Topic: [LTC-GLOBAL] LTC-ATF - page 7. (Read 25457 times)

LTC-ATF WILL BE SELLING NEW UNITS TOMORROW

Exchange-rate : .00228
Adjusted NAV/U : 56.4537
Bid at : 55.2

At present we're up around 12% this week, with the vast majority of that trading profits (exchange-rate isn't much different to at start of week).

Main purpose of this post is to announce that new units in LTC-ATF will be sold tomorrow (later today for some time-zones I guess).


WHY SELL MORE UNITS?

This will (or should) be the immediate question that springs into the minds of existing investors - after all, I've repeatedly said that I saw no need to sell new units.

Let's look back at a previous post of mine where I qualified that - and explained the circumstances under which new units WOULD be sold.


So IS the ratio of Bond capital to Fund Net Assets near the 150% limit?

The simple answer is NO - it's at just under 100% (97.35% to be precise).
The more complicated answer is NO - but it SHOULD be (and WOULD be, were I not keeping it low).

Let me clarify by looking at the first 2 numbered points in my quote above (point 3 does not apply - we've NOT made any trading loss).

1.  Need for BTC-denominated capital significantly grows.  This HAS occurred.  The most obvious area where we could use more capital is on BitFunder for two reasons:
a)  There's new very tradable securities (if less clearly worthwhile as investments) there.
b)  BitFunder HAD been implementing a similar system to BTC.CO - where the same capital could back orders on the bookds for multiple securities.  Our account there was one of a handful of accounts given this ability during their tests of it.  A few weeks back this was removed - and now every order has to be backed by its own cash.  That's obviously a total pain - given only a small percentage of our bids get filled on any given day - and of itself pretty much immediately doubled the capital requirement to maintain the same orders.

We've also on occasion run low on funds on BTC.CO (to the extent, once, of having orders auto-cancelled).  And on a few occasions now I've had to pull funds back from CoinBR (cancelling orders I'd rather leave up) for more pressing bids - which costs us 0.1 BTC per withdrawal.  Finally, I'd like us to be trading ASICMINER - but we don't really have the spare cash to do so.

In short there's now opportuniteis for fairly significant more BTC capital to be used.

2.  LTC falling further vs BTC.  From the time of the quoted post to now LTC has fallen about 50% in value vs BTC.  The immediate impact of that is to increase the ratio of bond-debt to NAV - restricting our ability to safely issue new BTC-denominated bonds (we've been able to do so to an extent purely because we've been making a profit so can sell new bonds backed by the profit).

In short, the actual circumstances have precisely matched two of the three criteria I listed - so this isn't actually a reversable of policy.  The only reason the ratio of bond-debt to NAV is NOT near 150% is because I've held back from issuing bonds (that we could do with selling) to STOP us getting near 150%.  I feel obliged to exercise this caution as if BTC continues to rise there has to be a significant chance of LTC falling lower - and the absolute last thing I want is to sell bonds then be forced to buy them back at a premium or issue new units in a rush.


PROTECTING EXISTING INVESTORS

In the past I've toyed with the idea of, when any new units are issued, giving first option on them to current investors in proportion to their current investment.  There are, however, a few big problems with this:

1.  It's a cumbersome and impractical way to do things - as there's no functionality allowing any automation of it.  At a vasic level I don't even know the account names of the various investors (with a few exceptions) to do a transfer to IF they chose to take up such an option.  And I can't offer at a fixed price - as the value of a unit can change very rapidly (either through trades, major price-changes in an investment or simply through a change in the LTC/BTC exchange-rate).

2.  If the extra units are offered at any sort of discount to what the market would pay then investors who take up the option are advantaged compared to those who don't (as fund value doesn't grow to the degree it would if units were sold on the open market).

My belief is that issuing extra units (but not an excessive quantity) will have a minimal (but non-zero) impact on growth per unit.  Some small reduction IS likely (predominantly because around 70-80% of the extra LTC raised from selling units won't be used - it's the BTC raised by selling more bonds backed by the units that will actually be put into play).  This is offset to some degree by a reduction in our fixed fees (per-transaction transfer fees, monthly fee on CoinBR) which won't rise but will represent a smaller cost as a percentage of NAV.  I DO, also, have a proposal to put the LTC to use - which I'll hopefully get time to type up for discussion before too long.

My intention is to sell the new units at a more significant markup to NAV than units were initially sold at.  If they won't sell at a reasonable markup to NAV then they won't be sold.  That markup will generate an immediate small growth in NAV/U for existing investors which I believe should compensate for any tiny short-term drop in weekly profits.  In practice profits could rise OR fall significantly after sale of new units - we could currently easily have a +25% week or a +1% week (or a -5% week if an asset openly defaulted whilst I was offline and we had bids on it) and that won't change.


MECHANICS OF SALE

100 units will be sold (or placed for sale) at 22:00 GMT 2nd March 2013.  That's around 22 hours after the time of this post.

Of these 100 units, 25 will be purchase via transfer by myself at NAV/U +1%.
The other 75 will be placed on the market at a price of NAV/U +10%.  If there are existing orders then the highest of those will be filled.  If no (or insufficient) Bids then I will adjust the price thereafter as/when NAV/U changes.

