Bitcoin Forum

WHAT IS LTC-ATF AND WHY DOES IT EVEN EXIST?

LTC-ATF is a small fund established to trade in securities denominated in crypto-currencies.  The fund's focus is very much on trading rather than investment - it doesn't sit on investments waiting for them to (hopefully) make a profit, rather it strives to buy and sell making profit in a much shorter time-scale.  As part of its strategy LTC-ATF now operates pass-throughs to securities which have a significant barrier to entry that would otherwise prevent smaller investors buying them.

The obvious question to ask is "Why bother setting up a fund with such a small amount of capital - couldn't you just use your own funds to trade?".  There are a range of reasons why the fund exists - hopefully the give some insight into
the rationale behind the fund and why it operates the way it does.  In no particular order :

Funding : Of course I have sufficient funds to use my own capital for an operation this size.  But if market conditions (range of securities and volume traded) change such that a much larger operation is desirable then without a track-record it would be hard to raise the funds to take advantage of that.

Fairness : I'm by no means shy about expressing criticism of other virtual securities.  It's therefore only fair that I run one myself and give opportunity for those I criticise to reply in like manner.  It's my hope (and expectation) that my performance, fairness to investors, reporting standards and transparency will make plain that - whatever else my faults may be - I'm no hypocrite when I complain about others' lack of those same qualities.

Fun : It's far more enjoyable running the fund in public than it was when I just invested my own funds in private.

Motivation : Having a responsibility to my investors causes me to put more effort into my endeavours than I otherwise likely would.  If I become lazy, lax or careless then it will become a matter of public record - a great incentive to do none of those.

Start Small : It's painful watching people attempt to create new companies in areas they have no proven expertise in and trying to raise thousand or tens of thousands of BTC right from the start.  I'm doing it (what I believe to be) the right way - start small, prove you can do well whilst small then (and ONLY then) expand.

WHAT SECURITIES DOES LTC-ATF OFFER?

At present LTC-ATF offers four securities on LTC Global:

LTC-ATF - This is the parent fund.  Investors in this purchase units of the fund representing a portion of the assets owned by the fund.  This fund does not pay dividends - all profits (or losses) are reflected in a regularly updated and published fund valuation.  Liquidity is provided via a constantly maintained bid-wall just below NAV/U.  Units of LTC-ATF are valued and transacted in LTC.

LTC-ATF.B1 - This is a bond issued by LTC-ATF.  The bond's purpose is two-fold - to retain as much of profit as possible for LTC-ATF investors and to allow trading in BTC-denominated securities with greatly reduced exposure to fund value changes casued by exchange-rate movement.  This bond has a face value (and pays dividends) denominated in BTC but transacted in LTC.  Dividends are paid weekly at a fixed rate which can be raised by the fund manager at will (but never lowered again whilst there are bonds outstanding).  Liquidity is provided via buying back through the market at just below face value and by facilitating sell-back of larger quantities of bonds through direct transfer.

At present 25000 LTC-ATF.B1 bonds have been sold.  These have a face value of 0.01 BTC each and pay a dividend of 0.6% of face value each week.

S.BBET-PT - This is a pass-through to the BitBet security listed on MPEx.

S.DICE-PT - This is a pass-through to the Satoshi Dice security listed on MPEx.


PLATFORMS TRADED ON AND DISTRIBUTION OF FUNDS

I list below the exchanges/platforms our funds are used on - along with an estimate of the percentage of funds deployed at each location.  Some of these ranges are pretty wide - actual funds on each platform varies as profit/loss occurs and needs change.  I don't intend to update the percentages too often - they're only there to give a general idea of how funds are distributed.  I WILL, however, update the list promptly if we add an extra platform to which we have exposure.

LTC Global : 25%-45%.  Majority of funds will usually be here - as we can't use LTC denominated capital anywhere else (there's no meaningful LTC activity on Crypto).  This percentage will drop as activity on BTC.CO/BitFunder picks up and we issue new bonds to take advantage of it.

BTC-E : 10%-20%.  We hold reserves here (for faster movement between LTC/BTC, to exchange to maintain ratios and to ensure we can maintain bidwalls in the event lots of our Bids get filled).

BTC.CO : 10-30%

BitFunder : 15-35%

Cryptostocks : Currently no funds here.

CoinBR/MPEx : 5-25%  CoinBR is a brokerage through which we trade on MPEx (the 30 BTC MPEx registration fee to trade cirectly on there is beyond the fund's budget at present).

WeExchange : 0%  Have to pass through this site to deposit/withdraw from BitFunder.  No funds are left here for any period of time.

BitFinex : 0%-10% Used to arbitrage LTC/BTC, as an alternative to BTC-E for exchanging.


SUMMARY OF RESULTS TO DATE

The table below shows the overall performance of the fund to date.

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There's a column for each of LTC and BTC showing how the fund has performed measured in that currency.  From top to bottom the rows are:

Fund Start :  Shows the date on which the funded and the initial NAV/U.
Last Report :  Shows the date at which the latest report was produced and the NAV/U at that date (that's the NAV/U after deduction of any management fee) plus the total of all dividends paid to date.
NAV/U Change : The change (growth) of the NAV/U from the fund's start until when the latest report was produced.
Growth (%) : The percentage the NAV/U of one unit has grown since the fund's start.
Days Elapsed :  How long the fund had been running for when the last report was produced.
Daily Multiplier :  What the starting NAV/U would have to multipled by every day (compounded) to reach the current NAV/U.
Daily Growth : The daily multipler shown as a percentage.
Weekly Growth : How much on average the fund has grown in a 7-day period.
Annual (APR) : What the annual growth would be if the current growth were maintained over a period of 365.25 days.

Whilst these figures DO represent the actual performance of the fund to date they should NOT be taken as any sort of sensible prediction of future behaviour.  A lot of the growth to date has been achieved with a much smaller amount of capital AND a much lower-valued LTC : both factors which allowed growth of a scale it is unlikely can be sustained.

No promises or predictions are made, intended or implied as to future profitability.


DETAILED HISTORICAL RESULTS

The spreadsheet below shows the performance of the fund since its inception.  Do note that the ending NAV/U reported for each week is BEFORE management fees - the starting NAV/U for the following week represents the actual NAV/U units were worth to their holders.

http://img203.imageshack.us/img203/8132/atfresultsendmar13.gif
http://img541.imageshack.us/img541/7374/2q3n.gif

Here's an explanation of the various columns (from left to right) :

Date : With the exception of the first row (which records the start of the fund) this is the date at which a report was produced.  This is typically done each weekend - however it can be done more of less frequently.  Shorter periods between reports will only occur if either the fund is in significant profit AND is selling new units (where the ask price gets artificially inflated by unclaimed management fee otherwise) or if a very significant event occurs (such as the closing of GLBSE).  For the remainder of this post I refer to each of these periods as "a week"  - this should be read as an abbreviation for "accounting period (typically a week)".

Exchange-Rate : The LTC/BTC exchange-rate at the time at which the report was generated.

Start of Week NAV/U : This is the NAV/U of the fund at the start of the week.  If the previous week was profitable then this will be lower than the ending value listed for the previous week (due to the reported value at the end of a week being before deduction of management fee).

End of Week Actual NAV/U : The NAV/U of the fund at the end of the week.  This is the value before deduction of management fees, but after servicing any outstanding bonds or other commitments.

End of Week Actual Profit : This is the trading profit made by the fund expressed as a percentage.  Again, this is before deduction of management fees, but after servicing any outstanding bonds or other commitments.

%LTC : The percentage of the fund's net assets which are denominated in LTC.

%BTC : The percentage of the fund's net assets which are denominated in BTC.  Net assets refers to gross assets less liabilities.  Bonds are a liability at their face value.  So if the fund had BTC denominated assets (cash+securities) worth 30 BTC but had 20 BTC worth (at face value) of outstanding bonds then the fund's net BTC-denominated assets would only be 10 BTC and this percentage calculated accordingly.

Recalced minus E/R NAV/U : This is a (fairly crude) estimate of what the NAV/U would be were any exchange-rate movement ignored.  It is the average of (the average fund-split between currencies at the old exchange-rate) and (the average fund-split between currencies at the new exchange-rate).  i.e. the calculation assumes that the exchange-rate change happened steadily throughout the week and any change in the split between currencies also happened steadily through the week.  Sometimes one (or both) of those assumptions will be wrong.  This is just an approximation designed to give a crude view of what part of profit/loss was actually from trading rather than from exchange-rate movement.

Recalced minus E/R Profit : This is the profit that the fund would have made (expressed as a percentage) were the NAV/U at end of week the one recalculated in the previous column.

These last two columns are important - as the maximum rate that LTC-ATF is able to offer on bonds is one third of the average weekly profit adjusted to remove exchange-rate fluctuations.  This value needs to be defined ignoring exchange-rate impact as funds raised by issuing BTC-denominated bonds are immune to exchange-rate changes.  Below the main table are listed the average gross profit per week (i.e. before management fee) and the maximum rate LTC-ATF is allowed to offer on bonds.  Both of those are AFTER adjustment for exchange-rate fluctuations.

At the time of writing this, that figure sits at 3.2%.  There is no way a rate THAT high will ever be offered as I believe our results so far are above expectation and we shouldn't need to offer that high to sell bonds anyway (and why pay more than we have to?).

[[Contract for asset on LTC-GLOBAL
UPDATED 23rd November 2012 in accordance with a motion passed by investors
UPDATED 16th January 2013 in accordance with a motion passed by investors
UPDATED 5th May 2013 in accordance with a motion passed by investors
]]

----- CONTRACT BELOW THIS LINE -----

DEFINITIONS

(The) Issuer / (The) Fund Manager : The individual controlling the user account with the name "Deprived" on The bitcointalk forums.

The Fund : The Litecoin Actively Traded fund (Ticker : LTC-ATF).

Unit : The smallest portion of the fund which may be traded.

NAV : NAV (Net Asset Value) refers to the total value of all assets held by the fund.

NAV/U : Net Asset Value per Unit.  This refers to the NAV of the fund divided by the number of outstanding units.

HWM : High Water Mark.  This is the previous highest NAV/U at which units have been valued.


OVERVIEW

The fund exists to trade share, bonds and other securities denominate in Litecoins (LTC), Bitcoins (BTC) and other crypto-currencies.  The fund is itself denominated in LTC and has the long-term objective of primarily trading in LTC-denominated assets.  Due to the current paucity of such assets initial trading will be largely in BTC-denominated securities.

The majority of the fund's capital will be used for short-term investment (sometimes referred to as "day trading") rather than for long-term investment.  Long-term investments will, however, be made where the fund manager believes it to be sound.

Initially trading will only be made on the BTC-based exchange known as GLBSE and the LTC-based exchange known as LTC-GLOBAL.

The fund is a growth fund - no dividends will be paid and profits (or losses) can only be realised by selling back units to the fund.


UNITS

Equity in the fund is distributed and measured in units.  Each unit represents ownership of 1/(Units outsatnding) of the total value of the fund's assets.

100,000 units have been originally created.  A portion of these units (2500) will be initially authorised for issuance.  At various times in the future additional units may be authorised for issuance.  The manager is entitled to authorise for issue whichever is the larger of 2500 units or 25% of current outstanding units each week.

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).

The manager is entitled (and expected) to buy back units.  This may only be done on the LTC-GLOBAL exchange at prices below the current NAV/U.

The current value of a unit will be regularly calculated and posted in the forum thread listed above.

Units have no voting rights.  The manager may, on occasion, issue votes to obtain feedback from investors.  Such votes are purely for information purposes and are in no way binding on the manager.


MANAGEMENT FEES

At least once per fortnight (with the goal being to do it weekly) a report will be prepared and posted in the forum thread linked above.  This will include a current valuation of the NAV and NAV/U for the fund.  This valuation will be in LTC (a BTC valuation will also be posted).

When that valuation is above the current HWM then the excess is considered to be profit.  The manager is entitled to receive 10% of that profit as a management fee, paid in LTC-ATF units at the calculated adjusted NAV/U.


INVESTMENT METHODS

The following are intended as an overview of the TYPE of strategies the manager will be using.  The following is not exhaustive, definitive or restrictive - the manager is entitled to invest as he sees fit within the constrainst described elsewhere in this document.

Long-term investment:  A minority of the fund (no more than 25%) will be allocated to long-term investments.

Spread/margin trading: Securities will be bought with bids and sold with asks to make a profit.

Bot-exploitation: Some securities on GLBSE have bots trading on the spread/volatility.  At least some of these bots are exploitable due to their having very naive interpretations of market depth.

Panic-trading/Liquidity crises: A lot of trading on GLBSE is from investors who need to raise cpaital quickly.  As there is very little liquidity for most securities on GLBSE this forces them to sell at way below a fair price.  This can be doubly taken advantage of - first by collecting their initial sales, secondly by buying during the temporary price-slump that often then follows.

IPO trading: Often when a new security is issued, some portion of securities are offered at a discount.  Profit can be made by buying then reselling.


LIQUIDITY & FUND CLOSURE

The fund does not pay dividends - so the only way for investors to realise profits (or losses) is to sell their units.  The fund shall attempt at all times hold at least 5% of fund value in LTC for the purpose of buying back units.  When the manager is online (and has an accurate current valuation of the fund) this shall be done by bid-walls placed on LTC-GLOBAL at between 95% and 99% of NAV/U (the precise value within that range may be set by the manager - based, primarily, on volatility of the LTC/BTC exchange rate).

If significant bids already exist at above 99% of NAV then the manager is released from the obligation to place bid-walls - but not from the obligation to hold sufficient liquid LTC to place such walls if the need arises.

If circumstances arise such that the manager is no longer able to continue operating the fund then the manager shall dispose of all assets held by the fund and distribute the proceeds to unit holders.  Such process shall be conducted in as timely a fashion as is possible without incurring major loss by selling into under-priced bids.


DIVIDENDS

It is not LTC-ATF's policy to pay regular dividends - in general profits are retained increasing the value of units.

On occasion the fund may grow to a point where it is the manager's view that there is excess unused LTC-denominated capital which should be returned to investors.  In those circumstances the manager is entitled to pay a dividend provided ALL of the following points are met:

1.  The dividend shall be paid immediately after a weekly report (and the payment of any management fee units plus adjustment of the HWM if required).
2.  The dividend may not be so large that, after its payment, the ratio of LTC-ATF.B1 debt to fund NAV exceeds 100%.
3.  The HWM will be reduced by the amount dividended per unit.
4.  If any market Bids are up that would be above the new NAV/U post-dividend then manager will briefly suspend trading and clear orders so noone is sold to at a markup to NAV/U higher than they intended when they placed their Bids.
5.  No management fee may be taken on the dividend - though the manager WILL receive dividends on any units he holds the same as any other investor.


DISTRIBUTION OF HOLDINGS

The manager should always aim to hold at least 5% of fund NAV as liquid LTC on LTC-GLOBAL (obviously this will not be the case immediately after someone has sold back units into a bidwall).

Target initial distribution of funds is:

5-10% uncommitted LTC on LTC-GLOBAL
10-20% LTC-denominated securities or bids on the same.
The rest BTC-denominated securities or bids on the same.

It is hoped that over time the proprotion allocated to LTC-denominated investments will rise - but that depends almost entirely upon suitable such securities being able.  The above distribution is a guideline only - and not a strict target which has to be achieved.


BOND ISSUING

The fund manager is authorised to issue interest-paying bonds with a face value denominated in BTC.  These bonds may be issued on ones or more trading platforms of Manager's choice.  Costs associated with creating these bonds will be charged to the fund and treated as an non-realisable asset depreciated to zero over a period not exceeding 20 weeks.  No additional management fee may be taken for
administering these bonds and the manager's fee must be taken on profits AFTER payment of interest due on the bonds.  For accounting purposes bonds are treated as a liability at their face value.  Although face value must be in BTC, the bonds may be transacted (and dividends paid) in any currency of manager's choosing.

The following restrictions are placed in respect of these bonds:

Bonds may not be issued with a total value greater than 1.5 times the NAV of the fund.  If, through exchange-rate movement or trading loss, NAV falls below this requirement then either more units must be sold or bonds redeemed.

The fund must maintain BTC-denominated assets such that outstanding bonds amount to a liability of no more than 90% of such assets.  When this ratio is not met (such as after issue of new bonds transacted in a currency other than BTC or after significant BTC-denominated trading losses) it must be promptly restored.

The interest offered on new bonds issued may not exceed 1/3 of the estimated average trading profit (excluding exchange-rate caused elements) of the fund for the previous 26 weeks (or since the start of the fund if it hasn't been running for 26 weeks).

No risks associated with normal trading may be passed on to the bonds - all loss from trading is applied against the value of fund units.  The risk of trading-platform failure may, at manager's discretion, be fully or partially shared with the bonds.

Manager has authority to define the detail of how bonds will be managed as he sees fit within the above parameters.


PASS-THROUGH OPERATION

The fund manager is authorised to run pass-throughs on LTC-GLOBAL to securities
issued on exchanges other than LTC-GLOBAL.  

Costs associated with creating these pass-throughs will be charged to the fund
and treated as an non-realisable asset depreciated to zero over a period not
exceeding 20 weeks.  No additional management fee may be taken for administering
these pass-throughs (any profit from them would be treated as normal LTC-ATF
profit and management fee applied as usual).

The following restrictions are placed in respect of these pass-throughs:

1.  With a single exception LTC-ATF must always hold at least as many units of a
security to which a pass-through operates as (units outstanding + units for sale).
a)  The exception is that this may briefly be theoretically broken whilst buying
back pass-through units from an investor.

2.  No pass-through may offer any guarantees in respect of the performance of
the underlieing asset.  Specifically, no guarantees may be offered by the
manager in respect of either future prices or dividends of any security to which
a pass-through is operated.

3.  Risk of failure of any asset to which a pass-through is operated, along with
risk of failure/default of any platform on which those assets are held or
transacted MUST be passed on to purchasers of units of the pass-through.

Manager has authority to define the detail of how pass-throughs will be managed
as he sees fit within the above parameters.


CAVEATS

The performance of the fund (expressed in LTC) is strongly dependent on the exchange-rate of LTC/BTC.  It would not be wise to invest with the expectancy of making an (LTC-denominated) profit if you believe LTC is likely to significantly appreciate vs BTC in the short to medium term.

For the purpose of this offering, BTC and LTC are considered virtual currencies with no intrinsic value (akin to currencies in online games).  This fund is being run for the entertainment of the manager and investors with no expectation of financial gain or loss for either party.

----- CONTRACT ENDS HERE  -----

----- OLD POST BELOW THIS LINE -----

STARTING PROCESS

Though not part of the contract I believe it would be useful to explain how the startup phase of the fund will occur (assuming the asset is approved by LTC-GLOBAL).  After approval I will do the following:

1.  Place a sell order for 500 units at 10 LTC each (or sell into existing orders if such exist).
2.  Calculate NAV based on my own current holdings on LTC-GLOBAl, GLBSE and BTC-E at the exchange-rate at that time.
3.  Assign to myself (a seperate LTC-GLOBAL account) units equal to NAV/10.1 (by contract I am obligated to buy shares either through the market or at NAV + 1% if I just transfer them).  Doing it this way saved myself the fees of converting BTC to LTC and saves the fund the cost of then converting those LTC back to BTC to invest.

The only shares I currently hold and will transfer are a few BTC-worth of ASICMINER.  These are one of the most liquid securities on GLBSE with a steady trading range (0.11 - 0.2 typically).  There will be no ponzi assets or unsellable fixed-rate mining bonds transferred from me (it is unlikely I'd ever even day-trade in such offerings).

Thereafter those LTC-GLOBAL and GLBSE accounts will only be used for this fund.  I already have a second LTC-GLOBAL account to hold my own units in - and will make a second GLBSE one if I ever see a need for it.  The BTC-E account may be used to do trades unrelated to this fund.

I will be using units gradually (up to the authorised 2500), rather than all at once for a few reasons:

1.  To get the best price possible,
2.  Most of the funds will need to be exchanged to BTC - I don't want to impact the exchange rate if possible.
3.  It takes a bit of time to get funds into play - I do noone any good by taking funds faster than I can actually usefully apply them.

...just in case you don't want to day trade your own funds/value.  ;)

Asset is now live.

LTC was trading at 0.00356 vs BTC when first units were placed on the market at 10.0.  Price of units for sale (and the buy-back bid) will be adjusted appropriately if that exchange rate significantly varies: from now on all bids/asks I make will be based on actual NAV/U of the units.

FUND VALUATION

The contract for this fund does not spell out any details of how the fund will be valued.  This is intentional - I did not want to commit to a specific means for valuing securities only to then be compelled to use it in circumstances where it would be irrational to do so.  Here, however, are the guidelines I will be following when valuing the fund:

LTC/BTC exchange rate : This will be the mid-point between bids/asks on BTC-E.  I toyed with the idea of just using the rate quoted at the top of LTC-GLOBAL, but unfortunately that's just the price at which the last trade completed.

Securities : The first rule with these is simple:

The valuation must always lie in the range (Highest Bid - Lowest Ask).  This seems obvious - yet I see funds trading where they religiously use 5-day average even when that value now lies outside the range at which the security trades.

Bearing the above in mind, the means by which a security is valued is determined based on whether the security is one I'm trading or one I am investing in (i.e. intend to hold for more than a day or two).

Investments:  Securities I purchase with the intent to hold will be valued at the 5-day average (GLBSE) or 7-day average (LTC GLOBAL) adjusted where necessary to fall within the bid-ask range.

Traded Assets: Securities I purchase with the intent to sell back in the short-term will be valued at the price they were bought for (adjusted if necessary to fall within the bid-ask range).  There will be no optimistic valuations based upon the price I expect to be able to sell them for.

The regular reports for the fund will NOT include details of which securities are currently held for trading (long-term investments WILL be shown) - those lines of the spreadsheet will be hidden when the screenshot is posted.  I AM willing to provide the full spreadsheet to any investor holding 10% or more of authorised issued units (currently 2500 units are authorised for sale): if you hold 10% or more of units (250 until more are authorised for release) then email me (at the email address listed for this asset) from the email address associated with your LTC-GLOBAL account.  When I produce the weekly report (1st one will be this weekend) then I will email you the full spreadsheet showing all securities held, their valuations etc (after verifying that you indeed hold the required number of units).

NAV/U at end of (my) trading today is 10.1112 LTC.

LTC/BTC Exchange rate is 0.00357

A small quantity of Asks will be left up overnight at 10.25 LTC and a small bid-wall at 9.7 LTC.  I do NOT recoomend buying into (or out of) the fund at those prices - but the option's there if you're desperate.  The reason why these values are significantly either side of NAV/U is so as to protect existing investors in case of a minor swing in the LTC/BTC exchange rate.  Whilst I'm online I regularly adjust the asks/bids - I cant do that whilst I'm asleep.

Exception to the above would be if the LTC/BTC exchange rate DOES move significantly - in which case buying or selling could make sense (which makes sense depends on which way the exchange-rate has moved).

30.75% of the fund is in LTC (or LTC-denominated securities), the other 69.25% in BTC (or BTC-denominated securities).  With those percentages and the NAV/U a bit of basic math will allow you to work out the current NAV/U at any exchange rate that transpires.

Throughout the day (when I'm online) I update asks/bids every hour or so - typically the Ask will be about 0.5-1% over NAV/U and the Bid 1-5% below NAV/U.  These spreads represent the costs involved in processing each type of action - and ensure existing investors dont lose any value when someone new invests or an existing investor divests themselves of their holding.

The small premium on asks reflects that there's a 0.2% fee to the fund for the sale plus a small cost in transferring the bulk of the funds across to BTC.  There's also a hidden cost to existing investors - that earnings on their working funds are being shared with the new investors whose capital is not yet in play.

The larger premium on bids reflects the fact that if a signficiant number of units are sold back then holdings may have to be liquidated to get the reserve 5% LTC back in place.

The degree of the spread is also determined by the current situation of the fund: if I have an immediate use for capital then the ask will tend to be lower and the bid significantly lower.  Conversely, if I have surplus liquid capital then the ask will be raised and bids made more attractive.  The spread will also tend to widen when the LTC/BTC exchange-rate looks volatile and tighten when there's significant walls on both sides of the current value.

On a final note (for today) if anyone at any point knows in advance that they will need to sell back their units at a particular time then feel free to let me know - and I can ensure I have funds available (even if it's over the 5% I'm committed to).  It makes my life easier - and in return I'd be able to buy back at 99% of NAV/U rather than anywhere in the 95-99% range you'd get trying to sell back to me through the exchange.

Turns out that whoever bought the handful of units up at 10.25 did well for themself.

LTC/BTC rate is now 0.00356

Adjusted NAV/U is now 10.3129

Adjusted NAV/U is the standard NAV/U modified to what it would actually be if my 10% management fee were deducted.  Bids/Asks are based around this - so anyone buying in doesn't pay for "profit" that wouldn't actually end up being theirs.  And also so anyone cashing out doesn't get to take profit that they wouldn't keep if they stayed in.  Management fee is NOT actually taken from the fund until the next report of course.  NAV/U before adjustment was 10.34772.

Bids will be put up at 10.15 and Asks at 10.36 (Adj NAV/U+0.5%) shortly after this post is made.  Those will be adjusted throughout the day as profit/loss and exchange-rate changes occur.

Someone's been seriously buying up LTC - whether an attempt to manipulate the rate, laundering or what I don't know.  But there's essentially no volume at pressent from 0.0036 right up to well over 0.004.  If I had to estimate a current exchange it'd be about 0.004 - but it could end the night significantly either side of that.

There's no doubt that this will majorly reduce the value of LTC-ATF units (expressed in LTC) - as majority of funds/investments are in BTC or BTC denominated securities.

Assuming a rate of 0.004 then current NAV/U is 9.699 LTC.

To see how the exchange rate move (of over 10%) impacted NAV/U the NAV/U if rate was same as at start of day (0.00356) would have been 10.57888013.

Obviously not the start I wanted for the fund - but it was always an explicit risk of an LTC-denominated fund whose investments were mainly in BTC-denominated securities.  Whether the exhcange-rate rise sticks remains to be seen - but with the rate in flux as at present I can't leave a Bid-wall up overnight at any reasonable value.

An Ask is being left at 10.5 - that becomes good value if the rate returns to below 0.00365.

Right now LTC/BTC exchange ate is at about 0.00382 - but there's no volume either side for quite a way, so that's likely to vary a lot during the day.

Adjusted NAV/U is 10.1226 at that exchange rate.

Will be putting up Bids at 9.65 and Asks at 10.4 - the spread is wider than usual as the exchange rate is far from steady.  Rates will, of course, change throughout the day as the exchange rate moves and trading occurs.

Exchange rate's been all over the place today - it finally seems to be settling down a bit, though there's little support on the sell side (so a rise is more likely than a fall in my view).

LTC/BTC Exchange rate at 0.00377

Adjusted NAV/U at 10.5612 (NAV/U before projected fee adjustment 10.6236).

Will be leaving Asks up overnight at 10.75 and Bids at 10.1

Would recommend against buying in if exchange rate gos much over 0.00385.  Would never recommend selling to my overnight bids unless either LTC/BTC rate really tanks or you're absolutely desperate.  Were I staying online ask would be 10.68 and bid 10.3 (meaning the first few investors could cash out for a 3% profit less 0.4% fees if they chose).

Y U NO release a detailed report?

I guess you track NAV using a spreadsheet of some sort, so just releasing that spreadsheet makes a lot of sense.

I think it's important to release it sooner rather than later because you started with non-transparent transfer of assets.

It's great that you post NAV updates, but since we don't know what holdings consist of they might as well be bullshit.

(It's worth noting that contract and communication makes a really good impression, like it's done by a pro. So I'm parking little spare money I have in LTC-ATF.)

I'm actually still around - got bogged down in other stuff.  Give me 10 minutes and I'll see if I can upload shot of the spreadsheet.

I can't show what shares are held - for two reasons:

1.  I day-trade, not invest: within a few hours of any details being released that information will usually be out of date.  Seeing a list of securities we hold at a specific point in time doesn't tell you anything about how I rate those shares, nor does it actually prove that we DO have those shares.
2.  I don't want to give away to competitors details of which shares I trade on - only a small percentage of shares on GLBSE meet my (pretty tight) criteria to invest in.

There's some pretty specific things I do which work pretty well - they only work on securities with certain characteristics.  Some of those characteristics are fairly obvious - e.g. they aren't obvious scams (which could vanish any time leaving me holding worhtless junk), they trade within a fairly well defined range etc.  Some are a lot less obvious.  It's not in my (or my investors') interest for me to provide information which would assist the competition (yes there IS competition - though it's not from other funds afaik).

Let me give an old example of the sort of thing I do - then maybe you'll be able to see why I really can't give detailed info on trades.

The below is an extract from a set oftrade done BEFORE the fund started.  You can likely find the trades in the GLBSE twitter feed - and i'm fine with nefario confirming the trades listed were done by me, in the order listed with no other trades in between.  These trades weren't particularly profitable - but as a proof-of-concept they did the job.

buy   23/09/2012 21:48   0.11399999   ASICMINER   34
sell   23/09/2012 21:42   0.11900001   ASICMINER   10
sell   23/09/2012 21:40   0.11900001   ASICMINER   11
sell   23/09/2012 21:38   0.11900001   ASICMINER   13
buy   23/09/2012 21:34   0.11399999   ASICMINER   46
sell   23/09/2012 21:32   0.11850001   ASICMINER   9
sell   23/09/2012 21:30   0.11850001   ASICMINER   11
sell   23/09/2012 21:28   0.11850001   ASICMINER   12
sell   23/09/2012 21:26   0.11850001   ASICMINER   14
buy   23/09/2012 21:24   0.11399999   ASICMINER   36
sell   23/09/2012 21:20   0.11850001   ASICMINER   11
sell   23/09/2012 21:16   0.11850001   ASICMINER   11
sell   23/09/2012 21:13   0.11850001   ASICMINER   13

What you see there is me selling shares at one price then buying back the same shares at a lower price.  In fact it was the SAME shares being traded back and forht with me making a profit every cycle.  The actual tarding went on for quite a lot longer in simialr fashion - with one share sniped by some third-party plus a buy at wrong price due (I guess) to a mislick.

The other side of those trades was a remarkably dumb bot - that always undercut asks by 1 satoshi and overbid bids by 1 satoshi.

There was a gap in trading range on asci miner including from .113 - .1195.  So all I did was:

Put up a bid of 1 share at .1185.

(Wait for him to outbid me.
Sell to his order.
Cancel my bid.) Looped until he stopped putting up decent quantities


Put up an ASK at .114
wait for him to undercut me.
Buy all my shares back from him.

Rinse and repeat.

After a bunch of these cycles the bot must have hit some stop-loss and halted.  It cam back again next day and did the same thing lol.  It was SO dumb that before putting up at ask at .114 i'd put up a BID at .11399999 - and the dumb thing would STILL undercut me, selling into my order so he landed with the trade fee.

That bot no longer operates on ASCIMINER (that share is now tricky to trade in for a few reasons - though proft can be made in an entirely different way).  It DID, for a while, contine trading but only doing 1 share at a time (which makes the strategy I used too risky).

Not you've seen the above, hopefully you can see why I absolutely can't afford to identify which securities I'm active on at a particular time.  At present my bot-exploloitation is largely on hold - GLBSE's way too slow to do it manually and I've yet to finish off my own bot (which, as well as monitoring my trades, executing stop losses etc will also be able to be set up to strip cash off other peopke's badly designed bots).

There's other types of trades I do (which require far less effort) - and a few more things that will come online if/when the fund grows a bit.

Now I'm definitely off to bed.

Oh - the initial transfer of assets was purely BTC + asicminer shares.  The asicminer shares I transferred in ( a dozen or so from memory) sold for more than I valued them for the first day of trading (I've since bought and sold more of those as well).  I did have some other junk shares (e.g. DMC which I only bought so I could state I was a shareholder in the thread) - those I liquidated and got a handful more ATF shares with the BTC from their sale.

Meh - the spreadsheet screenshot will have to wait - will be doing 1st weekly report tomorrow anyway and posting one then.

I might get some of these since I do a bit of spread trading on glbse too  :)

Current LTC/BTC exchange rate 0.00382.  Still not much volume around that price so it could change in either direction fairly quickly.

Adjusted NAV/U : 10.45434

Ask going up at 10.6,  Bid at 10.25

Subscribed

OK, time for the first weekly report.

I'll post a screen-shot of the fund's spreadsheet - then explain what everything in it means.  Going to do the explanation in a second post - so I can make sure the image displays properly before explaining it.

http://imageshack.us/a/img194/9739/ltcatf290912.gif

EXPLANATION OF SPREADSHEET

Most of the spreadsheet should be obvious - but in case not, here's what every item on it is.  Values in Black (other than percentages) were manually entered.  Values in green are calculated.

At the top is the current LTC/BTC exchange rate - as this fund is valued in LTC but mainly holds BTC-denominated assets, this exchange rate has a massive impact on the fund's value.

Next we have a list of what assets are currently held in currency (LTC or BTC).  For each item it is valued in both LTC and BTC.

The balances in LTC and BTC are given for the BTC-E exchange.  These will usually be zero (in fact there's some tiny amounts in there) - but there may be occasions where funds happen to be being moved between exchanges when the weekly report is prepared.

Next is the balance in BTC on GLBSE
Then the balance in LTC on LTC Global.

Do remember that this is primarily a day-trading operation.  That 58% of the fund is in BTC on GLBSE does NOT mean that the cash is sitting idle - in fact over 10 BTC of it is committed to buy orders at present.

After the currencies section, we have our GLBSE holdings.  Only long-term (i.e. intentionally being held for more than a day or two) securities are displayed here. You'll notice some hidden rows after ASICMINER - those contain the other securities we current hold (and some rows are for securities we've recently held but no longer do).  For long-term securities the general rule is that I use the 5-day average on GLBSE.  That valuei s currently lower than the 0.11 in my spreadsheet.  Why?  Because there are bid orders up into which I could sell the ASICMINER shares right now for .11 - so their value has to be at least that.

Next we have out LTC-GLOBAL holdings.  The comments about GLBSE apply here as well - other than that the 7-day average rather than 5-day one is used by default.  Again, the LTC-GLOBAL shares could be sold for 73.1 - so that is used as their value rather than the (slightly lower) 7-day average.

We then have the total for LTC and BTC denominated holdings and a grand total.

Now for the data below all that obvious stuff:

Units Authorised : This is the number of units I am authorised to sell to the public (an arbitrarily large number of units was created so that there'll never be a need to make more).  At present I am allowed to issue up to 2500 units in total.

Units Outstanding : This is the number of units held by investors (including my own personal account on LTC-GLOBAL).

NAV/UNIT (in LTC then BTC) : This is total value of the fund divided by the number of outstanding units - it represents what each unit is backed by in assets.

OLD HWM : This is the previous 'High Water Mark' - the value/unit above which management fees are payable.  The fund started off selling units at 10.0 - so that is the base from which profit is measured this week.

Adj NAV : This is the value per unit discounted by the management fee which would be taken at the end of the current week.  It represents what each unit would be worth to an investor if I took any fees due to me, sold all assets at their current valuation then shared out the proceeds (in fact this slightly underestimates the value - as we'll see later).

The columns below that showing various percentages of NAV or NAV/U are used by me in pricing my Bids and Asks so as to protect existing investors' equity without grossly overcharging new investors or allowing us to be too easily exploited if the exchange-rate suddenly swings.

Man fee (Units) calculates how many units I am entitled to as my fee for the current period's trading.  That value this week is 2.6.  According to the contract that gets rounded down - so my fee for this week is 2 units which will shortly be transferred from the asset's account to my personal one.

WEEKLY RESULTS FOR THE TRADING PERIOD 26th Sep 2012 - 29th SEP 2012

Results are given in LTC (in which this fund is denominated) and also in BTC (for any investors who view BTC-value as more important than LTC value).

NAV/U (LTC) at start of period : 10.0
LTC/BTC exchange rate at start of period : .00356
NAV/U (BTC) at start of period : 0.0356

NAV/U (LTC) at end of period : 10.50186932
LTC/BTC exchange rate at end of period : .00383
NAV/U (BTC) at end of period : 0.04022216

Exchange-rate change during week : +7.58%

Trading Profit :

Change in NAV/U (LTC) : +5.087%
Change in NAV/U (BTC) : +12.98%

Management Fee taken : 2 units.

New High Watermark : 10.45168239

I'm satisfied with the results of the first few day's trading.  We made a reasonable profit -despite a large chunk of it (measured in LTC) being wiped out by the change in the exchange-rate.  I should point out at this stage that IF the exchange rate had reduced us into a loss (in LTC) for the week I would be entitled to reduce the HWM to the new NAV/U.  In fact it didn't take us into loss - though it did nicely eat up a chunk of the management fee I would otherwise have earned.

For reference, if the exchange rate had not changed during the week (i.e. it ended at .00356) then the ending adjusted NAV/U would have been 10.98 and we would have made 9.8% profit measured in both LTC and BTC.  I would also have been entiteld to 5 units (5.37 rounded down) as fee.  Such is life - no doubt there'll be weeks where the exchange rate drops (by less than 5%) and I get an extra unit or 2 fee.

IMPORTANT : do NOT make the mistake of thinking "we made 9.8% trading profit in half a week so we should make 15-20% each week".  That absolutely will not be the case.  Here's why:

1.  Some of the most profitable activites are only available on a very tiny scale - as the fund grows the profit from those has a decreasing effect on overall profits.
2.  So far I haven't made any typos, bought into a security just before the bottom fell out of it or got stuck with some useless junk that noone else is willing to buy.  The first of those (typos) will likely happen at some point.  The second (bad timing) is inevitable at some stage.  The third (getting junk noone else will buy) shouldn't happen - but is possible (for GLBSE shares I have very strict rules on how much I'll tie up in any security relative to their daily/5-day trade volumes).

I'm not going to attempt to guess what trading profit we'll make each week.  I'm confident we WILL make a trading profit - but really can't say how large/small it will be.  Remember, also that even if we make a trading profit it can be wiped out by LTC rising vs BTC.  Of course the converse also applies - that profit can be enhanced (or loss diminished) by LTC falling vs BTC.  Swap LTC/BTC in the previous sentence if you like to think of your units as being worth BTC.

Not many units have been sold so far.  That was entirely expected :

1.  I have no track record,
2.  I didn't even make a token effort to claim not to be a scammer (I believe such claims to be valueless - both scammers and non-scammers will say they aren't a scammer, so them saying it adds no information assisting anyone else to assess them).
3.  I'm not actively promoting the fund in the main securities forum or in my signature.
4.  I'm keeping details of what securities I trade hidden.  There's a good reason for it - but many investors (including me) are wary of black-box operations.
5.  I'm not paying dividends - many investors like these.  Personally I prefer growth - but to each his own.

A slow start, giving me time to explain things to investors, iron out any glitches in my systems etc makes perfect sense - so please don't panic if you're one of the few current investors but don't see anyone else investing.  All the time the fund stays tiny, your units should grow at a far better rate than when it gets larger.  Do bear in mind that from MY perspective growth (to a certain point) is good even if it diminishes the percentage returns to you - my fee is based on the amount of profit not the percentage of profit.  This divergency of interests is mitagted by my holding units myself - where if more units are issued I MUST make more profit or my fee stays the same and my earnings on my personal units decreases.

Thanks for investing (those who did).  Thanks for at least considering investing (those who didn't but read the thread).

I won't be doing a whole lot of trading tomorrow (got a busy day) - but will obviously have bids/asks out and check them a few times during the day.  Will be around a few hours now to answer any questions anyone has.

Exchange rate at 0.00397

NAV/U : 10.4563912

Not been on long (as I said yesterday, I have a busy day today).  Some of my bids and asks went through whilst I was offline - the profits from those just about cancelled out the reduction in value (in LTC) from the exchange-rate change.

Also had our first sell-back of units to the fund today - which added a tiny bit to the NAV/U of everyone else.  Will be around on and off for rest of the evening - then trading as usual again tomorrow.

Exchange rate at 0.00395

Adjusted NAV/U at 10.50244162

Asks up at 10.6, a very small bid up at 10.15.

Last 3 trades were all sells back to the fund (54 units - approx 10% of units).  That drained our liquid LTC.  Have BTC on withdraw from GLBSE, will convert it in morning and put up the usual 30 unit wall.  As the fund mainly day trades, liquidity isn't the huge problem it is for some investments - only real delay is converting from BTC to LTC (withdrawals from GLBSE is the slow part).

Exchange rate at 0.00399.

Adjusted NAV/U at 10.50730245

Ask staying at 10.6, moving Bid up to 10.3 as the exchange rate seems to have stabilised a bit (famous last words, no doubt).

Just a bit of explanation for the math of something which might seem offputting to some if not through carefully.  It would be easy to look at my historical NAV/Us and Bid prices and think "Heh - something's wrong here: he's saying NAV/U is 10.45 but placing bids at 10.15 meaning we can only draw out 1/3 of the claimed profits."

There's two reasons why that's the case - one obvious and one much less so.

Obvious: I have to hedge against exchange-rate fluctuations (so people can't drain money from the funds by buying/selling based on pretty small changes in the rate).  I have to balance between two competing interests - offering attractive rates to those trying to buy in/sell out and protecting the investments of those already in and staying in.  I will always err on the side of caution in attempting to achieve the latter of those two.

Less Obvious: My spreads are based on a % of unit value NOT on a % of profit - so attempting to assess them based on a % of profit is misleading.

If NAV/U is 10.45 and my bids are 10.15 then the margin on bids is NOT to withhold 66% of profits, it's to offer bids at at around 2-3% below NAV/U (which is what I typically do if the rate looks fairly volatile).  Consider two extreme examples -

If NAV/U were 10.00000001 Then my bid would be around 9.7 - 9.8.  Rather obviously that's withholding more all profits AND some of original capital.

At other end of the scale consider if NAV/U were 20.  Then my bid would be around 19.4 - 19.6.  Obviously that's withholding around 5% of total profits.

In short: don't look at the current % of profits you can't withdraw and mistakenly assume that in some way my bids are actually BASED on withholding profits - they aren't.  My bids are based on the best price I believe I can safely offer such that any likely exchange-rate fluctations whilst the bid is unattended will not detrimentally impact the value of units belonging to investors already in the fund and not trying to exit.

Exchange rate at .00412

NAV/U at 10.36764959

Bid up at 10.2, Ask up at 10.5

There's some volume slowly building up around the .004-.0042 range, so with any luck the exchange-rate will settle in that area for a while.

