Topic: [PrivFund] jdany's bitcoin fund (Read 2344 times)

Since reception to this fund was a bit cold, I'm going to go back to running it as a private fund.
I was interested in seeing how it would work as a product, but someone will come around that actually needs the capital to open/run the fund.  Which will be better for the community because you'll get more action from a person in that position.

My accountant lectured me on "playing around" with this anyhow, when I didn't have a thoughtful plan on the return side of the ledger.

I'll still be heavily investing in Bitcoin over the years.  I'll just be doing it with my own money.   

For those of you who asked questions, thank you!  It was fun going through the exercise of thinking this one out.

I'm going to escrow enough BTC to cover the few hundred test shares we're playing with.
No downside risk.  But, we'll allow you to play the upside.

More like...
I just came here to share something that I've been using to help people get involved in the real world.
And I found there are those same people here.
I'm not real sure if what I do in the real world works here - so I'm going to test it.

I'm more of a bitcoin activist than bitcoin philanthropist.

You nailed it.
Great job.

+1 for "I don't need teh money, just wana share."  


Altruism?

Simmer down...   Just testing it.  
Adding some test money to get some guinea pigs involved.

That's how capitalism works.  If something is in demand, someone is going to do it.
As soon as I shared this idea, I had people interested in becoming involved.
Wouldn't you rather it be thought out and done this way?  
I'm not looking to have people finance my investments.  I'm sharing investments that I already have.
I don't have a NEED for investor money.  I was hoping that would be pretty obvious.

OP, I was pleasantly surprised by this thread because you wanted to "share" your story without asking for money.  Now, you're asking for money.
Way to blow it, OP.

1. Why do you hold illiquid shares in your fund? What advantage do they provide? Yes you have half the fund liquid, but the other half is grossly illiquid. when you say it takes long, how long can it be? 1 Week? 1 month?
-----------------
Trading on Havelock can be expensive.  Because I have always held more than 50% of any fund I have ever created, I have never needed to consider selling or liquidating that other half of the mining securities.  If Havelock got hacked, taken over or went out of business - I really don't want everything to be gone.  I consider the direct shares to be more safe but illiquid.  I consider havelock to be more liquid but less secure.
If the percentage of the fund crested more public ownership than what I held, I would just make the liquid portion proportional.  It's just a preference that if given the choice, I would rather hold direct.    I have never done a transfer in to havelock.  So, I am only guessing that it's probably a week. Maybe someone with experience can help with that question.  

2. Low hanging fruit is correct. you did say you have other strategies. Do any of those involve more "skill" in investing than just being NET LONG on BTC?
-----------------
Since my involvement, there has always been some low-hanging fruit angle.  If there is a true market behind this, professionals will be involved - (not just mine either)
My role is proof of concept and making sure there is a business model where the operator gets to make money and the investors do better than they could do on their own.
I am creating a product that a spec investor like myself will feel comfortable with.  Something that is has nice volatility.  Something that is well capitalized.  Something that is balanced and thoughtful.
I honestly think skill people would struggle with this right now because of the data they would have to work with.  But, once "real money" gets involved in BTC, the technicals will matter more.  To be honest, none of the assets in the fund have data or history that would satisfy any traditional investor, nor any investment manager.  So, I imagine it will go through more volatile bubbles that us low-hangers have been benefiting from for a good while yet.
But, when that time comes, I want us to be ready.  I don't want wall street dipshits to come through here and "harvest us".   We're not big enough to withstand an extraction that doesn't reciprocate.  We need BTC people to solve this, so that we are the ones handling the need for real products.  

To answer your question - when the funds need more sophistication, we'll become more sophisticated than I personally, can make them.

1. Why do you hold illiquid shares in your fund? What advantage do they provide? Yes you have half the fund liquid, but the other half is grossly illiquid. when you say it takes long, how long can it be? 1 Week? 1 month?
2. Low hanging fruit is correct. you did say you have other strategies. Do any of those involve more "skill" in investing than just being NET LONG on BTC?

1. How liquid are ASICMINER direct shares? Where do they trade? Are they privately held or publicly traded? If, I as an investor have no clue about ASICMINER or BTC, I would want to know whether what price impact will you have if you were to liquidate your fund tomorrow morning.
-------------
Direct shares are not liquid at all.  They can be sold or auctioned through private sale or converted to Havelock shares, but it takes time.   I'm holding half through havelock and half through Direct shares.    In a pinch, I have at least half the fund liquid.

2. Your calculations show a term value. What happens at that time? Do you just liquidate all the fund and take your fee? What happens if you have investors who want to stay in?
--------------
All of my funds have either overlapped or run consecutive.  If the fund's term or objective ends, it's reevaluated, closed out and a new fund takes its place. (with a new set of calculated goals and a new term) Anyone who wants to stay in, they just enter the new fund at exactly the same level. Since all of the funds include the same 6 assets, it's just a shuffle of percentages.