I will endeavour to provide some updates to current NAV/U during the period before placing the sale.  Based on current NAV/U the ask price is likely to be in the range of 60-65 LTC (dependent largely on how exchange-rate moves) but obviously that could change significantly if there's a major exchange-rate move or substantial tarding profit/loss.

In case anyone wonders why I get 25 at NAV/U+1% here's a quote from the contract:

"When new units are authorised for issue the manager additionally has the right
to buy up to 25% of those units at NAV/U + 1% before releasing the remainder to
the market. "

That clause was always in the contract to allow me to maintain ownrship of a significant portion of the fund personally when expanding.  That I get them at a discount to what (hopefully) the market pay is explicitly part of my reward for running the fund in a manner such that units DO (hopefully) sell at a premium to NAV.

I will NOT sell any of my personal holdings (including the new 25) into bids placed tomorrow.  I will also NOT bid on more units myself prior to placing the sell order but if they don't all sell at NAV/U+10% I WILL then buy more up myself.

At the time of making this post I personally hold 248 of the 533 outstanding units of the fund.

On the pricing of shares at 10% over NAV/U, all the contract says on pricing is this:

"Other than as detailed below under "MANAGEMENT FEES" the manager is only
entitled to sell issued units on the LTC-GLOBAL exchange. Such sales may only
be made at or above the current NAV/U (to avoid dilution of existing investors'
holdings). "

So any price at or over NAV/U is acceptable under the contract.  The referral to "other than as detailed below" refers to my own right to buy 25% at NAV/U without them being listed on the market (necessary as there's no way to transfer to myself via the market at that price if there's higher Bids up).


SALE OF FURTHER BATCHES

Whether more such batches are sold depends a lot on what happens with the exchange-rate and with trading conditions (and with what demand there is for this batch).  My expectation right now is that another few batches of 100 units could usefully be sold - but when they're sold depends as much as anything on how quickly we can sell extra bonds backed by them (as the goal is to back BTC-denominated capital - right now the actual LTC themselves aren't too much use).

There's a risk that it will be difficult to sell bonds if units are available (although the bonds have less risk, the much higher historic profit of the units will outweigh this to many investors).  Should this prove to be the case then I'll revisit the idea of listing bonds on BTC.CO.

WEEKLY REPORT




Slightly worse results this week compared to recent ones - 13.2% growth but only 8.43% after adjusting for exchange-rate movement.  There are a few reasons for this:

• With BTC rising sharply, there was very little buying going on at BTC-denominated exchanges.
• Bad timing.  I launched our S.MPOE pass-through and immediately it dropped a bit - so instead of selling at a small profit, we were selling at a small loss compared to what we bought at.  That's no big deal - as we expect to absorb profit/loss on out float for pass-throughs and just make sure we're replacing sold stock at a small profit.  However:
• Shortly after that, LTC dropped.  That had the effect of forcing me to raise prices on pass-throughs (as, although the underlying BTC price hadn't moved, the LTC-denominated price obviously had rose.  That made the shares look expensive compared to what they'd previously been sold at and pretty much killed all pass-through sales for the rest of the week.
• More bad timing.  I put new bonds up for sale, went afk for a few hours, came back and LTC had dropped and the bonds had sold at below face value instead of slightly above it.  Not much I can do about this until we get a fully functioning bot that can set prices AND convert on BTC-E when sales occur (without the conversion, pricing is pretty meaningless - as we end up gambling on exchange-rate movement).

Still, hardly a disastrous week - I'm still not totally sure how we ended up making such a respectable profit at all.  I did quite a few trades but nothing especially spectacular - it just shows how if you keep making 5% here, 10% there etc it can add up.

On the pass-throughs there's finally signs of upwards movement on S.DICE again, with the Ask wall at .0069 gone.  I'd expect price to go up a bit before dividends.  At present S.DICE looks like dividending out upward of 10k BTC this month (still less than last month) - it sounds like a lot, but remember there's 100 million shares to spread it between.

S.BBET seems stalled - with little activity on it.  This week I again bought back some shares, decreasing the number outstanding.  I'm buying back well above the price they sold at - but it's slow as I can only buy back when I manage to sell some on MPEx.  Have had top Bid pretty much non-stop for the last few weeks but never had anyone sell into me - so been unable to sell more at a competitive price.  Noone wants to buy at the MPEx Ask rate (and rightly so in my opinion) so for now this is pretty stagnant.

S.MPOE hasn't really sold much yet - I'm blaming a combination of market saturation (a few IPOs recently that have sold quite nicely), uncertainty in general with LTC's price drop (some will have cashed out to BTC at least temporarily - or to buy into the Novacoin pump/dump) and the apparent price hike on it (actually BTC price fell but that tiny drop was drowned out by the much larger drop in LTC).

Bid is at : 49.8
Management fee this week is 6 units which will be transferred shortly.

WEEKLY REPORT




Another week of good results has passed.  BTC gained significantly vs USD this week, causinf LTC to fall fairly heavily vs BTC.  We ended with growth of 17.33% before adjustement for exchange-rate movement and 12.68% once exchange-rate movement was factored out.