I've also raised a motion on LTC-ATF.  The text of it is:

"    

This motion is advisory in nature and the asset issuer is not obligated to
commit (or not commit) any action in response to it.

Proposition : The unit-holders of this fund believe that the motion system on
LTC-GLOBAL is functioning properly.

Vote Yes if you agree with the proposition.
Vote No if disagree or would prefer to press the No button (IF there's a NO
button - which I don't know yet)"

The motion shows up on the LTC-ATF page (near bottom).  I'd encourage all investors to vote (doesn't matter which way) so we can see if/how well the system works.

I fixed your 'NO' vote.   ;D

There was a bug where asset issuers were able to vote with their non-outstanding shares.

Cheers.

There's currently no bid up from me on LTC-ATF (should be one before long - just waiting on exchange-rate to settle down a little).

Earlier the price of LTC/BTC actually hit the 0.005 mark (a 20% rise in a few hours).  I pulled my bid quickly obviously.  Someone else had a bid up at 10.1 for 20 units.  when the rise looked like slowing I sold to that bid (NAV/U was under 10.1 at that stage) then transferred the LTC from the sale to BTC-E with some other LTC (making sure to leave 5% of fund value liquid on LTC-GLOBAL of course).  I then sold into the exchange at peak and bought back lower for a profit.

Exchange rate is currently hovering at around 0.0043 - I expect it to drop a bit lower in next few hours.

Whoever's bid I sold to now has units worth more than they paid - and, because I was able to use their funds to take advantage of the exchange-rate spike, our fund will have gained more LTC from the sale to them at 10.1 than if they'd bought NOW from us at our ask of 10.6.  Note that we had plenty of liquid funds in BTC - but no way I could use those as they were on the wrong side of the market and would have taken too long to move from GLBSE.

Yeah, guessed that was the case - only issued the motion to test the system.  Next one I'm gonna try is voting with the shares on my personal account, sending them back to main asset, returning them to my personal account and seeing if they get to vote again :)

Not sure how you do voting - if you just add up votes when someone clicks the vote button then you'll have same problem GLBSE has (you can end with more votes than shares - and by transferring shares the votes can be rigged).  Way i THINK you should do it is to register the vote for the person voting - and only convert it to actual share-votes when the motion ends (based on whatever shares they hold at that time).

Cross-posting this to your thread for the exchange in case you miss it here.

Exchange-rate at ~.0045 - still room for it to move quite a bit in either direction.

NAV/U at 9.96313697

Will leave bids at 9.0 and asks at 10.5 overnight - the rate really is moving about in that wide a range.

We started the day with exchange of .00412 and NAV/U at 10.36764959.  If exchange-rate had ended the day at same rate then NAV/U would now be 10.506. My little trading profit of 1.5% was swallowed whole by the ~10% swing in the exchange-rate.

I don't see any reason to believe the current high LTC price will be maintained or get higher.  Obviously if you DO see a good reason for it to rise more (and at a decent speed) then you should NOT invest in this fund (until it's reached whatever you believe is the peak for LTC).

The Ask of 10.5 is priced based on an exchange rate of about 0.0042 (I don't believe LTC will stay above that long-term but am willing to chance it not going above that overnight).  So if the exchange rate falls below .0042 the units become a good buy.

I have to track the votes as they're made to show a real-time tally, but I have set it up so that when the motion ends (and at regular intervals while it is open) it will iterate back through all the votes, tally the shares held at that time, and do a final vote count update.

Cheers.

Well, the fund's been running a week now.

At present the exchange-rate is moving around in the range 0.0042 - 0.0046

Using 0.0044 we get a NAV/U of 10.11043197
Across that active range we get a NAV/U of (9.81 - 10.44)

Putting bid up at 9.7 and Ask at 10.5 - that's the tightest I can safely make the spread.  Will adjust throughout the evening as/when the rate changes.

If you look at the long-term graph for ltc/btc on ltc-charts

http://www.ltc-charts.com/period-charts.php?period=ytd&resolution=day&pair=ltc-btc&market=btc-e

You can see just how big the rise in LTC value was yesterday compared to how it's been for the previous month.  Running an LTC-denominated fund that mainly invests in BTC was always going to be challenging - especially whilst trying to offer some real liquidity.  I didn't expect it to be QUITE so hectic in the first week of operations but am actually pretty satisfied with how it's going so far.  At the current exchange rate, LTC has gained about 25% value on BTC since the fund started - and yet we're still (very slightly) in profit when valued in LTC (the BTC value of a unit has risen by ~25% since fund start).  To look at it a different way, if the LTC/BTC rate dropped back to 0.00356 (what it was when we started a week ago), each unit would have a NAV/U of 11.73 (and an adjusted NAV/U of 11.6026).

In short - the fund's made around a 20% profit on trading during its first week, but the exchange-rate rise has pretty much wiped that out when valued in LTC (and increased it slightly if you were to value your units in BTC).

Exchange-rate at around 0.0046.  No real volume from .0045-.00473.  Decent volume at both ends is at about .005 sell and .0043 buy - which is what my overnight bid/ask will be set based on.

NAV/U at 10.079.

Bids going at 9.4 and Asks at 10.6

We started the day with NAV/U below 10 at an exchange-rate of 0.0045 - so despite LTC strengthening by 2%ish we've still made a profit.  If/when LTC finally falls back down our NAV/U will go through the roof.

I'd not recommend buying at my overnight rate unless either the exchange-rate drops below 0.0044 OR you're very confident LTC will drop sharply soon (you're better off putting up an ask at 10.3 - 10.5 which I'd likely sell to in the morning if the exchange-rate hasn't fallen far).

I wouldn't recommend selling to my bid unless the exchange-rate gets pretty close to 0.005 (and you actually want to sell anyway of course).  As ever, I'd recommend AGAINST investing anyway if you believe LTC will continue to gain on BTC at a decent speed.  Conversely, if you believe LTC is likely to fall against BTC in the near future then investing not only gets you growth from the exchange-rate change, but also from my trading activities.

Exchange rate at 0.00446

For once it's having a steady spell - becalmed between 0.0044 and 0.0045. Will set a nice tight range for now so anyone who wants to buy in or out can do so without too much premium.  That range will, of course, widen significantly as soon as I spot the exchange-rate starting to significantly move.

Adjusted NAV/U : 10.4716 (yep, we're now in profit for the week despite LTC still being up over 10% on the week)

Bid : 10.35
Ask : 10.55

GLBSE is down with a message saying:

"GLBSE is offline

We will update our users on Saturday."

Obviously majority of our fund's assets are stuck on there.  I've cancelled all outstanding orders on LTC-ATF (mainly so nooned sold to the other Bid that was up) and temporarily frozen trading on it.  Will be sending out a notification saying this as well.

I'll reenable trading later tonight - but won't be placing any buys or sells up myself (not on the asset account nor on my private one).  I've also done no trades on either account since GLBSE went down -

We'll then review the situation on Saturday and decide how to proceed.  My guess (ONLY a guess) is that they've been ordered to close by the FSA (UK equivalent of the SEC in the US) pending investigation of whether to license them.  I don't personally expect much news on Saturday if that's the case.

Will go post this on litecoin forum and in a notification for LTC-ATF then I'll make sure my spreadsheet is up to date and report back what the situation is with our holdings.

First off, here's the current fund valuation:

Exchange-rate LTC/BTC : 0.0044

Adjusted NAV/U : 10.5696 LTC

With the exchange-rate finally stopping rising, profits were beginning to build up.  Then GLBSE pulled the plug.

I'll be reenabling trading of the units shortly - but won't be buying or selling them myself.  Here's a break-down of how funds are currently distributed:

BTC on GLBSE : 41.88%
Securities on GLBSE : 10.33%
LTC on LTC-GLOBAL : 5.57%
Securities on LTC-GLOBAL : 42.22%

This valuation is 100% accurate as of about 10 minutes before GLBSE went down - I was online at the time and had checked for new trades on GLBSE within the 10 minute period before it went down.

This means that just over half of our assets are currently inaccessible on GLBSE.  Usually we'd have a much larger portion of our assets on GLBSE - it just so happened that GLBSE went down at a time when we didn't.  I'll now explain why.

One of the trading opportunities I have been doing is buying LTC-MINING bonds on GLBSE then trading them with burnside (who runs the asset AND the exchange we're listed on).  Because of the current high(ish) LTC/BTC exchange-rate we make a 10%+ profit on each such trade (after paying the transfer fee on GLBSE and the costs of liquidating some of those bonds on LTC-GLOBAL then exchanging the proceeds back via BTC-E into BTC on GLBSE).  It's a profitable arbitrage opportunity for us (one of the types of thing our fund does) and also serves burnside's desire to get the bonds off of GLBSE and onto LTC-GLOBAL.

This morning I transferred 10 of these bonds on GLBSE to burnside and sent him a PM to say I'd sent them (we'd agreed I'd just send them, PM him, then when he got online he'd transfer the bonds back to us on LTC-GLOBAL).  burnside didn't get online (or at least didn't see the PM) until AFTER GLBSE was down - and he could no longer verify that I'd sent them.  He STILL sent us the bonds on LTC-GLOBAL - my thanks for that trust (for anyone believing I could be trying to scam him, do bear in mind that the PM was sent some hours before GLBSE went down - had I known GLBSE was going down and intended to scam this is hardly the way I'd logically be doing it).

That's why we currently have a much larger proportion of our assets on LTC-GLOBAL than we normally would.  The bonds transferred from burnside are around 18% of our tiny fund.  Had GLBSE not gone down, most of those bonds would have been sold by now and the funds would be back on GLBSE to be recycled.

Those bonds will sit untouched in the fund's LTC-GLOBAL account at least until Saturday's announcement from GLBSE.  Before we can trade them we need to know that all transactions on GLBSE prior to its shutdown are intact and being honoured.  If they (for example) roll-back their database to before I transferred to burnside then I'd either need to re-send them on GLBSE (if the rollback wasn't far enough to cancel our purchase) or return the ones on LTC-GLOBAL (if the rollback was so far that we no longer had them at all on GLBSE).

The above information should be taken into account by anyone who wishes to trade our units prior to Saturday : there are circumstances in which that 18% of our assets could end up being on GLBSE not LTC-GLOBAL.

If GLBSE's next announcement does not make clear whether there's been a roll-back then the bonds will sit untouched in our account.  If their announcement indicates that there HAS been a rollback (without a precise time AFTER I sent to burnside) and we still cannot access our GLBSE accounts then the bonds will be returned to burnside (as it is then far more likely that the trade is reversed than that it occurred).  If GLBSE confirm that all trades are honoured up until their shut-down (which I believe to be be by FAR the most likely case) then the bonds are in burnside's GLBSE account and we can use the ones one LTC-GLOBAL as we see fit (though obviously, if this were the case and then somehow it turned out GLBSE were wrong we would need to reimburse burnside with 10 LTC-MINING bonds on one of the two platforms).

Although the majority of our assets on GLBSE are in BTC, those are nearly all committed to bids - I very rarely leave any significant amount of BTC on GLBSE idle (idle makes no profit).  My hope is that when GLBSE comes back up they'll either clear all bids/asks or give a decent amount of notice and then have a period in which no trading occurs but bids/asks can be cancelled.  It is near enough a certainty that when GLBSE returns there'll be a wave of panic selling.  So long as I can cancel our bids before trading starts we'll be in good shape - we can either withdraw the funds (if we no longer want to stay on GLBSE) or take advantage of the panic to buy into the better securities at bargain-basement prices.  It's unfortunate our fund is still so tiny - so even a good % profit is still a tiny amount of actual LTC.

Looking forward, I'll continue to trade on LTC-GLOBAL (though volume is still tiny) until Saturday - then reassess things when the GLBSE situation is hopefully a bit clearer.  All I expect to happen on Saturday is that GLBSE will issue a brief announcment explaining the reasons for the shutdown (which I'm very confident will be that they were instructed to by the FSA or LE) and maybe some sort of a time-scale for reopening.  I also expect them to confirm that all data is intact and that all trades up until the moment of shut-down will be honoured.  If we're lucky they COULD re-open the site read-only (no trades or withdrawals possible) so at least everyone can verify what they've got on there.  But I'm not too optimistic on that.

I won't be doing a weekly report/profit-split this week.  Under the contract I could possibly do so - and take some more units as my fee.  I will NOT be taking a fee for any funds tied up on GLBSE.

I'd recommend against trading the units before Saturday - but in case anyone wants to, I will shortly be re-enabling trading of the asset.  I will NOT be clearing trades/freezing trading on the assets again - anyone who wants to trade it now does so on the basis that they believe they can react to changes faster than those on the other side of the trade they're trying to make.  I will not be placing bids/sells until GLBSE is back up and I have proper access to our assets including the ability to withdraw funds and trade securities.  At that stage my Bid wall WILL eat any Asks below it.

UPDATE

By now you should all be aware that GLBSE is closing down.  As regards assets on GLBSE, the following is a summary of what is supposedly happening:

BTC deposits will be returned - this may involve the need to provide some ID.  I have no objection in theory to IDing myself - though am not too keen on doing so to an organisation which is closing down.  For now I am valuing the fund on the basis that our BTC on GLBSE will be returned.

Asset-issuers will be provided with a means by which they can get in contact with asset-holders.  It will undoubtedly be the case that some asset issuers will just run with funds (or prevaricate until people give up trying), whilst others will act proactively to ressetablish a relationship.

I will now disclose our holdings on GLBSE and explain why I was holding them and how I am currently valuing them.  Note that this is only my best estimate of value and investors are entirely free to value any bids/asks you place on units on any valuation you choose.  It is also possible that our actual holdings are different to listed below - we had lots of active bids and a few asks up.  Whilst the below list was accurate maybe 10 minutes before GLBSE shut-down, it could have changed in that last 10 minutes without me noticing.

ASICMINER 16.

We were holding 10 of these as a longer-term investment and also regularly traded these.  We happened to have 16 at the time of GLBSE shut-down.  The 7-day average for these was .108 and last I checked (shortly before GLBSE going down) bids were at around .106 and asks at around .110.  friedcat (the issuer of these) is already proactive in seeking to resstablish contact with share-holders and I am confident our ownership of these will be recognised.  These will continue to be valued at .108 each for our portfolio until/unless circumstances or new information indicates to do otherwise.

OBSI.HRPT 20.

This always looked like a scam/ponzi to me and I never invested in them (nor did the fund) until they totally crashed in price from .1 down to .005.  We bought about 100 of them at under .005 and since then had been trading them a lot.  The price recovered from the bottom and at the time GLBSE went down bids were at around .0058 and asks at just over .01.  We had both bids and asks active on these at the time.  The value of these 20 units on GLBSE at the time it shutdown would have fairly been in the range .12 - .18.  I have zero confidence we will receive any more funds in respect of these and so these are being written off to a value of 0 in my records.  Obviously if we DO receive funds for them then those would go to the fund - but I cannot in good conscience value them above 0.  We have still make a nice profit on trading this stock - would guess we've bought and sold 150-200 of them making a 70%-100%+ markup on every trade.

BITBOND 3

This mining bond had recently been in a plummet in price from 0.4 per unit down to around 0.2 (maybe slightly slower) at the time when GLBSE closed.  The reason for the slump in price was entirely rational - if you compared their upgrade offering (to ASIC-based mining) with that of competitors then they were severely over-priced in terms of MH/s per BTC.  My view was that the devaluation had probably gone too far - as bitbond was about to announce an upgrade in the MH/s for their ASIC-bonds, information not immediately obvious to anyone looking at just the OP of their thread or the contract on GLBSE.  I had bought a few for us, hoping to make a profit when they announced the detail of their upgrade - as from past experience the naive market would over-react and over-price the stock briefly.

As noted above, these were trading somewhere around 0.2ish at time of GLBSE shutdown.  As far as I know there has been no announcement yet from bitbond in terms of how they intend to proceed following GLBSE closure.  This isn't a big deal - no reason they should have announced yet - but obviously I can't value them at full price.  For now these are being marked down to 0.1 BTC each in my accounts.  This valuation will be revisited when the situation with them becomes clearer.

Taking into account the above devaluations, the current valuation for the fund is as follows:

Current Exchange-rate : 0.00436

NAV/U : 10.30795017

If that proves correct and we can navigate past GLBSE closure and still be in profit then I won't, honestly, be too disappointed.

For anyone who believes we won't see a dime from GLBSE, nor be put in contact with asset-issuers the NAV/U is 4.977159 if you only count assets/LTC on LTC-GLOBAL.  So noone should be selling units significantly below that.  I'll put up a buy (from the fund) at 4.8 so noone accidentally sells for a stupidly cheap price.  As that price is JUST for LTC-denominated assets I don't need to monitor it based on exchange-rate.

Cross-post from litecoin forums.


That depends on what happens with all the securities that were traded on GLBSE.  At present there's not a lot of volume on LTC-GLOBAL, so it would be pretty poor value for me to run a day-trading fund based on there (a long-term investment fund like yours doesn't need much daily volume, a day-trading one like mine does).  I don't see any significant number of the funds from GLBSE being likely to move to LTC-GLOBAL as being denominated in LTC would become an absolute nightmare for most of them.

If enough securities move to either Crypto or to any BTC-denominated platform created as an offshoot from the LTC-GLOBAL code then I'd be very likely to start trading there as a replacement from GLBSE.  Obviously volume would be a lot lower than GLBSE - but luckily my fund is still very tiny so doesn't need a huge amount of volume to do well (I could have used about 5-10 times the capital on GLBSE and generated the 5-20% per week I was doing on trades no problem).

Really, right now it's wait and see - until we're out of GLBSE I won't be trading anywhere other than LTC-GLOBAL for sure and I obviously can't shut down (if that was was I decided to do) until we have our BTC back and know what's happening with bitbond.

Hopefully enough securities will re-register somewhere else that the fund can continue - if not, then it wouldn't take too long to shut it down as our (non-GLBSE) assets are pretty liquid.

I haven't meantioned MPEx: it lacks range of securities and the few there are seem to have too small spreads and too stable prices for what I do.  I don't see many GLBSE securities moving there as to handle dividends for all their investors each ivnestor would have to pay 30 BTC to register to use the site.  That's just not going to happen.

UPDATE AND REPORT

I've now received back the BTC we had on GLBSE - though no email received at all (seems some people got emails, some didn't.  Some got all their BTC, others got 90%).

In fact I received back around 0.7 BTC more than we had on GLBSE.  Looking at the few securities we held just before GLBSE closed, the explanation would seem likely to be that 6 of our 16 ASICMINER shares sold.  10 of those shares were intended as long-term holdings so would not have been up for sale, the other 6 definitely would have been for sale.  So for now (until I receive an email confirming our holdings) I'm only listing 10 ASICMINER shares in our holdings.

SPREADSHEET

http://imageshack.us/a/img87/8293/atf161012.gif

NAV/EXCHANGE RATE ETC

Current LTC/BTC exchange rate : 0.0078
Current NAV/U : 7.63649216

Placing bids up at 7.4 and asks at 7.9

SUMMARY OF RESULTS

Obviously we've lost around 25% of our NAV/Unit.  How?  Well there's actually two reasons:

1.  The obvious one - the exchange rate.  Since GLBSE closed down the exchnage-rate has moved from 0.0044 to 0.0078.  Over half our holdings were in BTC (and locked in GLBSE so no way for me to trade them) and those lost ~43% in value.  That pretty much accounts for the loss on its own.

2.  We took a further hit because of having to hold on to our 10 LTC-MINER.LTC shares until it was clear GLBSE wasn't going to be rolled back.  At the time of GLBSE closure those could have been sold on LTC-GLOBAL for 110-120 LTC each.  By time I was sure GLBSE wasn't being rolled back (and so could trade them) the price of them had fallen and we ended up selling at 80-90.  That cost us around a 5% loss in value.

The above 2 factors were mitigated to an extent by someone deciding to sell back LTC-ATF units at 4.5 - which essentially cancelled out the loss from point 2. above.

To put our performance in context (and show just how much the loss is down to exchange rate) consider the following two things:

1.  At fund start each unit was worth .0356 BTC.   Now each unit is worth .05956 BTC.  Expressed in BTC each unit has actually gained 67.3% in value.
2.  If the current exchange rate were .00356 (what it was when the fund started) then each unit would be worth 11.313 LTC.  So even after the losses incurred from GLBSE closing down (writing off OBSI, marking down BITBOND, losing ~300 LTC having to hold LTC-MINING) and despite being unable to trade much for 2 weeks we're still actually 13% up on trading.

My point is NOT to claim that we can value the fund a different way to pretend we've made a profit.  We haven't.  My point IS that my actual trading has been sound - just the (known from the start to be a risk) exchange-rate jump is the reason for our losses.

For now I'm holding 10 BTC on BTC-E.  I don't want to convert them to LTC at the current rate - as there's serious resistance to the rate rising higher and I expect some sort of downward correction within the next day or so (though it may well only be a temporary one).  Whilst I don't want to end up speculating on the exchange-rate, I definitely don't want us locking in our losses by converting everything to LTC at the peak of a bubble.

I still can't make a deicison on the log-term future for LTC-ATF until we see what ex-GLBSE asset holders do when nefario releases lists of their investors to them.  So for now I'll just be trading on LTC-GLOBAL then will review the situation when we see how things develop.  From now on I'll be maintaining bids and asks all the time - so anyone who wants to buy in/cash out can.  The spread of bid/ask will vary (as usual) depending on how volatile the exchange-rate seems.

One final note: the HWM is being reset (per contract) to the current NAV/U.  Please do appreciate that if the exchange-rate swings back in the other direction there IS provision in the contract to prevent me taking management fees on "profits" that are actually just the result of that currency movement rather than a trading profit.

Thanks for the updates. Was getting a little concerned with the whole situation, especially considering that the liquidity on LTC-ATF completely disappeared. That said, it's performed well as a hedging instrument.

Regarding MPEx: I really think you should be trading there, but I do understand why you're not.

First off, though the spreads appear small, you have to look at the daily trading range. I make pretty decent profits trading S.MPOE, which has high volume). (It's a little tight this week due to a correction, and significant upward push with GLBSE money being claimed)

Second - options. The primary attraction to MPEx is really MPOE. There's plenty of volume on options. Plenty of money to be made if you're an experienced options trader.

Thirdly - registration fee. Yep. It's expensive, and would hurt to buy that out of this fund. There are brokerage services. In fact, I offer brokerage services. (as do a few others) - If you're interested we could negotiate a favorable deal (lower fees, access to interest payments on carried balances, means to mitigate the counterparty risks you'd take on with a broker, etc) My email is on my GPG key, linked in my sig - PMs are disabled.

Fouthly - I seriously doubt you'll see more that one or two (at most) GLBSE assets move to MPEx. There really aren't many that would be able to meet the MPEx listing requirements. Most GLBSE assets are most likely completely dead, certainly as far as public trading.

There's also assets-otc.

Thanks for the info guruvan - will have another look at MPEx either tomorrow or Friday (either got a very busy day of work tomorrow or a very idle day - won't know until the morning).  And yeah - a narrow spread doesn't matter too much if the volume's there: but without an automated brokerage system it would be hard to trade just on volatility: so I'd need to be very confident about market trends/stability before getting involved too heavily.

I removed the liquidity from LTC-ATF as no way I could offer to buy people's units back at full value without being certain GLBSE would return our BTC (and of course I couldn't be sure of that).  Similarly I couldn't allow anyone to buy into LTC-ATF at just the value we held in LTC-denominated assets - as it would horribly dilute existing investors' funds when GLBSE returned our BTC.

I agree totally that I'd expect very few ex-GLBSE assets to go to MPEx - it wouldn't make sense (even if they were able to get listed there) when they already have a load of existing investors who wouldn't want to fork out the MPEx registration fee.  If they go anywhere I'd expect them right now to go to cryptostocks if anywhere - unless burnside gets a BTC-GLOBAl up.  I had another look at crypto-stocks today.  There's tiny volume there, with the highest volume being on a couple of securities I really wouldn't want to touch (think the obvious ponzi has highest volume).

BRIEF UPDATE

May as well give a brief update on LTC-ATF in this post:

LTC/BTC exchange-rate 0.0077
Adjusted NAV/U : 7.7505

Exchange-rate has been locked in the .007 - 0.0095 range for the last day or so.  There's pretty significant resistance against it rising out of that band (though some of that could be artifical) and a downward move seems more likely than an upward one.

Have made a small amount of profit trading on LTC-GLOBAL - at moment prices seem to have over-corrected for the currency-rate change so there's some (I believe) under-priced securities being sold. 

QUICK COMMENTS ON LTC-GLOBAL

I think there's a few fundamental issues with the LTC-GLOBAL market so far (not the platform, the players in the market).

1. Investors acting in an irrational manner.

As a simple example, consider LTCI - there's a full list of its holdings in a spreadsheet with them valued by the fund-manager at BID prices: i.e. the price those assets could immediately be sold for.  And we still picked up a bunch at below even that.  The out of date spreadsheet values assets based on bids at over 0.6 (including valuing our own units at 4.5 - the LTC-denominated-only value) and a more reasonable estimate of NAV/U for it is around .75.  So grabbing some units at .5 and under wasn't a hard choice, especially with my assessment that if anything the exchange-rate will fall rather than rise in the short-term.

2. Terrible reporting from some investments.

As an example consider EMIF.LTC-TRADING.  He's paid dividends the last few weeks without ever reporting what profits are or what current NAV/unit is or what (if any) managerial fees he's taken.  As he's actually paid dividends every week then, from his contract, it follows that he hasn't made a loss - so NAV/U must be over the original 0.5 per share.  Yet it's been trading significantly below that.  Can only believe it's down to the total lack of information coming from the asset owner - he got cold feet about his original plan after 1 week, promised information on what he was going to be doing in terms of change then went silent but continued paying small dividends.

It definitely seems like a lot of asset owners seem to think once they've sold as many shares as they can they can just stop posting and pay out the occasional dividend - and don't realise that their security price plumetting is a direct result of their silence.

Put together investors with a low level of knowledge, asset-owners with a lack of communication skill and the current situation of wide-spread uncertainty about crypto-investment in general and it's no real wonder the prices of nearly everything on LTC-GLOBAL is falling (this one's an exception - as the trading range for LTC-ATF is set by myself as an effective market-maker, so the fall in price is a direct measure of a loss in value rather than anything to do with the aforementioned factors).

Note that price have fallen also for stocks like LTC-GLOBAL and LTC-MINING.LTC -- this must be not due to a lack of trust.

Also LTC-GAMING and LTC-CHARTS are not backed by anything, so their price simply reflects the mood on exchange.

I think falling prices means that people are withdrawing litecoins: i.e. they sell assets they have and do not buy another assets... Also new people with money do not come. So there are too few litecoins for too many assets, which produces weird prices.

Maybe they withdraw litecoins to sell them on btc-e while prices is high?

I suspect that the increase in LTC value on the exchange probably has a lot to do with it.  Now is definitely a good time to cash out if you've been sitting on your coins for a few months.

It's also expected for mining assets to swing roughly in step with difficulty.  No one wants to spend 100 LTC on a mining bond that will produce half the coins it would have produced a couple weeks ago.  With difficulty twice what it was, I would expect the mining bonds to trade at half what they were.  That seems to be playing out on LTC-MINING.LTC as expected.

(Replying tyo both quoted posts)

Yeah the drop in mining-bonds was perfectly normal.  In part due to rising difficulty, in part due to the exchange-rate rise.  When buying a 1 Mhz bond one of the obvious comparisons is to the cost of mining hardware that would produce 1mhz of mining power.  The cost of mining hardware is denominated in fiat - so a steep rise in exchange-rate SHOULD be accompanied by a fall in mining-bond prices.

Yeah - a desire for liquidity (maybe in part to take advantage of the high LTC prices) could well have something to do with it too.

And totally agree about LTC-CHARTS/LTC-GAMING - an investment there is in the hopes that they'll successfully monetise somewhere down the line.  Plus, in the case of LTC-CHARTS, buying at IPO would have been a way to thank the site operator.

No real change in LTC-ATF overnight - exchange-rate dipped a tiny amount but seems to still be trading in the same small range its been in for a few days.  Have tightened my spread slightly as I'll be around for a fair while now to keep an eye open for any sudden currency movements.

Current exchange-rate 0.00747
Current adjusted NAV/U : 8.1796

Slight rise in unit value due mainly to the change in exchange-rate.  Bids/Asks have been adjusted accordingly (spread is slightly wider than earlier whilst I wait to see just where the exchange-rate settles down).

Pretty consistently I see flow out of securities when the denominating currency moves up significantly & back in for a safe haven while it moves down.

Investors are generally not sophisticated & make wild moves. Fund managers are not necessarily sophisticated investors  :o (You're doing pretty well, especially considering the treacherous marketplace) :D

It's a real challenge to make profits in a highly volatile, illiquid, generally unsophisticated, fraught with scams, market. Risk is, well....off the charts in most cases, but - it's really the wild west still, so that's to be expected.

There are a lot of young holders of LTC (especially), and they tend to trade more impulsively.

Would agree with this - and it's actually not an entirely irrational thing for investors to do (if LTC is rising then just holding LTC will usually outperform every security on LTC-GLOBAL).  Have definitely noticed an increase on the Bid side on LTC-GLOBAL now LTC has started falling against BTC.

Certainly LTC-ATF isn't a good investment any time you believe LTC is going to rise significantly vs BTC (unless you're using it as a hedge - when you get the benefits of a hedge + trading profits instead of actually having to pay to hedge).

Current Exchange-rate 0.0074
Current Adjusted NAV/U : 8.25757

Not much exchange-rate movement overnight.  We made a few profitable trades as well.  Unfortunately we're not gaining value as quickly when the exchange-rate falls as we lost value when it rose.  This is because most of the time whilst the rate was rising we had the majority of our holdings in BTC-denominated, now we have most (just over 60%) in LTC-denominated.

Bid at 8.0, Ask at 8.45

LTC/BTC exchange-rate currently in a bit of a free-fall: at about .0067 with no downward resistance left until .006 or lower.

Asks will be kept high (or removed totally) until price settles down - we don't desperately need new cash injections right this second so not going to risk someone buying in just before/as price of LTC tanks and devaluing the NAV/U for current investors.  Bid will move up if/when support solidifies at a new range.

Fun day with the LTC/BTC exchange-rate.  It plummeted down to almost .005 then rebounded back up to over .007 before settling down in .0066 area.  Managed to trade a small profit on currency, which made up for LTC-GLOBAL being inaccessible for much of the evening so no trading profit on there.

Current exchange-rate : .00665
Current adjusted NAV/U : 8.8001129

Exchange-rate is far from solid - it could move significantly either way, so leaving a pretty wide spread up overnight.  Bid at 8.4, Ask at 9.6.

For the bid to be decent value you'd be wanting an exchange-rate of .0072 or higher.  For the ask to be a fair price you'd want the exchange-rate to be .0055 or lower.  As always I'm erring on the side of caution to protect existing investors.  Hopefully rate will be more stable tomorrow and I can set a tighter spread.

UPDATE AND REPORT

Going to do a report now.  The fund has appreciated significantly - and without doing a report it's hard to set a tight spread.  The reason for that is because I report adjusted NAV/U (NAV/U less projected management fee) but I have to set Ask price based on unadjusted NAV/U - or anyone buying in would reduce the NAV/U (and also Adj NAV/U) for existing investors.  When the fund's up over 10% (as it is) that adds over 1% to the spread.  It's made worse this time, as the adjusted NAV/U is actually artifically low as a decent chunk of the "profits" are ones caused solely by the exchange-rate change, upon which no management fee is due.  So I end up pricing Asks too high.

SPREADSHEET

http://imageshack.us/a/img194/4148/atf201012.gif

SUMMARY

The fund's grown back nicely over the 4 days or so since we received back our GLBSE funds and started trading again.  I'd guess about half the growth is down to the exchange-rate change and the other half actual trading profit (will calculate exact figures as I type this report).

Just to clarify about our GLBSE funds: we were in the first batch paid who received back 100% of BTC from GLBSE.  We weren't in the batch who received 90% (some got it twice).  So we don't have any over-payment to return or anything.

Exchange-Rate : .00685
NAV/U : 8.87679642
Adjusted NAV/U : 8.752765997

From the spreadsheet it can be seen that I'm enttled to 5.8 units as management fee, however (per contract) that needs to be adjusted down to address the fact that the exchange-rate dropped a lot, so a lot of the "profit" for this period isn't down to my trading and I shouldn't receive a management fee for that portion.  Here's the calculation for it:

Exchange-rate at last report was .0078
HWM at that point was set at 7.63649216 LTC
Converted into BTC (at the rate then) that is .0595646388

Current NAV/U in BTC if the exchange-rate still were .0078 is .06577216
So the gain per unit (in BTC) if exchange-rate hadn't changed is .00620752
Multiplied by 409 outstanding units that's 2.53887615 BTC
10% of that profit is .253887615 BTC - the actual management fee I'm due.
That's now converted back to LTC at the CURRENT exchange-rate (as the units are being paid now) and is 37.063885 LTC
That should actually be divided by a corrected adjusted NAV/U (which would lie between the reported NAV/U of 8.876 and the reported adjusted NAV/U of 8.75) but luckily it's pretty clear that rounded down it'll be 4 units (4*9 < 37 so we know it's 4+), so it saves a bit of nasty math.

Double-checking this, with the old exchange-rate plugged in, the spreadsheet shows a management fee of 3.9 units (based on valuation in LTC).  Why the difference?  Well, the precise calculation of what amount of profit is down to management fee (by the method I'm using) will vary depending on whether it's done in BTC or LTC.  BTC was chosen in the contract as, at that point, the bulk of our trading was done on GLBSE and so was denominated in BTC.  Thus using BTC as the base currency to revalue to exclude exchange-rate impact made sense.  Now the situation is less clear - as we have a small majority of our assets LTC-denominated, though at times (e.g. yesterday when exchange-rate hit a low) we still have a majority BTC denominated.

Any calculation will only be approximate.  We can do a simple check to see if it's in the right ball-park as follows:

NAV has increased by 16.24%
LTC has weakened by 12.1%, but under half our assets were in BTC at the time (and that valuedropped during the week) so very clearly this accounts for well under half the growth in the fund (the holdings denominated in LTC aren't impacted at all by the exchange-rate change).

I will therefore be taking 4 units as management fee as per the calculation done according to the contract.

With those units added into the spreadsheet we end up with a new NAV/U of 8.79082261.

That's slightly higher than the adjusted NAV/U at the beginning of this report due to me only taking 4 units instead of the 5.8 the spreadsheet was assuming.  HWM is now also adjusted to that value (and, of course, that is also the current Adjusted NAV/U).

Bidding at 8.45
Asking at 9.1

Exchange-rate 0.00747
Current NAV/U : 8.6147

Exchange-rate rose a fair bit yesterday evening, but now seems fairly solid in the .0072 - .0078 range.  Obviously NAV is down a bit - but has been offset a bit by trading profits.

FOr comparison, exchange-rate was the same 3 days ago:


You can see we're up about 4% from where we were the last time this was the exchange-rate (about 3.5% after taking into account that the old adjusted NAV/U was slightly undervalued).

Setting bid at 8.4, Ask at 8.9.  Will widen the spread before I log off for the night.

Exchange-rate 0.00748
NAV/U : 8.63078

Bid at 8.45
Ask at 8.85

Exchange-rate has stayed in the same band.  There's been little trading activity - and our ability to trade is slightly restricted as I can no longer comfortably trade esecurity.SA securities.  If those were a scam then now's whem it would become apparent (market price holding below cost meaning no likelihood of being able to sell more/an esecurity3).  Neither of them paid its dividend yesterday and neotrix' pool website is totally down without any explanation.  So I won't risk holding any unless they're picked up at a tiny percent of their theoretical value or some update is provided.  We haven't actually traded them much anyway - think last was a week back when we picked up a hundred or so and sold them back off same day for a 10-30% markup.

Exchange-rate 0.00747
NAV/U : 8.6410939

Bid at 8.5
Ask at 8.8

Exchange-rate has been stable for a few days now.  Will try to keep a tight spread as long as I can.

Exchange-rate : .00748
NAV/U : 8.707926

Exchange-rate feels like it's going to move soon - the walls either side of it have largely vanished.  I would tend to expect an upwards move given that next difficulty change is upwards - but in a purely speculative currency like LTC moves aren't always rational and are often just the herd stampeding in whichever direction somewhat started a move.  Hopefully I'll be around and watching when it happens to trade some profit from it.

For now putting Bid : 8.55 , Ask 8.85

That spread will widen later this afternoon whilst I'm out.

Exchange-rate : .00746

Current NAV/U : 8.72846

Exchange-rate moved around a bit but ended up pretty much back where it started.  Will be out for next 4-8 hours, so setting a widish spread - will narrow it once I get back.  Bidding at 8.45, Asking at 9 whilst I'm afk.

Exchange-rate 0.00747
Adj NAV/U : 8.796833

Bid : 8.65
Ask : 9.0

Exchange-rate : .00779
Adj NAV/U : 8.901517

Bid : 8.75
Ask : 9.05

Pretty hectic day yesterday with the exchange-rate.  It dumped down to around .007 then was pumped to .0082.  It then fell to .0073 before being repeatedly pumped back to 0.0081.  I managed to trade decently on one of the cycles, so although LTC has gained aboout 4% vs BTC since last update (which would have been a fall in our unit price of ~1.5%) we''re actually up a bit over 1% on the day.

Whilst currency trading isn't one of my main objectives (with the tiny amount of this fund it's too much work for miniscule returns anyway) I do try to take advantage of obvious pump/dumps and minimise our losses when the rate rises.  I keep some of our funds on BTC-E for a few reasons:

1.  To allow us to trade on obvious pump/dumps,
2.  To keep some non-LTC assets (BTC) so even if LTC falls to near zero we still retain some value,
3.  To ensure I have liquid funds to keep a bid-wall up.

Point 3 may seem strange at first - surely I could just keep LTC on LTC-GLOBAL for that?  Well, no I actually can't (at least not in the asset-issuer account).  We typically have bids up that amount to more than the amount of LTC in our wallet.  If a bunch of them then get filled then the rest would auto-cancel.  That would include my bid-wall on our own units.  By keepung some funds out of that pool, I ensure that no sells to other bids of ours can use up so many funds that the obligation to keep up a bid-wall for 5% of our own units is broken (other than for the 10 minutes it takes to move funds over).

There's a decently tight spread up at moment - as we happen to not have much in BTC at moment (the serial pumper on the eexchanges always buys up to over .008 so I'm not selling LTC below that right now - may as well get as much as we can out of him on his next pump try).

One final note: If you want to buy in or sell out you DON'T have to pay the full spread I put up.  If I see a bid or ask that's within 1% of current value and it doesn't disadvantage the fund for me to fill it then I'll fill it.  The purpose of the spread is NOT to try to charge a hefty fee for buying in/out - it's to ensure that people buying in/out can't do so at prices that will cause loss to current investors.  Any time the price is pretty stable I'll happily buy anyone in or out if it doesn't cost existing investors.

Exchange-rate : .00778
Adj NAV/U : 8.94165

Bid : 8.78
Ask : 9.08

Very slow day yesterday - exchange-rate was pretty stagnant and very little activity on LTC-GLOBAL.

UPDATE AND REPORT

http://img440.imageshack.us/img440/259/ltcatf291012.gif

This week has ended with LTC up around 10% on BTC against last week.  Had I not been trading that would have translated into about a 4% loss in value (in LTC) for the fund.  As it is, we made about a 3% gain on the week - so trading was making about 1% per day on average.

We're ending the week with pretty much no BTC holdings (other than the few shares locked on GLBSE).  This isn't a policy change - just that the exchange-rate has fallen to a point where I believe the next move is likely to be slightly upward: so we'll be back to having significant BTC holdings before long (if I'm right).

Management fee for this week is 1 share (rounded down) - I don't get to claim for profits that were wiped by currency move.

1 share will be transferred and the HWM updated shortly after I post this.

As we're temporarily almost compeltely in LTC (and hence almost unaffected by any exchange-rate move) I can offer a VERY tight spread for the next few hours (or until the currency starts to move and I have to get back into BTC).

Bid at : 8.95
Ask at : 9.05

If you want to get into (or out of) the fund this is best chance you'll get buying from my orders (you may be able to do better placing bids/asks yourself and hoping someone else fills them).

Exchange-rate : 0.00743

Adjusted NAV/U : 9.055844

Bid at 9.15
Ask at 8.96

We had a few profitable sales go through overnight.  We're no longer holding just LTC (have some BTC on BTC-E) so spread isn't quite as tight as I was able to make it last night.  I'll be only be around for a few more hours before going out - at which point the spread will widen more.

Exchange-rate : 0.00753

Adjusted NAV/U : 9.099822

Bid at 8.97
Ask at 9.24

Not too much happening - currency fairly stable and only a small amount of trading happening on LTC-GLOBAL.  Slow but steady profits would be fine by me though.

Exchange-rate : 0.00747

Adjusted NAV/U : 9.15587

Bid at 9.04
Ask at 9.3

LTC taking a bit of a dive vs BTC at the moment.  Down to about .0071 right now.

I didn't expect it to fall quite so much - and the fund got to 100% LTC when the price was about .0073.  So if the exchange-rate drops lower we won't be getting any significant increase in unit value.  Conversely, if the price does a big bounce back up (which often happens) we're nicely positioned to sell out at the peak.

Exchange-rate ~ .0071 (big gap above that - as noone's following the price down other than a few bots : hence high chance of a fast bump back up).

Adjusted NAV/U : 9.233006

Bid at 9.1
Ask at 9.35

The value is pretty stable as we're 100% in LTC (other than the odds and ends of shares tuck on GLBSE).  e.g. even if rate shot up to .008 we'd still be ahead of where we started the day (and if it fell to .006 we wouldn't gain much from it).  It's a shame to be missing out on profit if it falls further - but we've been regaining value decently so no need to start gambling on big exchange-swings.

The fall wasn't one big dump - a fair bit of it would have been traders correcting for a mismatch between the LTC/BTC and LTC/USD books (did a few cycles of correction myself but the profit was way too small to be worth the effort of doing it manually).  And the rest likely the sheeple seeing price fall so following blindly.

Exchange-rate : .00746

Adjusted NAV/U : 9.26092
Bid at 9.1
Ask at 9.45

Leaving a fairly wide-spread overnight as we have a fair chunk in BTC at the moment, so price a bit more volatile with currency moves than last few days.  As can be seen, we grew a lottle bit today even though ltc raised 3% or so vs BTC - that was because we were largely unaffected by the currency rise due to already being totally in LTC (as noted in previous post).