3. I believe the performance of this fund and future fund of yours will depend a lot on when you start them(as per your cost basis explanation). Right now there is a general consensus that the price of BTC will go up and thus your future expectations should yield good results. In the future, as long as you can have a "VIEW" of the markets and can sell it to investors, you should be in good shape.
-------------
This fund is going to be a good example of low hanging fruit.  But these set of circumstances offer a nice balance of risk and upside, perfect for testing the logistics behind running a public fund.


Again, thanks for questions.  I think the BTC world needs Entrepreneurs and Finance guys to come together and make it safer and more stable place to do business.
I'll be leaning on guys like you to get this right.

Thanks for the answers and sorry for more questions. Again, I believe these questions would help you create a strong pitch.

1. How liquid are ASICMINER direct shares? Where do they trade? Are they privately held or publicly traded? If, I as an investor have no clue about ASICMINER or BTC, I would want to know whether what price impact will you have if you were to liquidate your fund tomorrow morning.

2. Your calculations show a term value. What happens at that time? Do you just liquidate all the fund and take your fee? What happens if you have investors who want to stay in?

3. I believe the performance of this fund and future fund of yours will depend a lot on when you start them(as per your cost basis explanation). Right now there is a general consensus that the price of BTC will go up and thus your future expectations should yield good results. In the future, as long as you can have a "VIEW" of the markets and can sell it to investors, you should be in good shape.

Again Good Luck!

I am not sure then what do the two Asicminer heads mean? How are you invested in Asicminer directly?
-----
One is direct shares.
One is shares on havelock.
The first column is just a bunch of notes to remind me about cost basis, etc,

I think "WILL BE" is a strong preposition. I believe you quote these numbers to justify your target return. I would suggest you form a grid of different possible scenarios to disclose future outcomes as fairly as possible to investors. This will come handy if you intend to scale up(which I believe you should).
-------
I agree.  Just to give the rational to the investors that if I should happen to sell next week - my intentions were known.
I only brought this to the forum as an idea for others.  I had no intention of pitching it for myself.
I would say the entire thing is under-developed by normal investment standards.  That will all change as this thing takes shape.

So the Buying opportunity is just the price dipping under your cost basis? How do you arrive at cost basis? Is it the initial buy in cost or some other costs are also included?
-------
I think I am in a very good position right now.  But, if I dip below my cost basis - and I have a chance to get in a better position, I'll take it.
For instance.  The fund believes both BTC and AM are undervalued and will return to a higher level within the next 6 months.
I believe BTC will go up by 40% and AM will go up by 100%. 
I want to be heavier on AM, but not as heavy as we are.  10% in BTC and 90% in AM.
So, if we can move some of the fund to more BTC without giving up cost basis, that's what we'll do.
Cost basis for me is going to be when the asset was entered into the fund as a percentage of total value.

Awesome questions!   I appreciate your interest.

I am not sure then what do the two Asicminer heads mean? How are you invested in Asicminer directly?


I think "WILL BE" is a strong preposition. I believe you quote these numbers to justify your target return. I would suggest you form a grid of different possible scenarios to disclose future outcomes as fairly as possible to investors. This will come handy if you intend to scale up(which I believe you should).


So the Buying opportunity is just the price dipping under your cost basis? How do you arrive at cost basis? Is it the initial buy in cost or some other costs are also included?

This fund is very heavy in Asicminer, gearing up for Gen3 production.
I don't have any of my own mining operations involved in the fund you were looking at.
The fund is opportunistic and is simply mimics my own investing strategies - which each fund I operate has different motives.
This one is pretty simple.  Bitcoin will be at $700 by September and Asicminer will be at 1BTC per share by September.
Between now and then, we buy more of each when they are below our cost basis and we engage in as much commerce (localbitcoins) as we can to accumulate our position.
Everything is reinvested.  Cash accumulates until a buying opportunity presents itself in either BTC or AM.
We bought a ton of BTC on the way down and then converted that to a ton of Asicminer shares as it came down.

Great questions.

If I understand correctly, as per your worksheet you are :

1. Long Bitcoin
2. Long Asicminer company via havelock
3. Long Your own miner - hoping that mining BTC will cost less than BTC's value.
4. Some portion in cash.

How do you divide your fund amount amongst the 4? completely your discretion?
if you run a miner physically(as per 3), do you have out/adjust for any expenses that you might be occurring?

In the US - Ohio

Interesting. Where are you based?

Absolutely.  Hopefully in a big way!

Thank you!