There's been little of great significance happened all week - just steady growth from trading.  The most important news for us was that ASIC-MINER got its first units hashing.  As a result of that, and with ASIC-MINER shares trading off-market for over 0.4 BTC each I have revalued our 10 shares from 0.1 to 0.25 - which is still very conservative.

In related news, DMC (who you may recall we have a stake in - due to their ASIC-MINER holdings) have now decided to allow trading of 11 DMC shares for one ASIC-MINER once ASIC-MINER becomes tradable on an exchange.  My intention is to take this offer up (in fact I was the one who suggested/requested it).  Whilst it means we'd be taking slightly less value than the DMC shares are worth we'd be gaining liquidity.  Our DMC shares are still listed in the spreadsheet at a value of .02247 each but will almost certainly be worth significantly more than that (in fact they could be sold right now for a 50% profit).  Once these are converted to ASIC-MINER and sold I expect a resulting jump in our NAV of somewhere in the 10%-25% range : so there should be a bumper week for us in the not too distant future.

The DMC situation is a good example of why I don't in general disclose our holdings.  Whilst I was accumulating out stock of them cheaply it would have been a very bad move for me to show that we were holding them and gradually accumulating more cheaply (and an absolutely terrible move for me to reveal why).  Once we had as many as we needed (based on restricting our exposure) then I disclosed them - as at that point the market moving up didn't matter any longer (and potentially even helped - as in addition to the long-term ones I still trade it).  Hopefully some LTC-ATF investors managed to grab cheap ones after I explained what was happening.

Trade has been fairly sluggish on both pass-throughs.

S.BBET has seen only buys occurring on MPEx this week - I'd guess these were mainly the two new pass-throughs to it (one on BTC.CO and one on Bitfunder) stocking up.  Noone on LTC-GLobal seems interested in buying from the Asks at 0.002 (and I don't fault them on that) and in fact we've actually repurchased a few (I sold via an Ask at the top on MPEx and bought back some from Asks on our own pass-through).

S.DICE has seen a fair amount of profit-taking on our pass-through.  The price of the underlying has risen which, coupled with the fall of LTC vs BTC, has meant a significant rise in the price of these in LTC.  The fund has sold AND bought back these this week - ending with about the same amount outstanding as we started the week at.  The majority of trading of these on the pass-through this week haven't involved the fund at all - they've just been new investors buying from old ones with the trading occurring within the spread on MPEx.

This week I'll be opening a new pass-through run by our fund - to S.MPOE.  That's the asset which gets the profit from trading on MPEx as well as (sometimes) overflow profit on MPOE.  It has a pretty stable price and pays regular dividends so is a good candidate for inclusion in the portfolio of investors who want some BTC exposure.  I'd been holding off on this until activity on the existing pass-thoughs had slowed down - as our ability to supply to pass-throughs is limited by the speed of converting/moving funds from LTC-Global via BTC-E to CoinBR.

Management fee for this week is 7 units (rounded down from 7.
Bid at 44.6

WEEKLY REPORT




This was the week of S.DICE - there's been more volume in the pass-throughs to this on BTC.CO and Bitfunder than on all their other assets combined.  The release of more shares at below-market prices produced a bit of a feeding frenzy on them which is only now finally dieing down.  Activity has been limited on other assets but we've managed to claw out just under 14% growth for the week (both before and after currency adjustment as the exchange-rate really hasn't moved much).

LTC seems to have settled into a range now vs BTC - it's actually fairly impressive that it managed to stay above .0034 all week despite BTC rising strongly vs USD (which produces downwards arb pressure on LTC/BTC).

With ASICs about to arrive our activity on some mining stocks has been largely curtailed - irrational exuberance has driven the prices of some up well above where they should be.  When valuing mining stocks the main thing I look at is what value of hardware (at the higher of second-hand value and replacement cost for same hash-power) backs each share.  When you see a share trading at three times that number (i.e. for each BTC of shares there's 1/3 of a BTC-worth of ASICs/FPGAs/GPUs) then you KNOW it's overpriced - as there's other shares you could buy where you got nearly 1 BTC worth of hardware for each 1 BTC you spent on shares.  The biggest culprits for these are shares that have previously lost a lot of their value - it's as though investors somehow believe that a share that originally cost X BTC has some divine right to return to being worth X BTC in the future.  They are, of course, wrong.  I refer to BTC not LTC here - as this problem is one fairly specific to BTC.

Linked to this is another area of irrational behaviour - that investors who absolutely wouldn't buy a share of something for X BTC will also refuse to sell shares they hold of it for X BTC.  They're unable to fully accept that whatever they spent on the share is gone - and all shares have the same value whether or not they personally previously bought it or not.

These two factors make trading certain stocks non-viable for our fund.  There's no way I'm going to chase a 10% profit on something that's overvalued by 200% - and likely end up wearing a 50%-70% loss if investors wake up and realise that no way they should pay X BTC for the share when they could pay X/2 BTC for a different one and get more hash-power/share.