Will tighten spread a bit when I get online tomorrow.  If anyone wants to buy in or out would suggest you put up asks at around 9.2 or bids at around 9.35 rather than buy from my overnight spread and I'll fill them when I get up unless they've moved out of range due to either currency moves or profit from trades transacted whlst I was offline.

Exchange-rate : 0.00744

Adjusted NAV/U : 9.31197

Bid at 9.19
Ask at 9.46

Holding mainly LTC again, so have tightened spread a bit.

UPDATE AND REPORT

http://img689.imageshack.us/img689/8185/atf041112.gif

We're now back over our initial IPO NAV/U of 10 - having dropped to 7.5 when LTC jumped vs BTC whilst we had BTC denominated assets stuck on GLBSE.

The final surge was down to one series of trades.  I don't usually give details of trades but as this last jump was 10% in one go I'll explain how it happened. 

LITECOINRS-PT WAS a pass-through to a stock on GLBSE.  A few weeks back its owner decided that, rather than close it, he'd inject a bit of cash and convert it into an investment fund here.  That was accompanied by offering to buyback all shares at IPO - so existing investors had nothing to complain about.  At that point it was apparent that the NAV/U of current investments were WAY over the buyback price - so our fund bought in pretty heavily then relisted our purchases at decent markup - but still largely below the current NAV/U.

For the last few weeks those have pretty much just sat there - with noone seeming to notice how heavily underpriced they were (we sold a few but also bought more at steep discount).  Finally today someone actually looked at the stock and bought in - getting sharest hemselves at 1/2-2/3 NAV/U and realising profit for us.

We bought in at 1.0-1.1.  Our sales today were:

100 @ 1.5,  100 @1.75, 200 @2.0

It's easy enough to work out we made 300+ LTC on that.  A fair NAV/U for the share is definitely over 3 - so the buyer got a good deal.  Why did we sell so cheap then?  For two reasons:

1.  General - our mandate is to day-trade.  We buy stuff with the intent/expectation of selling pretty quickly at a profit.  In a liquid market it's fine to try to buy below value and sell slightly above value.  In an illiquid market I prefer to try to buy WELL below fair value and sell below value as well.  Usually I wouldn't sell this far below value though.

2.  Specific - at peak we had over 20% of our fund invested in this one share.  Whilst I'm fine with having that much in one share briefly I don't like to have us so exposed on one asset for any great length of time.  In general I try to keep holdings below 10% in any single asset.  So I was fine with selling off SOME of this stock cheaply and "only" taking a 40-80% profit on it.

Until the sales today this share had been valued on our books at what we paid for it - as is my usual policy.  I've now marked the remaining ones up slightly - but we'll still make some more nice profit when the remainder sell.

After posting this I'll be taking my management fee which is 6 units this week (rounded down from 6.13).

At present we have quite a bit in BTC on BTC-E, so for now Bid will be at 10.05.  Should be able to raise that a little once I get us back into LTC.

For now there's no units up for sale from the fund.  Two reasons for this:

1.  Until some more shares get sold to us (or bought by me) we don't actually need more cash.  No point selling new units if all it does is dilute the profits for existing investors.

2.  There's every chance more of the LITECOINSRS-PT shares will sell shortly - if so, I don't want someone buying units cheap before I've had a chance to adjust my Ask upwards.

If our cash on hand reduces (either by security purchase or by selling back of units to the fund) then I'll put more units up for sale.  Until then anyone who wants in needs to find a current investor willing to sell.

Bad timing - whilst I was posting the report, the LTC price did the drop I was expecting.  As I wasn't paying attention to it, didn't make the profit I should have.  Anyway, we're now back in LTC and up slightly from when I typed the report - so raising my bid up to 10.15.

Exchange-rate : .0071
Adj NAV/U : 10.30075

Bid at 10.18

Exchange-rate .00712
Adj NAV/U : 10.340024

Bid at 10.23

For now I'm keeping us totally in LTC (other than the odds and ends stuck on GLBSE) so exchange-rate changes have a negligible impact on fund value and I can continue to offer a decent buy-back rate.

Exchange-rate 0.00692
Adjusted NAV/U : 10.452992

Bid at 10.34

Exchange-rate : .00691

Adjusted NAV/U : 10.538823
Bid at 10.4

Making slow but steady profit.  Not having much luck picking up assets cheaply at moment, just selling off ones we've held for a while for a profit.  So still no plans to issue more units as we still have plenty of cash on hand.

Exchange-rate : 0.00689

Adjusted NAV/U : 10.565177

Bid at 10.43

UPDATE AND REPORT

http://anonymouse.org/cgi-bin/anon-www.cgi/http://img855.imageshack.us/img855/8286/atf111112.gif

Trade picked up this week - in conjunction with LTC falling vs BTC.  That's actually a pretty common pattern - when LTC is strong investors sell shares to get LTC, when LTC weakens investors buy more shares as they see it as a way to protect against LTC falling in value.  That's not actually as irrational as it may sound - as many shares' value (either capital or revenue) is effectively denominated in fiat so rises (in LTC) when LTC falls.

We've been solidly in LTC all week - so, unfortunately, haven't gained from holding BTC in the way we would have before GLBSE shut down.

You may have noticed a new section in the bottom right of the spread-sheet - this shows the calculation adjusting my management fee for currency fluctuation (only applies when LTC weakens).  The calculation done there is actually slightly different to that prescribed in the contract - when convering recalculated profit from BTC to LTC I used the OLD rather than the NEW exchange-rate.  Had I used the old rate (as per contract) it would actually have increased my management fee.  The method in the ocntract was devised on the basis that most of our portfolio would be in BTC - as such it's actually pretty irrelevant now we're almost entirely in LTC.  Just about all profits are from trading (just a tiny amount from appreciation of the assets stuck on GLBSE).  In fact the fairest calculation would use the mid-point between old and new rates - to reflect that (typically) profits were made throughout the week as the exchange-rate moved rather than all at either the beginning or the end.

I'm not proposing to update the contract in respect of this calculation - as I hope that, before too long, some decent market for BTC-denominated securities will emerge and we'll be back to having a chunk of assets in BTC and the calculation will become relevant again.  For now I'll just use the least favourable (to me - most favourable to investors) of the formula detailed in the contract and what I consider a common-sense/logical calculation.

I expect our position to remain largely cash until LTC next rises.  There's absolutely no reason to panic buy - I try to only buy when I'm confident I can sell for a profit and would far rather hold cash (LTC) than securities I bought at a fair price.  So, for now at least, I won't be putting more units up for sale - that can, of course, change very rapidly if market conditions change and/or a significant number of our orders get filled.

HWM will be updated and 2 units transferred to my personal account as this week's management fee.

Bid at : 10.7

Not a glitch - just none have been traded in the last 7 days.  I'm not selling new units at the moment and seems noone wants to sell theirs back to me (or to other  bidders who have put buys up at just over NAV/U, overbidding my buyback).  Haven't seen an Ask up that's within 20% of NAV/U - so seems like existing investors don't want to sell and new ones can't get in at a reasonable price, hence no trades.

Would suggest you just manually value LTC-ATF shares at my quoted NAV/U - most of our holdings are usually in cash (as you can see in the report) and the shares we hold are all valued at or below their 7-day average, so my official NAV/U is a slightly pessimistic one compared to most valuations.  As I've mentioned before, other than investments I expect to take a while to sell (due to pricing typically) I generally value everything at what I paid for them until I sell them.  As volume's so low, 7-day average for most securities jumps around all over the place - so if I used that, my NAV/U would jump all over the place without reflecting any real change in the value of our assets. 

Exchange-rate : .0064
Adjusted NAV/U : 11.0238
Bid up at 10.87

We've remained solidly holding LTC - so haven't gained or lost anything significant from LTC dropping below .006 then rebounding back up to where it now is.

Note that the above quote is from our thread in the Litecoin forums - if you click it here it'll take you to some entirely unrelated post.  If there's a query on one thread which I respond to in any length then I tend to cross-post on both to give context to my comments and save me having to answer the same question again later.

Exchange-rate : 0.0064
Adjusted NAV/U : 11.37739
Bid at : 11.23

Seems like there's some active buyers around at moment - at the rate our assets have been selling so far today we'll be entirely in cash by the end of it (if that happened, NAV/U would be at around 12 at a guess).  Every single asset on LTC-GLOBAL is either up or unchanged - definitely some buying happening (which makes it harder to get more assets cheaply, but great for realising profits - have relisted some of our last stuff at higher prices).

I've posted (a rather hefty) proposal in the litecoin forums:

http://forum.litecoin.net/index.php/topic,857.0.html

If you're reading this post on BTC forums (I post all my updates to both forums) then sorry for only posting it on the other forum - but I'd prefer all discussion (if anyone actually reads it all) in one place.  Here's the CN for the thread - so you can decide if it's of interest before visiting:

SUMMARY (CN)

I am proposing that when LTC-ATF begins trading on BTC-GLOBAL, we raise funds for it by issuing bonds paying a fixed-rate of interest rather by issuing more units.  This would greatly reduce NAV/U volatility caused by exchange-rate fluctuations and would keep the bulk of profits for existing unit-holders rather than giving them to new investors.  This comes with the risk that if we make a loss trading we lose more than we would do if additional capital was raised by issuing more units.[/b]

Exchange-rate : 0.00545

Adjusted NAV/U : 11.79257
Bid at : 11.6

Have had a few decent trades last few days.  In the meantime LTC keeps falling vs BTC - if we'd still had significant BTC-denominated assets we'd be up a whole ton more.

UPDATE AND REPORT

http://img26.imageshack.us/img26/2469/atf181112.gif

It's been a good week for trading - pretty steady throughout then very busy last few days.  There's definitely some new investors into LTC-GLOBAL, at least one of whom is buying up whole chunks of assets at stupidly high prices.

Although we're, as usual, mainly cash that definitely hasn't been consistently the case last few days.  To give some idea, we currently hold ~1000 LTC worth of (non-cash) assets.  My last 30 trades (which is all that's easily viewable) were all in the last 10 hours and have a total value over 3200 LTC.  If half of those were buys and half sells (which is about right - cash was around same 10 hours ago) then we've turned over 1600 LTC worth of securities in that period: or over 25% of total fund value.

LTC dived heavily this week - but is now showing first signs of recovering (though the upward movement is small it's actually against arbitrage pressure).

Management fee due is 6.6 0 recalced at 6.2 to exclude the small impact our GLBSE assets have from exchange-range change.  That gets rounded down to 6 - which units will be transferred to my personal account (and HWM updated) after posting this.

Earlier in the week I made a post here : http://forum.litecoin.net/index.php/topic,857.0.html

This explained a proposal to issue BTC-denominated bonds to raise new capital rather than selling more units.  Feedback on it was pretty much zero (which was expected tbh).  I will NOT be creating a bond asset on BTCTC in the near future to issue bonds - I can't justify the 5 BTC listing fee when initially we'd only be looking to sell 5-10 BTC worth of bonds anyway.  I still like the idea of removing currency risk and leveraging our capital - so may consider private bond sales (i.e. just handled through a forum thread rather than on a trading platform) in the short-term.  Will probably put up a motion authorising this later in the week - so I can move on it when securities to trade in actually get listed on BTCTC.

Bid at : 12.2 for now.  Might be able to move it up slightly after I've had a proper look at the BTC-E currency markets.

Just bought 60 Shares  :D

Heh, well it's gonna take a while for the price to rise to what you paid for the last of them.  But welcome aboard.

You weren't buying direct from the fund - but from sellers by the way.  Only new units in last few weeks have been the ones I've taken for management fee.  Can't see any new units being sold by the fund for quite a while - so at least you don't have to worry about me selling new ones for less than you just paid.

I see well i had a few from a while back so they must have been from the fund,

Thanks i guess its a long term investment, but i dont mind i can see how much work you put into it so i thought id like to help you out if it did in any way  :D

Exchange-rate 0.0053

Current Adjusted NAV/U : 13.0082307
Bid at : 12.85

Overnight we temporarily went to a position of holding zero securities (other than the handful locked on GLBSE) - i.e. we were entirely holding cash.  Pretty sure that's the first time we've been that in position since launch (when we started we already a few shares that I transferred in - and had bought more before those were sold).  We're no longer all cash now (just mostly).

There's various pretty crude attempts at price maniluplation occurring at moment on LTC-GLOBAL - essentially someone buys up most of the Asks for a share, places a high bid themselves then hopes others will overbid them.  Right now the obvious two are esecurity.sa2 and ltc-gaming.

Esecurity.sa2 is interesting - as yesterday the actual asset issuer was manipulating the price.  Basically he was putting up bids himself at 5.2, then selling NEW shares to anyone who overbid him.  Obviously once I spotted this pattern I made us some profit off it (would guess about 3% gain before weekly results and another 3% after) - by bidding just over 5.2, waiting until he did next dump (KNEW it was him as outstanding shares would rise after each dump) then selling them back off at 5.4-5.9 via Asks.  A LOT of the massive volume last few days in esecurity.sa2 was through this - with a pretty big chunk of it having me on one side or the other of trades (I was happy to take smaller profits on larger volume - as the asset-issuer, through his market manipulation, was setting a floor for me so risk was low).

I don't agree with asset issuers manipulating their own share price - sales policy should be transparent.  The last statement from the asset issuer was that he wasn't selling more shares (this was because LTC/USD rate had risen to the extent he could no longer sell without undercutting previous sales).  Now, unannounced, he's selling back onto the market - and doing so whilst attempting to manipulate the price.

Now someone bought all the way up to 10+ - and there's an Ask at 6.0 which is almost certainly going to be whoever's trying to mess with the price.  I've no evidence to suggest this is still the asset issuer - could well be someone who saw the massive traded volume last few days and thought they could push the price up and resell for a big profit.  If so, they're in for a pretty epic fail - as a whole lot of that volume didn't represent demand at all (for starters, volume is pretty much doubled by me picking them up cheap and reselling for modest markup - and my belief is a lot more of the volume is false as wel for a slightly different reason).

Same thing (attempted price raise) is happening on LTC-GAMING.  Someone's bought the market out - and now there's an isolated big Bid up.  I'm even less clear on what's happening here.  Esecurity.sa2 at least pays good dividends and has a defined, credible, model by which those profits are being delivered - so if you believe they're doing what they say they are they offer good value as an investment.  LTC-GAMING, on the other hand, was set up as a website to develop games yet appears to have completely failed to develop anything of note - but has kept ticking over due to its policy of paying out miniscule dividends every day (which would amount to an annual return of 1-2% that isnt even profit as the site generates no revenue other than donations).

It's hard to see how this price rise could be genuine given that the contract states:

"50000 shares will be issued at 1 LTC per share

Funds raised will be invested into the rapid and agile development of original
intellectual property and games."

Only 11000 shares have been sold so far, so to actually keep the price over 1 LTC you need to soak up the other 40,000.  And there's zero sign of any "rapid and agile" development going on - just a third--party solitaire game on the site which looks like it was written in an afternoon by someone as an exercise whilst they were learning to program.  Though there IS an announcement of unspecified major developments - so maybe it's someone speculating who didn't realise there are still 40,000 shares to be sold at 1 LTC each.

I post the above, as much as anything, to explain why - at times - we HAVE to sit on mainly cash for a while.  When a few securities are in artificial bubbles I have to stay clear of them until the bubble bursts - as it's not worth the risk of trading a security when you KNOW it's in a bubble that will collapse (probably sooner, rather than later).  And with only a small range of available investments in the first place, losing the ability to trade a few DOES restrict overall ability to trade.

 Note that whether I view a security as a good investment or not is pretty much totally irrelevant to WHETHER I trade it - I'll trade any old junk (NOT saying either of the 2 securities above IS junk) if I can make a profit doing so.  The quality of it (and, more importantly, how I perceive the market as perceiving it) just alter what % of funds I'll risk on it, how big the likely profit margin has to be to trade it and what degree of credibility I'll give to any apparent moves in its market value.

Not much happening - but at least no longer 100% in cash.

Exchange-rate : 0.005
Adj NAV/U : 13.14996427

Bid at 12.95

Exchange-rate : .00534

Adjusted NAV/U : 13.63996
Bid at 13.4

Got up to about 30% of funds invested in LTC assets then they all sold and we were back to 100% cash again (more cash than last time of course).  Only stayed all cash briefly this time.  Getting back to all cash is nice in a way - every time we do it I (and you) can be absolutely confident that at that stage my valuation is totally accurate (ignoring the few GLBSE shares - which are under 5% of our value) and there's nothing toxic we're left stuck with.

Will be putting up a motion today to address issuing BTC-denominated bonds and the necessary changes in our contract to accomodate that.  A means of getting out at full NAV/U (including reimbursement of the 0.2% fees) WILL be provided for anyone who disagrees: so if you happen to think it's a bad idea DON'T panic and sell into my bid - you'll have a means to sell for full NAV/U (which should hopefully be up around 14 by the time motion passes).

I'll also be updating one of the early posts in this thread with a spreasheet showing TRADING profit for each week of operation of the fund (that's profit BEFORE fees and excluding changes caused by exchange-rate changes).  That's needed as one of the restrictions on my ability to issue bonds will be that the rate offered is no more than 1/3 long-term trading performance - so clearly that has to be estimated/calculated.  Exchange-rate changes will be ignored - as one of the main purpose of the bonds is to make us pretty immune to them, so as they won't have any great impact once bonds are in play they can be ignored when calculating what we can afford to pay for bonds.  More on that when I write the motion up later today.

The following motion is being put up to vote on :

--- MOTION BELOW THIS LINE ---

This motion is to make two changes to the contract:

1. The section of the contract headed "MANAGEMENT FEES" to be amended to:

MANAGEMENT FEES

At least once per fortnight (with the goal being to do it weekly) a report will
be prepared and posted in the forum thread linked above.  This will include a
current valuation of the NAV and NAV/U for the fund.  This valuation will be in
LTC (a BTC valuation will also be posted).

When that valuation is above the current HWM then the excess is considered to be
profit.  The manager is entitled to receive 10% of that profit as a management
fee, paid in LTC-ATF units at the calculated adjusted NAV/U.

2. A new section to be added to the contract as follows:

BOND ISSUING

The fund manager is authorised to issue interest-paying bonds with a face value denominated in BTC.  These bonds may be issued on ones or more trading platforms of Manager's choice.  Costs associated with creating these bonds will be charged to the fund and treated as an non-realisable asset depreciated to zero over a period not exceeding 20 weeks.  No additional management fee may be taken for administering these bonds and the manager's fee must be taken on profits AFTER payment of interest due on the bonds.  For accounting purposes bonds are treated as a liability at their face value.  Although face value must be in BTC, the bonds may be transacted (and dividends paid) in any currency of manager's choosing.

The following restrictions are placed in respect of these bonds:

Bonds may not be issued with a total value greater than 1.5 times the NAV of the fund.  If, through exchange-rate movement or trading loss, NAV falls below this requirement then either more units must be sold or bonds redeemed.

The fund must maintain BTC-denominated assets such that outstanding bonds amount to a liability of no more than 90% of such assets.  When this ratio is not met (such as after issue of new bonds transacted in a currency other than BTC or after significant BTC-denominated trading losses) it must be promptly restored.

The interest offered on new bonds issued may not exceed 1/3 of the estimated average trading profit (excluding exchange-rate caused elements) of the fund for the previous 26 weeks (or since the start of the fund if it hasn't been running for 26 weeks).

No risks associated with normal trading may be passed on to the bonds - all loss from trading is applied against the value of fund units.  The risk of trading-platform failure may, at manager's discretion, be fully or partially shared with the bonds.

Manager has authority to define the detail of how bonds will be managed as he sees fit within the above parameters.

--- END OF MOTION TEXT ---

EXPLANATORY NOTES

Hopefully most of this is pretty straight-forward.

The first change deletes all the section addressing modification of management fees to deal with changes caused mainly/solely by exchange-rate fluctuation.  One of the main point of the bonds is to massively reduce the impact such movement has - and make the mechanism being deleted irrelevant.  In practice this will have two effects:

1.  If LTC falls more than 5% against BTC then my fee will be slightly larger than it would have been before.
2.  If LTC rises more than 5% against BTC then I no longer have the ability to reset the HWM downwards - and get zero management fees until the fund grows back over the previous HWM.  This actually a pretty huge improvement for investors in theory - as on the old system if I had a whole bunch of genuine trading losses (or one big one) HWM would still get reset next time currency moved up by more than 5%, allowing me to claim management fees on making back previous trading losses I'd incurred.  Had that situation ever arisen I would not, of course, have claimed such fees - but this formalises that in addition to removing my ability to reset HWM when previously I could perfectly legitimately do so.

I believe that, on balance (and excluding the loophole - which I wouldn't have exploited, so removing it doesn't actually gain anything) this change has no overall theoretical impact on management fee (I get slightly more when LTC falls and less when it rises than under old system).

The second change introduces the ability to offer bonds to raise funds as an alternative to selling more units.  The reasons for this (and the benefits/risks) are detailed in the following thread:

http://forum.litecoin.net/index.php/topic,857.0.html

I'll just address a few specific parts of the proposed change whose purpose may not be immediately clear.

"Costs associated with creating these bonds will be charged to the fund and treated as an non-realisable asset depreciated to zero over a period not exceeding 20 weeks. "

This is to prevent a sharp(ish) drop in NAV/U if a registration fee is paid to create a bond asset.  Having the ability to issue the bonds DOES have a value (or we wouldn't be doing it) so it's not an unreasonable method,  More to the point, it removes any incentive for people to sell out before we do so then buy back in lower afterwards (though it's pretty unlikely the opportunity to get back in would exist).  So if (as is likely to be the case) there's a 250 LTC fee to list the bonds then that will be written down over up to 20 weeks rather than deducted in full from NAV immediately.

"Although face value must be in BTC, the bonds may be transacted (and dividends paid) in any currency of manager's choosing."

This is pretty important.  I'd previosuly mentioned that we couldn't justify a 5 BTC fee to list the bonds on btc.co - and was considering manually managing them in a forum thread.  Since then, the obvious has occurred to me - why not just list them in LTC?  Although their FACE value is in BTC, all transactions can still be done in LTC.  That way, not only does it serve as a bond - but also as a means by which investors can speculate (or hedge on) the LTC/BTC exchange-rate without having to take funds off of LTC-GLOBAL.  The only area where this causes any real inconvenience is that I wouldn't be able to leave a bid-wall up on them unattended (as their price should swing round as exchange-rate moves).  But I can still do buybacks by arrangement with no difficulty.

"Bonds may not be issued with a total value greater than 1.5 times the NAV of the fund.  If, through exchange-rate movement or trading loss, NAV falls below this requirement then either more units must be sold or bonds redeemed."

When reading this statement bear in mind that NAV is Assets - Liabilities (The N stands for Net - i.e. not gross).  If we have 5k LTC of assets and issue 5K LTC worth of bonds then our NAV remains 5k (10K Assets - 5K liabilities).

I'll do the spreadsheet for historical trading profits tomorrow.

After this motion passes, I will offer for a week the opportunity for anyone who wants out of the fund to get out at very slightly over NAV (either by purchasing their units myself or by the fund repurchasing them and me repaying the fund the fees element so NAV/U doesn't drop).  I strongly believe that if there's any non-trivial change to the contract of a bond/unit then all investors should be given the option to exit at a price no less than what they would receive if the bonds were recalled/fund closed.  It may well be the case that you can sell direct to market for more anyway - but, if not, then that offer WILL be in place.

I'd recommend you vote yes - but if you have any questions or a reason why this is a bad idea PLEASE speak up.  If I'm missing something I'd like to know - and will happily cancel or alter the motion if necessary.

Exchange-rate : .00511
Adjust Nav/U : 13.8419

Bid at 13.63

The motion allowing issuing of Bonds was passed.  As promised there will be an exit route provided for anyone wanting to sell out at full NAV/U because they disagree with us issuing bonds.  I WAS going to do this by messing around with transfers, verifying emails (to make sure it was an owner at the time of this offer) etc - but that's far too much like hard work.  Instead I'll be doing the following:

BUYBACK OFFER FOR ANYONE WHO WANTS TO GET OUT OF THE FUND

For the next week I'll be placing Bids at 100.3% of current NAV/U - yes, buying back units at more than their actual (book) value.  For units sold back in this fashion I'll do one of the following (at my discretion) :

1.  Buy them (via transfers) with my private account from the asset issuing account at 100.1% of the cost the fund paid for them,
2.  Transfer 0.4% of amount the fund paid from my private account to the asset issuing account.  Units bought back in this manner will NOT be sold on the market until after this buyback offer ends.

This ensures that remaining investors get a (very tiny) increase in NAV/U if/when such sell-backs occur whilst ensuring anyone who disagrees with the direction we're taking can exit without loss.  And I'm fine with personally paying a small premium to get back some units and/or decrease the outstanding units which increases my share of profits.

If I haven't updated bid price for a while you MAY want to PM me first - so I can update it to reflect any profits (or losses) from recent trading before you sell.

If anyone believes this is in any way unfair please DO let me know.

Obviously if there's higher bids on the market already you may choose to sell to those.

This offer will last until 23:59:59 GMT on 30th November 2012

As a result of this policy, bid is now at 13.884

NEXT STEPS TODAY

Here's what I intend to be doing today on the fund:

1.  Update the copy of contract in second post of this thread to reflect the changes passed in the recent motion.
2.  Edit the first post of this thread to give general information about LTC-ATF and to show a spreadsheet of past results (already done - just needs to be posted).
3.  Create an asset for the bonds on LTC-GLOBAL and write up its contract etc.
4.  Create thread in relation to the bond asset on litecoin and bitcoin forums for feedback.
5.  Update my spreadsheet to properly account for bonds in fund valuation - and also for depreciation of the cost of creating the asset.

I'm creating the asset now so as to get the (potentially lengthy) process of getting 5 moderator votes started.  As yet there's nothing to actively trade on BTC.CO, so no immediate need for funds.  But it's best to get everything ready now than, down the road,  sit here twiddling our thumbs and missing bargains because the asset hasn't been approved.  My intent is to release the first batch of bonds BEFORE we can use the funds anyway - as that way we increase our chance of being able to sell them at lower rate of interest (this will be explained in more detail later - after I've done the list of tasks above).

WEEKLY REPORT

http://img594.imageshack.us/img594/7450/atf241112.gif

Another solidly profitable week.  Most of the profit was made in the first half of the week - towards the end of the week activity on LTC-GLOBAL seemed to drop off a bit.

I've delayed creating the bond asset (and updating the spreadsheet etc) until after this report - that way I have a week to iron out any glitches in the spreadsheet and can include this week's report in the new first post so I dont have to redo it later.

LTC seems to have started to rise vc BTC - it dipped pretty lkow during during the week but is now back to (very) slightly over what it was at last report.  So I won't be rushing to get assets into BTC just yet - as obviously if LTC rises we want to be holding as little BTC as possible.

The section of the spreadsheet calculating adjustment to management fee for exchange-rate movement has been removed per the passed motion.  It wouldn't have been used this week anyway - as LTC hasn't dropped.

Management fee this is week is 5 units (rounded down from 5.2) which will be taken after this is posted.  HWM will then be updated.

Bid is at 13.889 (above NAV/U due to my offer to buy back at above NAV/U for a week due to a change being made to the contract).

Exchange-rate : 0.00494
Adjust NAV/U : 14.21786

Bid up at 14.26 (Still buying back above NAV/U due to the change to the contract)

One update on the GLBSE situation.  As you may recall, our holdings when GLBSE closed were some ASICMINER (10-16, currently valued as 10 but almost certainly 16), some BITBOND (3, valued at about half last traded price) and some OBSI.HRPT (written off).

I registered a claim with friedcat for our ASICMINER ages ago (maybe a month?) - that'll be pretty irrelevant now that nefario is actually sending out lists.  But we were in posion to get them back even if he hadn't.

I did also PM Amazingrando (issuer of BITBOND) making our claim (as requested by him) but had receved no reply.  Today I received the following email from Amazingrando:

"Dear BITBOND bondholder-

GLBSE has recently sent me a list of BITBOND bondholders and their holdings at the time of its closure.  This email is to notify you of the information I have received.  Please reply to this email and confirm that this information is correct.

Wallet address: (REMOVED)
Bonds held: 3

While I await confirmations, I have started the process of migrating all bonds to Cryptostocks.  I hope to relaunch the security soon.  Additionally I will be providing more information about buyback and upgrade programs once they are finalized.

Thank you for your patience"

So it looks like that asset will soon be liquid again (and likely at a price over what it's valued at on our books).  It also bodes well for us being included on the list sent to ASICMINER - I'd been concerned that we wouldn't be included as I never received any emails from nefario about the return of our funds (though we did get the funds back obviously).

Dependent on what is offered in terms of buyback we'll likely NOT take a buyback.  If a buyback is offered to all investors then the one thing we can be sure about is that it'll trade at a higher price than that buyback - so selling on the market will probably make more sense.  I'll announce when we create a cryptostocks account (and update spreadsheet) - so investors are aware of the point at which we begin to have assets (and hence exposure) there.

Exchange-rate : .00581

Adjusted NAV/U : 14.45211

Bid at 14.49 (Still offering buyback above NAV/U)

Making slow but steady profit this week - looking unlikely we'll have a 10%+ week like last couple, but should be a 5%+ one.  LTC is rising like mad against BTC at the moment - up nearly 20% since last update I made.  As we're still nearly all in LTC it's only having a marginal (downward) pressure on our NAV/U (and a big rise in BTC valuation of the fund of course).

Exchange-rate : .00682

Adjusted NAV/U : 14.7653763

Bid at : 14.58
Ask at : 15.08

The week of offering to buy back above adjusted NAV/U has finished, so Bids are now dropped down to their more usual level.  A few investors did sell back units.  The first few I took myself, the last few sells the fund covered (the markup was covered on the larger one by profitable trades having occurred shortly before the buy-back - meaning buyback was actually below NAV/U.  And on the later smaller one by us being over 5.24218% in profit for the week meaning that the accrued management fee on repurchased units exceeded the compounded .3% markup and .2% transaction fee, so fund NAV/U gained slightly at the cost of lowering my management fee).  If anyone wants the math for how 5.24218% is calculated I can provide it - in practice I just made a note of NAV/U, reduced outstanding shares by 1, updated balance to post-sale and checked NAV/U had risen.

Units outstanding when the buyback offer started were 464.  After my management fee of 5 units that rose to 469.  Outstanding units is now at 444 - meaning the fund itself acquired back 25 units.  I am now going to place those back on the market at around 1% over NAV/U (which is higher than Adjusted NAV/U as it also includes earned management fee).  There's no great rush to sell them (at present our holdings are over 60% cash) but with the impending purchase of a ticker for our bonds and us then wanting some cash in BTC (we have to maintain SOME of our own funds in BTC as well as that raised from bonds - to ensure safety vs any massive drop in LTC value) I'd like to get us back to where we were in terms of cash.

Price of those will be adjusted along with bid as normal - for now they're going up at 15.08.

I have no expectation of issuing more units in the foreseeable future other than putting back on the market ones sold into the fund's bid (units outstanding DOES, of course, rise each profitable week due to my management fee being paid in units).

Trade and profits died down a bit towards the end of the week - coinciding with the strong rise in LTC vs BTC.  As I've commented before that's pretty typical - when LTC rises, people sell securities to benefit from the growth in LTC.  When LTC starts to fall next, they'll be back buying securities again.

WEEKLY REPORT

http://img571.imageshack.us/img571/9673/ltcatf021212.gif

In the middle of the week it didn't look likely that we'd manage another 10%+ week - but we eventually got there thanks to a little burst of activity last night (we'd have got there earlier had LTC not risen to much vs BTC).

Even with the tiny percentage of our fund still denominated in BTC (the GLBSE holdings) the exchange-rate change reduced our trading profit (profit before management fee) from 11.09% to 10.21%.  If anyone values their units in BTC rather than LTC then obviously they did massively well this week (gaining from LTC's rise PLUS the profit we made trading).

LTC's rise seems to have stalled and there's the first little bits of trading happening on BTC.CO - so this should be the week we move (slightly) back into BTC-denominated trading.

We've ended the week with only 20% of holdings in non-currency holdings.  But it hasn't been that way all week - at one point we had over 60% of assets in LTC-denominated securities and I even moved some funds back over from our BTC-E reserves to make sure the bid-wall could be kept up.  In the past week we've traded in about 10 different securities on LTC-GLOBAL, right now we have holdings in only 5.

Management fee this week is 4 units (rounded down from 4.28) which will be transferred after this is posted.

Bid at : 14.9
Ask at : 15.4 (only 11 units left being sold)

Earlier this week I made a post on the Litecoin forums about the issuer of Esecurity.SA and .SA2 trading and market-manipulating his own asset.  The post can be found here : http://forum.litecoin.net/index.php/topic,915.0.html (http://forum.litecoin.net/index.php/topic,915.0.html)

It's therefore only fair that I clarify the extent to which I trade LTC-ATF myself.

Fund Account : This only places Bids and Asks in accordance with the policy in the contract.  Bids are always slightly below Adjusted NAV/U, Asks (when the fund is actually selling) slightly above the undajusted NAV/U.  On bids if there's a bid from someone else at around where the fund would bid I'll Bid slightly lower than them - so their order gets filled first.  On Asks I just put them where my spreadsheet tells me to - irrespective of any other Asks in the vicinity.

Personal Account : I usually have some units up for sale from this - at 10% or more above current adjusted NAV/U.  I don't try to sell below that.  If I want to buy more units I buy from the fund (if it's selling) or put bids up myself that are always at or above adjusted NAV/U.  If I buy from the fund I do so AFTER I've done a recalculation of value and updated the fund's Asks - and the valuation at that time is posted to forums: so I never take advantage of an outdated Ask price.  My trading on my personal account is minimal - I don't try to manipulate the market price or try to profit from trading across a small spread between the fund's own orders.  What I DO do is try to make sure there's always SOME units up for sale if someone wants to buy a small holding at a significant premium.

I personally hold a bit over half of the units in the fund - that should be pretty obvious as the effort I put in would in no way be justified if all I got in return was the small management fee.

Any statements I make about the fund's holdings or trading activities on LTC-GLOBAL/BTC.CO may be verified with burnside at any time without need to ask my permission.  So if spreadsheet says we have X LTC then I've no problem with anyone asking whether we actually DO have that (ignoring rounding).  Similarly if I say we have Y LTC worth of securities then I've no problem with him verifying that (at the time the statement was made) our holdings had around that value (think ALL our current investments are on my books at below 7-day average - and that will usually be the case).  This permission only extends to confirming that things I HAVE said are accurate - not to giving any further information.  So if I said "Earlier today we bought around 100 units of a share and sold it within an hour for 50% profit" then it would be fine to ask for confirmation that I had a set of matching trades meeting that description.  It would NOT be fine to ask what the share was, what the price was or what the exact quantity was (as the latter two would allow identification of the asset).  I'm offering the above just as a way for anyone who is concerned to obtain SOME reassurance that the spreadsheet and my reports aren't just figments of my imagination - but pretty accurately reflect the business actually being conducted by this fund.

I wonder if there would be any demand for being able to make a simple copy of your portfolio public?

Eg:

https://litecoinglobal.com/portfolio/[username]

Would give a page with the portfolio summary tab populated and nothing else?

You'd toggle it on/off in the account settings.

I don't publish my current holdings for a good reason - I'm not the only person actively trading on the market.  If someone knew (for example) that I already had 15% of fund invested in security X then they'd know I couldn't afford to buy more.  That would let them know that any bids I placed I didn't want filled (so was deliberately letting myelf be outbid rather than just not having noticed).  They (if they only had a small holding in X) could then remove their own bids, forcing me to remove mine (as I wouldn't want to end up buying more, so couldn't risk being top bidder) and drive the price down.

For a fund that invests, showing current holdings has no big dowside.  For a fund that trades it's a disaster.  Even ignoring active scenarios (such as the one I just gave) there's the passive information of being able to work out which Asks are mine.  That can reveal information such as whether I believe the current low Ask is fair or not, whether I'm trying to sell by Asks or just get the price down to buy more etc.

I'm fine with making some LTC for other people who invest in the fund. I'm not interested in explaining all the details of how I do it (though I'm totally fine with you verifying that I am indeed making the profits I report trading on LTC_GLOBAL).

Unlike an investment fund we tend to be very liquid anyway - the vast majority of time over 2/3 of assets are cash (some is kept cash anyway for maintaing bidwall on LTC-ATF itself and the next chunk is only used for really golden opportunites - which are rare and so far haven't occurred when we were heavily invested already in any event).

So no - I've no interest in exposing my portfolio.  It would be of marginal benefit (though maybe a bit more interest) to actual investors but would give way too much useful information to others trading the market.  If any investor is concerned that my reports are inaccurate (e.g. I'm just making up valuations - and don't actually trade at all) then there are a couple of solutions:

1.  As mentioned in a previous post, I'm fine with them contacting you and you verifying that I did indeed (at the time of the report) hold securities and cash with a value matching that in my report (cash will match to a few decimal places, securities may vary a bit - as my valuation isn't based on current market.  Generally my valuation is above highest bid, below 7-day average, well below lowest Ask).

2.  If anyone has signficiant holdings in LTC-ATF (say 10% of outstanding units or more) then I'm fne with mailing them an unamended spreadsheet 1 month after the date of a published report (so they can see precisely what I held a month ago when I made a report).  Note that I DON'T keep old data like that as a matter of course - but can preserver a spreadsheet at any date (on request) for release a month later.  Think that would remove/reduce the risk to me of giving away that info - whilst allowing them to (in retrospect) see how I reached a particular valuation.

Makes sense to me.  Thank you for the explanation.

Down the road feel free to use it as a tool to allow other 3rd parties to verify your holdings, should you ever need to do so.  There's no list of pubic portfolios published anywhere and I do not output any account info on the public portfolio pages.  The url to access it uses an obfuscated identifier, thus it's only as public as you want it to be.

Cheers.

Exchange-rate : 0.006

Adjusted NAV/U : 15.33286

Bid at : 15.05
Ask at : 15.66 (only 3 units left for sale)

So far this week trading has been very sluggish - that may pick up if (as seems to be starting to happen) LTC begins a drop vs BTC.  I've now converted a small part of our capital into BTC ready to trade on btc.co - so NAV/U will now be slightly more affected by exchange-rate changes than previously.  We still have nearly 90% of assets LTC-denominated, so won't be seeing massive changes.  The current amount we have in BTC should be sufficient for any bonds we need in the short-term (we need to keep some of own assets in BTC to ensure that any big swing in LTC price can't impact our ability to service bonds).

Exchange-rate : .00602

Adjusted NAV/U : 15.60045

Bid at : 15.32

No Ask as no more units left on sale.  Been pretty slow trading other than someone (yet again) trying to fix the market on -SA2.  Worked out nice for us as we had some profitable Asks up which they bought out whilst clearing the Ask side of order book.

i bought a few more not sure if it was me  :D

Basically no change in last day.  Been quietest day I can remember on LTC-GLOBAL - only 3 securities have any trade at all in last 24 hours (and 2 of those it's just a 1 unit sell to make last traded price high).

REPORT AND UPDATE

http://img832.imageshack.us/img832/2364/ltcatf091212.gif

There's a few additions to the above spreadsheet from previous weeks:

BTC balances held at BTC.CO and CRYPTO have been added - as we'll now be trading on those platforms.  The spreadsheet also tracks holdings of securities there - but those rows have been hidden as we currently hold no assets (other than BTC) on either.

Towards the bottom of spreadsheet you'll see a section headed "Miscellaneous" with an entry for the LTC-ATC.B1 bond ticker valued at 225 LTC.  As previously discussed (and passed by motion) the 250 LTC cost of the ticker is being written off over a period of no more than 20 weeks.  As we made respectable profits this week I already wrote the value down by 10% - I intend to write it off far quicker than the maximum 20 weeks if possible.  This method is, to a degree, creative accounting - but serves to avoid a sudden drop in unit value when there's been no underlieing loss (the ticker DOES have value or we wouldn't have bought it).

Trading on LTC Global has been extremely sluggish this week - so profits are well down on the previous few weeks.

BITBOND

Since GLBSE's closure we have had 3 units of this asset stuck on GLBSE - these had been marked down on our books from a purchase price of around 0.2 BTC each to 0.1 BTC each.  Earlier this week the security was relisted on Crypto and bonds distributed per a list provided by Nefario.

The issuer also made a rather concerning post in the thread for the asset - indicating that he was unable to pay (yet) dividends due for the period whilst the bonds were inaccessible.  This was apparently due to some undisclosed arrangement made with some large investors where they had a senior claim on dividend funds.  No explanation was offered of why funds weren't at hand to pay ALL due dividends.  He also indicated that he would be unable to pay further dividends going forward - obviously totally unacceptable for a supposed fixed-rate bond.

Clearly some individuals either don't read very well, don't do any research or were attempting to manipulate the price - as I was able to sell our three (two at 0.25 BTC and one at 0.3 BTC) for a price higher than what we paid and higher than they were trading at when GLBSE closed.

In theory issuer could make a buy-back offer higher than that - but I'll be shocked if his offer is anywhere near that and/or is available for immediate settlement.  We may, of course, trade these bonds once issuer has explained what (and why) is actually happening and the trading range has moved (down) to somewhere sensible.


LTC-ATF.B1

Our BTC-denominated (but transacted in LTC) bond has now been submitted for approval by LTC Global moderators.  Initially we will only be looking to sell 10 BTC worth of bonds with a dividend rate of 0.6% per week.  The rate may be raised if few sell.  As more trading opportunites present themselves, further tranches of bonds will be issued.


ODDS AND ENDS

A management fee of 2 units is due this week (rounded down from 2.08) which will be taken after this post is submitted.

Bid is up at 15.47

The first post of this thread has been updated with some general information about LTC-ATF - at some point in the coming week more information will be added and the formatting tidied up.

Exchange-Rate : .00596

Adjusted NAV/U : 15.8063
Bid at : 15.5

Our bond has now been approved and first few have been sold.  Below is how the accounting spreadsheet has been updated to deal with the bonds.  Any suggestions, comments or requests for clarification are gratefully received.

http://img24.imageshack.us/img24/935/atfexbondscalc.gif

The line after "BTC denom holdings" is now changed to "Gross Assets".  This represents the total value of all assets managed by LTC-ATF.

There is then an entirely new section of data entitled "Bonds".  Here's a breakdown of what each line here represents :

Outstanding : The number of bonds actually sold.

Face Value per bond : The face value of each bond.

Total Value : The total value (cost) of all outstanding bonds = number outstanding * face value.