Cool I'm in for a 100 shares. Will take about 2-3 days though. Will PM you once sent. The results of the test run will be shared I hope

If any smaller investors are interested in a few hundred shares, send me a message.
I'm using the last couple weeks of April to run some tests - and see if my fund has a market.

Price right now is 100 shares for 0.208 BTC

Another user was interested in how my funds work.
I put a quick spreadsheet for the upcoming May fund.  If anyone wants to see how it comes together.
It doesn't have any investors involved.  I am simply loading it up and getting it packaged pretty for the next round.

https://docs.google.com/spreadsheets/d/1Vo5sX7ugZgesnm2G6uNMTAe9I0c-zNM5MAoswP-_uu4/edit?usp=sharing

I considered running it like a real fund - charging a management fee, or something.
But, I made bigger returns on my investment because of the new money that would flow into the fund - that it was sufficient to justify the extra hassle and liability.

In fact, I probably worked a little harder at making better calls becuase other people's money was at stake.

Yes everyone had a huge warning and disclaimer - Honestly, I find it hard to believe how eager these people were after the picture I painted for them in the worst case scenario.

What to do you charge to do this? This sounds interesting and it may be something I would like to do with those closest around me as well. Just wanted to know what you think is fair in terms of compensation. Do you tell them that it is really risky?

Not at all.
These are all people I know.

Nope.  I got started right after the $300 bubble.
April 2013 I started mining.
Investing pretty heavily since July.
Started these funds in Aug & Sept.

I would say we got totally lucky on the $1,200 bubble.
I think a more responsible return of 30-40% is what I expected from a volatile, risky investment like BTC.
So, while I am happy about 320% - It was good fortune, not savvy that landed us there.

But, We're sitting very pretty right now even after this huge consolidation.
And I think the intention of giving some people a very positive experience has been achieved.

The fund holds
Cash
BTC
Securities
Mining hardware.
Localbitcoin sales

BTC is valued by Bitstamp
Securities are valued by Havelock
Mining hardware is very conservatively valued
Localbitcoin sales are exchanged immediately for new coins at current price.

I keep it very simple.  I update spreadsheets a few times a week.  
Immediately if someone needs to sell.
The practice keeps it very interesting.

Have you run a successful fund in a non bubble situation? Sounds like you lucked out with 320% gain.

ah... ok... sounds interesting. Is there a website or a platform or something like that showing the daily valuation? Like if I put buy 100 shares now and a month later, want to cash out, how is the value determined?

PS. Sorry for all the noob-like questions. I'm fairly new to this

Some of the people who went through a few of my pools actually setup a wallet and bought a few coins on their own after they got some exposure to it.

I KNOW they would have never done it on their own without experiencing it tandem-style.

Most of what people think they know about Bitcoin is terribly wrong. 

The current fund is 10,000 shares at $1.22 per share. It started off $10k for 10k.
People get into a fund at whatever my daily valuation is at the time.
Same with getting out. 

These are IRL people.  So, I've had people hand off $20 at a time if that's all they could do.

So that's 12,200 shares of 1 USD each? Is there a minimum value?

The pools just mimicked what I was doing with my trades. (just on a bigger scale)
So, my groups allowed me to just do what I would do - as if they weren't sitting there.
Through a private facebook group, I documented my moves and some of them actually paid very close attention.

To answer your question, every pool had a different intention. 
The Coin-Heavy pool (Which was the first one I did) we got out when BTC was at $1,000.
A good exit point, even if unintentionally.

When I'm running the fund, I find myself wishing I had cash so I could buy in an area that was cheap.  So, a fund that did 320% is an attractive liquidation. 

Things happen so fast in BTC, before people wonder about their investment, it's already turned in three directions.
The volatility is really the only thing that scares people. 
Everyone who does this with me know how speculative this is - and is closer to gambling than it is to investing.

nice!! So do you have a fixed percentage or date on when its going to cash out?

The first fund I did closed out at $32,000. (320%)
All investors cashed out and I decided to reallocate my portion in starting a new pool.

The newest fund is at $12,200.

I started a bitcoin fund about 8 months ago to help some of my friends and locals to get involved in bitcoin.

I basically took a $10,000 investment in BTC, mining equipment, mining securities and local BTC sales.
I broke that investment into 10,000 $1 shares. 

I make all of the fund moves.
People are free to sell me back their stake at any time to buy out of it.
They are free to buy in (if there are any sellable shares) at the current value/10,000

I've created a few of these $10,000 pools and they've worked really well.
I've given some local people a taste of bitcoin - it's cheap enough that I have a few college kids buying in $20/$30 at a time.

The current consolidation has given some renewed interest in some of the earlier people to get involved again.

Just thought I would share.
It's been a very positive experience for everyone no matter what the market was doing.