Added to this is that investing in mining stocks right now is a total gamble.  There's no guarantee BFL will ship imminently and it's still unclear to me to what extent Avalon have actually shipped in bulk as opposed to just having the intent to ship in bulk.  And of course if/when ASICMINER comes online companies invested in both BFL/Avalon will take an extra hit to their projected profit (or loss).  So right now i'm being very cautious on mining investments (and I wear gloves when I touch them normally) as I only really like to gamble when I know the odds AND am getting better odds than are fair.  This may negatively impact on growth in the short-term - although I don't tend to trade mining stocks a lot we HAVE had some very good profits some weeks from them.

On our pass-throughs, the last batch of S.DICE (1 million at .0062) were all snapped up by someone and relisted higher.  Evoorhees has annoucned he won't be releasing the other 2 planned batches and now has no intent of releasing more onto the market in the foreseeable future.  The remaining walls of these on BTC.CO/Bitfunder have now gone - and our LTC-GLobal one is now the only place you can get these for (slightly) under .0062 (from resellers - our own listing is higher).

S.BBET has seen little trade all week - other than the previous lowest Ask getting impatient and selling into Bids.  So at present there's a huge spread (Highest Bids at ~.0005 and lowest Asks just short of .00195 other than one 500 unit one at .0016).  At present there's no interest in our pass-through in selling into the Bids or Buying from the Asks, so what trade IS happening is investors buying from other investors.  That won't change unless we get a Bid filled at the low end or the spread tightens significantly with some volume.

Bid is at 38.6
Management fee for this week is 6 units which will be transferred shortly.

Exchange-rate : .00347
Adjusted NAV/U : 37.1578
Bid at : 36.4

Well we're up a bit over 6% (before management fee) nearly all of it from trade as the exchange-rate hasn't moved much.  But that doesn't tell the true story of whats happened this week.

We started off well - and by end of Monday were up around 4%.  Then all of a sudden a huge block of S.DICE showed up on MPEx at 0.0044 - when it had been trading at around .0074.  Turned out the asset issuer had decided to release 5 blocks of 1 million shares into the market at prices well below the range it was trading at.

I'd been trading S.DICE (as well as selling it to our pass-through) and when his block was put up it filled a buy order for 1k of ours at around 0.007.  Those then had to be sold to the pass-through at 0.0044 equivalent.  Problem then came when noone was around at CoinBR to manually approve my next deposit.  The sell wall at 0.0044 started vanishing fast (one purchase of 550,000 of them more than halved it) and I was unable to restock at the cheap price.

The net effect of that was to wipe out our profit so far for the week and leave us at a very small loss.

Since then I've traded us back solidly into profit - with a fair chunk of it coming from S.DICE.  The second block of S.DICE sold out immediately last night at 0.055.  The third block is going up tonight at 0.0062 - I'd expect it to sell out immediately or very quickly too as there's a lot of demand for the shares on the various pass-throughs (think around half the block last night was bought by various pass-throughs).

This sort of scenario is the way we're most likely to have a bad week - when the price of something collapses for whatever reason and our order(s) get filled on the way down.  There's no way to avoid it - as a good chunk of our profits come from those very orders.  WE just have to hope it doesn't happen too often - or on multiple shares at the same time.  In this instance the drop was in price not value - but in a lot of scenarios a sudden price drop is caused by an actual major fall in (real or perceived) value making the drop long-lasting.

WEEKLY REPORT




Another good week - not as spectacularly good as the previous few, but 13.58% growth (11.64% from trading) is perfectly respectable.  All sites other than Crypto chipped in with a decent share of profits again this week.

DMC - 'Long-term' investment

For the first time in quite a while we have what is considered in the contect of this fund to be a long-term investment.  That doesn't mean that we'll necessarily hold it for months - just that my expectation is that we'll be holding onto it for a week or more at minimum.

Why DMC?  After all, I've been very critical of its management in the past - and it's lost well over 90% of its original NAV.  Let's have a look at its holdings and see.

DMC (https://bitfunder.com/asset/DMC) presently has 11,579 shares.

Its current assets are:

106 BTC-MINING
1000 BTCMC
1000 ASICMINER

The BTC-MINING are likely nearly worthless - as bulk of their assets were loaned to the scammer AmazingRando.  These can be ignored for the purposes of valuing DMC (they have a tiny value not worth adding in due to a few BTC in their wallet).

The BTCMC are of dubious value - the operator of that company seems to be constantly stalling on giving out information (one excuse/delay after another).  They'll probably have SOME value - but likely less than the around 0.25-0.4 BTC each they should be worth.  It's probably reasonable to assume these add a value of around 0.01 BTC to each DMC share.

ASICMINER - This is where the real value is.  Each DMC share is effectively backed by 0.0863 ASICMINER shares.  ASICMINER has passed the biggest hurdle it faced - getting chips produced that actually functioned.  Its first batch of 10-12 TH/s of machines should be going online within the next few weeks.

At present ASICMINER shares aren't tradable - but they will be before the first dividend on them is paid.  Trades have been agreed - with recent prices around the 0.5 BTC/share mark (there's been more deals than are visible in public).  Unless something gos horribly wrong I'm expecting prices to rise even higher than that once proper trading on an exchange starts.