Weekly Dividend : The dividend paid each week (as a percentage of face value)

Days since last dividend : The number of days since last dividend was paid.    Each day when I first open the spreadsheet I'll update this number.  This resets to 0 right after I pay a dividend.

Accrued Dividend : The liability the fund currently has in due but unpaid dividends.  This is equal to Total Value * Weekly Dividend (%) * (Days Since Last Dividend / 7).  This allows the cost of paying dividends to be built up over the week (for purposes of calculating current value) rather than all taken off in one hit at the end.

Ratio Bonds : Total BTC - This measures total percentage of total bond liability as a percentage of liquid BTC denominated assets.  This value has to be kept under 90% - in practice, once bond sales are largely complete, I'll be aiming to keep it in the 80-85% zone.  Bond liability is face value of bonds + accrued dividend.  Liquid BTC denominated assets is total BTC denominated assets less illiquid ones (currently only ASICMINER shares which are untradable).

Ratio Bonds : NAV - This is the percentage total bond face value is to total liquid NET assets.  Liquid Net assets is total NAV for the fund less illiquid assets (ASICMINER shares and Bond Ticker value at present).  This isn't allowed to exceed 150% - but there's no intention of getting too near to that anyway (and in short term it's not going to go over 20-25% depending on exchange-rate).

Net Asset Value is then calculated - which is Gross Asset Value less (Bond Face Value + Accrued Dividend).

The remainder of spreadsheet is unchanged - though obviously uses the new NAV row rather than the old row it used to use.

WEEKLY REPORT

http://img39.imageshack.us/img39/4822/atf161212a.gif
http://img339.imageshack.us/img339/7509/atf161212b.gif

This week saw the release of our BTC-denominated bonds.  1000 were initially placed on the market with a face value of 0.01 BTC each to raise BTC-denominated capital of 10 BTC.  They sold out pretty quickly - and there was still unmet demand left at the end (an order I couldn't fill of ~200 + I wouldn't have minded a few hundred more myself).  That bodes well for us being able to sell more when the need arises without having to raise the rate we pay (or at least not by much).

First dividend on the bonds has been paid - I rounded it up to nearest 0.5 LTC so investors got a fairly legible number as their dividend - will do that regularly so its easy for them to add up what they've earned on their bonds.  At week's end we have exactly 0 BTC-denominated assets held (other than actual BTC).  During the week we did briefly hold some assets - but sold them off making a 0.3 BTC profit.  Whilst that sounds (and is) tiny, remember that the total cost of servicing the bonds is only around 0.06 BTC per week (it'll be slightly higher due to my rounding up on dividend + exchange/movement costs of funds).  So the capital raised by bonds has already earned its first month's dividends (the trade we did definitely would NOT have occurred before we sold the bonds).

Activity on LTC-GLOBAL has continued to be extremely sluggish - it may well be a seasonal thing (before Christmas people don't tend to do a load of investing).  We still made a modest profit for the week.  The ticker has been depreciated by a further 15 LTC this week.

There's a new line under "Net Asset Value" towards the bottom of the spreadsheet.  This line has the title "% NAV BTC Denominated" and represents the percentage of LTC-ATF NET assets that are BTC denominated.  This is AFTER deduction of liabilities in respect of the bonds - and is an accurate measure of the degree to which LTC-ATF units are susceptible to changes in the LTC/BTC exchange-rate.  The issuing of bonds has reduced this slightly from last week - even though we've significantly increased the amount of BTC deployed.

Management fee of 1 unit will be taken shortly after posting this.

Bid at : 15.83

Exchange-rate : .00587

Adjusted NAV/U : 16.1744

Bid at : 15.91

With immediate effect the fund is going to begin trading on Bitfunder in addition to the existing sites we trade on.  An additional 600 bonds (6 BTC face value) will be placed on the market to raise BTC-denominated capital for this.  Trade on the site is picking up nicely - and although some assets listing there are dead/dieing ones there's also some that are definitely alive and kicking.  From what I've seen so far it has a similar approach to LTC-Global/BTC.CO (simple interface and responsive developer).  Pretty certain that within a few weeks (or even days) it'll have passed Crypto to be in second place for volume (not counting MPex as that's a totally different beast and several orders of magnitude larger in terms of volume).

I've no plans to increase bond interest rate at present - there's no desperate rush to sell this batch (we can temporarily take slightly higher exposure to exchange-rate and use our own funds if necessary) and I'll be taking a decent chunk of them myself (after giving a few hours so others get a chance first).

There's still limited trading opportunities on BTC.CO, but it's definitely picking up.  Assets relisted (from GLBSE) on any site tend to have an initial 'exuberance' period after relisting (where everyone's happy operator has relisted and not run with their cash) suring which they trade above (what I believe to be their) real value.  I have to be careful not to get sucked in then and end up holding assets when price drops to a more realistic level.  Obviously when we actually HAVE some of those assets (as was case with BitBond) it offers a great opportunity to first few to get out at a good price (lowest Ask is already below the cheapest price we sold for and lowest bid way below that).

Although we've had a few weeks of low (by our historical standards) profits, I'm very optimistic about the fund's future.  Even if we 'only' made 2% per week (below our worst week other than when GLBSE closed) we'd still be outperforming just about every non-ponzi business that has lasted for any period of time - and the bonds let us leverage 'cheap' capital to increase the profit for holders of actual units in the fund.  But nonetheless there WILL undoubtedly be some terrible weeks at some stage - eventually we'll get stuck with holdings in a scam/disaster that collapses- so investors should definitely NOT expect profits every week forever.

Once new bonds have sold and I've moved funds around will update OP with a list of where we currently trade and approximate percent of total controlled capital held on each.  That will allow (current or potential) investors in either units or bonds to get a rough idea of how platform-based risk is spread.

Exchange-Rate : .00583

Adjusted NAV/U : 16.3288

Bid at 16.06

Over half the new batch of bonds have already sold.  I've deployed funds to BitFunder - for now temporarily increasing our own BTC exposure (only up to 13.5%).  That will drop to under 8% once remaining bonds are sold.

I've updated the OP with a list of where we trade and rough percent ranges of total capital held on each platform.  That gives a bit more information for prospective purchasers of Units or Bonds to assess platform-dependent risk.

WEEKLY RESULTS

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Another fairly slow week - we made 2.8% trading profit, up from last week's 2.4% but still well below what we'd been used to previously.  Whether this sort of result or previous ones represent the 'norm' is up for debate - I believe the likely average result lies somewhere in between.

We still have fairly significant BTC exposure - due to me moving extra funds over to BTC.CO.  I'm not sure whether we need more there permanently yet (I'm certain we'll need significantly more before too long).  For now I'm just going finish selling last of current batch of bonds (up to 1600 total) - think that'll do us until another liquid security or two relist there.

We made a profit on all 4 sites we trade on this week - the extra capital from bonds is definitely paying for itself.  I'd guesstimate profits this week from LTC-Global only would be around 1.5% - there's a few securities in a slump and others where large-scale market-fixing is going on, making it harder than to usual to trade profitably there (though a slump CAN sometimes deliver slightly longer-term profit when price recovers).

Management fee this week is 1 unit - which will be transferred after posting this.  Note that if profits ever fall below about 2% per week I won't get a management fee at all (though I'd still do OK on the ~half of units I personally own of course).

Bid at 16.16

Trading's been fairly slow over Christmas (expected) but we've been lucky enough to manage a few decent trades.  All bonds on market have sold out (1600 total released) and there won't be any more sold by us this week (unless someone sells back).  I'd expect some more to be issued before too long (for more capital on BTC.CO) so would recommend against buying bonds at any significant markup to face value.

Exchange-rate : .00572
Adjusted NAV/U : 16.8860134

Bid at : 16.55

WEEKLY REPORT

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I'd been expecting a very quiet week over Christmas - in the end we made a pretty healthy profit of a it over 7%.  LTC fell vs BTC significantly - but even discounting that we made a trading profit of just over 6%.

Of the BTC exchanges we trade on:

BTC.CO is picking up nicely - we're going to need more capital there as the range of securities expands (at one stage this week we had almost all our funds there invested in assets).

Bitfunder is picking up more slowly - I DO expect us to need more capital there eventually, but not in the short-term.

CRYPTO - there's very few assets with any liquidity there.  There ARE a few good opportunities there but I'm not expecting to need more capital there in the foreseeable future (it would take some large asset relocating to there - which I'd say is fairly unlikely given how horrible the platform is to use).

This week we'll be releasing 400 more bonds (taking BTC bond-capital to 20 BTC) with that being moved to BTC.CO for use there.

At the moment we still have a fairly significant percentage of Net assets in BTC - in fact it rose this week (I did no fund movements - the rise is due to us making a higher percentage profit in BTC trades than LTC ones plus the fact that bond interest and the continuing depreciation of the ticker cost are both charged in LTC).  There's three ways to lower that:

1. Convert some BTC back to LTC.
2. Sell more units in the fund.
3. Sell more bonds and don't convert the proceeds to BTC.

All of these are unacceptable for the same reason - we don't need more LTC-denominated capital.  So for now we'll just accept slightly higher BTC exposure than ideally I'd like.  If the LTC-GLOBAL market stays with some assets market-manipulated (into artifical trading ranges - where a collapse any time is possible), others totally illiquid and others totally unreliable then we can reconsider down the line.  At least the bonds have got our exposure more than halved from the 38% it would be had the capital been raised from selling more units.

We've now passed 3 months of operation - and despite losing over a quart of NAV due to GLBSE closing, we're up over 75% from where we started.  Not a bad start - hopefully we can build on it next year.

I've updated the historical results table in OP of this thread.

Bid at : 17.1 (a bit wider than usual as the exchange-rate is currently moving quite quickly).

Management fee of 3 units will be transferred shortly after posting this.

Exchange-rate : .00527

Adjusted NAV/U : 18.243257

Bid at : 18.0

Trade was almost non-existent News Year's Eve/New Year's day - but since then we've had a few very profitable trades meaning we're up a decent amount already this week.  As majority of this was BTC denominated there's no longer any great need to sell all of the 400 bonds I'd planned to this week.  Got 41 left on market at moment, which would take us to 1800 total - then won't btoher with other 200 this week unless some great deal shows up.  No point raising capital just for the sake of it - even though the interest we pay IS pretty minimal compared to the profit we make using the capital (consider we pay just over .1 BTC to service our current bonds and have made over 2.5 BTC profit on bond-raised capital THIS week - i.e. half a year's interest on them) and made similar last week.  Can definitely say the bonds are a great success for us so far (though a week of heavy losses and the bond-holders would be the ones with the smug grin on their faces as they got interest and we got losses).

Oh - and the increase in NAV/U doesn't tell the whole story.  As we had a big jump in one go I went ahea and wrote off the remainder of the ticker cost (150 LTC).  So we actually made nearly 2% more profit than this update reflects.  So no more depreciation of ticker to do - that's reduced our apparent profits for the last month as we'd been gradually writing it off.

Exchange-Rate : .00524

Adjusted NAV/U : 19.026466

Bid at : 18.6 (put it at 18.5999 as someone already had a bid at 18.6)

The week continues to be very profitable - only need a small bit more profit for a 10%+ trading on the week.  In fact we've already made over 10% profit trading as I wrote off rest of the ticker cost.

I don't expect a huge amount more profit this week - as we're currently back to a mainly cash position (all cash other than the ASICMINER and some assets of LTC-GLOBAL).

ASICMINER's chips arrived from the foundry, passed initial tests and are now being packaged ready to place on boards and start mining.  Unless something gos hugely wrong at that point, our tiny holding in ASICMINER is likely to increase greatly in value.  I still haven't received final confirmation of how many we hold (spreadsheet shows 10 - but it could be a bit more) and at present they're not tradable.  They should be available for trading shortly.

I wouldn't be surprised to see significant price drops on other mining securities once ASICMINER starts hashing - and have almost entirely cleared our positions in mining securities.  There's a few reasons why a drop is likely:

1.  A large chunk of new mining power obviously reduces the immediate output of all other mining companies.
2.  Companies with pre-orders in at BFL etc are going to have to have a serious rethink about their plans.  It's now extremely unlikely they'll gain an advantage from being first to mine with ASICs - so there's no longer any justification to pay premium prices for being in first batch of ordered ASICs.

Pretty obviously BFL hiked up the price of its first batch to recover development costs.  This is clear from them offering a full refund on their FPGA gear against the price of their ASICs.  That returned hardware will be of little value to them - and obviously reflects that the price they're quoting for ASICs has a huge enough markup to soak up that discount.  Anyone ordering ASICs who is NOT trading in should likely immediately request a refund - the mining revenue they'll miss out on by waiting for hardware is likely to be more than compensated for by significantly cheaper hardware.

With ASICMINER's development costs being recouped via mining, they'll be able to start selling hardware at far more competitive rates - though likely not for a few months.  Friedcat has given out some information on costs of chips - and it's pretty obvious they could sell at around 1/3 BFLs cost (in GH/s per $) and still make a very good margin.  So I'd expect ASIC prices to head in that direction fairly rapidly - once the other ASIC manufacturers have got back their development costs from the first batch of purchasers.  The issue thus becomes for miners upgrading whether buying at first-batch ASIC prices from BFL/etc is going to make back 2/3 of the cost in a few months from mining.  That seems VERY unlikely if ASICMINER will already be mining 0 along with all the other people with pre-orders.

My expectation is that most other mining companies will actually STICK to their current plans - even though doing so likely condemns them to loss (remember - in mining companies, the operators typically make THEIR profit on mining: so they make most profit by mining as much/as soon as possible even if doing so makes less profit/more loss for the investors).  That won't change unless/until mining companies beging paying operators based on profit rather than turnover - which is highly unlikely given how few mining companies actually make any profit at all.

Getting back to the point - at a minimum there's going to be uncertainty over the value of mining companies.  And that uncertainty can only be over whether/by how much the ASICMINER news devalues them - there's very few for whom it's good news (debatably ones with no commitments to pre-orders + MOORE).  So for now I'm not trading MOST mining companies unless I can buy at a much lower price than I'd previously have required.

Weekly Report

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Well, officially it didn't quite manage to be a 10% profit week.  We got over 10% trading profit then LTC rose significantly vs BTC pushing profits down below 8%.  Then LTC fell back against BTC, not quite getting back to 10% profit for us on the week as I type this (it may well be there by time I finish posting - but have to take a snapshot at some point to do the report).  In fact we still DID make over 10% trading - just it doesn't show in results as I wrote off the last 150 LTC of the bond ticker cost.

We have 1900 bonds in the wild now - I sold 100 to an order on the market when exchange-rate rose past the price it was at.  Of course exchange-rate then moved back other way - so whoever I sold to won't have any complaints.  Despite that we still have over 20% of fund capital exposed to exchange-rate changes.  As discussed previously, the obvious two solutions (sell more bonds and/or convert some BTC back into LTC) aren't really all that feasible - as we just don't need more LTC-denominated capital right now.

I have, however, figured out a wait around it.  What we ideally want to achieve is ALL of the following:

1.  Decrease or at least not increase our LTC-denominated capital.
2.  Keep our BTC-denominated capital the same (or a small increase wouldn't do any harm).
3.  Reduce the percentage of fund exposure to BTC.
4.  Ensure we keep bonds measured as a percentage of BTC-denominated capital below 90% (around 85% would be ideal - right now its 64%).

This can ALL be achieved by one simple measure - increase the number of bonds without actually selling any.  So the amount of capital the fund controls would be unchanged - just the BTC-denominated portion would now consist far more of bonds, lowering the fund's exposure to currency movements.

Based on current fund breakdown this would be done by issuing to every owner of units in the fund 2 LTC-ATF.B1 bonds for each unit they hold of the fund.  I would then further need to convert around 3 BTC-worth of the fund' LTC reserves into BTC.  We'd then end up with slightly more BTC capital than now (3 BTC more), slightly less LTC (3 BTC-worth less - around 550 or so) and exposure to BTC for the fund down from 20%+ to 12%ish.  Investors would still own the same percentage of fund as before.  NAV/U of fund units would drop by the value of 2 bonds - and future growth on those units would be at a higher percentage (assuming we make over 0.6% profit per week).  Total value of 1 unit + 2 bonds would be identical to the value of 1 unit had the bond issue not happened - and exposure/total profit for an investor would also be unchanged if you just held onto the bonds.  But of course you can then choose to decrease your BTC exposure by selling the bonds (or increase it by obtaining more on the market).  Were this to go ahead I'd offer to buy bonds at 100% face value from anyone who didn't want them (buy them with my personal account that is) and, of course, would offer a buy-back at over NAV/U on fund units if anyone simply didn't like the idea at all.

The principle behind what I'm suggesting is simply to try to reduce (as far as possible whilst maintaining obligations to bondholders) the fund's exposure to BTC - so that investors who WANT such exposure can choose to gain it to the extent they want (either by buying our bonds, holding BTC or doing anything else they choose).  Personally I actually WANT a decent amount of BTC exposure - but the correct way for me to get that is by investing seperately to the fund in BTC (obviously my preference is the fund's own bonds) so that I control the ratio.

The change would have minimal impact on management fees - I'd actually lose out on spread-sheet calculated fee due to bond payments being made before fee is worked out (so i'd lose out on 10% of the new bonds' weekly dividends).  But that would be balanced out by unit price being lower, so rounding down having less impact.

As the change would lower NAV/U, should new units need to be issued in the future (only likely if trade volume on the exchanges grows much faster than we make profit - we'd still have space to issue another 30 BTC or worth of bonds even before making ANY more growth) then I'd commit to offering them first to existing investors at NAV/U in ratio to current holdings - so noone lost out on the percentage of fund they hold due to the devaluation of units followed by issue of new units.

There's also a simpler alternative - issue a one-time dividend on the fund (of around 3.5 LTC per unit) then just sell new bonds on the market.  Easier for me to adminstrate - and could do it in conjunction with allowing investors to reserve 2 Bonds per unit they hold which they can buy for the value of the dividend (Dividend would be precisely the value of 2 bonds).  That would mean investors who didn't want bonds could just do absolutely nothing - and those who DID want bonds would just need to do an email exchange with me confirming the account name from which the dividend would be returned (and to which bonds would be sent).  I'd tend to go with the latter approach - as it avoids anyone who doesn't want bonds having to do anything at all.

Summary of Suggestion :

1.  A one-off dividend to unit-holders of 0.02 BTC (paid in LTC obviously).
2.  Sale of new bonds with a face-value equal to the total amount dividended.
3.  Unit holders would be entitled to purchase up to 2 bonds for each unit of LTC-ATF they hold at exactly face value (locked in at exchange-rate at time of dividend) - remainder would be sold on open market at usual rate.

Summary of impact of Suggestion :

1.  Reduced exposure to BTC for LTC-ATF - allowing investors better to balance their own exposure and minimising exchange-rate caused fluctuations in NAV/U.
2.  NAV/U of LTC-ATF units would fall by 0.02 BTC.
3.  Fund would have lower NAV - but same capital under its control.
4.  Funds controlled would be slightly less LTC-denominated and slightly more BTC-denominated - reflecting where growth is more likely and reducing need to issue more bonds in the short-term.
5.  Growth of NAV/U in future would be expected to be a slightly higher percentage - but a slightly smaller absolute number (ino change in either when aggregated for any investor who accepted and held 2 bonds per unit).
6.  Management fee would tend to decrease slightly as a percentage of profits but increase slightly as a number of units (very small difference in both cases - and often probably unchanged on both counts due to rounding).

Feedback (from anyone - but especially from investors) welcome - it may well be that noone except me actually cares about what extent the fund has exposure to BTC (or about accurately balancing their own exposure).  There's no desperate rush on it - so it's not an actual proposal yet.  It's just a suggestion on how the fund could address an issue that - whilst hardly disastrous - is presently not ideal.  Do note that originally there was no plan at all to deal with this - as back then nearly all trade was in BTC on GLBSE so there was no alternative other than massive BTC exposure.

Bid at : 18.6 or thereabouts (looks like currency has moved whilst typing all this up - so will calculate it after sending management units).

Management fee of 4 units - which will be transferred shortly.

Exchange-Rate : .00538

Adjusted NAV/U : 19.4900979
Bid at : 19.1

Off to a steady, if not spectacular, start this week.  In contrast to previous few weeks the majority of profit so far has been on LTC-Global (though we've already made enough BTC-denominated profit to cover this week's dividend on the bonds).  Hopefully this pickup in activity on LTC-Global continues now the holiday season is out of the way.

New securities (mainly GLBSE relistings) are popping up on BTC.CO and Bitfunder - which means more opportunites for profit.  It also means more opportuniteis for fuckups - as someone found out when they overlooked (due it not being publicised well) that there'd been a 30:1 split on RSM and bought shares at what would have been a bargain pre-split but was about 15 times value post-split (our fund wasn't involved in this trade at all).

New bonds are being issued up to a total of 2500 - with funds from this batch earmarked for Bitfunder (in fact the funds are already on their way there).  Bitfunder doesn't allow leveraging same funds across orders on multiple securities in the same wat LTC-Global/BTC.CO do - so unfortunately we have to keep more capital there to maintain same volume of orders.  Because of that I have to pass up marginally profitable trades - but there's enough decent opportunities there to still make trading there worthwhile.

Exchange-Rate : .00514

Adjusted NAV/U : 21.014388
Bid at : 20.5

Had a few decent trades overnight (I bought the shares before going to bed and they sold whilst I was asleep) which pushed us up over 10% adjusted NAV/U growth so far this week.  LTC falling in price has also contrbuted to apparent profits - without the exchange-rate movement we'd only be at about 9.85% profit for the week so far instead of at 11.4% (Those percentages are trading profit - increase in adjusted NAV/U is lower due to project management fee deduction).

Not such good news today I'm afraid - whether it's bad news or not isn't yet clear.

At some point overnight the wallet on Cryptostocks was compromised (not OUR wallet - the site's own one).  At present there's just a news item up saying "Withdrawals are currently deactivated."  When I first logged into the site maybe an hour ago there was a longer news item saying that their main wallet had been compromised and that everyone would need to use new deposit addresses and that withdrawals would be suspended.

No information has been provided on how much (if any) actual funds were stolen/transferred.

At present our balance on Cryptostocks is 5.982 BTC and we hold no other assets there (the 1.15 BTC increase in this since last report is the profit we'd made on there so far this week).

Obviously worst case is the site is bust and we lose that ~6 BTC.  Best case is they only lost a small amount (or nothing) in a hot wallet and our funds are intact.  If a clear (and credible) statement is made that all depositors' funds are intact then we'll continue trading there as before.  If withdrawals are reactivated without any such statement then I'll immediately withdraw all our funds.

For now I'll be placing Bids by the fund as though the money had all gone - but I doubt that's actually the case.

In the absolute worst case (funds there totally worthless) it basically just wipes out this week's profits.  So I've already decided that even in that event, all of the loss would be applied to the fund - and the face value of bonds would not be reduced.  I've also checked and even if those funds were totally vanished we already still meet all necessary targets for servicing the bonds - i.e. we still have sufficient BTC-denominated capital etc.

Exchange-Rate : .00499

Adjusted NAV/U (assuming funds on Crypto intact) : 21.364
Adjusted NAV/U (assuming funds on Crypto gone) : 19.1349

Bid at : 18.7

Trading is possible as normal on Crypto (and our balance shows as intact) - but I won't be buying anything until the status of funds is clear.  I'm performing a clear of all orders on LTC-GLOBAL so noone is left with a bid over NAV/U up that they wouldn't want up with this new information.  I'll then place a bid with my personal funds at just over full NAV/U - so any smaller investors who want out can get out.  I personally expect our funds will become available in full - but have no right to make others act on that belief: hence the fund's own bid being placed conservatively as though the funds will not be returned (so there's no risk of dilution of value for investors if some sell out).

Obviously I am making no trades myself on LTC-ATF until after I've cancelled the order book.

Looks like Crypto situation is resolved.  BTC withdrawals have been reenabled and are working there and on Vircurex (same problem and same owner).  Seems like they lost some funds but are covering it themselves.  Obviously I can't be sure they actually have enough cash to cover all deposits - but I could never be sure of that anyway (and same's actually true for ALL exchanges we operate on - none have public segregated deposits on display).

I withdrew just under half our balance on there anyway (as for a semi-related reason we don't need quite so much there) leaving us with just 3 BTC there.  I'm now trading again on there.

Exchange-rate : .00495

Adjusted NAV/U : 21.5477
Bid at : 21.0

The LTC/BTC exchange-rate has seen a lot of movement in last few days (prompted undoubtedly by BTC rising vs USD which nearly always triggers a fall in LTC/BTC due to arbitrage - with the low level of orders making the price fluctuate around a bit before settling). Will almost certainly do our weekly report tonight as not sure how much I'll be around tomorrow.  With crypto back functioning it's definitely been a very good week for us.

WEEKLY REPORT

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We ended the week with a trading profit of just over 14%.  At one stage it looked like we may not make any profit at all (the CryptoStock scare) then shortly after that it looked like we may make almost 20% (LTC dropped heavily for a while before recovering today).  I'd estimate that we make 2-3% trading profit per week from normal buying and selling of shares - with good weeks (such as this one and last) coming when I manage to get one or two highly profitable deals in addition to the normal fare.  Don't assume that I always make profit on deals either - there have been a few occasions when I've had to sell off assets for less than I bought them for (one this week I sold at a loss about 5 minutes after I noticed my buy order had been filled) or have had to mark assets' value down in the book.  In general I'm more aggressive about marking things down in value than marking them up - I'd rather undervalue our holdings than overvalue them.

I've given plenty of consideration over the past week about how to resolve our current surfeit of LTC-denominated capital.  My suggestion last week was to dividend some of it out - then replace it with more BTC-denominated bonds (either directly allocated to investors in lieu of dividends or just sold on the open market).  That still remains a feasible option - however we then run the risk that if our need for capital grows we could reach the point where we can't sell more bonds without massively exposing ourselves to heavy losses if only 1 or 2 investments go bad.

What I'm now considering is expanding our operations a bit.  Specifically, I'm looking into this fund running some pass-throughs (on LTC-GLOBAL).  The two assets I'm considering for initial pass-throughs are SatoshiDice and BitBet.  Both of these are listed on MPEx - I wouldn't bother running pass-throughs to anything on BTC.CO/BitFunder as there's no barrier of entry to anyone just making an account there and buying the originals themselves.

The fund would:

Cover the costs (ticker for each and  0.09 BTC/month brokerage fee)
Buy the shares that were then sold in the pass-throughs

All profits from the pass-through (cut of dividends plus margins made on buying/selling) would be treaeted just like any other profits the fund makes.

There's two specific risks the fund takes on if we do this:

1.  That we buy shares then their price collapses and we either can't sell them or have to sell them for less than we buy for.  This is actually almost irrelevant - as it's precisely the risk we take on in every trade I make already.
2.  That there's insufficent interest in the pass-throughs to make back the cost of tickers and cover broker fees.

Risks that we DON'T face are:

1.  Exchange-rate exposure,
2.  Changes in value of the underlieing assets.

All sold shares in the pass-throughs would give neither of the above risks to the fund - as the liability due to the investors in the pass-through would be exactly matched by the value of the underlieing assets we held.  And the two would move in tandem.

As both of those assets are BTC-denominated, the capital used to buy them would be largely bond-raised - but it would still soak up some of our surplus capital.  The actual capital needed would be pretty small - as we'd be buying small batches as and when needed: not buying some huge chunk then praying we could sell them.

I need to do some proper calculations to work out exactly what level of interest we'd need to make this a profitable proposition for the fund - and obviously won't intend to proceed unless I'm confident the fund will make some extra profit from it.  Any thoughts/feedback on this are welcome.  Note that I COULD just run the pass-thoughs myself and keep all profit (or loss) for myself.  I'd prefer, however,  to have everything run from one account - and to be able to use all funds where they're needed rather than keeping seperate wallets and having to do pointless currency conversions.

Management fee this week is 6 units (rounded down from 6.07) which will be transferred shortly after posting this.

I've updated the OP of this thread with up to date results history and have also updated the indication of where our funds are typically held.

I had previously missed this, but I have to say (belatedly) that it is a pretty good example of how one should conduct themselves if they want to be taken seriously, at least going forward.

Exchange-Rate : 0.00448

Adjusted NAV/U : 22.66454
Bid at : 22

We've made a decent start to the week - though not quite as spectacular as the growth may at first seem to show.  Although on first glance we're up over 5% a decent chunk of that is due to LTC falling significantly vs BTC (with ~25% of our holdings BTC-denominated a drop in LTC/BTC rrate of 10% converts into a rise of ~2.5% in NAV/U).  If we look at actual trading profits we're only up just over 3% - which is still reasonable for only being 1 day into the week.  We'd be up more if I hadn't had to liquidate a holding at a loss to avoid exposure to bASIC (where there's now significant questions over when and even IF their ASICs will be available).

I'm out for most of the rest of the day - will see about making some progress on getting our pass-throughs sorted tomorrow.

I'm now putting a motion up for vote:

The following motion is being put up to vote on :

--- MOTION BELOW THIS LINE ---

This motion is to make an addition to the contract for LTC-ATF:

A new section to be added to the contract as follows:

PASS-THROUGH OPERATION

The fund manager is authorised to run pass-throughs on LTC-GLOBAL to securities issued on exchanges other than LTC-GLOBAL. 

Costs associated with creating these pass-throughs will be charged to the fund and treated as an non-realisable asset depreciated to zero over a period not exceeding 20 weeks.  No additional management fee may be taken for administering these pass-throughs (any profit from them would be treated as normal LTC-ATF profit and management fee applied as usual).

The following restrictions are placed in respect of these pass-throughs:

1.  With a single exception LTC-ATF must always hold at least as many units of a security to which a pass-through operates as (units outstanding + units for sale).
a)  The exception is that this may briefly be theoretically broken whilst buying back pass-through units from an investor.

2.  No pass-through may offer any guarantees in respect of the performance of the underlieing asset.  Specifically, no guarantees may be offered by the manager in respect of either future prices or dividends of any security to which a pass-through is operated.

3.  Risk of failure of any asset to which a pass-through is operated, along with risk of failure/default of any platform on which those assets are held or transacted MUST be passed on to purchasers of units of the pass-through.

Manager has authority to define the detail of how pass=throughs will be managed as he sees fit within the above parameters.

--- END OF MOTION TEXT ---

As with bonds I've kept detail out of the motion - so as to avoid the need for modification of the contract if any minor change needs to be made to current or future pass-throughs.

At present it is my intent only to offer pass-throughs to investments on MPEx - starting with S.DICE and S.BBET.  These will be purchased vis CoinBR - where we now have a working account and can trade MPEx securities on behalf of the fund as well as for pass-throughs.

I am proposing the following fees on them:

1.  A spread of around 2.5% on buys/sells.  Around 1% of this will be eaten up by fees to us (transaction fees, currency conversion fees, currency movement fees).
2.  A fee of 2% on dividends.  These would be converted based on exchange-rate mid-point, meaning we actually only make around 1% ourselves sometimes - depending on whether we need to actually convert currency or not.

The biggest potential profits come for LTC-ATF in the following situations:

1.  The traded range of a security to which we run a pass-though moves significantly and we can either sell or buy on the pass-through at a significant profit compared to buying/selling the underlieing asset.
2.  We manage to buy shares at Bid price then sell them on the pass-through at Ask price.

The risks to LTC-ATF are two:

1.  There is little/no interest in something we run a pass-through to - and we lose the 250 LTC ticker fee for it.
2.  We buy shares to sell in a pass-through and their price drops before we sell them, forcing us to sell at a loss.  This is balanced by the chance that we buy and the price rises before we sell - allowing us to sell at more than our standard 2.5% markup.

CoinBR has a 0.09 BTC per month fee (plus 0.5% per transaction).  We need to trade a volume of about 5 BTC in total pass-throughs per month to cover this.  As we'll be trading on our own behalf anyway this is largely irrelevant.

To cover the costs of a ticker for a pass-though, my estimate is that we need to trade around 25 BTC-worth of that security.  That could be 25 BTC of sales or 12.5 BTC of sales and 12.5 BTC of buy-backs.  Provided I pick securities with decent value I don't see that being a problem - there's a lack of good investment opportunites on LTC-GLOBAL right now.

Our actual margins are slightly lower than those of most pass-throughs (when you take into account that we're absorbing exchange-rate conversion fees and movement fees) which will hopefully make our offerings fairly attractive: our profit will hopefully come from volume and from smart trading on my part to increase our actual profit above the headlined 2.5%.

There is no guarantee the motion will pass - I currently personally hold just under 50% of units in LTC-ATF (I sold some recently at steep markups to NAV/U and bought a chunk of our bonds) so at least one other investor will need to vote yes for the motion to pass.  If there's any significant opposition (No votes) then I'll vote No myself anyway and run the pass-throughs personally (I have no inclination to drive out long-term investors by making changes/extensions to what the fund does against their wishes).  If the motion passes then, as with the previous motion, I'll offer a buyback above NAV/U for a week afterwards for anyone who disagrees with it (that option has been available for a while anyway - with buys over NAV/U up from myself and others).

We already have an account on CoinBR - setup last night - and have some funds there (and orders up).  I moved funds from BTC.CO to there (as we had most spare funds there and there was no fee for the transfer).  Will sell some more bonds now to replace the BTC.CO funds - even if we don't go ahead with the pass-through we'll still want to trade on CoinBR/MPEx.

One last unrelated point - I've now received confirmation that we do actually hold 10 units of ASIC-MINER.  Had been hoping we held 16 - but the 10 in spread-sheet was correct: we must have sold some shortly before GLBSE went down (explaining the extra 0.7 BTC we received as I'd guessed).

I think CoinBr is a great platform.

Have you considered going direct to MPEx?  The up-front cost is steep, though there is a referral discount I believe, but the transaction fees are lower, (0.2% to the seller, 0% to the buyer) there is no maintenance fee, and the risk to the passthru assets is lower.  I think rini17/Jurov is a good op and we've discussed the security of CoinBr at length (it's pretty good) to where I'd be comfortable using the platform personally.  When you're operating a passthru you have to set the gold standard and the risk of Jurov getting hit by a bus is non-zero.

Cheers.

Exchange-rate : 0.0043
Adjusted NAV/U : 22.91129
Bid at : 22.4

Profit for the week has continued to grow - in part from weakening LTC and in part from actual trading profit.  So far this week all profits have been on LTC-Global and BTC.CO (last week the biggest profits were on Bitfunder - with good performance on Crypto and very little profit on BTC.CO : showing the benefits of operating on a range of platforms).

The motion passed with no votes against it (majority of shares held by people other than myself voted yes as well).  As I did last time a motion changed the contract, I will be offering to buy back shares at above NAV/U for the next week (until 23:59:59 GMT on 23rd January).  At present there's a bid up by the fund for 50 units at 23.5.  I will reimburse from my personal funds the 1.1 LTC above the fund's normal price for any units sold back (At this juncture I am inclined NOT to relist them for sale as we have more than sufficient LTC-denominated capital for the immediate future).  If anyone wants to sell back more than that - or wants me to update the order before selling (in case NAV/U has risen) then feel free to PM me.

I will shortly create the asset and contract for our first pass-through which will be to Satoshi Dice.  I HAD intended to to BitBet first but at the moment the price is in a small slump (it was to be expected due to the way the IPO is being done - which I'll explain when I do get around to doing it).  Creating a pass-through when the price is falling is very risky for our fund - as we could easily end up buying shares then selling the pass-through to them at a loss (to be accurate - the risk isn't in creating the pass-through, it's in populating it with stock).  S-Dice, on the other hand, is rising at present with a very narrow spread which is ideal both for us and for potential LTC investors.  In fact my fear is that the price of it may over-shoot its reasonable range before we get approval for the pass-through listing (there's remarkably little of it for sale and a very heavy order book).

Accounting for the pass-throughs will be very straightforward.  All shares we hold to which we operate pass-throughs will be listed as long-term with the total volume held shown in each week's report.  These will be valued  at the mid-point between highest bid and lowest ask.  The number of units sold of each pass-through will also be listed - and that number of underlieing asset discounted when calculating both total assets and net assets (those shares 'belong' to the investors in the pass-though and can't be traded - so aren't assets of the fund in any meaningful sense).  The value of shares committed to pass-throughs also (pretty obviously) can't be counted as BTC assets towards the ratio we need to hold to ensure bond backing - but unsold ones (equally obviously) can.

As with all other assets we invest in, I will be aiming not to commit more than 10% of total assets to a single share.  This will slow down the rate at which we can sell shares in the pass-throughs but is absolutely necessary to ensure we don't over-expose ourselves to a single asset.  For S-Dice (which is traded on BTC.CO and BitFunder) our exposure is considered to be all units we hold or have bids on across all platforms less the number of sold shares in our own pass-through.

There's no way the fund at present can justify spending 30 BTC on registering with MPEx.  Maybe at some point down the line we'll be able to - and the contract for the pass-throughs will explicitly make provision for that.  At present I don't have a clear view of the extent to which the fund can usefully trade on MPEx (the only way to get a clear view is by actually doing so - for example I have no way of knowing whether two competing orders are from the same person unless one of them's mine).

Indeed there's a non-zero risk of Jurov being hit by a bus: same as there is for me.  Jurov has already offered that, in the event I vanish, he would accept a list of investors and settle with them.  He will also have authority to verify that I hold shares to back the pass-throughs (GPG signed statements verifying this are already in his plans) and to delay any withdrawals I make if there is any question over that.  So at least investors will be gaining some mitigation of risk in return for the additional counter-party risk using a broker adds.

Sounds great to me.  You have my vote.

Ended up creating pass-throughs for both S-Dice and BitBet.  Had an exception thrown first time I tried to make the S-Dice pass-through so tried again and got same exception.  Then spotted that it had actually charged for two securities and created them - seems the exception was thrown after creation whilst trying to notify moderators.

Having made two tickers - and planning to make the second in next few days anyway - I got burnside to rename the second, so both are now up for voting.  There's discussion threads for the pass-throughs on both BTCtalk and LitecoinTalk.

Assuming they get past the moderators I'll begin selling shares in the S-Dice one immediately (I've already done a bit of profitable trading on S-Dice covering about our first 4 months of fees to CoinBR and 10% of our listing fees) as we hold shares in it.  The BitBet one I don't plan on selling shares until the trading range narrows - I don't want to buy at top of range and run the risk of trading moving to the bottom in return for a gain of 1.5% if we sell shares.  I will, of course, sell shares in the pass-through for it if either someone commits to buying at the Ask price or I manage to pick some up at the Bid end of the range.

Hopefully my contracts have covered everything - I tried to make them shorter and simpler than the previous ones.  If anyone spots something that need correcting please point it out.

Exchange-rate : .00419 (currently very volatile)
Adjusted NAV/U : 23.607
Bid at : 23

Higher bid placed at 24 to buy-back at over NAV/U from anyone disagreeing with the motion to run pass-throughs.  This is pretty irrelevant as there's significant higher bids already up.

Trading profit for the week has now passed 10% - in fact it'd be even higher but I've already written down 20% (100 LTC) of the ticker costs for the pass-throughs (as with previous ticker I'll be aggressively marking it down quickly).  A fair chunk of that is due to currency movement - but actualy profits from trading ignoring currency impact are around 7% (8% if you counted in the marked-down ticker fees).  We also have some decent unrealised profits in a few assets (valued on book at below what I could sell at) so looking like another good week for us.

Both pass-throughs got moderator approval overnight - and the first units of S-DICE are up for sale.  S.DICE price has been rising over the last few days and is likely to shoot up into a bubble before long in my opinion (there's very little asks left before a 10% -15% rise).  If anyone wants to gamble on that, now would be the time - though you'd be taking a risk on whether I'll be around to process sells back if you try to sell out at peak.

S.BBET won't be put up for sale just yet - as previously (and elsewhere) discussed.

Well both pass-throughs are now live and there's been a decent amount of trade, especially on S.DICE.

Exchange-rate : 0.004 (it seems to be dropping through this having climbed back a little overnight).
Adjusted NAV/U : 24.8175
Bid at : 24.2
Higher bid (for those unhappy with the motion passed) : 25.4

The pass-throughs are making a slow but steady profit for us - and we realised some decent profit from S.Dice I bought before the motion was passed (when it became obvious price was going to break through to well over 5.0).  I also traded some profit for us on S.Dice.

We ran out of cash on CoinBR last night to keep selling more pass-through shares (deposits are manually approved - there were 3 there for operator when he logged in this morning).  I've increased the cash we use to operate the pass-throughs (pulled a bit from BitFUnder - where it was no longer needed as I've totally stopped trading S.Dice passthrough there and on BTC.Co).  If necessarily I'll sell some more bonds to increase capital available further - but will wait to see whether trade volume dies down before doing that (the cost of bonds is small to us - but ANY cost is less profit for us if we can get by without it).

I'm expecting this to be a record week for us in terms of profit (though maybe not in terms of actual trading profit - a decent chunk of current profit comes from the exchange-rate change though we're over 10% in actual trading profit already).

I'll be posting pass-through news in this thread (to avoid bumping multiple threads).

S.Dice saw a small drop overnight.  Up until just now there was one sell order significantly below the rest - so some LTC Global investors got some pretty cheap shares.  As I type I have the last of that batch up for sale - after which price will rise again to match the new lowest Ask (unless another cheap order shows up).  As LTC seems to just have started dropping again, price may rise as well due to that.

S.BBet still has around same trading ranges as yesterday.  Bids at .001,  Asks at .0013 then a big hole in asks up to .002.  Yesterday I obtained some at just over .001 and sold 1k of those at just over that (I bought 20 then someone else scooped the other 980 I sold).  Prices at moment reflect the lowest ask of ~.0013 but we DO have a bid up just over .001 and will sell some at that lower price if it gets filled.

Before buying shares in either pass-through I'd advise anyone to take a look at the markt for them on MPEx and at the exchange-rate and work out roughly what price you should be paying.  Because I'm trying to match the market as best I can, I can't leave large blocks sitting up unattended (too much risk to the fund) so at times the lowest asks on LTC Global will be from resellers - and they may not always be especially good deals.

I have a question. Where is the 0.6% per week interest coming from on your bond? I'm not saying your not making money, I'm just asking if it's profitable to run the bond. I'm considering investing in it since I.... (can't believe I'm saying this) like what your doing with ATF.

The 0.6% profit comes from LTC-ATF's trading.  To take a snap-shot right now (we're up a bit since last report):

The total assets LTC-ATF manages (ignoring shares SOLD in pass-throughs as those aren't tradable) are:

47.07 BTC worth of BTC cash and BTC denominated securities
plus 9.6k LTC worth of LTC cash and LTC denominated securities

Bonds sold have a face value of 35 BTC

All of those funds are used for trading and (now) to run the pass-throughs.

