@JJG - you crack me up sometimes but, also amaze me at the amount of thought and analyzing you perform.
No problem... I cannot really help myself, anyhow, and as you might realize, I have been just chomping at the bit to revisit my HypoPhil model, while at the same time potentially adding to it by showing some buy back ideas.
Here's a couple of charts that summarizes the HypoPhil matter.
** **You can go to the original post to find further explanation and context for the charts.[........&......]
Essentially, the charts show that even if you feel that you do not have enough bitcoin (10 & 5 BTC in the above examples), if you end up shaving off profits in relatively modest ways as the BTC price goes up, then you will still end up with a decent amount of BTC and value as the BTC price goes up, and surely the ideas behind the charts could be considered too inactive and too unrealistic because the BTC price might not end up going up, so then you are just stuck holding BTC and not getting any profits or being able to spend the BTC that you hold.
Subsequently, we found out from the real Phil himself that he does not have hardly any intention to be restricted by such charts, because his own way of playing his bitcoin stash includes the needs and/or preferences to draw some profits from his bitcoin on an annual basis, so surely there might be some years in which some compounding benefits could be achieved, yet instead it is quite more likely that the needs (and/or preferences) to draw income from BTC every year ends up stifling the amount of profits that anyone could be expecting to receive from his BTC stash.
In that sense, maybe we just give up on HypoPhil because he is not even close to wanting to follow such a more strict system.
I am thinking that if there is such a desire to sell on the way up with an expectation of buying on the way back down, and maybe even a willingness to ride bigger BTC price waves, then we might be able to create a HypoMyth out of this deal, and we could start with a similar portfolios of HypoPhil of 10 BTC and then to show some sell scenarios that spread out the sells a bit further (and more aggressively when they happen) while at the same time showing how it might look to build some buy back scenarios into the whole model. So we can start out with the same cost basis of $10k per BTC, and so maybe there are assumptions of mistakes along the way, but also assumptions of not having enough BTC, so wanting to sell and buy back.
I think that with HypoMyth, we still could throw in some fairly aggressive presumptions, including that HypoMyth is not going to sell any BTC until the price reaches at least 1,200% of his investment costs, so in this case the first sell would be at $130k-ish.. and we can go with a fairly aggressive sale of 20%. Furthermore, we can go with fairly aggressive sales of 20% of the holdings each time the BTC price goes up 50%.
So under this first scenario of no buying back, if there is no buy back of the BTC, then the 10 BTC will get depleted down to 1 BTC by the time the BTC price reaches $7.5 million. Not really a bad place to be.
The second scenario of having some set buy back plans is more complicated because there are several discretionary variables; however, if we project out an account, we can attempt to account for the various discretionary scenarios and to even create some structure that shows probabilities of success in our buying back at certain rates.
The chart looks like this:
You can probably see why I am so excited to be able to go over something like this.
So under the reinvestment parameters we can see that I divided the reinvestment into 3 parts that draw from the reinvest reserves 1/3 for each of the downward buy back prices that are 10%, 20% and 30% below the sell price, and we are using 80% of the amount that we sold for our buy backs. The likelihood of successful buy back is calculated as 70%, 40% and 15% respectively, and we are able to average those out to 41.67% (because they have equal proportionality to each other. Of course, if we had put different amounts into each of the buy back amounts, rather than 1/3 each, then we would have to change the formula for our total reinvestment success in order to calculate in accordance with the probability of each of the buy backs and the ratio (the amount) in each of the categories.
So a ball park figure shows that if the buy back success ends up being 41.67%, then the amount of bitcoin at $7.5 million would be about 3x greater at 3.12467 BTC rather than just over 1 BTC.
Of course, some people want to presume greater reinvestment success, especially if they sell, they kind of give high chances that they will be able to buy back at lower prices, so it is just a matter of how much lower, so there is a kind of presumption that selling BTC is going to increase their stash rather than decrease it.. .which I surely consider to be a BIG presumption, even if selling is not necessarily a bad thing to do, especially if we are not taking it for granted that we are going to be able to buy back cheaper, even if we are selling at price points that we consider to be exponential price rises (or potential blow off tops).
Of course, guys can create their own spreadsheets like this in order to figure out their own circumstances and to plug in their own numbers and their own projections. I am pretty sure that fillippone had created an earlier version of the HypoPhil spreadsheet (but I am not even sure any more), but I am pretty sure this is my debut of the buy back parameters.... so those formulas are a bit more complicated but they are still extractable and I have also laid out some format for trying to consider it.. and if anyone has some better suggestion of format, I am all ears.