At 0.5 BTC per share the ASICMINER shares would add 0.4318 to the value of each DMC share.  Adding on even a fairly pessimistic value for BTCMC shares we get a value for DMC shares over 0.05.  That makes the 0.02 we paid for them rather good.  I doubt we'll sell the DMC for that until ASICMINER pays its first dividend and DMC pays half of it out (the other half being used to buy back shares) OR DMC sells its ASICMINER and we get to cash out that route.  But by waiting until then it's highly likely we'll get far more than 0.05 per share - as once ASICMINER is tradable AND paying dividends its price will shoot up: after all it has low costs (in CHina), makes its own ASICs (so gets mining gear WAY cheaper than other mining companies), the shares also get a share of profits from any sales of those ASICs (and from development of next-gen ASICs) and all profit gos to the shares until the initial 0.1 BTC/share is paid off.

So that's why I bought DMC at an average of around 0.02 - because I'm confident we'll be able to sell them at 0.05 - 0.1 within a month.  Our shares ARE up for sale on Bitfunder - but we're not the cheap ones at the bottom.


PASS-THROUGHS

Both pass-throughs paid their first dividends this week.

S.BBET - Made tiny profits and paid a miniscule dividend.  This was expected (by me at least) - though the site's trade seems to be disappointly slow (and I didn't have THAT high expectations for the first month anyway).  There's very little trade happening on the underlying asset at present - those holding shares aren't deterred enough to sell off at a loss and there's not exactly a stampede of people trying to buy them.  As I've mentioend previously, I have concerns that their fundamental business model is flawed - specifically that they aren't providing what their target market (fairly heavy betters) wants (fixed odds).  This issue is made worse by the weighting system.

I'd recommend AGAINST buying these at the ask price until accounts have been published and there's a clear idea of what the site's plan is to pick trade volume up.  Someone has already got a bid up on our pass-through near the Bid on MPEx - but so far I've had no luck getting my top Bid there filled to pass the shares on.  If you want to buy in then I'd suggest you put up bids in that area rather than buy from Asks.  If you're losing your taste for this share then there's only a 1K order at .001 on MPOE I could fill before the price fell (the 1200 at .00105 is mine and will disappear if the bids on the pass-through it's placed to try to buy to fill get filled or taken down).

S.DICE - In contrast this paid a dividend that was a healthy ~2.75% of current traded value.  In fact S.DICE had a slightly unlucky month - had results been at the expected house edge rather than a bit below it then the dividend would have been aorund 3%.  Since the dividend was paid the Ask has briefly dropped a few times below the 0.0074 wall as people selling post-dividend put their Asks up, but those have been tending to get cleared fairly promptly.  The actual wall at .0074 is down to 177k.  A few days ago there were 400k shares in it - and it was at 200k earlier today.  My expectation is that wall will go this week and the price will move up a bit over 1% to the next wall (of 460k shares) at .0075.

I'd be very surprised if the price of S.DICE falls for any period of time in the near future.  It WILL probably dip on occasions - the bid side is always weak on MPEx - but has been recovering very quickly whenever it gets sold down (last week at one point the bid side got cleared down to .0038 - but was back up over .007 within an hour).  It remains a solid investment - whether the price will go significantly higher is open for debate: I wouldn't be surprised if it manages to (at least temporarily) get up to the big walls at .01 but nor would I be surprised if it stays in the mid .0007xs for the next month.

Do remember that both S.DICE and S.BBET are denominated in BTC.  If you believe LTC will rise vs BTC in the short-term then you should probably consider selling S.DICE now and buying back in after LTC has risen however far it is you think it will rise.  Remember that if there's no competetive bid up and you want to sell either pass-through you can put up an Ask - and if I can sell on MPEx and convert at Ask on BTC-E with a 2.5% markup then I'll fill your Ask for you and sell the shares off on MPEx (or keep them).  There's no need to sell at a huge loss compared to the MPEx Ask (at least not on S.DICE where theres usually some Bids not too far below the Ask).

I was going to discuss some other things - but will deal with those later in the week as this post is long enough already.

Management fee is 6 units (rounded down from 6.15) which will be transferred shortly.
Bid is up at 34.5.

Exchange-rate : .00345
Adjusted NAV/U : 34.2925
Bid at : 33.6

Whilst it looks unlikely we'll be setting any records this week, we're on target for respectable growth.  At present we're up just over 10% for the week with the majority of that (over 8%) from trading.  With ASICs finally arriving there's a fair amount of volatility in the price of most mining stocks which offers decent opportunities for trading - as well as a bit more risk than usual.

The S.BBET pass-through has pretty much stalled at present - it has a fairly wide and static range on MPEx (.001 bid, .0016 Ask) and there seems little interest on LTC-Global in buying at the Ask or selling at the Bid.

S.DICE has seen steady trade.  January it made just over 20k BTC profit of which 10% (2K BTC) will be paid at as dividend on MPEx in the next few days.  99% of received dividend/share will be passed through to our pass-through as per contract.  At current prices it looks like being somewhere in the 2.5%-3% range which is perfectly respectable.  As soon as I notice the dividend arriving on CoinBR I'll cancel my Ask, do the math and pay out the dividend - until then there's still time to buy shares and get this month's dividend.  Dividend is paid at some point in the first 5 days of the month - he's updated the accounts so it could be at any time.