Now if we didn't have the bonds issued we'd only have 12.07 BTC in BTC cash or BTC-denominated capital - which means we couldn't do anything like the amount of trading the fund actually does.  That leads to two questions:

1.  Is the extra trading profitable by enough to pay for the bonds?
2.  Would the fund be better off selling more units in itself (where there's no commitment to pay dividends) rather than selling bonds?

The answer to both of these questions is a resounding yes in my view.

The cost to support the bonds is 0.6% of face value per week - so with 35 BTC worth of them out there that's a whopping 0.216 BTC per week we need to make in extra profit to pay for them.  That's buying 2 shares at 1.0 and selling them at 1.1.  Every week since starting the bonds they've generated far more profit than that.

Here's some of the very early trades I did on S-Dice - prior to that I'd made another deposit and bouhgt some as a float for the pass-through.

01/16/2013 22:17PM    863    Sell    S.DICE    500    0.005807    2.9035    -0.0145175    8.51370531
01/16/2013 22:13PM    861    Buy    S.DICE    500    0.00539589    -2.697945    -0.01348973    5.62472281
01/16/2013 22:08PM    860    Sell    S.DICE    500    0.00569016    2.84508    -0.0142254    8.33615754
01/16/2013 21:59PM    857    Buy    S.DICE    500    0.00525471    -2.627355    -0.01313678    5.50530294
01/16/2013 21:27PM    541    Fund    BTC    1    6    6    0    8.14579472

You can see that after 2 buys and 2 sells all of 500 shares we'd made .35 profit - that's more than this week's bond payment already covered.  And we wouldn't be on that platform at all were it not for the bonds.

We also have made far more than that on BTC.CO this week - so if you took ALL BTC profits and allocated a percentage of it to bonds you'd still easily see the bonds covered.

But that's just the tip of it.

Consider the 2 pass-throughs - which again couldn't be run without the bonds capital providing the liquidity to keep orders refreshed.  The fund makes around 1-1.5% profit on each sale (more if we manage to buy below lowest ask).  On what we've sold so far in the few days the pass-throughs has been running that's made 0.4 BTC + whatever we've made by buying on bids rather than asks.  And that last bit is where the real profit potentially comes from.  Consider the very first S.DICE I bought (these are the very first transactions on my CoinBR account - immediately before the ones above.  Note that the tat end is available balance - which was altered by other orders that hadn't filled yet so doesnt mean much here).

01/16/2013 20:29PM    855    Buy    S.DICE    500    0.00503208    -2.51604    -0.0125802    0.64553972
01/15/2013 12:07PM    803    Buy    S.DICE    500    0.00462803    -2.314015    -0.01157008    1.67441492
01/15/2013 01:52AM    541    Fund    BTC    1    7    7    0    7

Those blocks were bought at .0046 and .005 but sold at the lowest ask of around .006 - another 0.5 BTC profit.

So just from looking at the first few trades on CoinBR and adding worst-case profits from the pass-through we see a bit over 1.2 BTC profit - over 5 weeks of dividend for ALL the bonds when under half the capital from them is used for that area.  And that's ignoring that once shares in a pass-through are sold the funds gets 1% of their dividends as well.  There's been more profit on there since - and a fair bit on BTC.CO as well this week (none whatsoever on Bitfunder or Crypto - but they've both had weeks when they made enough for 3 months of bond dividends for ALL bonds)

The bonds were issued for two reasons:

1.  To reduce the fund's own exposure to BTC - giving more control to investors to choose and manage their own exposure to different currencies.
2.  To retain as much profit as possible for holders of actual units in the fund.

Point 2 works precisely because  the average profit we make per week on capital is far over 0.6% (ignoring currency movements its actually over 8% on average).  That has built in assumptions that profit is similar on BTC to LTC and that the extra capital can be put to use with similar profitability to old capital (or, more importantly, with a profitability significantly greater than the liability the dividends represents).  So far I'm confident those assumptions are valid (some weeks our BTC stuff does better than our LTC stuff - other weeks its the other way round, but it balances out).

But do bear in mind the fund is still tiny - the rates of profit being achieved wouldn't be deliverable if it was an order of magnitude larger (unless the BTC/LTC securities market also increased by an order of magnitude).  And there IS a not insignificant risk with the bonds - as the fund itself absorbs all trading losses, leveraging bond capital does leave open the possibility of larger losses if something gos badly wrong.  I try to mitigate that by diversification and by selling out positions at the first sniff of trouble (unless I'd already priced it in) even if that means taking a small loss.

If you want to invest you're welcome - however the hard part would be getting units of the fund in the first place.  The only units on sale are a few of my own at prices of around double current NAV/U - and I can't see any reason why the fund itself would sell new units when we can sell bonds that only pay out 0.6% of profit.  Which isn't to say bond-holders get a bad deal either - with LTC falling vs BTC this week the face value (at which they can redeem at ANY time for a small admin fee) has shot up as did their dividend (expressed in LTC) though obviously it was still only 0.6% of the new higher value.

But if you put up bids at a good markup you may find a seller (it won't be me).

I should clarify a point in the above post.

When I refer to a trading profit of 8% per week that's measured as a percentage of the fund's own capital.  The capital actually used is the fund's profit + bond-raised capital, so the percentage return on capital USED is actually lower (though for most historical results there were no bonds - so historically it's actually pretty accurate).

A limit is set on number of bonds that can be issued (face-value of 150% of fund's own capital) and on interest rate payable (1/3 average trading profit %) such that the rate paid isn't allowed to exceed the returns generated on actual capital used anyway (if it falls near there then I have to start buying back bonds - if it falls below it I have to force-recall all bonds at a markup to face value).

WEEKLY REPORT

http://img845.imageshack.us/img845/6807/atf200113a.gif
http://img541.imageshack.us/img541/5265/atf200113b.gif

There's a few additions to the spreadsheet this week:

CoinBR added as a location we hold BTC at.

A section for pass-through assets has been added.  This lists the shares we operate pass-throughs to and for each lists:
The number we hold on CoinBR.
The number we've sold in our pass-through (this MUST never be higher than the number we hold on CoinBR).
Their price (in BTC) - this will be roughly the mid-point between highest Bid and Lowest Ask on MPEx.
Their value - this is the value of (Number we hold - Number we've sold) so represents the value of them that the fund holds on its own behalf (which counts towards our Gross and Net Asset Values).

Ticker cost has also reappeared as a Miscellaneous item.  We paid 500 LTC for the two tickers which will be depreciated to 0 over a period not exceeding 20 weeks.  As we had a rather good week I've already knocked 30% (150 LTC) off of this.

This was a very good week for the fund - made to look even better in the results because of LTC diving vs BTC.  Before management fee (but after ticker depreciation and bond dividends were paid) our NAV/U grew by 22.61%.   If we apply calculation to remove the effect of the currency change from that we end up with a figure of 14.14% growth in NAV/U due to trading.  Not quite a record for us - but still very respectable.

The pass-throughs (especially S.DICE) have started off nicely.  Now the initial flurry of purchases is out of the way trade on them will probably die down a bit until something happens causing major interest in either.  S.DICE price has dropped back a bit since we launched the pass-through - but there's still few sell orders up to .007 so no great resistance to it rising back over the price when we launched.  S.BBET has had little trading on MPEx and the price is currently pretty stable - with Bids at just over .001 and lowest ask at .0013.  I'd expect major activity on that when the first results for it come in - it could shoot right up or drop right down.  The results for first month won't actually be that meaningful (it'll be a partial month and the business model means profits SHOULD be way lower than usual in it anyway) but I'd still expect an over-reaction in one way or the other when they are published and dividend distributed.

Trading has been pretty slow on most platforms - though we made a respectable profit on BTC.CO on fairly low volume.  Both BTC.CO and Bitfunder have their fair share of dead/dieing ex-GLBSE assets that are using them as a retirement home in which to quietly die.  Those assets get very little trade - current investors want to sell for a price that won't cause them much loss, noone else wants to buy in above real current value which is a LOT lower.  Crypto-Stocks remains pretty much dead - but will leave the few BTC we have on there as there are a couple of decentish trading opportunities that show up from time to time.

With the velocity slowing down on pass-through sales we'll need no extra cash for that - so at present I see no need to issue extra bonds.  The fund is bidding on some assets being sold during the closedown of the various assets run by usagi.  If we win a lot of our bids then this may need to be revisited (most of them are things that I believe we can sell at good profit over a longer period than usual).  I'll give an explanation of why I bought any assets that we won - as the record of my pruchase would be public (and it's a one-off) there's no harm to the fund in my explaining why I was willing to pay what I paid.

Bid at : 25.2
Higher bid (because of contract change) : 26.5

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.

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).

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 : .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 : .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).

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

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).

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.

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.

WEEKLY REPORT

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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

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).

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.

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 : .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.

WEEKLY REPORT

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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 (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 : .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

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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.

WEEKLY REPORT

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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 7.8)
Bid at 44.6

WEEKLY REPORT

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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.

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.

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.

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.

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.

:)

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.

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).

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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).

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).

Thanks for the update.

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).

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.

WEEKLY REPORT

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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.

WEEKLY REPORT

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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

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.

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%.

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.

Keep up the good work Deprived dont worry about trolls  ;)

WEEKLY REPORT

http://img19.imageshack.us/img19/6028/atf240313a.gif
http://img805.imageshack.us/img805/4291/atf240313b.gif

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

WEEKLY REPORT

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http://img834.imageshack.us/img834/3414/atf310313b.gif

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

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).

Just a quick note as I believe this should be disclosed.

Today there have been two sell-backs of LTC-ATF shares (both partially filled by other orders, rest bought back by the fund).  The second one (a few minutes ago) was by me - of 50 units.  I haven't lost confidence in the fund or anything (I still own over half) - I just believe that LTC was nearing the top of a bubble so am protecting my own investment position as it was becoming too heavily LTC-based.

If LTC stays high then I'll have missed out on some profit but will have maintained a safer (for me) invetsment balance.  If LTC stays high then the fund benefits from the sell-backs anyway - as with a high LTC we still have more LTC-denominated capital than we need to cover out bonds.

If LTC falls to the extent that the fund needs to sell new units then I'll buy back in at the same rate as anyone else (likely NAV/U+25% again) and the fund will have gained a NAV/U increase (and I'd still personally be well ahead from having moved funds over to BTC during the fall).   Pretty sure the other person selling is planning exactly the same.

The fund DOES have liquidity to allow this sort of thing - so if anyone else thinks LTC is bubbling then feel free to try the same.

My sales back were done same as anyone else's - I sold into market and the fund's Bid was placed at NAV/U -2% (anyone other than myself would have got NAV/U -1%).

At present fund is down about 6% NAV/U on the week (would have been ~10% from the exchange-rate move but trading/profits on sell-backs have made around 4%).

The owners of ZigGap have shown up on IRC by the way - claiming the site was just down from hardware problems for a few days and everything will be back to fine soon.  If so, we'll make an absolute killing on this - as I actually bought MORE of them overnight at about 1.5% of what trading price was.  Figured in for a penny, in for a pound - and well worth risking 2 BTC for the chance to make 50-100 profit.

Well it's pretty crazy at the moment - with LTC now at over 0.04 vs BTC and at over $4.

I've sold back 30 more of my shares - and someone else sold back 20.  Mine has been converted to BTC - and will buy back in if necessary (at 25% markup to a much higher NAV/U than I sold at) should (as I expect) LTC crash right back down.  It may well rise a bunch further before final collapse - but I can't see this price (or anything near it) being sustainable at present.  If I'm wrong then I just lost out on some equity in the fund (plus on further growth of LTC).

I still won over half the fund.  I don't plan to sell any more unless LTC hits about $10 when I'd sell another small batch (and STILL have ~50% of the fund).

With this big rise we're obviously not short of backing for our bonds (at present bonds are 20% of NAV/U and our safe limit is 150%).  Main impact of the sell-backs (mine and others) is to reduce our LTC cash position - which is no big deal when we don't use it.  It doesn't impact LTC position per share - as after any sell-back I readjust to a 15% holdings in BTC position.  Those adjustments (which I do even without buybacks) mean we DO take more NAV/U loss when LTC rises (and more profit when it falls) than you may expect from a 15% BTC position.  Here's why:

Consider if we start with 15% assets BTC and LTC doubles.  First instinct is to think we lose 7.5% of NAV/U (as the 15% in BTC loses half its value) - but in fact we lose more.  That's because at various times during that currency movement I'll be adjusting our currency balance to get us back to 15% BTC again.  That increases our NAV/U change when movement is sustained in one direction - especially when it's slow and steady.  I can't just leave the balance alone - or no investor would ever be able to estimate what exposure they had to BTC.  Plus we could end up not properly covering bonds (the balance changes due to trading as well as from exchange-rate movement of course).

I would estimate that if LTC doubles vs BTC we'll usually lose somewhere in the 10-12% of NAV area before mitigation from trading.  WHere the change is sudden and huge that will lower (as I don't have a chance to rebalance).

RIght now with LTC at .042 vs BTC (more than 4 times what it was at start of week) we're at about 51.15 NAV/U - which is a bit under 20% down on the week (or day).  I'll try to keep bids up in case anyone wants to sell - but sometimes LTC changes by 25% in a few minutes to I'm having to be pretty cautious.

WEEKLY REPORT

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http://img189.imageshack.us/img189/5640/atf070413b.gif

I'm sure it will come as no surprise that we made a loss this week.  LTC rose massively vs BTC before moving back down but has ended the week (at least at the point when I prepared this) at .00258.  That's still nearly three times what it was at last week.

We've finished up with a 10.8% reduction in NAV/U (at one stage during the week we were at -20%).  Typically I'd expect a doubling of exchange-rate to result in a drop of NAV/U of around 10-12%.  That we've kept the drop down to 10.8% indicates some reasonable trading profits.  In fact trading profits were pretty good - it's hard to be exact but I'd guess around 10-12% before writing down prices.  Because the exchange-rate movement was so extreme it managed to hit with a double-whammy.  Not only did we lose value on the BTC part of our portfolio but a lot of our LTC-denominated investments had to be significantly written down.

Of course it's not all bad news.  The value of our units if expressed in BTC or USD rose enormously.  Whilst the units ARE denominated in LTC and DID make a loss I'm pretty confident most investors would happily take a 10% or so hair-cut on unit value in LTC in return for LTC trebling vs BTC and quadrupling or more vs USD.  A month of it doing that every week and anyone holding a decent number of units would never need to work again.

ZigGap is proceeding largely as predicted last week.  The asset issuer showed up, gave a totally unconvincing and vague explanation plus the obligatory assurance that everything would be OK.  Reaction in the market wasn't as good as I'd hoped - but it WAS a pretty piss-poor explanation which only the most blinkered of optimists would take seriously.  It does actually appear like the issuer may well try to struggle on - presumably having begged, borrowed or stole some cash from somewhere.  We picked up a nice bunch more of the shares absolutely dirt cheap and have since since sold a fair few at more than we paid.  So at the end of the week we own more shares with a total book value significantly lower than it was last week AND have taken some profit from it.  Our holdings there are now cheap enough that it's no longer a significant issue.  I haven't marked them down further (just averaged cost as usual) as right now I could sell them into Bids for more than they're on the books for anyway - but I'm holding off as I'm confident an opportunity to sell for more will show up at some point.

This week also saw significant sale of unit back to the fund - with a good chunk of them being my own.  Speaking for myself I sold to lock in exchange-rate gains - with the intent to buy back into the fund if necessary (i.e. if the rate plunged back down).  That works out well for both the fund and myself if it happens - I get good profit from exchange-rate movement and the fund gets to buy shares off me then sell them back at a pretty hefty markup.  When the rate was high the fund obviously didn't need the capital.  In fact there's still absolutely need for the fund to resell any of the units that were sold back.  The exchange-rate would need to drop to close to 0.01 before I'd have to start selling the units again.

If anyone else wants to sell units please feel free to do so : if the exchange-rate stays where it is I'd love to see another 50-60 units sold back and would sell back half of those myself if someone else sells back the rest (I'd like to keep my personal holding at around 50% of all units).

Looking ahead, I see a pretty dry period for us on LTC-Global.  The price of nearly all securities there has crashed.  There's three seperate, but linked, reasons for this:

1.  Most shares are effectively fully or largely valued in either BTC or USD.  So LTC's rise in exchange-rates has naturally lowered their price.  That means even if the same volume of shares changes hands the volume of LTC traded will be much smaller.
2.  The sharp price in value of lTC has, in my view, prompted a change in the view-point of many investors.  Suddenly they're thinking of it as "money" rather than as "LTC".  And that means they're more careful/cautious about investing it.
3.  There's been dodgy goings on and shoddy/non-existent accounting in a number of securities (that's not an exclusive to LTC-GLobal).  THis is in part due to the rise in LTC/BTC vs USD - whereby those who borrowed denominated in Crypto to spend in Fiat are a little bit screwed when it comes time to repay.

With the LTC exchange-rate madness I've had little time recently to work on our software.  I'll try to put some time aside for this week - and also for the other new projects I have lined up for us.

Management fee of 0 units is due this week.  HWM stays as it was - no management fee for me until I get NAV/U back over where it was at the start of this week.
WIll check exchange-rate and put up a suitable Bid after posting this.

Thanks for the update, any plans to put some LTC-ATF up for sale again?

Not unless LTC falls back a lot further vs BTC.  The rise in LTC vs BTC meant our LTC-Denominated cash/assets increased massively in BTC value - so even after buying a back of units we're still very safely covering our bond exposure (bonds currently equal under 40% of NAV - with 150% the maximum we're allowed).  When that gets over about 75% is when I'd think about selling more units - which would need LTC falling to fairly near .01 vs BTC.  At present it looks like LTC may manage to stay well above that - at least for a while - though I still expect it to crash back below that eventually.  But if it delays crashing back then we may well have made enough profit by then not to need to sell more units anyway.

On a seperate point there's an absolute howler of a mistake in this week's spreadsheet.

If you look at the LTC cash on LTC-GLobal it says 8048 LTC then reports that as being worth 8100 BTC!  Obviously what happened is that at some point I typed the LTC balance into the BTC-value field and never noticed.  The mistake has no ramifications other than being embarassing - the BTC-value there isn't used in any calculations of significance and doesn't impact on the final NAV.  If (and it HAS happened) I enter a wrong figure into a cell that actually matters then I tend to notice it immediately as it causes a massive unexpected move in NAV/U - which lets me know I just made a cockup.

Before submitting the report one of things I do is check all holdings/balances match ones on the actual sites - that doesn't, of course, mean I'll notice changes in values that are calculated for display only and not otherwise used.

Deprived, I am really sick of your continuous stream of lies and trolls regarding me and my businesses. It's time you start doing some research before running your mouth and spouting lies like we have refused to make payments from BMF. You've lost ALL your credibility on this and I am asking you, seriously, what do you want me to do? It's obvious to pretty much everyone you are lying about me, and that you're not going to stop. If you are not going to tell me what you want, would you prefer I start responding to your trolls here in your asset thread? Perahaps your shareholders would appreciate knowing the obvious kinds of lies you are trolling people's threads with?

For example in the Ian bakewell thread, why did you state that



All four of the above statements are complete fabrications you are fully aware of, especially as the thread was locked due to your own trolling on our April 4th update. Seriously, explain yourself. This is not logical. You need to stop trolling the Ian bakewell thread because you are derailing a serious investigation.

I am late for work and don't have time to respond to your other ridiculous lies, I'll just post this and ask you what you want me to do specifically to get you to stop lying about me, and see what you have to say.

Fine, it's your agenda. What do you want me to do for you to stop your agenda? I asked you what you want me to do, not what think I did to deserve it. There's plenty of things you think I might have done to deserve it. For example, you might be connected to the R.M-A crowd who likes to shit on me because I like Kung Fu more than MMA. So go ahead and explain yourself, and let us all know what I need to do for you to stop.

With TU.SILVER for example. You've been told over and over to contact DeaDTerra who oversees our finances. But you have not done this. So it's obvious you haven't bothered to do any due diligence at all -- your comments are not made out of honesty -- but to cause financial damage to me and my companies. Example:


The books are fine, Deprived, it's you -- you're wrong. You're wrong on pretty much everything you say about me and my companies, but you won't stop and you won't check your facts.

So I want to know what you want me to do here, for you to stop your agenda.

Well dealing with the 4 statements in order:

1.  Deleted all posts.  TRUE - after GLBSE vanished you deleted the vast majority of ALL your posts not just BMF ones.  How is that a lie?
2.  Locking thread.  TRUE - you admit so yourself.  That you did it because you didn't want to reply to what you viewed as me trolling is the reason WHY it's locked not evidence of it NOT being locked.
3.  Won't provide updated information.  TRUE.  My post that you believe was trolling pointed out that, contrary to your previous post, the information in OP was NOT up to date.  Have you updated it? No.
4.  Refuses to pay out to shareholders.  TRUE.  You HAD stated you weren't going to pay out more funds until your securities were approved for trading.  That appears to have been deleted from your contract on BTC.CO now.

What do I want you to do?  Pretty simple:

BMF:  Produce a proper accounting of what happened to all assets, ESPECIALLY the mining hardware and the funds raised from them.  If there's still significant assets left then, with proper info on what assets the shares have, I don't personally object to BMF being traded provided you dividend out further funds as they're received.  Right now I (and others) believe there's some very dubious crap going on over the hardware - and that some hardware listed as belonging to the company before GLBSE shutdown has vanished without trace.

NYAN.A: You promised to repay this in full personally.  Now you seem to want to weasel out of this. I wouldn't personally hold you to that promise (provided you acknowledge no longer keeping it) but if you don't intend to pay in full then you need to properly account for its assets.  And that also gos for whatever assets CPA and NYAN had - as those should go to NYAN.A investors.

NYAN.B/C: These have zero value - and should either be closed or left dormant indefinitely (in case obsi evr shows up).

NYAN/CPA: CPA had some assets - specifically BMF shares at least. Proceeds from this need to go to NYAN.A unless you're honouring your previous promise to repay NYAN.A in full.  Not sure if Nyan had assets or not.  If not then no reason to keep it open.  If it did then they should go to Nyan.A (and nyan.b if any overflow - unlikely) then it should be closed down.

TU.SILVER: You need to decide what it actually is and amend contract to reflect that.  If only a minority of the price of shares is silver then it is NOT a silver shop and any claim that is is just a plain lie.  If it's an investment fund that guarantees holding at least 1 unit of silver per share then cool - make that plain the contract - and stop lieing about it being in any way an economical or competitive way to purchase silver.

KONGZI: No issues with this one - other than that you're yet again asking for new investment without having properly closed down the old ones.

Basically sort out the mess on the old companies and decide what the new one is and stick to it (and have a contract that reflects what it IS not what is was, presumably, originally intended to be).  All the time you leave BMF/NYAN.A lieing around festering for no reason and with no clear accounting you can rely on me regularly raising it.  If you look at my last post in your TU.SILVER thread I believe I have a slightly less hostile than usual explanation there of what the problem is with what you're trying to do - selling options on shares than are 75% effectively just BTC is near worthless and dishonest when you portray them as being options on silver.

Exchange-rate : 0.02
NAV/U : 61.617
Bid : 60 (lower if I'm AFK)

NAV/U is likely slightly wrong - Bitfunder is down for maintenance at present so can't check our holdings there.  No big deal as this isn't an end of week report.

It's turning into a respectable week - we're up just over 8% with abouth alf that from trading and the other half resulting from LTC's drop against BTC.  LTC has been incredibly stable vs BTC around hte 0.02 area for the last day or two - with the LTC/USD rate swinging around wildly in time with the BTC/USD one.  That's not too surprising - as the volume traded on LTC/USD is generally a LOT lower than on LTC/BTC, so moves in BTC/USD tend to get arbitraged into the LTC/USD rate with a much smaller impact on the LTC/BTC one.

The fall in LTC/USD has caused trading to resume a bit on LTC-Global - so some of the securities I'd had to mark down heavily in the last weeks have started selling again.  Some are being sold for less than we bought them for (inevitable with USD-valued securities - even at current price of $1.5, LTC is still a lot higher than it was when they were bought) but at least they're selling for more than we have them on the books for.  And some are selling for an actual profit (a few for very good profits).

Non-LTC trading has been going well on both Bitfunder and BTC.CO (with a bit from trading S.DICE/S.BBET on CoinBR as well).

If LTC stays where it is then it'll be close whether we manage to totally recover last week's losses.  But if we can get anywhere near - with LTC still over double what it was 2 weeks back - then I'll be happy.  Of course LTC will probably make its next big move before the end of week (in which direction I have absolutely no clue - I could make a case for either direction) and that will end up having a large say in where we end up.

19 units have been sold back to the fund.  The second 10 were sold back by me (at about 57-59 from memory) however about an hour later I personally bought 10 units at 75 off the market.  That may seem strange behaviour but there's a method in my madness:

I had no personal holdings on BTC-E at the time (they were elsewhere making me profit) - and BTC was just going into a crazy spell.
So I sold back 10 units on LTC-Global then traded the LTC with the fund for LTC on BTC-E (I use a seperate account there, as well as on LTC-GLobal, but DO do swaps with the fund - so as to minimise delays in transfers and also avoid the 0.5 LTC withdrawal fee on BTC-E).
I then used those funds to trade an easy profit on BTC-E (not something I could do with the fund - as it involved taking on a USD position which I never do with the fund unless for an instant arbitrage opportunity).
I then swapped 750 LTC back via the fund to LTC-GLobal and bought the 10 shares on the market - leaving me with a few hundred LTC profit.

So everyone won out of it:

I ended up with same LTC-ATF shares but a few hundred extra LTC.
The seller got their units bought at 20-25% over NAV/U.
The fund got to buy back 10 units reducing capital (which, with the rate stable, is what we want to do) meaning profits get shares over less units - so more gain/week for remaining investors.

In general I keep private funds and LTC-ATF funds seperate - I have my own private accounts on LTC-GLobal and BTC-E and have never done private trades (or held balances) on the other sites we trade on.  There are only two areas in which they sometimes overlap:

1.  Trades - such as above.  There's no confusion on these at all.  I send (e.g.) 750 LTC from LTC-ATF to my personal account on LTC-GLobal then (or other way round - order obviously doesn't matter) move 750 LTC using a BTC-E code between accounts in the opposite direction on BTC.E.  I do these for the benefit of either party (myself or the fund).

2.  Liquidity loans.  These only ever occur very short-term and only ever happen with me lending funds to LTC-ATF, not the other way round.  These aren't because LTC-ATF has run out of funds, just because the funds are in the wrong place and can't be moved quickly.  LTC-ATF rebalances funds on BTC-E to maintain the correct ratio of LTC:BTC.  If the rate moves fast then occasionally the fund can end up without sufficient funds of the right denomination to convert.  This can also happen if someone sells back a bunch of shares or if we sell a large amount in a pass-through.  In that situation, if I have funds of my own sitting idle on BTC-E, I'll lend a bunch to the fund so the fund can convert whilst waiting for its own funds to arrive from wherever (Bitfunder is only quick source - and that's an hour - BTC.CO/LTC-Global/CoinBR all need manual approval for the sort of amounts I usually move nowadays).  That transfer is done by 0-cost BTC-E code and repaid (with no interest of course) as soon as the fund's own coins arrive.

I'd hope everyone agrees that neither of the above two scenarios is at all dodgy or against the interests of the fund (the 1st is sometimes benefical - the 2nd always beneficial as it allows the fund to lock in a rate removing exposure to exchange-rate movements).  Right now there's no chance of me doing #2 as all the personal funds I had on BTC-E were converted to fiat when BTC was at 200+ and are making profit elsewhere (though will be moving some back into BTC/LTC today probably).

WEEKLY REPORT

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Not much change in the NAV/U since my previous post - we made a few percent more trading profit but LTC rose over 20% vs BTC and pretty much cancelled that out.  So we haven't quite got back to the previous HWM yet (we're still about 3% or so below it).  We ended the week with 8.16% growth with LTC only falling slightly vs BTC over the week as whole - so trading profits were over 7%.  A very good week in my opinion.

We're back to 85% cash - having dropped as low as 60% during the week.  The percentage of cash we have at the time of a report should not be misinterpreted as meaning we don't actually use the rest of the capital.  The easiest site to show this isn't the case on is actually Bitfunder - as it's very easy to get an estimate of total trade volume there.  This report shows we only have 14.6 BTC worth of securities on Bitfunder and 88 BTC in cash - but how much do we actually trade there in a week?  Well, Bitfunder fees are charged based on your volume of sales in the last 60 days - the more you sell the lower the rate you get.  Here's our stats:

Pricing tier's are by last 60 day sales.
This period you have sold: ฿350 worth.
Bonus Discounts: 0.00%
Actual Trading Fee: 0.80%

We need 500 BTC of sales in last 60 days to drop to next tier.  But from this we can estimate what we sell on average - and it's 350/60 or slightly under 6 BTC worth of sales per day.  So in a week we, on average, have been selling about 40 BTC worth of shares (and obviously we have to buy those as well - which is maybe 30 BTC worth of buys).  And our volume is increasing - at the start of the month our average for last 60 days was almost exactly 300.  So although we currently only hold 14.6 BTC of securities we can estimate we've actually bought and sold around three times that much during the week.  Which hopefully is a useful illustration of how misleading it can be if you look at the spreadsheet and then start interpreting the results as if we were an investment fund rather than a trading fund.

If LTC stays around current range and BTC settles down a bit (i.e. Gox starts actually working for more than a few hours at a time) then I'll probably release some more bonds this week.  We've been tight on liqudity on specific sites at times - the worst instance being running out of BTC on BTC-E after one of the sales back to the fund.  Why do we need BTC on BTC-E when that happens?  Because when someone sells back to the fund that reduces our LTC - and hence the percentage of the fund that is in LTC.  I then buy LTC on BTC-E to get us back to around the 15% LTC mark (I tend to act when it dips below 12% or gos over 18%).  If I don't rebalance immediately then we end up gambling on the exchange-rate with the funds that should have been converted - and can end up either making a significant profit or loss on the repurchase of the units.  Which isn't what I want to do.  In this particular instance I had funds of my own on BTC-E at the time - so just lent 20 BTC to the fund whilst I waited for funds to arrive there from elsewhere.

I'm not sure yet just how many bonds I'll sell - but we won't go over the 200 BTC face-value mark this week unless something unforeseen occurs (like a whole bunch of new securities being released somewhere).  I have no intention of issuing new units this week - that won't change unless LTC falls under .015 vs BTC (which is where I'd start considering it - though it would have to go a fair bit lower than that for there to be any great need to sell more units).

Why do I try to keep us at 15% BTC exposure?  Well that's actually two questions in one - here's the answer to both.  I'll assume everyone already knows we have to keep SOME BTC exposure to ensure the safety of our bondholders in the event of a collapse in the LTC price.

Why do we keep a fixed percent?  I try to keep a fixed percent so investors (including myself) can plan the exposure of their own investment portfolio KNOWING that they can estimate the extent to which LTC-ATF value will be impacted by sharp changes in the exchange-rate.  If I let the rato fluctuate (for example keeping us near the minimum to keep bond-holders happy) then it would be very hard to work out what BTC exposure LTC-ATF had after any change in the exchange-rate.  As it stands, investors can be confident that LTC-ATF will always stay in the vicinity of 15% BTC exposure - and that LTC doubling vs BTC will mean somewher in the area of a 10% fall in LTC-ATF NAV/U and LTC halving vs BTC a 10% rise.

Why is the fixed percent 15% rather than, say 10% or 20%?  When managing our BTC exposure there's three main requirements I face:

1.  That exposure remains fairly constant.
2.  That bond-holders are always protected in line with their contract.
3.  That I minimise our exposure without breaking points 1 and 2.

15% happens to be the lowest round number that meets all those requirements.  If I set the target any lower then, in the event of LTC falling a lot, I'd end up unable to keep us at 15% exposure without breaking our commitment to bondholders BEFORE we even reached the point at which we hit the requirement to recall bonds or issue new units.  If I set the target any higher then we'd be gaining unnecessary exposure.  I won't bother running through the math - but it's pretty simple to do if anyone wants to check it out.

As always, if anyone has any questions about why I do things the way I do - or why seemingly random values set by me are where they are (as with the 15%) then feel free to ask.

No management fee this week - as we haven't yet got back over the old HWM.

It's a lie because you are not telling the truth. I did not delete posts germaine to outstanding contracts or the CPA liquidity loan. I also remained active and I posted during the timeframe where I was deleting my other posts. That is why it's a lie -- because you lied.


It's a lie because you said "won't respond (locked the thread)". Here you re-arrange the order in which you give your excuse, dealing with "(locked the thread)" as if it were a sole statement of fact. It was not, you used the fact that I locked my thread to show that I was refusing to respond. Your lie is even more ridiculous due to the fact that the thread in question was locked after giving a response to your puerile accusations. You were fully aware of the fact I was responding. you just decided to lie about it.


Sorry, not up to date or not providing updates? Sure, there's some out of date info in the thread. I'm not a machine. But you didn't say that, you said I "won't provide updated information," -- in short, you lied.


No, this is a load of horseshit. You are making it sound like there is a line of angry shareholders demanding payment. Sorry jack, that's a lie. I've made it very clear for months that I had not wished to shut down BMF and some of my other companies. You in particular suggested a liquidation auction which I did on the condition that you said you thought it would help me get listed. Well it didn't, and the companies still have assets. I've made it very clear how we will proceed with the companies. You are not running my companies. I don't have to pay anyone anything. I least of all have to buy anything back. Please show me where it states in my contract that I am forced to buy back or pay anything out to shareholders. Go ahead, the posts were un-deleted with my permission.


Done. See the final claims thread esp. the spreadsheets showing the payment of all funds refunded by BFL to shareholders.
There is still one BFL single for which BFL has ignored multiple requests to provide a shipping number. I think they walked off with it. Now it's your turn, please release the holdings of your company or stop running a LTC-GLOBAL moderated fund. I'm sure your shareholders would love to know more about how you committed securities fraud by issuing yourself 2,218 shares when it was time to pay the dividend and then cancelling them without placing a market order to buy them back. I'm sure you will claim they were sold back to the fund. Okay then, show us the books.

Oh, you don't want to show us the books? Well then don't ask me to show you my books either. You're a hypocritical liar. I published the books for BMF and they were updated almost every single day for months. Who do you think you are to ask me to publish my books like I have been hiding something? You're the one who refuses to publish his books.


Another lie. It was insured by CPA. There's a big difference. What I actually said has been posted on the forums since pretty much November.


Who are you to say what my companies are worth? If you have any sort of weight here at all, then get my securities listed like you said you would try to help me do if I ran an asset liquidation auction.


You are clueless. You have no idea what CPA's priorities are, what assets it holds/held, or anything. I've been in contact with the relevant people (for the most part). You? You're a tard, you know nothing because you are not involved in any of what we are doing. That is a fact. Here's a big hint. If CPA owed someone on a contract they signed, CPA's first priority would be to pay out on that contract, not liquidate it's assets and pay shareholders. And their second priority would be fufilling any other terms of their contracts before randomly liquidating all assets and paying out to shareholders. Seriously, are you retarded? Stop telling me how to run my companies.


You need to read our audited and approved financial reports and stop being a dink.


Done, thanks. You can get back to managing your own fund now. It has serious problems. You can't even beat your own HWM so I would suggest you go look after your own chickens before trying to tell me how to run my cattle ranch.

You really are full of shit.

An investor asked to sell back a bunch of bonds yesterday.

I bought 3500 from him personally and the fund bought back 2200-odd.  I don't have the right to release his identity to you without his agreement.

The 2200 odd were paid for by me transferring BTC to him on BTC.CO (at 99% of face value as per the contract).  The 3500 I bought personally were paid for by a BTC transfer from me to an address he provided.

2013-04-15 21:42:03    Internal Transfer To XXXXXX
txid: TXFR-Deprived-1366058523    22.28490000 BTC

There's the transaction, with recipient's name blacked out.  Complete with transaction ID.  Feel free to ask burnside if that transaction exists and matches in time 2200-odd shares being sent back by someone with the same account name on LTC.CO (he actually returned to my personal account by mistake and I promptly sent them on to the issuing account).

Incidentally, even someone as retarded as yourself should have realised that your claim that of me "issuing yourself 2,218 shares when it was time to pay the dividend and then cancelling them without placing a market order to buy them back." wasn't correct.  You just needed to look at the number of shares outstanding at time of each dividend and now.  And it would have been apparent that what happened was someone sold back.  Now that COULD have been me - but as it happens it wasn't.  And if it had been - so what.

READ THE FUCKING CONTRACT.

ANY investor can just send shares to me without placing a market order.  And I'll sell the relevant quantity of BTC and transfer them 99% of the received LTC.  It's in the contract.

Your level of retardedness is reaching new levels - which is one hell of an achievement.

I'm not that interested in wasting my time discussing your various failed/failing "businesses" in this thread.  If you ever have an unopened unmoderated thread about them we can continue the discussion there.  I'm assuming if I posted in your silver thread explaining how what you do doesn't match the contract my post would just get moderated.  If I'm feeling bored and have some spare time I'll make a seperate discussion thread for it one day.

I will however respond to the most obvious and blatant lie in a thread of its own - as it deserves a bit more publicity than it would get here.

Quote for posterity in case it gets deleted or edited.

The person selling the bonds back to Deprived and the fund was me.

I am very grateful he made himself available quickly, and made good on fulfilling their value with no hiccups whatsoever.

This enabled me to sell the BTC at market rate and buy during the dip to 51 last night, just as planned.

As I told Deprived, his assets are probably my favorite in all of cryptocoin investing, and I WILL be back for more. I just wanted to have as much loose btc as possible to play against the current volatility.

Thanks for confirming it wasn't me (not that it would have mattered even if it was me - I can sell mine back same as anyone else).  Would have maybe preferred if you hadn't as it's always amusing to read usagi's deluded accusations when I'm a bit bored.

You got back into BTC better than me.  Other than the 35 BTC I used to buy your bonds (which was my hedge against the chance BTC would just rise straight up fast) I only got in at about 58 (was out when the bottom was hit).  Sold at 74 then got back in at 64.  Looking like might be time to sell again soon.

To be clear: the BTC trading I refer to above has nothing to do with the fund - I don't do currency-trading on BTC/USD for the fund (fund never holds USD other than for a second when I do the occasional manual arbitrage on BTC-E  - but haven't done that for ages as too many bots doing it now).

Wow, deprived is so mad he's trolling the securities forum (https://bitcointalk.org/index.php?topic=178325.0) saying I am a liar. Deprived, you're pathetic. Why don't you go fix your own problems in your own security before you launch random, off-topic threads in the securities forum?

No, YOU read the fucking contract, and stop wasting my time.


Try me. I will allow your bullshit ONCE, where it will be ANSWERED.

The reason I made a moderated thread is precisely because I am not going to tolerate your bullshit anymore. You are the type of idiotic, hypocritical liar that demands I release my books despite them being public for months and updated daily -- while at the same time refusing to release your own books. And, trying to stick it to me by stealing (yes, stealing) access to my own company's records and posting them in full knowledge it was against company policy.

The truth is you wouldn't DARE post an accusation in a moderated thread because you know you are full of shit.

The reason I don't post in moderated threads is ... wait for it .. because they're moderated and my effort is likely to be wasted by the post being deleted.  There's nothing brave about posting in a moderated thread to make it worthy of a dare.

Not sure what problem it is you think I have with my security BTW.  Sure - I didn't get back to the HWM last week - but so what?  We made a decent profit nearly getting back to where we were before LTC's massive rise vs BTC.  Which means same LTC value and a much higher BTC one.

NAV/U is still almost exactly same as at last report (down 0.01%) - despite LTC rising a fair bit.  So we've made 2% or so trading this week so far which has been wiped out by exchange-rate rise.  Nothing I can do about that - nor am I unhappy about it.  As the fund has explicit exposure to BTC of around 15% that sort of thing is inevitable.  There's nothing wrong, nothing broken and nothing to fix.

Learn to read. I said I'd allow your accusations in my thread once, so they can be answered. It's the whole "I will pretend I can't read" BS that I won't allow (like what you just posted).

Not sure what problem it is you think I have with my security BTW.  Sure - silver didn't get back to the HWM we started with - but so what?  We made a decent profit nearly getting back to where we were before mtgoxusd's massive rise vs BTC.  Which means a much higher dollar value.

NAV/U is still almost exactly same as at last report (well, up 15%) - despite silver falling a fair bit.  So we've made 20% or so trading this week so far which will probably be paid out to shareholders with another massive distribution payment this friday. There's nothing wrong, nothing broken and nothing to fix.

WEEKLY REPORT

http://img198.imageshack.us/img198/7255/atf210413a.gif
http://img803.imageshack.us/img803/3723/atf210413b.gif

We had overall growth this week of 7.73% with the bulk of it (over 6%) from trading with the last 1.5% resulting from a small decline in LTC vs BTC.  That was sufficient to take us past our previous HWM and into new (price) territory.

We repurchased a few thousand bonds on request this week - but sold enough afterwards to get us back to around where we were at the start of the week.  At present my expectation is to sell more into orders up to around 180 BTC face-value total.  This is down slightly on what I'd expected to need in last week's report - as we've stopped trading a few securities.

Profits this week were boosted a bit (compared to where they'd otherwise have been) from some activity on S.DICE.  There was a bit of a panic about it mid-week when the domain for it appeared to expire.  Bets continued to be processed (the website isn't needed for that) and all seems well again with it.  A few people panic-sold very cheaply which we obviously took full advantage of.  This has left us with more cash on CoinBR than usual - which will be corrected this week.

Trading has become very slow in the latter half of the week - with BTC recovering (and dragging LTC up vs USD with it) there's been the usual slow-down of people investing in securities as they pile into the actual currencies.  I'm by no means convinced of the wisdom of that strategy but it definitely happens.

Management fee of 1 unit will be transferred shortly (much lower than would be usual for ~8% growth due to management fee only being paid on the excess over previous HWM).
Bid at : 64.0

WEEKLY REPORT

http://img23.imageshack.us/img23/2392/atf280413a.gif
http://img542.imageshack.us/img542/4395/atf280413b.gif

This week we've made a small loss - a drop of about 4% in NAV/U.  That loss is entirely down to LTC rising by nearly 50% against BTC - without that rise we'd have made a 2-3% profit from trading (results spreadsheet will indicate a projection of 2%, in fact it was higher - the difference being because we ended the week with a higher percentage of LTC-denominated holdings than we had for most of the week).

