change since previous post. I won't update again unless there's a significant move in either direction (LTC seems fairly stable within a few % at current which would only move NAV/U under 0.5% in either direction).
At present adjusted NAV/U Ask would be placed at 62.198 and would immediately be filled by existing bids.
I'll try to place the ask as near as I can exactly to the hour - so snipe away if you want.
Exchange-rate : .002395
Adjusted NAV/U : 56.544
No real change since previous post. I won't update again unless there's a significant move in either direction (LTC seems fairly stable within a few % at current which would only move NAV/U under 0.5% in either direction).
At present adjusted NAV/U Ask would be placed at 62.198 and would immediately be filled by existing bids.
I'll try to place the ask as near as I can exactly to the hour - so snipe away if you want.
Exchange-rate : .00236
Adjusted NAV/U : 56.6615
Bid at : 55.2
Just a quick update for those placing bids for the units later tonight. We've made a little more trading profit but LTC rose vs BTC slightly cancelling some of it out - so no real change in adjusted NAV/U.
Adjusted NAV/U : 56.6615
Bid at : 55.2
Just a quick update for those placing bids for the units later tonight. We've made a little more trading profit but LTC rose vs BTC slightly cancelling some of it out - so no real change in adjusted NAV/U.
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