Exchange-rate : .0035
Adjusted NAV/U : 32.997
Bid at : 32.3

It's been a slow but steady first half of the week.  NAV/U (before management fee) is up a bit over 6% - with ~4.4% being from trading and the rest from LTC falling vs BTC.  Nothing like as spectacular as last few weeks - but still a good week (I consider anything over about 3% a good week).

There's been a lot of activity on S.DICE over the last day or so - I assume people buying them up to collect the dividend due within the next week.  Last time I checked it looked like being about a 3% dividend (based on current price) but that could change in the last day easily if the whale keeps playing (he can lose or win 10k+ BTC in a day).  S.DICE has been staying solidly in the .0072-.00745 range for a while now - will be interesting to see if it stays there after the dividend.  Sometimes people dump shares right after collecting dividends - but equally last month the price rose after dividend as people noticed it was paying very respectable amounts.

Not a lot happening on S.BBET - lowest ask is about .0016 and highest bid about .00105.  I managed to sell some shares off at .00155 and cleared out all Asks on LTC-Global below that - so anyone who wanted to take their profits has now done so.  If I get hold of some cheap I'll put up an Ask much cheaper - until then my Ask is the lowest one at ~.47 representing the price I'd have to pay to replace the fund's float shares.

Exchange-rate : .00353
Adjusted NAV/U : 32.091
Bid at : 31.4

Obviously having sold more bonds and reduced our BTC exposure (down to around 17% from the ~30% when I produced report) LTC then drops.  Spreadsheet shows us up ~3% with ~1.5% of that from trading - in fact trading profits were over 2% before the drop in price but the spreadsheet has no way to know that the reduction in BTC exposure happened before the drop.

I managed to sell some S.BBET back before lowest Ask on it dropped and bought back some of the lowest priced ones on LTC-Global.  Won't be able to buy back more as, at present, the lowest Ask on MPEx is just too low for me to undercut and buy-back (and our selling price would be just over the cheapest ones currently listed on LTC-Global).  Will put up asks and/or rebuy soon as prices on either site change to make it feasible.

S.DICE seems to be holding steady at just under .0075 - so no change on prices there other than a small rise due to LTC weakening.

In a change of policy since my previous post I just released 1500 more LTC.B1 bonds.  Reason is simple.

Since posting the weekly results we've had over 15 BTC-worth of orders filled (BTC denominated) on various assets.  I had to shuffle funds around (and convert LTC to BTC) just to keep our other orders up.  Some of those purchased shares have already been sold for small profits - but it did highlight that in fact we're under-capitalised in BTC when someone panic sells into 1 or 2 of our orders.

Part of this is because a few weeks back I realised I was being WAY to cautious on bids - only bidding 1 or 2% of NAV on solid assets at cheap prices.  That was silly as it led to us not properly taking advantage of panic/desperation sells (which is where the real profit is - NOT trading across 5% spreads).  To an extent our last few good weeks have come from my change in bidding policy - as we've picked up 5% of NAV-worth of shares at cheap prices rather than the 1-2% we would have done previously.

Whilst we COULD have topped up our BTC by converting LTC that would expose us heavily to BTC (just the few exchanges I did earlier to prevent orders getting cancelled took us well over 30%).  For the last week or two, whilst LTC was falling, I wasn't too concerned about slightly higher BTC exposure - but now LTC is recovering I really dont want us to lose a bunch of NAV if it rises sharply vs BTC.

This sale of bonds gets our capital to safer levels to maintain orders - whilst also allowing me to get our BTC exposure down a bit.  And with trade picking up a bit on both BTC.CO and Bitfunder (Bitfunder especially has grown in trade in the last week - even if a decent chunk of it is an obvious ponzi) it keeps us positioned to take advantage of new opportunities as they present themselves.

Most of the 1500 bonds sold straight into bids - but as I type there's still a few up.

Bottom-line is that the maintenance cost of bonds is pretty trivial compared to the lost opportunity cost if we miss collecting a panic sell that we can resell for a 100% profit (some of our recent trades have actually been at over a 100% profit).

WEEKLY REPORT




Thanks to some good trades yesterday evening/today we ended up absolutely smashing our previous post-exchange-rate adjustment record (24.07% growth compared to previous record of 15.53%).  We also just beat last week's record for growth before adjusting for exchange-rate - which is great as last week's record included a fair amount of profit gained from exchange-rate movement whilst this week the exchange-rate moved slightly in the opposite direction.  First post has had an updated table uploaded including this week's results.

Last week we did no trading at all on Bitfunder - this week it was our biggest profit source (LTC Global, BTC.CO and CoinBR/the pass-throughs all made good contributions as well).  Again no trades on Crypto::stocks - will likely pull out of there completely before long as it's pretty much a wasteland unless trading DevCoins which I have no intention of doing.

Our sharp growth this week means I see no likelihood of having to sell more bonds in the next week (no new ones were sold this week).  At present we're sitting on a pile of LTC and STILL have a higher percentage of assets in BTC than I'd like.  If we get a few more bumper weeks I may revisit the idea of a one-off dividend payment to reduce idle cash - but I DO have another idea in mind which would give some use to otherwise idle LTC.