Even without the exchange-rate movement it would have been a week with fairly modest growth by our historical standards.  There's a few reasons for this:

1.  Activity on LTC-Global has dropped right down, so profits there are now very slim.  This is likely to continue.  The reasons for that have been discussed elsewhere but for most are some combination of being denominated in BTC/USD and/or being a scam/badly mismanaged.
2.  Activity on all other exchanges seems to have been lower (exception being ASICMINER activity) - the uncertainty over BTC/USD rate is likely partially behind that (with people believing they're better off playing the exchange-rate than trading securities) with the lack of any GOOD recent new securities being the rest of the the explanation.
3.  My own activity was more sporadic than usual this last week due to RL commitments.
4.  As previously discussed, profit was likely to fall anyway (as a percentafe) with the higher LTC price - as BTC-denominated profit now has a much smaller impact.

The loss  this week - and the larger loss a few weeks back should be put into perspective.

The recent low for the LTC/BTC exchange rate (at the time when a report was produce for this fund) was .00232 on 24th Feb.  At that point our NAV/U (after management fee) was 50.9855.
The exchange-rate is now .032 and our NAV/U is 63.519

So in a 2 month period where LTC has grown to nearly FOURTEEN times the value against BTC we've still managed over 20% growth.  That's ACTUAL growth AFTER all management fees were deducted.  So the occasional small fall in NAV/U when LTC grows a lot in a week is absolutely not any reason to panic.

This week the next security for LTC-ATF will hopefully be released (subject to it gaining moderator approval of course).  I won't provide full details of it now however here's the bulletpoints for it in terms of how it affects LTC-ATF:

1.  It will a USD-denominated bond/fund (it'll be listed as a bond but is really somewhere between a bond and a fund, having a fixed face-value but a variable interest/dividend rate).
2.  LTC-ATF will have very little exposure as a result of it - only real exposure will be to very short-term spreads/moves in exchange-rates when converting funds (by very short-term I mean during the period it takes me to do conversion - so seconds/minutes).
3.  Little extra capital will be required to operate it - I already sold extra bonds yesterday to the level we're likely to need - and the capital to operate it can also be used for our other needs.  The main capital needed for it will be LTC - which we have a load of sitting idle anyway.

This security will mean we then offer LTC, BTC and USD denominated securities allowing investors to spread investment across all three without ever holding anything other than LTC.  It will also allow writing of options on the LTC/USD rate.

The security will be launched explicitly as being intended to be dual listed.  Once any kinks have been ironed out and all accounting/currency exchange systems fully tested then we will also list it on BTC.CO (and possibly later on Bitfunder as well).

I'd hoped to get the security up for moderator approval today - but got side-tracked in some RL activity and only recently got online for the first time today.  I hope (but can't commit) to getting it put up tomorrow.  In addition to the contract for it I also have to produce some fairly lengthy explanation of how it works in detail and why certain specific terms are in the contract.

My view is that no motion will be needed to operate this one - as it doesn't add any significant exposure to LTC-ATF or require any changes to any other part of the fund's contract.

Bid is at 62.
No management fee this week (and HWM remains unchanged - so no management fee until we pass the old HWM as usual).

Questions relating our positions in LTC-ATF/LTC-ATF.B1.

One, you stated that you made a small loss of 4% versus an expected profit of 2-3% and that the loss was "entirely down to LTC rising by nearly 50% against BTC"(1). Yet your recent report 'b' (link (http://kongzi.ca/silver/LTC-ATF/atf280413b.gif)) states that out of a total of ~573.2 BTC total holdings, 64.11% are denominated in LTC, and most of that in cash -- a total of 11.44% of total value held on BTC-E and 44.6% held on LTC-GLOBAL ('a', link (http://kongzi.ca/silver/LTC-ATF/atf280413a.gif)). There's something wrong here. Since LTC rose by 50% against BTC, wouldn't that cause a much larger price swing than 7% of the fund? I can imagine that if the value of LTC swung by 50%, then that swing would account for a 64.11% * 50% change in NAV. Since, as you said, the price swing was the 'entirety' of the move. Can you please explain why your figures seem an order of magnitude off from your explanation of the cause?

Second, you state something very interesting in your report. You state that LTC-ATF profits are projected to be slim for reasons that "are some combination of being denominated in BTC/USD and/or being a scam/badly mismanaged."(2). I am curious. Do you actually have any evidence that something you are investing in is a scam? If so, two follow up questions -- one, why do you invest in scams? I'm willing to bet that you are referring to something like ZigGap which "turned out to be a scam". So maybe I should ask, "what are you doing to prevent investing in scams in the future"? The goal here is of course to quantify the amount of risk we need to attribute to poor management versus risk inherrent to cryptocoin investing as a whole.

Third question, minor question. You are on record stating that people shouldn't manage too many funds because it is confusing. You also state that your own RL committments have prevented you from doing the best job you can for your shareholders as the manager of LTC-ATF. You manage 5 securities already. Why bother introducing a sixth? Isn't that too much? If RL committments are already getting in your way, shouldn't you be working on closing down some of your funds instead of starting up a new project that you obviously won't have time to do a good job on?

Fourth and final. It seems from a cursory reading of all of your reports that you have never taken a serious management fee. This strikes me as suspicious, because it implies that the fund is unsustainable. I mean, it's nice that you are doing this as a hobby but what are your plans to "go live" so to speak, and start turning a profit with this? Put another way, how much money are you willing to personally lose over this before shutting down? If it's not profitable for you to run, this needs to be explicitly disclosed. I for one do not invest in LTC-ATF precisely because of this. I know people think you are trustworthy and you've done nothing to damage that view with LTC-ATF so far... but that is not enough in today's world of Ian Bakewell and Aethero(ZigGap). What assurances do we have that this isn't some kind of amateur joke fund, and that you're serious about it?

Thanks for answering my questions without swearing at me or accusing me of scamming. Full disclosure, I am a 12%+ holder in LTC-ATF.B1 (yes, even after the recent sale of 4,000 more bonds into the market).

(1)

(2)

Sure - what you're missing here is the impact of the bonds.

In addition to our HOLDINGS in BTC we also have a LIABILITY that's denominated in BTC - the bonds.  When LTC rises it DOES reduce the value of our holdings in line with what you suggested - however a very large part of that is cancelled out by a corresponding reduction in the LTC value of our liability in respect of the bonds.

If you want to estimate the impact exchange-rate moves will have on the fund's value then the value you need to look at is NOT BTC denominated holdings but rather (BTC-denominated holdings - BTC-denominated liabilities).  That's one of the major purposes the bonds serve - allowing us to have significant BTC holdings whilst our exposure to exchange-rate movement is only limited to the excess of those holdings over the value of bonds we have issued.  The percentage of NET assets which are BTC denominated is given towards the bottom of the spreadsheet and is always in the 15% area.  Be careful when estimating the impact of exchange-rates - as that percentage is maintained as the rate moves, so you can't just estimate it based on starting percent (I have bids and asks up that keep it near 15% even if I'm offline - unless it moves a LONG way).

Some of your questions in the bonds thread were based on you not understanding the above by the way.



As far as the LTC-Global scams are concerned (I was referring specifically to on LTC-GLobal in the quote) there's about 5 scam assets still in the main market.  The recent ones being moo.cow mining and LHPOOL (LHPOOL is run by a liar/scammer who has taken over moo.cow from a different liar/scammer).  My projection of this reducing profits isn't because we hold a lot of them (we hold zero of both) but because whenever an asset becomes a scam on LTC-GLobal it means one less security I can day-trade.  As we have a mountain of unused LTC on LTC-Global this reduces profits in a way which doesn't happen on the other exchanges (where we have other options to use the funds on).  This is a particular issue given that the price of most LTC-Global assets has fallen sharply (LTC-ATF being about the ONLY asset with a higher value than a month or two back) - and so the amount of LTC we use in trading there has dropped anyway.

We hold shares at present in precisely one security that I believe to be a scam (in fact I'm 100% sure it is).  Those shares were purchased for a tiny amount each (total spent on them was under 0.1 BTC) have been written down to zero for weeks and still occasionally sell for 10-15 times what I paid for them (some sold in the last week).  Obviosuly it's not in the interests of my investors for me to identify which security that is - as by doing so I may deter potential purchasers if they read here :)

There's a second 'dead' security we hold a position in - which I don't mind revealing.  BTC-MINING on btc-co (Namworld's security).  We hold a single share of that, sold to us at .007 (maybe different number of 0s - not worth checking).  SHortly after that was sold to us in the last week, the security was locked by Namworld vs trading.  That's the mining fund that lent nearly all of its cash to a scammer.  Reason I had a decent sized buy up on that was that it still had 15 BTC cash left - and I was bidding at a price that meant just that 15 BTC cash (even assigning 0% to recovery of anything else) would give a profit.  Unfortunately he locked it for trading right after it got sold down to our order.


On scams in general I DO on occasion trade in things I'm absolutely certain are scams - the most obvious example that's on the record in this thread being OBSI shares AFTER he'd defaulted (we actually had some when GLBSE closed).  I was flipping those at a 100% profit each time simply because although I knew it was a scam there were a bunch of people who refused to accept it.  In addition, in that case, there was a significant chance that (if GLBSE hadn't closed) the shares could have increased significantly in value anyway - depending on just how Obsi was planning to play the scam out.  So, put simply, my assessment was that despite it being a scam trading it was +EV - which proved to be the case as we made more profit trading it in the few days before GLBSE closed than we lost by writing off the shares we held.

Similarly with ZIGGAP.  If you look at the thread on it you'll see that I called it as a scam as soon as he sold his shares off cheap.  At that stage I also marked our own shares down significantly.  But I also then went and bought a LOT more cheaply - i mean 7 digits more shares (1 million or more - can't remember exactly how many but it was well over a million for a few hundred satoshi each).  Because although I knew it was a scam I also knew there'd be plenty of idiots who didn't see it - and whose idea of buying some cheap was to pay 2-3 times what I paid.  I sold all those at a nice profit (some at 20 times what I paid for them) which more than made up for the loss we made writing down the ones we originally held.

I actually PREFER trading something I KNOW is a scam than something I only SUSPECT is a scam - as it's much easier for me to price it properly (it has zero inherent value - I just have to estimate how many idiots there are who will pay too much for it).

As far as detecting scams is concerned I have no magic ability.  The main thing I look at isn't what they say when discussing their security - it's what they don't say.  Few will brazenly lie about things  - it's the omissions that are where you look to find the problems.  The other key I look for is "do I have sufficient information to value the security if I believe everything I've been told."  If I can't possibly properly value it - even if I believe every word they've said - then I tend NOT to believe what they've said.  The reason is that being able to value the security is something a prospective investor NEEDS to be able to do.  If they don't provide information sufficient to do that (and I ONLY mean provide - I don't mean prove) then either they have a very basic failure to understand the needs of investors OR they're intentionally hiding something.  WHilst I still can't distinguish whether they've crooked or incompetent I CAN be sure that they aren't a safe investment - which means being more cautious when trading them (buy lower, don't buy so many).

If I only traded "good" investments then LTC-ATF couldn't exist - there aren't enough good investments (by which I mean ones I'm 90%+ sure will perform better than just holding BTC/LTC) to run a diversified portfolio.  The lack of good investments is compensated for by the lack of good investors - LTC-ATF makes nearly all its profit from investors, not securities.  Which gets back to the original point - I can trade scams because there's idiots who will NOT accept they're scams until the asset issuer actually posts saying so.


Put simply there's a difference between not doing my "best job" and not doing "a good job".  To do my absolute best job I would have to do this full-time - ANY level of commitment lower than that won't be my "best".  Best and Good are two very different things.

My RL work is such that MOST weeks it takes very little of my time.  Occasionally (maybe once every few months) there'll be a period of a few days to a week when it consumes a lot of my time - last week was one such week.  We still made a 2-3% trading profit (remember the loss from exchange-rate would happen whether I was around or not) - which I think most securities out there would happily take.

Judging my performance on one week - when over 6 months of data is available isn't, I'd suggest, a good way to approach things.  Nothing has changed in my work situation over that period - you'll find other weeks in the past where I've mentioned having less time than usual.  That will continue to happen occasionally.  I don't think there's ever been two days in a row where I haven't been able to spend a few hours online - all that being busy means is that I can't be around to maintain orders when out-bid and so lose out on traded volume.

You also seriously over-estimate the work required on most of the assets.

LTC-ATF.B1 - takes a 10 second check every now and again for any bids/asks to fill (bids only early in the week and IF I'm selling) then a minute to execute orders and convert currency if necessary.   And 5 minutes once a week to calculate and pay dividends (the calcualtion is done in my spreadsheet anyway).

The 3 pass-throughs : Similar to LTC-ATF.B1 other than dividends being monthly.  When I'm around and the LTC price is fairly stable I also place Asks - if I'm not around then we only lose profit, we don't make a loss.

LTC-ATF itself is the only one that takes any real effort at all - all the others I have spreadsheet sections that give me all information I need to manage them with minimal time.  If I closed ALL the other assets then (aside from closing the bonds making running LTC-ATF impossible without major changes in policy about exchange-rate exposure) I'd save at most 1-2 hours work per week (exception being if I have to respond to PMs/Posts about them).  They really ARE that trivial in terms of demand on my time.

The new security will need some up-front time from me (to get all relevant spreadsheets/reporting formats sorted) then will also be very low maintenance.



You should really have done some math before posting that question.  Or maybe what you consider a serious management fee is rather different to what I'm happy with.

First - bear in mind I own over 50% of shares in LTC-ATF.  I'm also by far the largest bond-holder in LTC-ATF.B1 - with somewhere between 1/3 and 1/2 of all outstanding bonds.  So even without a management fee I do OK if the fund does well.

Second - bear in mind that each LTC-ATF unit worth 63 LTC.  At present that's about 2 BTC or $250.  So the 1 unit I got the week before last wasn't as bad as 1 unit sounds.

To look at what I've made financially you really need to compare what my units are worth now to what they were when the fund started.

I started off with 194 units of the fund worth 10 LTC each.
I now have 161 units and sold another 125 (I think - not gonna check if that's exact number) when LTC was at its peak.  For simplicty I'll value them all at 60 LTC.

In LTC:

Started with 1,940.  Ended with 17,160 - a profit of around 15220 LTC

In BTC:

Started with 6.71 (exchange-rate .00346) .  Ended with 549.12 (exchange-rate .032) - a profit of around 542 BTC

In USD:

Started with $38.54  (exchange-rate .041).  Ended with $69,841 (exchange rate 4.07) - a profit of around $69,800.

So you tell me - is that REALLY so bad that it isn't worthwhile?  I've never used ANY of my RL moey to buy LTC or BTC - all my crypto-holdings come from trading up from a few blocks of LTC I solo mined ages back.  They sat there untouched during the period whilst I wasn't active on the forums - then I traded then up on GLBSE and doing some currency trading, spent a chunk of them on listing the asset, invested most of the rest and what happened after that is in the table on the first page of this thread.

Part of the fun/challenge for me was seeing just how well I could do with those few LTC I mined (think it was about 200).  I'm happy with the start I've made.

Where are those profits I've made?  Well:

A bit over half of them are in the LTC-ATF units I still hold.
I also have a good bunch of LTC-ATF.B1.
I have $10k USD denominated online which will be going into the new security.
I took $10k offline for a different project (that may well end up being listed in 6 months or so - something entirely different and unrelated to my current assets).
I have a couple of loans out.
I have some BTC/LTC in various places doing various things (no trading of securities).

Now the 15k LTC / 540 BTC/ $69K profit I've personally made may be trivial to you - and pale in comparison to the profits YOU make, but I'm perfectly happy with it as a return for the effort I've put in over the last 6 months.

As for how much of it I'm willing to lose before shutting it down : that entirely depends on how you're defining those losses.

For example, if LTC were to double vs BTC/USD every week then every week the value of the fund (in LTC) would drop by 5-10%.  After maybe 10 weeks of that I'd likely call it quits, give up on LTC and cash out the remaining 50% of value for a few million USD and retire.  Because THAT's what's actually happeneing in these "losing" weeks - our LTC value is dropping slightly and the BTC/USD value rising massively.  I LOVE 'losing' weeks like that - I'd take those EVERY week if I could.  The weeks I dislike are the ones where LTC falls by a lot - even though that guarantees a decent growth in our share price.  An investment in LTC-ATF isn't just an investment in my trading skills - it's also an investment in LTC itself (which is NOT true for many other securities).  When LTC gets stronger that provides us with big benefits immediately - and I add some value whatever happens with it.

Do I have some stop-loss (in any of LTC/BTC/USD) where i'd call it quits?  No.  I have no money tied up in the fund that I need for anything else.  Obviously I'd prefer not to lose my investments - but if I do then it's not something I'd be losing sleep over.  I take seriously the "don't invest what you can't afford to lose" mantra - and if you look at my investments you'll find that I'm also actively trying to balance between LTC/BTC/USD. 

If I became convinced it was unprofitable (in the medium to long-term) to continue do what I'm doing then would I stop?  Yes - in an instant.  I believe in quitting whilst you're ahead - but ONLY when you become convinced you can't pull even further ahead.

If you (or anyone else) is still having problems understanding how the bonds work (in allowing us to invest heavily in BTC without all that much exposure to the exchange-rate) then I suggest you read the following thread.  It's my fairly detailed explanation of how that works made before the bonds were launched:

https://forum.litecoin.net/index.php/topic,857.0.html

Hopefully that will clear it up - I DO appreciate it's a bit of a tricky concept to understand.  There's also some information in that thread which may help explain how the targets for exposure to BTC were set.

Do appreciate that BTC.CO didn't exist when that thread was posted - at that stage I assumed it would be called BTC-GLOBAL, which explains the references to that.

Do also note that there were some changes from when that post was made until when the bond actually launched - the most major one being that it was initially planned that the bond would be on BTC-GLOBAL (BTC.CO) when in the end we went with listing it on LTC-GLOBAL.  But the post still gives a solid explanation of the principle behind the bonds.

MOTION UP FOR VOTE

We don't often have motions - but it's time for one.  I'll explain below what the issue addressed by it is, what the motion is, the rationale behind its detail and what the alternatives are (and why they aren't suitable).

Motion is only up for a fairly short period of time.  As I hold majority of shares I can obviously pass any motions in the system.  As a majority share holder I do, of course, have a responsibility ot minority shareholders not to abuse that position and act against either their interests or that of the fund.  If anyone believes this motion is against either of those interests then please say so.

As usual I won't vote until fairly nearly the end of voting period.  If 10% or more of outstanding units vote against then I'll vote against and the motion won't pass : I won't pass ANY motion if there's any significant opposition to it.

As the motion period is short I'll be offering an above NAV/U buy-back for 2 weeks rather than the usual 1 week I do.  If the motion passes then buy orders will be placed at 2% or so ABOVE NAV/U.  I will then, for any shares sold back either (at my discretion):

A.  Buy the shares myself - reimbursing the fund the full payment it made.
B.  Reimburse the fund the amount paid over NAV/U-1%.

Option B is more likely - as it fits in better with the objective of this motion.  It may seem excessivey generous of me but:

1.  As I'm changing the contract on a fund any loss should be taken by me - as it was my responsibility to ensure the contract covered all contingencies in the first place (even though this is the result of cirumstances beyond my control - GLBSE closing - and a change in focus of the fund since).
2.  Even with option B. the percentage of the fund I own would increase - soon repaying the small cost to me (so long as we stay profitable of course).

Obviously if anyone else outbids the buy-backs then sales would go to them.

PURPOSE OF MOTION

As I've lamented plenty of times, the fund has an excess of idle LTC lieing around.  That's bad news for two primary reasons:

1.  It's horribly inefficient - we make exactly same profits as if we had less LTC capital but the percentage growth we achieve is reduced due to the profit being spread over more unit capital.
2.  I'm holding investors' funds for no useful purpose - you get counter-party risk from myself and the exchange with no benefit at all in return.

With the reason massive fall in the prices of most LTC-Global securities the problem has got worse - as we need less LTC to conduct our trade and so the totally unused LTC has grown.

I've held off on doing anything much about it - in part because I was unsure the rise in LTC would 'stick' : so wanted to avoid a situation where I reduced LTC capital, LTC then fell heavily and we had to immediately sell more units (so as to ensure bonds are properly backed).

This proposal tries to address the two points above whilst incurring very minimal drawbacks/risks.


THE MOTION

Below is the text of the motion being put up for voting:

A vote of Yes indicates support of this change, a vote of No indicates disapproval of the change.

It is proposed that the contract of LTC-ATF be amended, adding a section into the contract entitled "DIVIDENDS".  The text below is the proposed content of this section of the contract.

It is not LTC-ATF's policy to pay regular dividends - in general profits are retained increasing the value of units.

On occasion the fund may grow to a point where it is the manager's view that there is excess unused LTC-denominated capital which should be returned to investors.  In those circumstances the manager is entitled to pay a dividend provided ALL of the following points are met:

1.  The dividend shall be paid immediately after a weekly report (and the payment of any management fee units plus adjustment of the HWM if required).
2.  The dividend may not be so large that, after its payment, the ratio of LTC-ATF.B1 debt to fund NAV exceeds 100%.
3.  The HWM will be reduced by the amount dividended per unit.
4.  If any market Bids are up that would be above the new NAV/U post-dividend then manager will briefly suspend trading and clear orders so noone is sold to at a markup to NAV/U higher than they intended when they placed their Bids.
5.  No management fee may be taken on the dividend - though the manager WILL receive dividends on any units he holds the same as any other investor.


EXPLANATION OF MOTION

Hopefully the basics of the motion are clear - when we have a pile of surplus LTC it gets returned to investors rather than sit around idle in the fund's wallet.  Here's a brief explanation of the 4 points listed that have to be met when I make such a dividend:

1.  The timing immediately after a weekly report is the obvious time to do it.  That's when a full valuation is already posted.  It's done AFTER the allocation of any management fee - so the fee is paid at the old (high) NAV/U not the new (lower) one: avoiding the situation where a small dividend could be paid to increase the number of units taken as management fee.  This timing also means the dividend is paid at the start of the week - so the fund can issue more bonds if desired to rebalance currencies in response.

2.  The fund is constrained by contract to keep the ratio of bonds to NAV below 150%.  I've therefore set a limit of 100% post-dividend.  In practice I'd normally not go near that - aiming more for around 75% (75% - 100% is the ideal range to be in).

3.  Obvously HWM has to be reduced by the amount dividended.  If we've just set a new HWM and I dividend out 10 LTC per unit then there's no way I have to make 10 LTC profit per unit before getting a management fee again.

4.  This has to be done so people don't end up buying very expensive units when they'd not placed high bids.  An unfortunate side-effect is that all Asks would be cancelled too but there's no way around that.

5.  This is in there just to make it explicit that no extra management fee is taken for paying dividends.  I get my units (if any are due that week) as per the existing contract then the dividend is paid with no extra fee.


ALTERNATIVES

Here's a brief list of some of the alternatives to this route:

1.  Keep going as we are.  My view is that's a bad idea - now it looks like LTC is going to stay high (with MtGox confirming LTC listing) there's no justification for me sitting on idle funds that belong to investors.

2.  Invest the LTC in securities.  There's just not any LTC-denominated securities that give any sort of return or have a stable price.  LTC-GLobal is the best candidate - and that's at least 50% BTC-denominated in practice and may well have further to fall before settling into a new range.  Additionally, although the contract allows up to 25% of capital to be invested rather than traded that is NOT what the fund is about.  In practice I'll only be using that opyion where I see a medium-term investment opportunity and have no intention of using part of the capital to run an investment fund.

3.  Buy back units.  I already did this previously - or the problem would be much worse.  Some investors sold back shares and I sold back a chunk of mine as well.  I'm not willing to sell back many more of mine unless others sell back too - and noone else seems to want to sell.  And why should they?  There's no reason why only SOME investors should bear the brunt of reducing excess LTC-denominated capital (reducing their own percentage held in the process) when there's a perfectly good mechanism to spread the refund evenly.

4.  Offer secured loans.  This was a suggestion I put up a month of two ago - which received little feedback.  I've abandoned this idea in general.  The proposal was that loans would be made secured on securities listed on LTC-Global.  As recent events have shown there's pretty much ZERO securities on LTC-GLobal that can be relied on to keep most of their value in a steep LTC rise - the only real exception to that being LTC-ATF itself.  I'd consider offering loans secured on LTC-ATF units - but doubt there'd be too much interest in it.  And loans are likely to take up far more time that the small profit they make warrants.

If anyone has any great alternative suggestions then by all means put them forward - even if this motion passes I'd still be very happy to hear any profitable uses for idle LTC as I expect it to be a recurring problem for us.


WHAT NEXT?

If the motion passes then I'd be making the first dividend payment on Sunday after producing the weekly report.  I'd anticipate it being for either 15 or 20 LTC per unit.  We'd still only have a bonds to NAV ratio of around 40-60% afterwards (depending where exchange-rate is and which of the two I do).  The only minor impact it might have is that for a while I'd only be placing bids up for 50 LTC-ATF at a time instead of 100 - but the contract only demands 5% anyway which is less than 20.

It would also theoretically increase the risk of needing to sell new units - but for that to happen the LTC/BTC exchange-rate would have to drop well under 0.01 which seems very unlikely to me in the short-term (longer term it's entirely possible - but by then hopefully we'll have grown more again anyway).

All feedback etc welcome.

I'm a small shareholder at the moment, but I just want to say two things:

1. I support the motion, but I'd also be open to finding new ways for you use that LTC to invest and make profit for the fund. The fact is you are good at this, and that's the true waste in sitting on that LTC.
2. I do not support any loaning of assets.

I've racked my brain repeatedly trying to find ways to use the spare LTC - and there's really no LTC-denominated uses for it.  There's still a fair few securities on LTC-Global that can be profitably traded but the trade volume is too low to use more than we already utilise.  Any use for them has to be LTC-denominated (in practice not just by some vague definition), has to be clearly profitable and has to provide decent liquidity.  Not much meets all those criteria.

On loans the proposal wasn't to loan assets but to loan actual LTC - secured against securities held by the borrowers (which would be held in accounts under my control until the loans were repaid).  But there's really no securities on LTC-Global that are reliable AND can maintain a pretty steady price when LTC sky-rockets (as nearly all are largely or entirely denominated in BTC/USD for all practical purposes).  Only asset I could fairly safely conisder taking as collateral would be LTC-ATF itself (and doubt many of our investors need or want loans anyway).  Without collateral there's no way I'd want to loan out any of our cash - it's just not worth the risk it for the fairly small returns.  Hence the loan idea pretty much getting scrapped (I'd consider raising the idea again it if someone holding a significant number of LTC-ATF units requested a loan to be secured against them).

Apologies, I was using the term "assets" loosely to mean the LTC being sat on too. I just don't like loans is all. I see the quandary, and I think it points to a larger problem with LTC not serving much of a purpose without BTC to lean on.

Exactly the same problem exists with BTC too - just it leans on USD.  Majority of BTC securities have large USD components (mining being the most obvious where usually they're effectively denominated in USD.  Right now that isn't the case - but only because of the short-term shortage of USD-priced ASICs).

The only LTC/BTC assets that are 'pure' are gambling ones and ones that don't hold or sell physical assets (e.g. currency/security exchanges, trading funds).  That's not going to change in the near future for LTC or BTC - which is a problem where the currencies tend over the long-term to appreciate in value significantly (it makes investing a loss-making proposition).

Even ASICMINER is largely USD-denominated - its edge over other mining investments isn't that it's somehow 'pure' it's that ASICMINER is positioned to deliver growth/profits that probably CAN beat the rise in value of BTC and so deliver BTC-denominated profit.  Give it 6 months and just about ALL mining investments will be back to being losers - as has been the case in the past.

Exchange-rate : .03108
NAV/U : 44.545

Bid at : 45.55 (2% over NAV/U - if anyone sells into the order I'll either buy the units myself at the full price paid or personally refund the extra 1 LTC/unit to the fund).

I took 2.5k more LTC-ATF.B1 bonds myself at 1% over face (did it via market) and traded LTC to the fund for BTC on BTC-E.  That rebalanced the fund's currencies without any cost.  The very small reduction in NAV/U below 20 LTC under old NAV/U is because LTC has risen slightly vs BTC since the report was posted.

WEEKLY REPORT

The spreadsheet below represents the holdings (and exchange-rate) as of Sunday evening - when I usually produce reports.  I was tempted not to do one this week gaving failed to post it on Sunday (by contract I only need to produce them every 2 weeks anyway) but have decided to post it late - so as to make my results spreadsheet nice and easy (with each row representing 1 week).

Will post a current NAV/U in a seperate post afterwards.

http://img585.imageshack.us/img585/4624/atf120513a.gif
http://img543.imageshack.us/img543/9692/atf120513b.gif

Results were slightly better this week than last - taking us almost back to the previous HWM.  In part that was due to LTC falling vs BTC, with the remainder down to a bit better trading performance (actual trading profits were similar - but with a smaller capital base it represents a larger percentage growth).

Our new security is now up - it's not quite ready for moderator approval (it needs admin unlock first and I also need to make a forum post for it explaining some of the contract detail).  At present it's essentially a USD-denominated fund that will loan to margin traders on BitFinex.  The contract is, however, written to allow addition of additional USD-denominated investments as/when suitable ones are found.  The contract is also written to allow dual-listing on multiple exchanges (BTC.CO being the next) - allowing one pool of capital to be split between IPOs on different exchanges.

The security has very low risk for LTC-ATF.  The funds belonging to the new asset will be segregated in a seperate account and are NOT guaranteed nor do they have any claim on LTC-ATF's other assets.  The only risk for LTC-ATF is brief exposure to exchange-rates.  That exposure is VERY brief - for the period of time between USD being transferred between wallets on BitFinex until a sell order into BTC is processed (also on Bitfinex).  LTC-ATF will get 10% of profits made - with the main contribution LTC-ATF makes being provision of rapid currency movement between BTC and LTC (LTC-ATF can provide that as it already has cash sitting on BTC-E).  That removes/reduces the new security's exposure to exchange-rates (which would otherwise be high - due to withdrawals from LTC-Global AND BitFinex being manual and slow) whilst using capital that we already have (the cash we have on BTC-E serves to fill any sudden needs and to allow rebalancing of our funds as the exchange-rate moves).

At present the 150 LTC for registering the new security is listed as a ticker asset (as we did with the pass-throughs) but I anticipate that being refunded (we've been running profitably for over 6 months which allows us free listings).

In the morning I'll go over the contract again to check for typos etc (something I didn't actually bother doing on the other contracts - which shows) then get a forum thread up and see about getting it unlocked for moderator approval.  If you have questions about the contract I'd suggest hanging on until I've made the thread - some bits of the contract may not make too much sense without an explanation (it's hopefully obvious what the contract says - but maybe not so clear why I've written specific terms in).

With LTC slowly falling vs BTC at the moment I'm not going to make another dividend payment yet (if it stops falling for a while - or we make significant profits - then I'd be looking at dividending out a further 10 LTC per share).  I'm also going to stop selling bonds at the 250 BTC mark.  My intention, once it's confirmed we're entitled to free listings, is to launch a new bond on BTC.CO at a LOWER rate of interest and issue further/replacement bonds there if needed.  Without the listing fee, BTC.CO would work better for the bonds - I could leave up bids/asks for one thing - and if we can cut the rate a bit then even better (I'd be looking at 0.05% per day - if the bonds were on BTC.CO I could schedule dividends in advance which I can't do on LTC-Global due to having to take exchange-rate into account).  I would NOT be looking to do a forced recall on the current bond - that would be acting in bad faith (especially to anyoe who bought at over face value), so those would stay outstanding until they were sold back at face-value.

Just to update with current values:

Exchange-rate .0265 (it's a bit volatile right now but in that area)
Adjusted NAV/U : 46.423 (adjusted as we're back over the old HWM)

Bid at : 47.35 (still 2% over NAV/U due to buyback offer following contract change)

WEEKLY REPORT

http://img819.imageshack.us/img819/7393/atf190513a.gif
http://img41.imageshack.us/img41/8669/atf190513b.gif

Another week of small growth has passed (2.38% growth - with an estimated 1.42% being from trading and remainder from a small drop in the LTC/BTC exchange-rate).  OP of the thread has been updated with all results to date (I only update that every few weeks).

NEW SECURITY - LTC-ATF.BFIN

The contract for this is now up - however I haven't completed the thread for it or unlocked it for moderator approval.  The reason for this is primarily that there are some question-marks over the current status of MtGox.  The security is intended to be a USD-denominated security initially investing solely in loans for margin-trading on Bitfinex.  Bitfinex hold significant reserves on MtGox - and I'm not comfortable releasing the security until I have confidence investors face no significant immediate risk resulting from exposure to MtGox.

In addition to the above, Bitfinex have recently (in the past week) announced that they will be supporting LTC.  That's great news for us (aside from the benefit to LTC in general it potentially makes moving funds in and out of their cheaper) but will require some minor amendments to the contract.  I'm holding off on those changes to see whether they're adding BTC/LTC and/or LTC/USD trading.

Hopefully we'll be able to proceed with launch this week - but no promises on that.


S.DICE

You may have noticed that we hold a significant quantity of S.DICE - and at a significantly lower price each than last week.  I trade regularly trade S.DICE - with buy orders up to catch sells from the regular panic sells/in desperate need of cash people.  Those happen every month - usually in the middle of the month.  This month there was actually a good reason for selling (though not necessarily at the prices sold at) - S.DICE are making a token effort to prevent US customers using their service.   It's only a token effort (those with US IP addresses can't bet via their website) and won't stop anyone who wants to bet (they can bet directly by sending to a BTC address as before).  It will, however, reduce volume somewhat by deterring (very) casual bettors.

The value in the spreadsheet reflects current market trading range - my expectation is that will rise slightly from there but I have to value based on the market not on my own guesses.  I'm not, however, looking to panic sell those shares.

ODDS AND ENDS

Bid at 46 (the buy-back at 2% over NAV/U has ended - noone sold back)
No management fee this week - we're back over the previous HWM but not by enough for me to claim a unit.

WEEKLY REPORT

http://img571.imageshack.us/img571/4775/atf260513a.gif
http://img838.imageshack.us/img838/5302/atf260513b.gif

4.68% growth this week (before management fee) with an estimated 3.28% from trading and the remainder from the continued slow fall in the price of LTC vs BTC.

Bitfinex have now introduced LTC/BTC and LTC/USD trading - as indicated last week.  At present volume is very slim there, but I've moved some funds over to take advantage of arbitrage opportunities with the BTC-E books.  Once our new security gets going we'll be moving funds in and out of there anyway.  I'm still waiting for the MtGox situation to clear up before launching the security - but it looks as though they may have pretty much pulled out of using Gox completely (which is the safest solution).

We now have 250 BTC worth of LTC-ATF.B1 bonds issued - which is where we'll be stopping.  When next we need more funds I'll be looking to raise them via a new bond on BTC.CO - on which we'll offer a lower rate of interest.  We can't lower the rate on LTC-ATF.B1 and launching a second bond on LTC-Global would be confusing - so that's our best way forward to reduce the cost of further capital.  We don't NEED to reduce the cost of capital but there's absolutely no point in paying more than we have to.

Our S.DICE holdings are still high - but don't misread that as meaning that we just sat on them.  We sold most of our surplus from last week (all at over .0023) and now have new stock of them (bought for less of course).

Management fee of 1 unit this week (rounded down from 1.27) which will be transferred after posting this.

Quick update as the NAV/U has changed quite a bit.

Exchange-rate : .0024
Adjusted NAV/U : 51.698
Bid at : 50.5

We've had a very profitable few days, with growth of nearly 6.5% (pre projected management fee) nearly all from trading.  The bulk of profit this week so far has come from two places:

1.  LTC-GLOBAL shares.  A week ago the ask-wall at 100 LTC got attacked.  I bought the last 12 from the wall.  We've been the seller in most LTC-GLobal this week - with 2/3 the shares we bought selling at 173-175 (for 70%+ profit) and the rest in the 115-150 range.  The high price might stick - or it may drop back down to the lower range.  We have our profit safely locked up whichever way it gos.
2.  I just filled a bid on our S.DICE pass-through for 11k+ shares (it was actually 2 orders on same price).  There wasn't enough on sale on MPEx at prices that would fill the order - but luckily we held a bunch at start of week and had picked up 4k more cheap yesterday.  Those plus another 4.6k I was able to buy on MPEx allowed filling the order with a 20%+ profit for us (compared to the price we bought at - mainly from cheap ones we already held).  The buyer didn't get a bad deal either - the lowest ask on MPEx is now about 10-15% over the price he paid (and if he'd bought from MPEx asks even before I cleared the low asks he'd have ended up paying more).

WEEKLY REPORT

http://img542.imageshack.us/img542/4835/atf020613a.gif
http://img843.imageshack.us/img843/8950/atf020613b.gif

This week's report is a bit late - the Litecoin forums have been down since yesterday evening and have been waiting for them to come back up.  Seems they're hosted without DDOS protection and their hosting company is being DDOSED.  I'll copy the report over there when the site finally comes back up.  The report content is the situation as of yesterday night when I would have posted the report had the LTC forums not been down.

This week was significantly better than the previous few - with growith of 8.48%, 6.66% of which was from trading and the remainder from LTC's continued slow decline vs BTC.  I already provided some information on where the bulk of that profit came from in a mid-week update.  It's typical that in very profitable weeks the majority of profit comes from a few trades - what was unusual this week was that those trades were on LTC-Global.  Lately we've been making little profit in LTC trading - it's nice to see our LTC reserves chip in for a change.

Bitfinex are no longer using MtGox at all - so I'll be looking to get our USD-denominated security up and running in the next few days.  LTC trading there is very sparse so they won't have much impact on currency conversion yet - but the contract (for the new security) will be amended to allow use of their exchange (and holding funds there) if/when volume and spread there make it useful.

Management fee is 2 units (rounded down from 2.23) and will be transferred after posting this.
Bid is up at 51.5

Exchange-rate : .0228
Adjusted NAV/U : 54.947
Bid at : 53.5

Off to a great start this week as well.  The single biggest source so far was something not far off a donation on Bitfinex.  Looks like someone used a market order instead of a limit order - and hit my bid set up specifically for that occurrence.

Exchange 577.58942443 LTC for BTC @ 0.00236 on wallet exchange    577.58942443       1336.77166065    04 Jun 03:56

We got to buy 577 LTC at around 10% of current exchange-rate basically.

In less good news the new security will be further delayed - possibly for quite a while.  This thread should explain why :

https://bitcointalk.org/index.php?topic=224745.0

For now I'm keeping funds on Bitfinex - though I've withdrawn our profit from the above trade already.

My point is that you're not supposed to. Just like how you run LTC-ATF. I will tell you what the NAV of BMF is, just like how you run LTC-ATF. And you will take it or leave it, just the same way your own investors do.

But, because I am a better fund manager than you, I will run a full accounting and hire a CA once listed -- just like I do now for TU.SILVER.


Yes, just like LTC-ATF.


No, you were just told I would run the issue the same as before. This is why I deleted your post -- that and questioning whether Tu.SILVER owned the assets. Trolls are not welcome. I mean wtf? Why would you even think that? You don't have access to the books and you have ignored the IFSA-compliant financial reports we put out. You don't know jack shit about what we hold, and for good reason. You're a troll.


Then neither is LTC-ATF. So what? You got approved. It shouldn't affect my listing either, unless the mods want to basically admit their process is biased and unfair.


Then delete your own asset and stop bugging me. Thanks!

You have your own threads to discuss your various failed securities in - though discuss isn't really the right term when you delete posts containing a view contrary to your own delusions.

I was going to ignore your deletion of my post - but if you're going to attempt to derail discussion of my securities with out of context responses to posts made in a different topic then fair enough : gloves off.  I'll make a new thread addressed to LTC-GLobal moderators and try to move this discussion there.

If that's not the outcome you wanted then tough.

[[This is a cross-post from the thread for this security on the LTC forums - in case anyone was interested in it]]


I'm not sure which new bond you mean.  There's three possibilities - I'll address all of them :

1.  If you mean LTC-ATF.BFIN then it isn't a bond but a fund.  It has an entirely different target market to LTC-ATF.B1 - being denominated in USD rather than BTC.
2.  If you mean the (potential) new bond on BTC.CO - to replace LTC-ATF.B1 for future raising of capital - then that would, if anything, increase the price of LTC-ATF.B1 as it would pay a lower rate of interest and so be a worse investment.
3.  If you mean the three new securities I'm about to launch on BTC.CO (totally unrelated to LTC-ATF) then they're, again, an entirely different thing with a very different market.

LTC-ATF.BFIN is, in any event, on hold right now - due to possible serious issues with Bitfinex such that no way will I put more of my own or investors' funds there until they're resolved.  If it does launch then I don't see it having any impact on LTC-ATF.B1's price.

Remember that LTC-ATF.B1's price is never going to fall below .0099 BTC (converted into LTC) as I'll ALWAYS buy them back at that price - that's guaranteed in the contract.

If you want to buy and sell LTC-ATF.B1 to speculate on the LTC/BTX exchange-rate then you should be buying when you think LTC will fall and selling before you think it will rise.  Sounds like you may have bought at the wrong time (from your own expectations) - personally I tend towards thinking LTC will continue to slowly fall for a while yet, with occasional upward spikes.  As the volume traded on BTC-E has dropped volatility will increase a bit - there's now often pretty wide ranges with no significant orders in.

Trading LTC-ATF.B1 as a means of speculation on the exchange-rate will only work in the medium to long term - the spread is too wide and volume too low for it to be used in the short-term.

For longer-term investment LTC-ATF.B1 is best suited for those who want some part of their portfolio to be (effectively) in BTC - especially if they believe LTC will fall vs BTC.  Whilst LTC-ATF is for those who want their investment primarily to be denominated in LTC - especially if they believe LTC will rise vs BTC.

LTC-ATF is undoubtedly the better investment if you can buy it at a reasonable price - and therein lies your problem : noone wants to sell LTC-ATF at a reasonable price.  If the LTC/BTC exchange-rate stays stable then LTC-ATF is always going to grow at a rate that is at least three times as fast as LTC-ATF.B1 pays dividends.  That's a fact - purely because if it ever falls below that then the LTC-ATF.B1 bonds will have to be bought back (at 5% over face value).  Historically LTC-ATF has grown by over 5% every week on average - compared to 0.6% for LTC-ATF.B1 dividends.  Going forward growth is likely to be lower than that - but I still expect average growth around 3% per week.