I've deleted the OBSI.HRPT from the spreadsheet.  It was marked down to 0 value as soon as GLBSE died and as there's no realistic likelihhod of ever receiving anything for them there's no point leaving it in the spreadsheet.

I've written off the rest of the cost of the tickers - so trading profits this week were actually even higher than the spreadsheet shows.

Both pass-throughs have seen steady if not massive sales - chipping in their part to our profits.

S.DICE - price on this has risen up to the big wall at ~.0075.  As highest bid is just below this there's no room to buy up cheap shares - price of the pass-through on LTC-Global reflects this reality.

S.BBET - The wall at .0014 went earlier this week.  It got replaced but went again (not sure if sold out or taken down the second time).  Prices on LTC-Global are also sky-high now reflecting no availabilty below .002.

If you bought previously in either pass-through and want to try to cash out profits feel free to put up Asks - if I can sell shares in the underlying asset then I'll happily fill Asks (unless someone else buys them before me of course).  With S.DICE I can likely sell into Bids, with S.BBET there's a huge  empty gap so I'd have to actually place an Ask myself and wait for it to fill before filling your ask.

Management fee this week is 9 units (rounded down from 9.55) and will be transferred shortly after this is posted.

Bid up at 30.6

Just to note further to the above that the Asks at .00114 has gone on S.BBET -as did an ask at .014 (which was the fund's own one trading some profit on a resell).  Right now the fund's Ask on LTC-Global is at .4821 (and will go higher if the small MPEx ask at .00175 - also mine - gets bought out).  All asks below that are investors who bought previously and relisted higher.  I'll clear the Asks on LTC-GLobal out if bids move up on MPEx to the point where I can do so.  Obviously my Ask will come down if new Asks show up lower on MPEx.

Exchange-rate : .0038
Adjusted NAV/U : 29.80277
Bid at : 29.5

With LTC regaining some ground against BTC NAV/U has fallen slightly since I last reported.  Trading profits have grown a tiny amount from ~16% to 18% for the week - pretty much guaranteeing our best percentage rise in NAV/U (after adjustment to remove exchange-rate effects) to date (would take either some heavy trading losses or a big drop in S.DICE/S.BBET to prevent us breaking our old record).

S.DICE price on MPEx has shot up, with lowest Ask now at .00745 (a few very small quantity ones down to .00733).  Highest Bid is at .00725 but although there's quite a few bids all the ones at highish prices are low volume.  My guess is that price will move around a bit in the .006 - .0075 range for a while before settling near the top of that range: there's just not many investments that can support large investments and give a fiat-proof return.  The price of this on LTC-Global hasn't risen to the same extent as on MPEx due to LTC regaining ground.

S.BBET is still trading in same range - but the Ask wall at .00114 has almost been eroded.  If that gos then there's only a few token Asks below .002.  On the bid side, highest bid is at .001 still with quite a few bids just below it but no decent sized ones until .0085.  So price could still move significantly in either direction on this one.  I have some reservations about the business model of S.BBET (specifically, that it's not really offering what the gambling market wants - which is fixed odds - so may struggle to attract any significant volume other than on BTC-related bets which can't be placed anywhere at fixed odds).  It'll be interesting to see what the site does to address this - it remains a risky investment but with a significant upside if they get it right.

Paying this week's bond dividend shortly - will do proper report for the fund itself tomorrow as usual.

Nope - as I'm not planning on selling more units there's no incentive for me to run a pass-through.  And there's basically never any units up for sale on market anyway (only ones up now are 10 of my own at very high prices) - so no way for anyone else to buy units to run a private pass-through.

If we need more capital it's likely to be to expand BTC operations - in which case we'd just sell more bonds rather than extra units.  Bonds cost less to service (0.6% per week rather than a fair share of profits) and can be denominated in BTC, keeping our BTC-exposure down.

EDIT: Just to clarify, the only circumstance in which the fund would currently be likely to issue new units would be if the ratio of Bond capital to Fund Net assets got too near to the 150% limit (at which stage we have to either issue new units or buy back bonds).  For that to occur would need some mix of the following three things to occur:

1.  Our need for BTC-denominated capital significantly grows.
2.  LTC weakens significantly further vs BTC (for this to cause a need to issue new units on its own the exchange-rate would need to fall to around .0015).
3.  We incur significant trading losses (for this to cause a need to issue new units on its own we'd need to lose around 40% of NAV).

I really like what you are doing here!  Is there a pass through so this security can be held in BTC?

Exchange-rate : .00336
Adjusted NAV/U : 30.194
Bid at : 29.5

The week of offering to buy back above NAV/U (because of contract change) has ended.  Noone sold any units back.

We had a very profitable trade last night which has boosted NAV/U very nicely.  We look set for a record week for us (trading profits are over 16% already - and can only drop if I make unprofitable trades, exchange-rate movement can't touch them).  We're still below last week's record of 22.6% on profits including exchange-rate movement - but with a few days to go we can hopefully pass that one too (we're at over 18% profit before exchange-rate effects are ignored).