Is that why you delete posts containing a view contrary to your own delusions?

]quote author="Bitcoin Forum"]
A reply of yours, quoted below, was deleted by the starter of a self-moderated topic. There are no rules of self-moderation, so this deletion cannot be appealed. Do not continue posting in this topic if the topic-starter has requested that you leave.

You can create a new topic if you are unsatisfied with this one. If the topic-starter is scamming, post about it in Scam Accusations.

]quote]Please change the title of this thread, it is exactly the same as my own.

I've said before that you can say whatever you want, just don't troll in my threads.

Please differentiate it to avoid confusion.]/quote]
]/quote]


The discussion is relevant because it shows you are a hypocrite and a liar and anyone who invests in your securities should be warned. In your latest lie, you turn a requirement for a request to access the books into a horror story where I am charging people money and attempting to facilitate insider trading. Are you on drugs, or are you intentionally committing malicious criminal libel?

You have been harassing me for over 10 months. You lie, and lie, and lie. You blow smoke. You attempt to confuse people, and you are an asshole about it the whole way through. People have a right to know what kind of person you are before they invest with you.

usagi, you seriously do not sound like a sane person. Can you please stop spamming this thread? I don't think you'll get anything from it, more people will see that you aren't sane. Seek help.

Deprived, on the other hand, always does things quite professionally... That's rare in bitcoin world now.

WEEKLY REPORT

Report represents status as of the evening of 9th June.

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After the great start to the week we didn't go anywhere - some more profit was made trading but LTC rising vs BTC cancelled that out.  This is the first week in quite a while that LTC has ended higher vs BTC than it started.  Interestingly the rise was caused by arbitrage of a fall in BTC vs USD - but the gains (by LTC) were kept when BTC rose back up.

We ended the week with 4.53% - with an estimated  5.69% growth from trading and the difference being due to LTC rising vs BTC.

DIVIDEND PAYMENT

With LTC holding nicely vs BTC - and two weeks in a row of solid profit I'm issuing a dividend of 5 LTC per share immediately after posting this report (part of the reason for the report being slightly later than usual was that I wanted to make sure LTC didn't go into dive when BTC recovered 0 if it had then there'd be no dividend).  I'm erring on the side of caution here - we could easily afford a 10 LTC dividend without impacting our activities - but, as before, I do NOT want to pay dividends then have to sell more shares if LTC drops rapidly.

DEPRIVED MINING SPECULATION

Some of you may have noticed that I've launched three new securities - and wonder why they aren't being run by LTC-ATF.  There's two reasons for this:

1.  There was no guarantee of profit from running them - if noone wanted to buy PURCHASE then potentially a loss of up to 15 BTC could be realised.
2.  LTC-ATF has nothing to bring to the table in managing them.  With the pass-throughs, issuing them by LTC-ATF gave the benefit of capital in place.  The new securities required no capital at all (other than the 15 BTC for listing fees).

Interaction between LTC-ATF and these new securities will be minimal.  As shares in the new securities DO represent equity (they own rights to assets) my interpretation of the SPIRIT of LTC-Global rules is that LTC-ATF cannot trade or hold them (by the letter of the rules we could).  In the other direction it's fine for the new assets to hold LTC-ATF.B1 (by the letter it's definitely clear - in spirit it's also fine as LTC-ATF.B1 is debt not equity and the rules were designed to prevent equity holdings).

POSSIBLE SPLIT OF LTC-ATF SHARES

This is an issue which has been raised a few times with me (by PM).  It's been raised again in the last week - so I'll discuss it here.

At present there's a significant barrier to ownership of LTC-ATF units - the price.  Not only is it a lot higher (in LTC) than when the fund started (even after dividends) it's now massively higher if viewed in either BTC or USD.  A split (of say 10:1) would reduce this barrier to entry and (in theoiry at least) increase liquidity and narrow the spread - in particular encouraging Bids above the fund's own buy-back offers.

I've held back from suggesting this in the past- as I MUST be clear that there is a not insignifcant financial benefit to me personally should a split occur.  If anyone isn't clear what a split is - in a 10:1 split every unit you hold of LTC-ATF would become 10 units and the NAV/U would drop to 1/10th current value - leaving you with exactly same value of holdings, but able to buy or sell in smaller quantities than is previously the case.  The benefit to me personally is that my management fee is paid in units - a split would mean I lost less on this being rounded down to the nearest whole unit (for example this week I'd receive 12 of the new units instead of the 1 old unit I'll currently receive - meaning 20% more management fee).

You may or may not believe me when I say that is NOT the reason for me suggesting it - but you MUST be aware that there IS a benefit for me (and a loss for everyone else) in that respect.  If you sell your units then that MAY be compensated for by increased liquidity at the bid side - from people who previously couldn't afford to bid doing so (and possibly causing over-bidding by others).

I'd be interested in feed-back on this - it would definitely help smaller investors not in.  It would help existing ivnestors who wanted to sell less than 1 unit.  It would increase liquidity in general.  But does that out-weigh the fact that effective management would increase?  If there's no clear opposition then I'll put it up for a vote - if that happens then I'll vote NO myself if more than 10% of units vote NO.  As always I won't push through ANY motion if there's any significant opposition.

No change to the contract would be needed - only other thing which would happen is I'd use my existing right to authorise new units so as to get them above the new total outstanding.

ODDS AND ENDS

Market will be briefly closed and orders cleared prior to paying the dividend - so as the existing bids don't end up being a higher markup to the post-dividend NAV/U than purchasers intended.

Management fee of 1 unit (rounded down from 1.24) will be transferred after posting this but before paying the dividend.

HWM will be set to the adjusted NAV/U in the above report minus 5 LTC.  NAV/U post-dividend will also be that.

I'm not a share holder, largely because there are no shares for sale. A lowest ask of almost 100% above NAV/U is just silly. I'm not sure why you think that a split would in any way entice these people to part with their shares if they are unwilling to do so at all. However, if you are considering a plit, a 1:100 sounds more reasonable, otherwise you'd just be back in the same situation in a year or so.

I don't care, in general, that the manager receives a higher payment when that higher payment is clearly indicated by the contract and has been kept down by artificial means. The intent of the contract is clear but its lettering may not have taken into account the low liquidity and high prices.

.b

Yeah - it was never my intent that I'd miss out on a chunk of the management fee.  That happened because shortly after the start GLBSE closing happened - totally destroying all confidence in the market.  By the time confidence recovered, LTC-ATF had made good profits.  The closure of GLBSE also totally reduced the amount of trading available - meaning there was less scope for expansion by selling more units (raising capital I can't use effectively from investors would be stupid - though a lot of crypto-securities do it).

The other reason why volume of units sold never increased much was the decision by me to raise BTC-denominated capital by selling bonds rather than by selling more LTC-denominated units.  That retained far more of profit for LTC-ATF investors AND allowed them to keep the majority of gains made by LTC's surge vs BTC and USD.  In delivering those benefits to investors I did, however, penalise myself in terms of management fee - but that was a trade-off I accepted (as I hold over half of units of LTC-ATF anyway - so the benefit I gained on those far outwieghed a small loss in my effective management fee).

And yes - on reflection I agree that if a split is done a 100:1 one would make more sense, i navoiding the need for another one down the line.

Have updated spreadsheet for the dividend etc.  Right now status is:

Exchange-rate : .0234
Adjusted NAV/U : 49.902
Bid at : 48.9

I am for 1:100 split. This might make dividend reinvestment easier.

In theory LTC-ATF growth is exponential (i.e. profit is proportional to NAV), but if dividends are paid regularly it is linear. Dividend reinvestment can make it exponential again if there is some liquidity on market.

It may well make dividend reinvestment easier (right now, people with small holdings can't sell a small part of their holdings - e.g. if someone has 2 shares they can't sell 5% or 10%, they can only sell 0%, 50% or 100%).

But it wouldn't change growth significantly - as LTC-ATF wouldn't be selling new units just because they were cheaper.  The only scenario in which new units would be sold is if more LTC-capital were needed, and that needs 1 or more of the following to happen:

1.  LTC to fall a lot vs BTC, so we need more capital to secure our bonds.
2.  LTC-ATF to make heavy losses trading.
3.  Significantly more opportunities to trade to appear.

I'd like to think #2 is unlikely.  #1 is sort of happening (LTC is steadily falling vs BTC for approaching 2 months now) but at a rate where the profits we make are outweighing its impact.  #3 is slowly happening as well - we'll quite probably sell more bonds soon - but nowhere near fast enough to require selling more units (there just wouldn't be another dividend for a while is all).

If I thought there was any real likelihood of us needing to sell more units of LTC-ATF in the next few months then I wouldn't have paid a dividend last week.

WEEKLY REPORT

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A slightly slower week than the previous two but still respectable profits.  NAV/U grew by 3.86% (before management fee) of which 2.36% is estimated to be from trading and the other 1.5% from LTC's small drop vs BTC.

S.DICE

There was some debate on S.DICE recently - with the issuer attempting to get investors to replace the betting pool with funds from the next dividend.  This has now been resolved.  S.DICE is having a very good month so far - both in terms of trunover and also in terms of luck (the house is performing better than expectation - compared to last month where it performed worse).  With the fickle short-term nature of BTC investors I therefore think it likely the price will rise as dividend day gets nearer (unless luck changes for the worse).  We're therefore holding slightly more than usual of them (other times we hold extra its usually with the intent to sell immediately - this time I'm not in such a rush).

S.MG

At the beginning of the week S.MG was IPOed on MPEx - it's highly speculative investment being a games company with hardly any disclosed detail so far.  We took a small position at IPO - I'm expecting a chance to sell for a decent profit at some point, but maybe not for a while.  As it may well be a longish-term investment and is also on CoinBR I've listed it with the pass-throughs.  I'm not planning to run a pass-through to it as I expect very little market activity on it for a while.  It would be pointless me NOT disclosing it anyway - as it's the only stock on MPEx we don't have a pass-through to, so it would be kind of obvious what we had.

ODDS AND ENDS

Holdings on BTC-TC are higher than usual this week.  They are NOT in any of my new DMS securities (I'd love to invest a chunk of LTC-ATF capital in it - but it would be against the spirit of the rules preventing cross-investment into funds/securities from same issuer.  DMS does holds LTC-ATF.B1 but that's debt not equity so not an issue with the spirit of the rules - there's no issues over voting rights or valuation.)

Bid is at 50.45

A management fee of 1 unit is due and will be transferred after I click the Post button.

I'll see about getting the split issue progressed this week - and also something else of benefit to the fund.

Just a brief note.  You may have noticed LTC has had a fairly significant jump vs BTC.  The drop in NAV/U that caused has been cancelled out almost entirely by trading profits - so NAV/U at present is pretty much unchanged (under half a % change) from where it started the week.  i.e. we've made a bit over 3% so far from trading this week but lost it (more accurately, it isn't reflected in NAV/U) due to the ~25% rise in LTC.

WEEKLY REPORT

Apologies for this being late.  The spreadsheet below DOES represent the status as of Sunday.  I'll make a seperate post updating for the current situation (as it's changed significantly since Sunday - for the better).  Some of the new in this relates to activity THIS week - seemed silly to make a new post for it.  There's quite a bit of news this time (none of it bad) - so hopefully it was worth the wait.

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We ended this week with a slight loss of NAV/U (down 1.22%).  This was entirely due to a surge in the exchange-rate of LTC/BTC - if that were discounted then we'd have been looking at growth of just under 3.5%.  As I always say when this happens, it's the sort of bad news I'd like to have every week - a small reduction in number of LTC/unit in return for a massive increase in the purchasing power of those LTC.

CIPHERMINE

This news actually applies to this week - but seems pointless to wait until the next report to mention it.

One of the things I frequently do is buy on IPOs then flip the shares for a profit.  There are a few factors that absolutely MUST be in place for me to do this - and this one met all of the criteria comfortably (sorry for not listing them - but it obviously isn't something I want to give too much education on).

The first batch of 10,000 shares sold out very quickly at 0.67 each - with, as I'd expect, the bulk bought up by one person (7000+).  We were second largest purchaser with 2000 of them.  I flipped some of these at over 1.0 each before the second batch came out at 0.9 each - and replenished stock from that.

Generally when I buy on IPOs my intention is to flip fast for a reasonable markup - and I never mention it at all specifically in news.  On this one I intend to hold a significant chunk longer - as I believe the share price growth has a LONG way to go upwards.  Specifically I'll be looking to get rid of half of them at a reasonable markup (50%+) and hold the rest a bit longer for some more.  Were it not for my caution in terms of exposure per asset I'd have grabbed a LOT more of these.  Expect these to show up on long-term holdings in the next but one report (I won't be certain I'm holding them long-term until probably early next week).

When I post an updated current valuation after this post, about half the growth is from the trade we've already done in these this week - we've had some other decent trades as well.

S.DICE / S.BBET

I've taken the decision to keep our exposure to these low (we need some exposure for the pass-throughs).  There'll be no more end of week reports with 5000-10000 S.DICE held by the fund (above those needed to cover outstanding pass-through units).

WIth S.DICE there's a couple of reasons.  Evorhees, the asset issuer, has appeared increasongly disinterested in the asset and increasingly keen to pass costs on to investors even where it's dubious whether the contract allows it.  Just-Dice has emerged as, in my view, a very credible alternative to S.DICE for gamblers.  S.DICE looks like having a good dividend this month - so I don't expect any sudden massive fall in its value - and it will almost certainly continue to have a good market-share of gambling.  But I no longer have sufficient confidence it its price stability to maintain high exposure to it.  Were we an investment fund then I MAY still hold it - but we aren't and what few longer term investments we hold need to be significantly more stable (and significantly more profitable) than S.DICE.

With S.BBET there's no sign of it gaining any traction.  My view is that it targetted the wrong market from the start - gamblers who don't mind not getting defined odds.  That market's tiny compared to the fixed-odds market.  It may still end up doing well - but I'm not confident enough of that to carry significant exposure.

S.MPOE I have no problems maintaining larger exposure on.  It's price continues to slowly grow and its model is such that profits are inevitable (though a pretty piss-poor ROI).

Just-Dice

This has emerged as a credible competitor to S.DICE - with a model allowing fast investment and divestment.  I will be seeking clarification on withdrawal speed from it.  If withdrawals are near-instant (other than confirms) then I'll use this to hold mobile BTC reserves rather than BTC-E.  That's BTC that I hold ready to move where needed.  We'd still have some BTC on BTC-E - backing LTC buys to rebalance currencies automatically if the exchange-rate moves - but the reserve portion (typically 25-50 BTC) would sit in Just-Dice earning profit.  I would ONLY be depositing there what would otherwise sit inactive (and we HAVE to hold some totally idle BTC to allow fast movement when opportunities present themself). I would NOT be raising bond capital with the purpose of investing in Just-Dice - even if it made slightly more than we paid in interest (we won't know whether it does for a while) the CP risk would be unjustifiable for meagre returns.

This policy will incur no extra debt, generate some small additional profit and distribute our idle-capital risk between BTC-E and Just-Dice rather than having it all focussed on BTC-E.  BTC in Just-Dice would be listed explicitly in weekly reports along with our other cash holdings.

If withdrawals aren't near-instant then this will NOT happen at all : I need to be able to withdraw from there to exchanges in the same way that I can from BTC-E at present.

SHARE-SPLIT

A motion to conduct a 100:1 split on LTC-ATF will be raised shortly after this is posted.  This motion will be for two things to happen:

1.  All outstanding units of LTC-ATF to be multiplied by 100 (the split itself).
2.  The units authorised to be muliplied by 50 - increasing from 2500 to 125000.

Without number 2 we'd be in a situation where there were more units issued than were authorised - and where, without a contract modification, I couldn't correct that in any reasonable time-scale if we ever needed to sell more.

I'm confident I've easily proven that I have no propensity to sell units just for the sake of it - not only is it horrible practice but it harms me personally by diluting my own holdings.  I've only ever sold units when there was a sound case to do so - and will continue doing so (heavy losses, massive fall of LTC vs BTC and massive increase in LTC-denominated investment/trading options remain the scenarios in which it would occur).  By multiplying by 50 rather than 100 I still maintain the ability to sell more if needed - but actually halve the amount (in value) I can sell - so even if you don't trust my judgement I'd be reducing my ability.

No change to the contract is proposed - my ability to authorise (as opposed to issue) more units would be massively reduced but I don't believe that likely to be a problem.

The vote will run until midday Sunday and any split, if approved, would occur AFTER the next weekly report (and AFTER payment of any management fee).  All market orders would be cleared during the process - so no need to be concerned if you have Bids up.


WEBSITE

Work has commenced on a website that will cover all my investments (DMS and well as LTC-ATF) as well as being a general port for cypto-currency securities.  Initially, at least, the majority of content will be written by me.  A professional developer is doing all of the artistic/design/implementation work.  All costs of this are (and will continue to be) paid by me personally.

This is still some time away from launch - at present the focus is on branding/logos/style issues - but my hope is that this will give far greater exposure to LTC-ATF and LTC-ATF's securities (and also to DMS of course).  This, together with the share-split (if approved) willl hopefully add liquidity to LTC-ATF on the market as well as significantly raising the price at which it trades (with its strong historical results it could easily be trading a lot higher than it is - the high unit price and low visibility of LTC securities are, in my view, what has hampered this).  That can only be good news for current investors - as would any increased activity on LTC-ATF's secondary securities (which I fully intend there to be more of).


LTC-ATF.B2

In the next few days I intend to launch a second bond.  This will be on BTC-TC and paying a lower rate than LTC-ATF.B1.  As LTC-ATF can now get listing fees refunded, this becomes feasible.

No further capital would be raised via LTC-ATF.B1 (unless it proved impossible to do so on LTC-ATF.B2) but there would be no forced recall on LTC-ATF.B1 as that would be unfair on investors who bought it at well over face value.  Voluntary sell-backs of LTC-ATF.B1 would gradually reduce the capital raised by it.

The advantages of it are:

1.  Lower capital cost.
2.  Easier maintenance for me - I can leave Asks and Bids up without having to worry about exchange-rate moves causing them to generate a loss for us.

I'd initially only be selling 50 BTC worth (we could use that now) and would issue more, as previously, when we either needed more capital or managed to buy-back LTC-ATF.B1


ODDS AND ENDS

No management fee and HWM remains unchanged (as we made a loss).
Will post Bid in a new post with update for current valuation.

Exchange-Rate : .028
Adjusted NAV/U : 53.514
Bid at : 52.4

LTC has risen slightly verus BTC so far this week, but we're still up about 5% on the week so far.

Vote passed??
If so, what's the ETA for the split? Thursday? Friday?

WEEKLY REPORT

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This was undoubtedly a good week for LTC-ATF : we achieved growth of 8.94% despite LTC rising by 10% vs BTC.  Had the exchange-rate not changed we would have grown by over 10%.

There have been no significant developments to report since my update in the middle of the week.  We've now divested ourselves of most of our CIPHERMINE holdings at a significant profit - some of that won't show up until next week's report.  The price of it rose above what I'd anticipated in the short-term (largely because whoever bought the bulk suppressed supply by not listing his for sale) so I was happy to sell more ours than I'd initially intended.  I'll happily take the profit now rather than over the year it would take with their optimistic projections (or the far longer period it would take with any more realistic model).

My focus over the last days and coming weeks has been on my website.  The name has been chose and domains registered (same name with a bunch of different TLDs) plus hosting acquired.  By the end of this week logo and styling should largely be complete and I'll then spend probably most of a week writing initial content so it launches with enough on it to make it worth visiting.  Once the site is complete I'll move to releasing weekly reports there (though with a link to each one posted here).  Discussion can still continue here - but reports will then be more clearly laid out and it'll be far easier to find past ones.   The website should help LTC-ATF by increasing awareness of our various products (including, of course, future ones that don't yet exist).

The vote on whether to conduct a 100:1 split passed with no votes against.  I will be contacting burnside after making this post and asking him to implement it at his convenience.  He now has a script to it which will modify all market orders - so the order book will NOT need to cleared.  I will, however, be reducing LTC-ATF's own buy-back bid until after it just to be on the safe side (so you'll see a bid for 25 units rather than 100).  Once the split is complete I'll post an update of current NAV/U and also make a news post.

I hope to get our new bond listed for moderator on BTC-TC today.  I'll be looking to sell 50 BTC-worth initially - opportunities for trade have increased so we can use slightly more capital.  There'll likely be more sold in the near future - I'm looking to expand trading to Havelock and also launch a new pass-through operated by LTC-ATF, both of which will require a bit more capital.  With the recent rise in LTC vs BTC there's no problem at all covering that - but it means there'll likely be no dividend for a while.  Dividends are, of course, only good news for those of you who can outperform LTC-ATF in your own trading.  For those of you who prefer dividends based on some principle you'll be able to simulate them by selling off a percentage of your holdings each week - the stock split makes that possible.  If you can sell at above NAV/U (very likely) then it'll work out better for you than if dividends had been paid.

Bid is at 54 (spreadsheet above would suggest lower but we've made profit since the report - even after a firther 10% rise in LTC vs BTC).
2 units are paid as Management fee this week.

What's your plan with S.MG PT?

No pass-through planned to S.MG - I'm not expecting enough market activity to be worth running one.  The S.MG we hold are just for LTC-ATF to make a profit from (we've sold some off at 50%+ profit but aren't really in a rush to sell the rest).

Since you mentioned it, I will likely be offering a S.MG PT sometime soon. I know it won't be popular, but I think it could turn that way eventually.

Yeah - I don't expect a lot of trade on S.MG yet but down the road it could well become pretty active.

I'll probably end up doing a pass-through on LTC-Global eventually - but it's low in my priority list unless I get multiple requests for it.  I have no intention, at present, of LTC-ATF moving into running pass-throughs on BTC-denominated platforms.

WEEKLY REPORT

As usual all figures represent the status as of Sunday (yesterday) evening.

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Another good week for the fund with growth of 6.27% before management fee.  Growth would have been higher (just under 9%) except LTC rose significantly vs BTC as BTC fell vs USD.

The 100:1 split went through smoothly and I only needed to change three numbers in my spreadsheet (outstanding shares, authorised shares and HWM).  The spread on the market has tightened and a few shares are already changing hands - so clearly the change has benefitted some current investors (who can sell partial old units) and some new ones (who can actually buy now).

We sold all our Ciphermine - so they don't appear in long-term holdings (which I'd said was likely).  With the release of a 3rd batch of shares I judged it better to divest totally of them rather than end up stuck below a ceiling if the third release failed or was slow to sell out (which appears to be the case).  A significant chunk of our high profits this week and last came from these - expect profits to drop back to more normal levels (my expectation is for weekly profits of 1-3% ignoring exchange-rate impact but that should NOT be taken as any sort of guarantee).

Our LTC-ATF.B2 bond is up for moderator approval on BTC-TC now.  Currently it has 4 YES votes and noone has raised any issues/complaints about it so it will hopefully be approved before long.  That will reduce the cost to us of future capital from 0.6% per week to 0.35% (assuming we can sell at that rate).  As has been previously stated I won't be recalling LTC-ATF.B1 - even though it would likely make financial sense for us to do.  I'd always (honestly) given the impression the bond would run for a long time and do not intend to forcibly change that.  I will, however (assuming LTC-ATF.B2 sells decently) offer buy-back at 100% rather than 99% on it as a small incentive for holders to sell back to the fund if/when they choose to divest.

Initially I'll be selling 50 BTC-worth of LTC-ATF.B2 - which can be used for current activities.  I'll then sell a second batch when our next security (a fractional ASICMINER pass-through on LTC-GLobal) is launched - to ease cash--flow for that.  Further sales will be as and when necessary as usual.

For now I'm holding off on releasing dividends - the recent rise in LTC's price vs BTC is by no means solid : occurring as a reaction to BTC falling vs USD.  Last night we clearly saw that when BTC started to make a recovery LTC lost back some of that ground.  As ever I want to avoid the scenario where I dividend out capital then have to sell more units - I'm firmly convinced that diluting  by selling more units is something ALL investors should want avoided and will remain as cautious as I need to be to keep the risk of that to a minimum.

My website's coming along fine - and is on schedule for public release at the end of this week.  There may still be one more weekly reportd published here before they're moved to the site (it'll take me a bit of time to produce a decent template for the financial details).  Links will still be posted here weekly.

Management Fee : 171 units - sounds a lot until you realise its less than the 2 old units I got last week.
Bid at : 0.575 (we're slightly up since the report was frozen yesterday)

Well, I'm interested in buying early, and I'd rather pay passthrough premium then pay monthly fee on CoinBr (fuck that shit).

WEEKLY REPORT

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Not much to report this week - it was a slow but steady week with no great excitement.  LTC fell vs BTC (as BTC made a bit of a recovery) and we ended with 4.73% growth (before management fee) of which ~2.41% was from trading and the rest due to the exchange-rate movement.

Our initial batch of 5000 LTC-ATF.B2 sold out in an hour and I sold a further 2000 into bids at a bit over face value - as we'll need more before long and it works out cheaper to sell now whilst orders were available and give (some of) the extra back in dividends.

My website's not ready yet - I got a LOT less done this week than I planned to.  Main reason was the start of the Ashes (that's cricket between England and Australia for those who don't know).  I promised myself only to watch the interesting stages - but that turned out to be most of the 5 days.  I'm looking into displaying our accounts live when I get everything done - so you'd be able to check on the status of it at any point in the week.  It would show same information as now, hopefully along with some pie-charts showing how funds were split between sites etc.

Management fee of 131 units will be transferred after posting this.
The fund's own bid is at : .594

WEEKLY REPORT

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Sorry that this report is delayed.  I've had problems with my laptop overheating and slowing right down to a crawl.  I've bought a new one and got nearly everything transferred over to it - only problem has been with moving my copy of Office over to use the Excel spreadsheet.  Think I may have to bite the bullet and just buy a new license - as the existing one has already been used on two computers so won't validate on a third.

Only news of any significance last week was the closure of S.DICE - and hence our pass-through to it.  We made a small profit on the shares we held ourselves, but closure of our pass-through was done without fee (per the contract) so we made (and will make) no profit on the shares held by all our investors.

Profits were slim for the week : 1.33%.  We made a bit more (2.22%) in trading profit but that was cut back by LTC rising vs BTC.

With LTC continuing to stay strong vs BTC and with the closure of S.DICE meaning we have less need of funds to manage our pass-throughs I've decided to pay a dividend of 0.05 LTC per share.  That will be paid out shortly.  NAV/U will still be slightly above what it was after we conducted the share split - and we're still good for supporting the extra bonds I expect to want to sell in the near future.

Management fee of 38 units will be transferred after I post this (and before the dividend is paid).
Bid will be at .555 (reflecting -.05 for the dividend and +.005 for the ~1% we're up so far this week).

Not sure why, but none of the embedded images in my posts are showing up on here - though they show fine in the LTC-ATF thread on the LTC forums.  Guess it's to do with the stupid anonymising that they add onto links here.

EDIT: If anyone wants to see the reports they show up fine in the LTC forum thread : https://forum.litecoin.net/index.php/topic,657.210.html
Expect the problem will fix itself fairly quickly - it was working fine half an hour ago.

WEEKLY REPORT

As usual figues represent the fund's status on Sunday.

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Good news is I've finally got everything transferred over to the new computer - it's amazing how fast a new computer is when you've been using an old one for a while.

Growth this week was 2.61% -  though 1% of that was due to LTC falling vs BTC.  The bubble in many securities is likely to burst before too long, so I'm having to be a bit careful not to get caught holding in something that's overpriced by 500% when it collapses.  There's no shortage of new IPOs as well - just have to be careful to pick the ones that will actually succeed (which for us means rise in price post-IPO - very few will succeed in the sense of making a profit in the long-term for investors).

I've sold another 8000 LTC-ATF.B2 (this was after Sunday so report doesn't reflect it) and moved most of the raised funds to Havelock where we will now have a presence trading as well.  I may well sell more later in the week once our next security (an Asic-Miner pass-through on LTC-Global) is ready.  I hope to have that ready for moderator approval by the weekend.  As with all pass-throughs there's minimal risk for LTC-ATF in running it - just some extra capital needed to process dividends and handle sales.

I also have some more new securities upcoming that will be run by LTC-ATF (initially two pairs - one set on LTC-Global and the other on BTC-TC).  Those are a bit different and I hope/think they'll be fairly popular (think a mix between a pass-through and DMS - though with nothing to do with mining).  Can't give more information until they're up - to avoid someone else beating me to it.

Website progress has been slow, but now the new computer's all set I'm working back on it again.  Would expect this week's report to be on the forums then subsequent ones on the new website.

Management fee of 74 units will be transferred after this is posted.
Fund's own buyback bid at .57

Would you care to explain how the last weeks(31 july repport) result is a profit, as far as i can see it looks like the gross assets value have gone down on both BTC and LTC and that the NAV is down to, and for some reason you don't use the adjusted NAV from previous week as old HWM this week like you always have done in your repports before ?
The value(in LTC) of 823.5702 BTC might be greater this week than 893.7899 BTC was last week thou to pricechange BTC/LTC but that still don't explain why you dont use last weeks NAV in the calculations and that one's still down from last week...

Date                     Gross assets BTC    LTC              old HWM            adj NAV             Profit
 2 july repport              731.8706         24 154.15     0.5148988513    0.5502003063   8,94%? 8,17%
 8 July repport              854.9658         23 881.73     0,55020031        0,58127047      6,27%? 5,64%
15 july repport             854.4514          28 293.09     0,58127047       0,60599474      4,73%? 4,25%
25 july repport             893.7899          27 930.93     0,60599747       0,613322737    1,33%? 1,21%
31 july repport             823.5702          27 636.58     0,56322737 ??   0,57644914      2,61%? 2.34% -7,01%

Why is the old HVM value used in the 31 july repport 0,56322737 instead of 0,613322737(the adj NAV from previous week) and why is the weeks result shown as a profit of 2.34%(2,61% ?) instead of a loss of 7,01% like it would have been if you used the correct? adj NAV like it has been done in all previous repports ?

A 0.05 dividend was paid ...

Oh ok your right i see that 2013-07-25 19:00 0,05 LTC per share, that explains it.

Assume that explains it - after I pay a divend the hwm is reduced by the amount of the dividend.  If it's still unclear let me know.  Can't give an accurate update as not at a computer (on mobile at the pub) but we're up 6 or 7 percent so far this week mainly from flipping the labcoin ipo.

So what do you guys think, will BTC Growth be a strong competitor to LTC-ATF? Since LTC-ATF is currently traded way above its NAV, is BTC Growth going to be a good alternative for new investors?

WEEKLY REPORT 4/8/13

This is the rather late report for the status of the fund as at last weekend.  Will be posting this week's immediately afterwards.  it may seem silly me posting two - especially as the contract allows me to post every other week anyway.  However I'm trying to keep weekly snapshots on record for the purpose of tracking past performance.

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Growth of 5.7% this week - most of which came from trading (4.88% estimated).  The NAV was higher for part of the week but dropped slightly at the end when LTC recovered some of the ground it had lost vs BTC.

Management fee of 158 units will be transferred.

Just a note on a small error in the above spreadsheet (it has no impact on results) - the LTC value of Havelock holdings is calculated incorrectly (BTC one which is the one that matters was correct).  The error was noticed and fixed but appears I used an old copy of the report.  Difference is tiny and the value isn't used in any totals - so I'm not going to redo the reports just to correct it (it's fixed in the current week's report which is coming shortly - was just doing last minute double-checking that it was correct and noticed I'd used uncorrected version of last week's).

WEEKLY REPORT

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Much weaker results this week : 2.45% growth but under 1% came from trading with the rest from LTC falling vs BTC.  There's a specific reason for the poor performance.  One of the things I do is trade the spread on a few securities that have a very wide spread.  One of these for quite a while has been Bitpride on Bitfunder (a horrible investment that's a t-shirt seller that raised thousands of BTC at IPO but has had declining sales).  We've done well on it - often flipping shares for 50%+ markups but the price of it finally collapsed after even worse results than usual.

When the price collapsed not only did our existing holdings lose value, but we got more shares dumped into a bid.  I made the call to liquidate our position totally and got rid of the lot at a loss.  We definitely made decent profits overall on it - but when tarding junk securities there's always going to be a risk of taking a hit when confidence in it finally collapses.  That proved to be the case here - not the first time it's happened to us and it definitely won't be the last.  It's a risk we take/price we pay for that particular strategy - which only works on shares which are pretty shit as they tend to be only ones with very wide spreads.  I'm satisfied I made no errors on it - just this week happened to be the one where we gave back a bit of what we'd made on it to get out of it at the end of its useful (to us) life-span )it isn't impossible it'll be worth trading again later - but if so it won't be in the range we were previously trading it in.

We're back above the NAV/U at which I last issued a dividend, however one will NOT be made at present.  Two reasons for this:

1.  We have some new securities coming out that can use more capital.
2.  LTC has fallen vs BTC increasing the percentage of NAV/U that bond-debt represents.  It's in our comfortable zone at present but would rise above my desired target range if we paid a dividend right now.

So there won't be a dividend until we've made a fair bit more growth and/or LTC has risen back a bit vs BTC.

Unfortunately I failed to get our ASICMiner pass-through out to date - I got side-tracked on other things (some RL work then bot testing for DMS).  That security and 4 more new ones (all run by LTC-ATF) will be my main focus in the next few days.  The other 4 in particular are, in my view, likely to attract decent volume and potentially bring in significant new profit for LTC-ATF.

The transfer bot for DMS is now functional - automatically handling transfers of shares for DMS.  It will be updated to also do some work for LTC-ATF - allowing trades of our ASICM passthrough shares for ones on BTC-TC and also, later, allowing trades on the other 4 new assets we'll be running.  Unfortunately the developer won't be able to work on it next week so it'll be a few weeks before it'll do the work for LTC-ATF.  All costs/payments to the developer for his work are being paid by me personally, no fee will be charged to LTC-ATF (or DMS for that matter).

Management fee for this week is a paltry 70 units
The fund's own bid is at .607

hey deprived, how we doing the last few weeks?  Lot of change in LTC/BTC, lots of volatility in a whole bunch of securities recently

Yea looks like reports is a bit delayed, 16 days since the last one now so the minimum of a report once every fortnight has not been held this time....

Will catch up today.  The fall in LTC/BTC has grown NAV/U (expressed in LTC - value has fallen if measured in BTC).  The collapse of many mining securities hasn't touched us - other than making trading profits very slim (not many opportunities to trade profitably in a falling market).  The general volatility has been hard to benefit from when most of it has had no obvious reason.

WEEKLY REPORT (W/E 18th August 2013)

Apologies for reports being late - even when I don't publish a report I save a copy of the spreadsheet on the Sunday so it can be produced later.

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Just over 2.5% growth this week - with ~2% from trading and the rest from the small fall in LTC vs BTC.

As this report was significantly late I'm foregoing the management fee of 72 units that was due (theoretically I'm taking it then giving it back - as the gain from it will show up in the next week's report.  That saved me changing formulas for calculating adjusted NAV/U for end of this report and beginning of next).

WEEKLY REPORT (W/E 25th August 2013)

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2.3% growth this week - however only about 0.63% came from trading profits with the remainder due to LTC falling more significantly vs BTC.  Do remember that when I say 0.63% from trading profits there was actually a bit more made from trading - that figure is after deduction of all dividend payments made on bonds.

Management fee of 66 units for this week IS being taken  (you'll see HWM for start of this week was set to UNADJUSTED NAV/U from last week - making sure no management fee was taken on the gain in NAV/U from me not taking last week's fee).

Will update current spreadsheet to reflect the management fee and also some profitable trades that went through overnight then will make a third post - giving more report details and also current NAV/U, current bid etc.

Exchange-rate : .0208
Adjusted NAV/U : 0.6611

At present we're up ~2.2% on the week with an estimated 1.37% being from trading and the rest from LTC continuing to fall vs BTC.

Fund's own bid is at : .648

Trading has been a bit trickier than usual last few weeks to crashes in the prices of various securities (strangely, some of the worse ones managed not to fall).  As we don't hold long-term investment positions much this sort of thing doesn't impact us to the extent it does actual 'investment funds' - unless, of course, we get caught holding securities when they crash.  That wasn't the case here - although we DO have significant holdings for a change (and they've gone up since last report) they aren't in the ones that crashed (exception being ASICMINER where we did pick some up during the crash - and may not end up making much profit on them).

The crash itself is no surprise - it's largely grossly overvalued mining stuff losing value so as only to be hugely overvalued : the real crash hasn't happened yet (and likely won't for another month or two).  I DON'T include ASICMINER in the 'grossly overvalued' category (it may well be overvalued but, if so, it isn't grossly so).

The new ASICMINER pass-through still isn't up for a few reasons:

1.  I had significant RL work the last few weeks which wouldn't have let me commit to the significant time needed after it launches to process transfers in and maintain constant bid/ask walls - the crash in price exascerbated this as it meant far more attention would need to be spent.
2.  Our new PT security is currentl glitched - I started updating it (did a few sections) but the actual contract can't be amended.  Somehow it's gone into a status as though it had been trading - where contract is locked against changes.  Will get burnside to fix this.
3.  I've received updated software which will allow cross-platform automated share swapping - once tested this will make life much easier for me to run the pass-through and also simplify the contract and explanatory notes I need to provide to investors.

Some clarification on points 1 and 3.  Initially (at least) the pass-through will be to shares of the pass-through on BTC-TC NOT to actual ASICMINER shares.  This simplifies life for me in a few ways:

1.  Transfers are much simpler.
2.  Obtaining new backing shares is much easier.

Investors will be able to transfer shares in both directions between the BTC-TC ASICM pass-through and our one.  I had been planning to do this manually initially - but now I have the updated software to test it makes sense to get that done first and start off with it already automated.  That reduces work-load for me and also allows the fee per transfer to be a lot lower.  Our pass-through will be a 100:1 split (each share in it representing 1/100th of a BTC-TC pass-through share).  Transfers will have the minimum possible fee - of 1 of our shares per trade.  That makes the maximum fee for a transfer 1%.

By doing this I largely sacrifice the ability to make profit for LTC-ATF by selling at a markup (we can safely assume the spread against BTC-TC will be arbitraged right down) - so our profit will come from the 3% fee on dividends.  That offers much better value for investors - and should also offer much better liquidity (as anyone who wants to can arb against the spread on BTC-TC).  In general when offering services such as pass-throughs I'd prefer to take a small percentage on a larger volume whilst offering good value than attempt to screw people by marking things up a lot.

Unfortuantely even with automated transfers there's still significant overhead for me - for each person who wants to do transfers I have to link their BTC-TC and LTC-Global accounts manually so the bot knows where to send to.  And that means I have to deal with a PM from each user, verify it vs an actual transfer and update the database for the bot.  Which is why the pass-through couldn't go live when I knew I wouldn't have much time - as I have to do one of linking accounts or manually maintaining bid/ask walls.

I still have some RL work to finish off today - then should be free until late next week (when I'll have some work to do again) so will try to get the modified bot tested over the weekend and the Security details updated.

Rough priority list for my work on securities (other than the usual daily trading etc which always occurs) is :

1.  Test modified transfer bot.
2.  Get ASICM pass-through finalised and up for approval.
3.  Get other new set of securities done.
4.  Get my website completed - It's frustrating that the website is mainly ready but needs to me to spend a few days working solidly on content before it can launch.

Notification of Testing

Over the coming weekend (31st August and 1st September) I will be testing a modified transfer bot that can automatically handle trades between BTC-TC and LTC-Global.  Testing may extend past that if necessary.

This testing will occur on the LTC-ATF.B1 and LTC-ATF.B2 securities.  Various accounts controlled by myself will be transferring these securities around - and extra of each security will be temporarily issued for the purpose of testing.

This testing will have no lasting impact (all extra sharcs issued will be returned prior to dividend payments) but will mean that at times the shares outstanding on LTC-ATF.B1 and LTC-ATF.B2 may significantly vary (testing isn't only of 1:1 exchanging but also of X:1 exchanging with fee deduction and return of shares not amounting to sufficient for a full trade to occur).

As well as shares outstanding varying in the securities themselves there will on occasions also be changes in shares held by the DMS accounts on both BTC-TC and LTC-Global.

All testing will be on accounts controlled by myself and manual transfers will be used to return all share counts to their correct values at the conclusion of testing (and before any dividend payments).

WEEKLY REPORT

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Growth in NAV/U (pre-management fee) was 3.9% with an estimate that ~1.75% was trading profits and the rest resulting from the continued decline of LTC vs BTC.  With BTC rising steadily vs USD it would be expected that LTC will continue to fall vs BTC due to arbitrage unless/until something happens to cause a rise in LTC's value.

If this continues much longer it does pose a potential (minor) problem to LTC-ATF.  Under the terms of the contracts for our bonds we are committed to ensuring that the value of our issued bonds does not exceed 150% of LTC-ATF's own NAV (Assets we manage less the value of our liabilities).  As LTC falls vs BTC that ratio increases - and currently stands at 108.68%.  That's not a problem at present - being barely above the 75-100% range that I consider to be the sweet-spot.  But if LTC declines much further then we'll get near the 150% point.

If that point is reached (and it would be reached if LTC fell to around .013 vs BTC - lower than that if we make more profit in the meantime) then the fund has to do one of two things:

1.  Recall bonds.
2.  Issue more LTC-ATF units.

As there's no way to selectively recall part of an issue and, in any event, we can use all the capital we have I would go with option 2 - and sell more units into existing bids.

Hopefully it won't come to that and if it does happen then it isn't as bad as it may seem.  Whilst it would dilute existing investment that is balanced by two factors:

1.  The new units would be selling at above NAV/U and so generate an increase in NAV/U.
2.  When LTC falls vs BTC profits tend to rise (expressed in LTC).  That's because most of our trading is done in BTC - and with a lower exchange-rate each 1 BTC of profit translates into more LTC profit and hence a larger percentage increase in NAV/U.  The massive rise in LTC vs BTC is what caused us to be unable to generate the 5-10% profits we were making earlier on - if LTC does fall right back vs BTC then such profits would become possible again.

Notwithstanding the above I'd still prefer not to need to issue more units - and will only do so if it becomes essential to do so and then would only do so to the extent that I had to.  The commitment to maintain that ratio is a key one from the perspective of bondholders (it's what ensures they can't end up with LTC-ATF defaulting on them if some trades go wrong) and is not one that can be avoided.  It's also a sensible one from the perpective of LTC-ATF investors - as it avoids the potential of massive percentage loss of NAV/U from a few bad trades.