S.BBET seems to be settling into its current range (bids at .009x, asks at .0011x).
S.DICE is back up to asks being at .0062 and lowest bid not too far below that (so no scope for getting cheap ones on the buy side).  This, with the low LTC/BTC exchange-rate means my Asks on LTC-Global are now over 1.9 - at present there's a few resellers/early purchasers with asks below the fund's own (the fund won't sell below the cost to us to replace - as that would make us a loss).

Exchange-Rate : .0036
Adjusted NAV/U : 28.1709

LTC has been moving around a lot today.  It fell as low as .0031 then rapidly soared to over .004.  It then fell back down to .0035 very quickly before, for now, settling at the current price around .0036.

Despite LTC gaining over 10% on BTC since last update our NAV/U has grown slightly - we've made enouhg trading profit to more than compensate for LTC regaining ground (though when LTC was over .004 we were below yesterday's NAV/U briefly).  At present we're up a bit over 9% from trading so far this week.

S.BBET seems to be trading in the same range - but obviously price on the pass-through has fallen as LTC strengthened.

S.DICE has had a fair bit of activity today.  Earlier the lowest Ask was at .0052 - but then there was significant buying of it on MPEx and now the lowest Ask is .0062.  So, despite LTC rising, the price of this on the pass-through hasn't dropped.  It DID drop earlier - as LTC rose before S.DICE rose: so for a while cheap ones were being sold on LTC Global (think last buyer may have noticed the rise before I did and so got 300 of them cheap).

Looking like another decent week for us - though if LTC rises that may only end up reflected in trading profits rather than large growth.  WHETHER LTC will rise remains to be seen.

Bid up at 29 - though someone else (or more than 1 person) has higher bids up - so likely this is irrelevant.

Exchange-rate : .00319
Adjusted NAV/U : 27.8738

Bid at : 28.5

Have only put up the higher bid for now (the one on offer until end of tomorrow in case anyone wants out because of the pass-through motion).  The lower bid got auto-cancelled earlier - a few sells into us took cash too low to cover both bids.  I should have seen that coming really - as 2 bids totalling 150 units (30% of ALL units) was nearly 4k LTC - which is pretty much what I keep on hand on LTC-GLOBAL.  I'd not taken into account that the rapidly rising NAV/U means more funds needed to cover the bid-wall.

No harm done - the 50 unit higher bid remained untouched.  For now I'll just keep the higher bid up but at 100 units.  Do remember that the fund's commitment is only to have a bid up for 5% of units anyway (25) but I like to keep a larger bid-wall up both to provde faster exit if someone wants out and as a means of showing that we DO have significant LTC on hand on LTC Global.

NAV/U continues to rise as a result of LTC falling - though we're up just over 4.5% from trading so far this week, so a decent part of the rise is 'real' profits.

Not much happening price-wise on either pass-through other than them both rising in LTC price due to the exchange-rate changes.  The BTC rise still continues - so a further drop in LTC (and rise in price of the pass-throughs) seems pretty inevitable.  Of course if this turns out to be a BTC bubble then when it bursts LTC is going to rise back up and the price of pass-throughs fall.  Investors will have to mkae their own call on whether the BTC rise is long-term or short-term - I don't have a strong view either way on it.

Exchange-rate : .00339
Adjusted NAV/U : 27.062

Bid at : 26.4
Higher bid (for those unhappy with addition of pass-throughs) : 27.5

NAV/U (unadjusted) is up 5.17% so far this week but a fair chunk of this is from LTC falling further vs BTC.  We are, however, up just over 3% from actual trading (split about 50/50 between BTC and LTC).  We've also had a fair few shares sell into us - and cash on hand has dropped from just under 90% (when report was produced) to 64%.  Hopefully we'll see some nice profits when those assets sell - remember we never make a profit by buying only by selling (in fact we make a small loss on the books when we buy on all platforms except BitFunder due to transaction fees).

S.BBET is still static at the same price ranges - though has risen on LTC-GLOBAL to reflect the exchange-rate change.  I picked up some more on the buy side yesterday (also sold some on the sell side - which made a profit for the fund) so at present there's still some up at a cheaper rate.

S.DICE seems to be slowly continuing the rise back which started yesterday.  Asks are at ~ .0054 at present but there's very little there then a jump to .0058.  Will keep listings up at the lower price all the time I can replace at that rate - but will have to take listings at that price down later this evening when I go out.  Those wanting to buy in will likely still be able to buy from earlier purchasers who are now reselling at a profit (though S.DICE is still down on MPEx from when we started, the exchange-rate change means it's actually risen in value in LTC).

I forgot to say that management fee for the week was 9 units (rounded down from 9.21) which have now been transferred.

Since posting the report (or maybe whilst I was typing it) S.DICE has gone up a bit in price - and our price on the pass-through raised in line with this.  We also just picked up some S.BBET on the bid side - which are being sold in the pass-through at a price equivalent to .0011 (highest bid on MPEx is still just over .001 and lowest ask .0013).  Price of the BBET will return back up to equivalent to .0013 once we've sold the cheap ones either in the pass-through or on MPEx.