Given that I'm having to consider this possibility does this mean I was wrong to pay a dividend in July?  I don't think so.  When the last dividend was paid the exchange-rate was at .0032 and appeared to have stablised in that area.  I don't think I could reasonably be expected to predict a fall in the rate to .0013 within 2 months (which is what would need to happen for more units to be issued).  Whilst it was always a possibility (everything's always a possibility) retaining unused capital solely to protect against a drop of that magnitude would, I believe, have been unreasonably cautious.

Let's hope LTC doesn't fall faster than we make profits - but if it does then hopefully it's at least clear what will happen (and why).  I would NOT be able to give advance warning of such sales if the ratio was actually over 150% (I would have to immediately fix it).  if the ratio was near 150% but below it then I'd try to give some advance notice to maximise the price new units sold at.  Note that I have the right to personally purchase 25% of newly issed units at NAV/U - I would not exercise that right for small batches sold in a rush (nor would I place bids to buy them ahead of others - unless there were insufficent bids over NAV/U otherwise).  I WOULD exercise that right if a larger batch were sold with advance notice - to maintain my own equity in LTC-ATF.

Management fee of 111 units will be transferred after this is posted.
Fund's own bid is at : .657

Back to testing the new transfer bot.

Just a brief update.

As you may have noticed LTC has risen significantly vs BTC.  That means two things:

1.  The rise reduces growth (expressed in LTC).  Recent weeks have seen growth boosted by LTC falling - looks like this week will be the opposite.  At present despite having made over 2.5% trading this week we're only up 0.14%.
2.  This rise greatly diminishes the likelihood of needing to issue more units.  At present the bonds:NAV ratio is at around 93% which is pretty much exactly where I like it to be (75%-100% range is my target).

For those new to the fund let me explain about our currency exposure.  We raise most of our BTC-denominated capital from bonds - which generate liabilities cancelling out our BTC-exposure on that capital.  But we can't raise ALL our BTC-denominated capital from bonds as that would potentially leave bond-holders exposed in the event of a fast depreciation in the LTC/BTC exchange-rate coupled with even a modest trading loss in BTC-denominated investments.  So we always maintain around a 15% exposure to BTC - with orders set on BTC-E to keep us at that level of exposure if the exchange-rate moves significantly.

Because we do have some exposure to BTC any rise in LTC vs BTC decreases our NAV/U (our BTC-denominated investments become worth less LTC) and any fall in LTC vs BTC increases our NAV/U.  For small movements this has negligible impact but for larger moves in the exchange-rate it does produce a noticable effect.

Long-term the trading performance of the fund has had far more impact than the exchange-rate : we've delivered over 800% profit DESPITE LTC massively rising vs BTC over the life-time of the fund (that rise means the profit delivered measured in LTC has been REDUCED from what it would otherwise have been).

Personally I prefer weeks like this one so far (no real change in NAV/U with decent trading profits being cancelled by a rise in LTC) to ones like last week (higher growth - but largely due to LTC falling vs BTC).

WEEKLY REPORT (Data for 8th September 2013)

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The week ended with only 0.56% growth in NAV/U but with estimated profits from trading of 3.01%.  The difference, of course, being LTC rising significantly vs BTC.  The exchange-rate is pretty much back where it was 2 weeks previously - and it can be seen if you compare NAV/U now (.6746) to that at the start 2 weeks back (.6481) that we've grown a bit over 4% as expected with pretty much exactly the same exchange-rate.  Actual growth doesn't exactly match my stated trading profits for a few reasons:

• They're estimates.
• Exchange-rate isn't exactly the same.
• Percentage of holdings in each currency has moved.
• My estimated trading profits are pre-management fee whilst the change in NAV/U over any longer period has had management fees deducted.

I'm still no nearer to getting the new securities done.  Problem I've run into is a practical one at my end.  The plan was to move the existing bot over to a different computer/net connection whilst testing the new bot (all the transfer bots were intended to run on the other connection anyway).  The second net connection is a backup mobile broadband connection I have.  Unfortunately in testing the move it became apparent that there's far more bandwidth being used than that connection can support - it only has a pretty small allowance per month (and ridiculously expensive fees for any excess).

At present the only API call to obtain your transaction history provides the full history - which is already well over half a MB for the DMS account.  When you're calling that every few minutes it eats up mobile broadband allowances very rapidly (a test-run showed it using half a GB per day) and that figure is only going to increase.  The ASICMINER pass-through would need a similar download on the main LTC-ATF issuer account (which already has a pretty large history) and on a second account (so as to support transfers in both directions).  The other new set of securities need similar downloads on 2 more new accounts.

Burnside has indicated he'll provide an API call that only provides a few days data - which will solve that issue and allow us to finally get things running.  The ASICMINER pass-through pretty much needs the automated transfer facility so as to allow a market on LTC-Global to be made by any investor who wants to : with the price of the underlying share moving a lot AND the exchange-rate of LTC/BTC being very fluid it's not something I could personally market-make on 24/7 without charging massive premiums on LTC-Global which I don't want to do.  I'd like the prices on LTC-Global to stay very close to the ones on BTC-TC with our profit coming, not from price-gouging on sales, but from a small cut of dividends and a small fee for transfers in both directions.  I believe that is far better for investors and also offers better long-term profit for LTC-ATF.

Longer-term I still intend to develop a proper trading bot with BTC-E integration at which point it could automatically arbitrage for LTC-ATF whenever exchange-rate and/or price-movements made doing so profitable.  But that's still a fair way off.

Management fee of 16 units will be transferred shortly.  I'll then post a brief update with current NAV/U and the fund's own bid price (there's been hardly any net trading profit this week - what profit I made has been wiped by having to mark down some shares I bought with bad timing - but NAV/U will still be up a bit because of LTC falling vs BTC).

Exchange-rate : .02
Adjusted NAV/U : 0.6858
Fund bid at : .672

Before management fee, NAV/U is up by just under 2% on the week with an estimated .45% from trading and rest because of the drop in LTC/BTC exchange-rate.  It's better than I thought but still not a very good week.  Those figures already include full provision for tonight's LTC-ATF.B1 dividend so shouldn't change much by the final report (unless we get some good trades, the exchange-rate moves or price of shares we hold falls and they have to marked down).

WEEKLY REPORT (status as of 15th September 2013)

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No real change since my update on Saturday - think we made a tiny bit more profit and the exchange-rate changed very lightly.  Final results were 2.0% profit of which only 0.48% was from trading with rest due to LTC's drop vs BTC.

Management fee of 58 unit will be transferred shortly.
Fund's own bid is at : .673

As there's nothing new to report I'd like to raise a suggestion I've been considering for a while - ever since LTC last bubbled in fact.  When LTC rises massively vs BTC and is likely to crash again it puts investors in a bit of a bad spot (those who don't like missing out on profits anyway).  IF they cash out of LTC-ATF they can make a decent profit (in LTC) by swapping to BTC then back to LTC after the bubble bursts.  But in return for taking that short-term profit they then have to try to get back into their LTC-ATF position.  This can be expensive and/or very hard in a relatively illiquid market - and it can also cause major price movements when nothing has changed in respect of the actual asset itself.

The same situation can arise for other reasons - ANY reason, in fact, where someone has a short-term profitable position but wants to maintain (or get back) their LTC-ATF position.

Now at present there's a couple of ways to do it:

1.  Sell into the market then buy back via the market.  This would likely be fine for small amounts (a few hundred shares or less) but would lead to massive losses if done with any holding in the thousands of shares.
2.  Take out a loan (and use the LTC-ATF shares as collateral).  Whilst you almost certainly won't get to borrow against full market value of the shares (it being a lot higher than NAV/U) I expect you'd get very near NAV/U.  Except that if LTC is in the middle of major price movement most lenders will be very wary of LTC-denominated collateral.

So in the most significant scenario (major upward movement of LTC that is likely to crash back down + significant holdings) neither of these options really works.  I'd like the fund to offer an alternative.  It's really simple.  Investors would be allowed to:

Sell their shares back directly to the fund.  They'd receive 95% of the NAV/U per share (lower than usual) but also an option to buy up to the same number of shares back at any time in the next month for whatever the current NAV/U was at the time of repurchase + 10%.

It should be pretty obvious how that helps the investor - it allows them to use the capital tied up in their shares whilst reserving their place in the fund - but how does it help the fund?

Well, obviously the fund makes a profit on the spread.  But to understand how it works very well for the fund you need to look at what happens to the fund's capital requirements with a moving LTC/BTC exchange-rate.

When LTC rises vs BTC our debt:equity ratio drops - as we owe same amount of BTC but our own LTC-denominated holdings are worth a lot more BTC.  That causes our effective BTC-denominated capital to rise (and that's what matters in trading terms as we don't do a lot of actual LTC-denominated trading) and we end up in a situation where we have more capital than we actually need, so at that stage buying back units is what we ideally want to do : so allowing people to cash out then is not just acceptable but positively good for everyone else (and doubly so if it's at a lower price than usual).

However if LTC then falls again vs BTC then suddenly we need (or want, or ata least don't mind having) that capital back again.  Now obviously in theory we'd prefer to sell into the market at 2-3 times NAV/U than by allowing execution of an option at 10% over NAV/U.  But fact is that without something like this we'd never have bought the units back in the first place (they'd have been sold into market orders or used as collateral - noone is going to sell back to the fund at NAV/U without the right to get back in).

And in LTC terms not only are we making the 15% spread but if the units were sold back when LTC was high then repurchased when LTC was low then the NAV/U at reinvestment will be higher (in LTC terms - lower in BTC terms of course) than when the units were bought.

The proposal essentially allows existing investors to divest then reinvest (to make profit during the divested period) with the cost to them being lower - but with the cost (to them) of doing it going to LTC-ATF rather than either to market traders or to those giving loans (or, most likely, them just missing out on other profit due to the difficulty of getting back in).  There'd be limits on it - so it would only be available if it didn't take the debt:equity ratio too high, it would be first-come-first-served, it would be manually managed and all such trades would be documented in our reports including who did them (it isn't impossible I'd do it - though that's a lot less likely now than it was in the past due to my LTC-ATF investment only being a fairly small part of my portfolio now).

Any thoughts, comments or suggestions?  This isn't urgent (right now debt:equity is too high to do it - am planning ahead to whenever LTC gets on Gox or bubbles for some other reason) and I don't intend on having a vote soon - but it's something to consider anyway.

LTC-ATF Buys shares + Options in BMF

I don't generally disclose investments/trades we make but am disclosing (and will discuss in some length) this one for a few reasons:

1.  It's a matter of public record anyway (which I'm fine with)
2.  It's in BMF (run by usagi) which definitely warrants an explanation from me
3.  It's likely we'll hold the shares for a while - so would be disclosed by me anyway (unless there was a material disadvantage in doing so)
4.  It isn't a straightforward purchase of equity - so is entirely capable of being misrepresented.

In this post I'm just going to quote the terms of the deal then I'll make a second, much longer, one and explain WHY I did it, how it's to the likely benefit of LTC-ATF etc.

The post by usagi offering the deal is here :

https://bitcointalk.org/index.php?topic=295356.msg3166233#msg3166233

As it's now locked I can't directly quote it, but here's the terms as stated:


Usagi has commented on the agreement here:

https://bitcointalk.org/index.php?topic=229036.msg3174029#msg3174029

There are two significant inaccuracies in that report:

1.  LTC-ATF has NOT bought a controlling interest in BMF for two reasons:
a) The shares purchased amount to (just) under 50% of outstanding shares.
b) Only 1/3 of the shares purchased were by LTC-ATF, the rest were by myself personally.

2.  Usagi states "As a vote of confidence, Deprived has committed to hold the fund for a minimum of two months.".  That is not accurate.  What I've committed to is not exercising the right to sell back at .032/share for 2 months.  Which is significantly different - as will become apparent in my next post.

I think the first inaccuracy was done for impact - and the second is just a poor choice of words on usagi's part.

I'll post this in both LTC-ATF threads then make a much more lengthy post going into a lot more detail - as there's quite a few points that I want to clarify/explain.

As promised, here's a lot more detail/explanation on the BMF investment.

Why Invest in BMF/Usagi?

The short answer to this is that I believe making this deal has a positive expectation for LTC-ATF/myself.  There a few general points to consider - I'll get to explaining why it has a positive expectation in a seperate section of this post.

1.  Quality of an investment has never been something which has prevented me trading securities.  Examples where LTC-ATF have traded something that was completely horrible include trading the spread on Obsi's Ponzi AFTER it was known to be a scam and he'd stopped paying interest and holding DMC shares despite it being maybe the most mismanaged fund that wasn't an actual scam (we made 200%+ on our investment due to it being misvalued by the market as they hadn't appreciated the value/liquidity of its ASICMINER holdings).  In short, LTC-ATF holding/trading something has NEVER meant that I believe it to be intrinsically a good investment - just that the circumstances of our trading are such that I believe it to have a positive expectation for us.

That isn't to say that quality is something I ignore - far from it.  But it's important to remember that LTC-ATF's objective is to make profit for our unit-holders - and I always have done that regardless of my views of the actual securities traded.  The most recent such case being Labcoin - where LTC-ATF flipped shares for 150% profits despite there never being any convincing evidence that it was a profitable or sound venture.

In short, it doesn't matter whether I believe BMF is a good investment (or usagi a good manager) or not so long as I believe the deal is profitable (has a positive expectation - as actual profit is never guaranteed) for LTC-ATF.  In fact, as we'll see later, this deal doesn't need usagi to do well for LTC-ATF to make a profit (though the best possible outcome for us IS that he does well).

2.  Risk of issuer default is always an important factor.  I've been (and continue to be) critical of many of usagi's past dealings.  There are specific aspects of his behaviour I've been critical of - it's my belief that those don't present any great risk to us here.  The ONLY risk that matters here (in terms of default) is whether or not he adheres to the agreement.  And the agreement is specific on the most important points:

a) The price at which warrants can be exercised,
b) The right to sell back and the price at which this occurs,
c) The MAXIMUM time he has to perform buybacks in.  This is absolutely critical - as one of my main ongoing criticisms of him has been the ridiculous amount of time (it continues to take) to buyback his Nyan.A.  No explicit time-scale was defined for that - and so there's no date at which 'default' can be declared.  In our case the time-scale is "It may take up to seven days to liquidate your value for large or multiple simultaneous redemption orders (20btc+)."  There's an absolute maximum of seven days defined.

This moves things away from the grey areas - where I believe his judgment has been bad - into something very black and white where there's no way to delay or argue that it means something other than it evidently does.  I believe that usagi will try his hardest to avoid breaking the deal - as doing so would finish him here for good.

3.  It's important to understand what I did and what I didn't 'buy'.

The wrong view to take is that I bought shares in BMF that came with warrants/options as a bonus.
The correct view to take (from my perspective) is that I bought options that could be exercised as PUTs OR CALLs (at the same strike price) and that the premium I paid to get those options was that I had to buy some BMF shares at current NAV/U.

It's important for LTC-ATF investors to understand the distinction between the two - as my entire rationale for making the deal (and strategy going forward) rests upon me having made the decision with the second description reflecting my viewpoint.

So What Do The Warrants Mean?

There's an important point with these which must be considered when looking at my strategy going forward.  Each warrant we hold can ONLY be used in one direction or the other - not both.

LTC-ATF holds 1563 shares of BMF.  We are NOT entitled to do 1563 redemptions at .032 AND 1563 CALLs at.032.  Rather we're entitled to 1563 of any mix of the two.  That's because the terms for redemption at .032 are that a warrant has to be surrendered for each share redeemed.

That restriction is an entirely reasonable (in fact, essential) one for usagi to have imposed - as without it we could make the deal, immediately sellback all shares at the same price and be left with 1563 totally free 1-year CALLs at .032.

For the remainder of this post I'll describe them as options - as holding one warrant effectively gives the right to either PUT or CALL 1 share at .032.

There's no restriction on the size of each execution - and they don't have to all be in the same direction - but we can only execute 1563 options in total (warrants were issued per share, not per purchase, so can be considered as independent).

Potential Conflict of Interest

This point needs to be got out of the way.  As one third of the shares/options were purchased by LTC-ATF and 2/3 by myself personally there exists a potential conflict of interest when an opportunity to trade or exercise options comes around.

That's not an entirely new situation - a similar position occurred on the LABCOIN IPO where LTC-ATF bought a small amount to flip and I personally bought a much larger amount to flip.  As then (and on one other occasion I can think of) the simple rule I follow is that LTC-ATF gets to go in the most profitable position.  So on LABCOIN I dumped the LTC-ATF holdings right before dumping (the first half of) my own (had to let the market recover a bit before dumping 2nd half).  Here if it would be in the interest of both LTC-ATF and myself to sell/exercise an option then LTC-ATF gets to go in whichever position is the most profitable (be it first or second - in some scenarios going second is best value).

But it does raise the question of WHY I got into this potential conflict of interest in the first place.  The answer to that is very straightforward - that it is far better for LTC-ATF that I hold the rest of the warrants than that anyone else does.  I can avoid Prisoner's Dilemma-type scenarios where each holder does better not cooperating despite the best result for all being cooperation.  I can avoid races to execute options where delaying makes more sense but being second costs.  And I control sufficient votes (at least initially) to block any dumb moves.  Knowing what all other warrant/option holders will do is a massive edge when going from a general strategy into the specifics of tactics.

In short, LTC-ATF will definitely be no worse off - and almost certainly better off - from me holding the remaining warrants than from anyone else having them.

Have been typing a while now - and still probably at best halfway through making the post.  Will post this half now - then, after a quick break, type up a second half where I look at the real substance (why it's likely to be profitable and an overview of strategy).  It's amazing how long it takes to type up crap like this when it only took about 30 seconds to realise it all after reading the offer post.

In the end, I'm guessing the only question we'll have is why you believe Usagi will make good on any option excercises that equate to profit for you, loss to him.

Is BMF the fund that is basically all PMBs and thus guaranteed to depreciate? Admittedely I've ignored much of his workings and offers, so I am speaking with some ignorance.

Time to get into the meat of it - why is the investment +EV for LTC-ATF?  It's useful here to consider the worst and best cases to determine a range within which likely results will fall.

I won't, hereafter, be discussing default by issuer - which is always the worst case.  I explained in the first post why I don't believe default on the agreement by usagi is likely - but obviously it can't be totally discounted and is the true worst case.  That's always the worst case for all securities we hold - the only important point with it is that I don't believe the default risk is higher than usual here.  There's some mitigation as far as default is concerned as well - on most securities we're also exposed to some extent to exchange default.  Here we're largely immune to that - as the repurchase agreement means we're theoretically immune to losses to the security caused by the exchange failing.

So bear in mind the above when reading on - I'm not saying default risk doesn't exist just that, as always, there's no point dwelling on it : the key is determining that likely profit makes a small default risk acceptable.

For the remainder of this post when I refer to 'value' it is somewhat ambiguous : it could refer to NAV/U or it could refer to market price.  Which I refer to in practice is very situational - at times NAV/U will drive decisions I make and at other times market price matters more.  I'm making no effort to disambiguate such references.

Worst Case Scenarios

There are two different scenarios which are potentially the worst case ones - it's not immediately clear which is actually worst.

1.  Short-term heavy loss for BMF with no medium-term recovery.  In this scenario the value of BMF falls immediately and massively and hasn't made any significant recovery after 2 months.  We end up sitting on the shares for 2 months then selling them back at the purchase price.  The loss to LTC-ATF in this is the cost of 50 BTC for 2 months - which can be approximated as being 60 days of paying dividends on LTC-ATF.B2 on 50 BTC (as that's where we raise new capital now) or 1.5 BTC.  There's no larger opportunity cost as we could sell more LTC-ATF.B2 into the market without problem.

2.  Whilst the above is the obvious worst-case scenario there's actually another which potentially ends up worse.  That's where the value of BMF drops slightly then stays there.  And remains there for 6 months.  In that scenario we can never sell at or above .032 on the market - as the value is just too low - but because the fall is small there's a strong disincentive to sellback after 2 months as by doing so we would surrender our right to the 1 year warrants.  In that situation we end up selling back after 5 months or so - so it costs us a lot more in capital servicing.  Of course during that period we ARE receiving dividends - and as the value hasn't fallen a lot those are likely to cover a significant part of what would otherwise be our losses (if the value has fallen AND dividends were tiny then we'd be selling back earlier and the outcome would be roughly like 1.).  So it's a bit of a toss-up which is the worst.

Bottom line is that maximum expected losses to LTC-ATF on the 50 BTC investment, ignoring default, are around 2 BTC.

Best Case Scenario

For purely illustrative purposes let me give a humorous best case scenario.  I'm not intending to suggest that usagi WOULD gamble the funds on J-D - take it as analogy for investing in something high-risk and high-reward.

1.  We sell our shares on the market at around the price we paid for them.
2.  Usagi gambles the 150 BTC we paid for them (representing around half the NAV of BMF) on a single even-money roll on Just-Dice.

If Usagi wins the roll then NAV has increased by 50% - we can now start turning in warrants to get shares at .032 and selling them at a signficant profit on the market.

If Usagi loses the roll then NAV has halved.  We can now start buying shares on the market at around .016 and selling back per our right to do so.  And as we do this the NAV MAY fall even lower - as if BMF is paying for the redemptions then the NAV/U of all remaining shares is falling so we get the next batch cheaper.  And as this would end up with us having all the cash and the final NAV/U for everyone else being 0 there's pressure on the other investors to sell first (and get something) allowing us to buy even cheaper.  I say "NAV MAY fall" as it isn't at all clear to me whether if I sell back at .032 when NAV/U is lower BMF or usagi pays the difference - it's a point I deliberately didn't try to clarify as I didn't believe asking the question to be in my/LTC-ATF's interest.

Now ignore the J-D references above and consider what would happen to the share price of BMF if NAV/U either fell or rose significantly due to usagi's investment performance.  It's pretty safe to assume that if he makes heavy losses it won't trade at a premium, and if he makes large profits it likely WILL trade at a premium.  The extent to which that happens depends mainly on his willingness to issue or redeem paper - but the pressure is always going to be in the direction which maximises our profits.

In anything approaching a best-case scenario we can make a signficant profit if the value of BMF EITHER rises or falls by a lot.  That's because we have the ability to execute (what are effectively) options in either direction.  What we absolutely don't want is value stagnation.

More Realistic Scenarios

The best case, as described above, is pretty much guaranteed not to happen.  Whilst the value of BMF could conceivably go up or down a lot there's just no way to shift all BMF shares at near NAV/U in the first place.  That said if anyone wants them I'd sell them all right now at a 5% discount - but only if all sold in one block (there's good reasons why selling a small number at a discount is a bad move).

I'm going to have to be intentionally a bit vague from here on out - as if I were to describe precisely the strategies I plan to use it would make them less likely to succeed.  Some of you will be able to read between the lines or extrapolate from what I say - others won't.  If you're an investor in LTC-ATF and have some brilliant idea of how profit could be made DON'T post it in the thread because:

a) I almost certainly already plan on doing it.
b) Informing other market participants probably reduces either the probability of it working or the profitability of executing it.

For LTC-ATF to make a profit doesn't require that we sell all of our BMF shares - in fact we only need to sell a relatively small amount.  There are a few key factors that we require to occur for us to make a profit:

1.  That the value of BMF is above the price we paid for SOME period within the next few months and that we sell some shares near that price - freeing up options.
2.  That subsequently, but within the next 6 months, the value of BMF moves majorly in EITHER direction.

The best outcome for us is undoubtedly if, whatever it is usagi has planned, makes a significant profit - as we then get to make profit on selling existing shares AND double-dip with warrants.  But provided we free up a fairly small number of options we come out ahead if the value subsequently crashes.

It's important at this point to consider what the portfolio of BMF actually is.  Although it claims to be a mining investment fund at present the vast majority of its holdings are very safe things like bonds - many of which actually pay more than what we pay ourself on LTC-ATF.B2.  So whilst we would ideally like to sell shares quickly we don't face any massive cost if we fail to do so due to dividends reducing the effective cost of holding them (with no change in value) to next to nothing.

I don't know what usagi's planned big investment opportunity is - but it's a safe bet that he isn't just planning to buy more bonds as that wouldn't achieve anything for him other than a nasty cashflow problem in 2 months time when I asked for the 150 BTC back.  I believe it against the interest of LTC-ATF investors for me to speculate further on this.

There's two more things to consider when looking at why this is a decent thing for LTC-ATF:

1.  LTC-ATF can now trade BMF with impunity provided certain guidelines are adhered to.
2.  LTC-ATF can write options on BMF backed by the options we already hold (again subject to certain restrictions).

Hopefully this at least shows that the downside is small compared to the upside : if you do the math then with a downside of under 5% of invested capital usagi doesn't need THAT high a chance of making a profit for this to work out well for LTC-ATF on average.  And that's if we were to totally discard any possibility of profit if BMF were to fall in price.

The key, for me, in choosing to do this deal was that the most likely downside is very small compared to the upside.  It really IS that simple.  It's then just down to me to extract the most possible benefit from it - which I've hinted at above but can't describe in detail for (hopefully) obvious reasons.

The LOL Factor

I'd be remiss if I failed to mention that the humorous side of this DID occur to me when considering it.  I believe the deal is good for LTC-ATF on its merits - but that it was with usagi added an amusement factor which certainly added value for me personally.

Disclaimer

As with all investments I make on behalf of LTC-ATF no endorsement of securities we hold should be assumed.  LTC-ATF trades and holds securities because I believe the specific circumstances, terms and context of those holdings make the situation +EV for LTC-ATF.  That should never be extrapolated into a general recommendation to buy, hold, trade or otherwise interact with something.

The sort of points discussed above are things that I consider on most investments/trades we do - having seen how long it took me to type this up only reaffirms my decision not to, in general, discuss the detail of LTC-ATF's dealings.

It was nearly all PMBs - and did depreciate.  Now it's nearly all bonds with just a few PMBs left.  After taking a haircut on DMS.MINING he swapped to DMS.SELLING.

I addressed your question to an extent already in the second post.  Bottom line is I'm confident he'll make good on option exercises if he possibly can.  You need to look pretty carefully at his past behaviour to see why I believe that.  I'm not going to expand on that as it falls into the area where it isn't in the financial interest of LTC-ATF investors for me to do so.

Yes, once exercised in either direction they expire.
The buyback is for 1 share and 1 warrant (it's just a reversal of the original trade). Should Deprived choose instead to exercise them as purchase warrants, they would be spent in the process.

So in essence they can only be used once -- either to sell a share back to BMF at 0.032, or to buy a new share at 0.032.

Deprived can also sell these warrants if he so chooses, he doesn't even have to inform us of the sale (although in that case we would only accept his authorization to exercise them).

Thanks for the clarification.  I hadn't actually considered selling them - though they definitely have value.  Any sales or exercising of them will, of course, be recorded here.

BMF shares will be valued in accounts at .032 unless/until they have a higher value AND there's significant bids at above that.  The warrants, as with all options we hold, will be value at zero.  Though options/warrants often have a clear value that value tends not to be immediately realisable so shouldn't be recognised in NAV/U.  If the situation arises where their value IS realisable then I'd value (and that report that value) appropriately.

In view of the imminent closure of BTC-TC and LTC-Global, LTC-ATF will be closing its doors.  In theory we could move to another exchange - but there's nowhere which supports securities denominated in LTC so a major restructure would be needed with a massive change to the contract.

The following will happen today, assuming the exchanges are up and the necessary functionality works:

1.  All bonds will be recalled at face value.  The contracts are explicit that redemption is at face value in the event that LTC-ATF closes.
2.  I will buy out all LTC-ATF shares at the NAV/U as of yesterday.  The adjusted NAV/U (i.e. post management fee) was 0.69148904 LTC per share.

This is an expedited version of the closure procedure defined in the contract.  If I were to strictly follow the contract then bonds would be paid out now (once I was sure all funds were going to be accessible) then LTC-ATF investors would get back cash slowly as shares were sold.  Some of the investments we hold are NOT going to sell for full value - e.g. the 500 LTCI we picked up a day or 2 ago to flip (which will lose a load of value because of holdings LTC-GLobal shares which obviously aren't going to be worth a lot).  There would also be signficant delays realising some assets - e.g. the BMF shares where I can't sell them back for nearly 2 months.

As maximum losses are under 100 BTC I've decided I'll just eat whatever losses there are myself and save my self the hassle of sending small bits out as we sell stuff - and then having to send out to lots of people directly after October.  I'd hope all investors would appreciate that this isn't something I was obliged to do, will definitely cost me some BTC (probably only 20-25 BTC unless usagi defaults on the BMF deal) and is better for investors than if I stuck rigidly to the contract.

Those of you who invested at the start will have made very slightly under 900% profit denominated in LTC, 5550% denominated in BTC and something with even more digits if you measure it in USD.  Thanks for your support - and hope you're happy with the return you received for putting your trust in me.  For those who invested more recently, buying at well above NAV/U, I can only apologise for your losses.

DMS will be dealt with seperately in its own thread.

For the BBET and MPOE pass-throughs, for now I'll fill any asks where I can sell at that price into orders on MPEx.  Down the line I'd be aiming to do a forced buyback before LTC-Global gos offline at whatever price I can sell the underlying at.  I'll address those in more detail once I've got the easy ones (bonds and LTC-ATF itself) out of the way.

A dividend of 0.69148904 LTC per share has been submitted for immediate processing in full and final settlement in respect of LTC-ATF's closure.  I returned my own shares to the fund first - so the total paid is under half the NAV that the fund had at closure.

That payment represents the adjusted NAV/U as of late yesterday evening when I locked the spreadsheet ready for this week's report.  I haven't attempted to mark things down because of the collapse in value of them today.  I'd been intending to do a much longer report than usual to celebrate the fund's 1 year anniversary.  We never quite reached it (the anniversary is still 3 days away).

It's been fun - and profitable - and who knows, maybe I'll start a new fund somewhere else in the future.

P.S.  Both bonds have also been repurchased in full at face value.  The pass-throughs aren't closed yet - but I'll personally take liability for those and will try to get them closed out as well before the exchange closes.

Well this is disgusting will never put money on these sites, a total loss of 100 ltc, i dont even wanna think about share holders with big capitals on this stock. Much information, much reports, but on the moment of fulfill shareholders, happens things like that, yes i would have read the terms, look and morals can be disguised too well. Im not statisfied with the final handling of this stock.
this is the price i paid to yell.

Lots of things in your post to comment on, but lets start with the above and have a look at the LTC.AFT contract at LTC-global.
From LTC-AFT's Contract with it's shareholders we read the following:

"LIQUIDITY & FUND CLOSURE

The fund does not pay dividends - so the only way for investors to realise
profits (or losses) is to sell their units. The fund shall attempt at all times
hold at least 5% of fund value in LTC for the purpose of buying back units.
When the manager is online (and has an accurate current valuation of the fund)
this shall be done by bid-walls placed on LTC-GLOBAL at between 95% and 99% of
NAV/U (the precise value within that range may be set by the manager - based,
primarily, on volatility of the LTC/BTC exchange rate).

If significant bids already exist at above 99% of NAV then the manager is
released from the obligation to place bid-walls - but not from the obligation to
hold sufficient liquid LTC to place such walls if the need arises.

If circumstances arise such that the manager is no longer able to continue
operating the fund then the manager shall dispose of all assets held by the fund
and distribute the proceeds to unit holders. Such process shall be conducted in
as timely a fashion as is possible without incurring major loss by selling into
under-priced bids."

 
The contract say "If circumstances arise such that the manager is no longer able to continue
operating the fund..", it dosen't say if the exchage the fund is listed on were to close down.
I can't see that it would be stranger to run a fund denominated in LTC on an BTC exchange (like Bitfunder or Havelock) than having bonds denominated in BTC on an LTC exchange.....
So BTC-TC and LTC-GLOBAL's closing is not really a reason for closing the fund according to the contract, that is not an option that excist for you to take in this type of situation(it would have been another situation if there woould have been no btcstocktrading platforms or exchanges left or if you had been seriously ill and couldent continue things because of that) accourding to the contract as it's possible to continue running the fund either on another exchange or totally without any exchange, so that looks like a breach of the contract.


The only slight problem i can see in the contract is this line:

"The manager is entitled (and expected) to buy back units. This may only be done
on the LTC-GLOBAL exchange at prices below the current NAV/U."

And i can hardly think investors would object to having trades of the share be done at another exchange instead and the wording in that sentance dosen't mean the funds have to close just because you can't buyback shares at that specific exchange after the 7 october ....


So the action you took on LTC-AFT, LTC-AFT.B1 and LTC-AFT.B2 looks to have been taken to quick and be incorect ones. The coming 2 weeks on LTC-golobal and BTC.TC may also result in a lot of profitable situations for you and your fund so there's probably lots of BTC's and LTC's for the fund and you to make in that period so closing the fund now seemes like a very bad decition for the shareholders and bondholders.
Also the BMF position the fund recently took just a few days ago looks like it can be a very profitable one with those options rights to.


There's also the fact that some(/many ?) people that invested in your fund relatively late will make big losses on the action you decided to do while closing things down, witch probably was in breach of the contract(s) they made there investment based on.

LTC.AFT.B2 has probably for most periods only been trading at max at 4% over face value, but LTC.AFT.B1 for example has at times traded at over 30% or so over face value and even worse the LTC-AFT itself that has been trading at around 300% NAV for quite a while now.

Therefore i think the least thing you should do if you stand by your decition that things should be closed down for good is to compensate those shareholders/bondholders that made a loss on this action you took(as it most likely was a incorrect one), whether they have bought LTC-AFT stocks at above NAV value, LTC-AFT.B1 or LTC-AFT.B2 bonds above face value and havent made there investments back on them sofar, as the LTC-AFT shoulden't have been closed accourding to the contract and therefore neither the bonds should have been bought out.
It also looks like many/most of those LTC-AFT.B1 bonds and LTC-AFT stocks that has been sold at high market prices recently has been sold by either you personally or your other fund DMS that you also own significant amount of shares in, so your quick decition to close things down in what looks like a very profitable situation for shareholders/bondholders if things would have been carried on gives a very bad taste...

It is never a good idea to buy above NAV/U.

As much as I like LTC-ATF, I sold all my units when they started to be traded way above NAV/U.

Please do the math next time, do not throw your money on the wind.

Nobody, absolutely nobody can guarantee consistent stellar performance for years, and this is what you was hoping for when you bought above NAV/U. You just haven't put any thought into this, what do you expect now, somebody to compensate for your unreasonable expectations?

This wasnt a situation to be predicted, i didnt lost my money taking some excesive risk, they just shut off the thing, you only were lucky, all this litecoinglobal junk, is after all just a pyramidal scheme, deprived, burnside are all on the same basket. my error was to trust these people. I dont know what happened on my mind to put money on that crappy basic php site.
Sure we can do nothing, this is internet, the only thing we can is identify/remember them with this thing to prevent people to get scammed again.
If there were any good will, they simply solve this issue moving servers to other country or the stock to other exchange, like some other stock owners are trying to solve.

This really could been handled in a different way. There was a year, or with a disclamer on the stock, displaying: PLEASE DONT BUY THIS SHIT WE WILL SELL MORE STOCKS AN STOLE YOU.
https://bitcointalk.org/index.php?topic=108485.0;all

The way I see it, anyone who bought LTC-ATF way over NAV must have known they were either gambling on the fund continuing to do well for a long time, or were just purely speculating on short-term price movements. They only have themselves to blame for their loss. I looked at LTC-ATF and decided not to buy based on the crazy valuation.

I ended up buying something else that tanked, but not by as much as this did. I'm not blaming the operator of that security for something we both had the same visibility of. It was my choice to invest.

Deprived, any chance of you starting another fund elsewhere?

This is precisely the sort of situation meant when I said "if manager can't continue running the fund".  In theory I could have run it for another week - until trading closed - but that would have been irresponsible.  When something is closing because of legal pressure you don't want to leave funds on longer than you have to.  Also the closure was BOUND to spark a fall in LTC vs BTC - this way gave investors a chance to get out first if they wanted.

The market, in general, was already falling.  These closures are going to cause it to fall further - due to concerns over things like is Bitfunder also exposed (it also is run by someone in the US) and a general wariness of exchanges (whether warranted or not).

You mention the options on BMF as being profitable and me getting to keep them.  Do you want them?  I'll sell you the shares + warrants + sellback rights if you want.

BMF lost 25% of its NAV/U.  Sure - in theory our sellback protects against loss - but how are we supposed to make a profit?  The plan for profit was to sell on the market then be able to buy back on the market later if price sell.  Price crashing immediately was never part of the plan - and is one of the explicit bad scenarios I described when I explained the decision to buy.  Unless it recovers majorly (and it's not even relisted anywhere yet) there's NO chance of profit - just a likelihood of getting initial money back in 2 months and a non-zero risk of being defaulted on (whilst I expect usagi to honour the sellback right I can't guarantee he will).  Not sure how you see that as profitable: but if you do then you're welcome to buy LTC-ATF's 50 BTC worth AND my own 100 BTC worth and I'll even give you a small discount on what was paid.

Or maybe you'd like the ASICMINER we held?  Which I'd already mentioned being written down once - and in fact sold yesterday for slightly less than they were valued for on our books.

Or do you want the Ice-Drill we were flipping - where the price fell so I'll be lucky now to sell for what we paid.

Or the Kenilworth I was flipping - where I won't be able to sell until after the merge with Bitfunder and then will be lucky to get back what we paid as there'll be loads selling.

On what we held it's likely I'll take around a 10% loss.  Had I closed down strictly by contract then you'd be waiting 2 months to get everything back - and get back less than you received now.

So why didn't I continue?  Well firstly consider what we'd be trading:

1.  No LTC-denominated securities whatsoever.
2.  Pretty much nothing on BTC-TC - as nothing there that wasn't listed elsewhere has been relisted yet or has even announced relisting.

So we'd only really be trading on Bitfunder (Havelock only occasionally has worthwhile opportunities).  That means we'd use NONE of our LTC-denominated capital and only about half of our BTC-denominated capital.  But we'd still have to pay full interest on both sets of bonds.  On the bonds the ONLY way for me to buyback at face-value was to close LTC-ATF.  In all other circumstances any buyback would have to be at 5% over face value.  So to reduce capital we'd have to lose significant NAV/U.

And then we'd be trading in a falling market.  It's VERY hard to make profit in a falling market - especiallly one where even on the few securities not dropping fast, volume has fallen right off.

And then there's the problem of relisting.  I CAN'T relist denominated in BTC without totally rewriting the contract.  I have no right to do that.  Which means only way to continue right now would be list on Cryptostocks - and exhange which has twice been hacked and had funds taken from it, which is horrible to use, where the owner changed the contract on his own shares mid-IPO and then stole from his own investors.  And where, from his OWN accounts, he doesn't even have even cash to cover all the money of depositors on his currency exchange.  That wasn't an option.

Running it off an exchange is theoretically possible - but then there's no liquidity and a lot of extra work for me.  Take no liquidity, an immediate drop in NAV/U (to close down LTC-ATF.B1 at 105% - which we'd have to do), likely more drops over a few weeks as other positions are cleared and what do you think you'd be able to sell the units for (if you even could)?

Try looking at the other funds running - are you seeing all these big profits there?  The opportunities to make big profits on the closure came for those who were around immediately after the closure announcement - when some people sold dirt cheap into any bids that were up.  I'm in the wrong timezone for that - by time I was aware of the situation all the real bargains had gone.

I'm not sure why you're accusing DMS of selling LTC-ATF.B1 or LTC-ATF.  It's sold LTC-ATF.B1 in the past - but hadn't sold any for many weeks (it's never held any LTC-ATF).  It has a public portfolio and its holdings are reported every day.  Its LTC-ATF.B1 got bought out at face value exactly the same as everyone else's.

After I saw the announcement I didn't trade ANY of our securities - I just locked them then moved funds around and paid them out.

Continuing was NOT an option for me.  There was nowhere reasonable to relist in LTC and relisting in BTC wouldn't be valid under the contract.  Plus it's hard to relist ANYTHING right now - Havelock aren't taking new listing at all and Ukyo's not in a rush to take much.  Running it off an exchange was also not an option I'd consider.

Whilst I'm sorry if people bought high, expecting me to run for a long time (which WAS the intention) I can't take responsibility for what people do on the market.  The NAV/U was clearly defined every report - and reinforced by the huge bid-wall from the fund.  I've NEVER placed bids to try to drive it up - but have placed Asks to try to stop it getting too silly (generally selling half my management fee so as to keep my portion of units at a bit over 50%).

I took on the likely losses on current holdings personally to try to reduce the losses for anyone who bought in recently - not because I believed any of them very profitable (of about 12 different securities we held there's 1 that will probably make a reasonable profit and 2 that may make a small one: the others will - or already have - break even or worse.

What I did was the ONLY real option after the closure announcement.  There was NO viable way to continue running as we were.  I had no more information about the closure than anyone else - and only began to suspect it as being likely shortly after making the BMF deal (rather obviously I wouldn't have done the deal had I known closure was likely - as the deal was always very unlikely to make a profit if BMF took heavy losses very shortly after the deal).

I don't know what the closure cost you.  It's cost me, so far, probably 25-30 BTC and still rising : plus I have a bunch of securities from LTC-ATF that, overall, are unlikely to make any profit so are tieing up cash with no benefit.  So don't assume I made out like a bandit on this - you're nowhere near the truth.  If I DO come out well from this it'll have nothing to do with anything LTC-ATF would have been doing.

Yeah the price got silly high - especially as profits hadn't been ridiculously high since LTC rose massively vs BTC.  But none of the ways for me to control it were feasible:

1.  I could hardly say "stop paying high prices for it" - or I'd immediately get (rightly) criticised by anyone who just bought high.
2.  I couldn't sell loads of my own shares to force it down - as I was committed to keeping over half the ownership myself.
3.  I couldn't sell new units - as the fund didn't need more LTC-denominated capital : if I did that I'd just be losing value for ALL current investors.

The problem arose largely because I was protecting existing investors by trying to maximise their profits through keeping capital at optimal levels for available opportunities.  That meant no real supply of new units (other than half of what I received in management fees) and led to massive price inflation due to being about the only profitable fund around.  Which, on closure, was great for long-term investors - but pretty horrid for anyone who bought in recently.

But when you buy ANY BTC/LTC investment you're ALWAYS betting not just on the isser but also, to varying extents, on the exchange (not so much where all their action is off the exchange - but when they hold funds on an exchange and trade securities on it then the exchange closing is ALWAYS going to cause some immediate losses and massive loss of confidence).

Without the closure of LTC-Global/BTC-TC we'd have been continuing in fairly hard times - but I'm sure we'd have continued making small profits with the occasional good week.  There WILL still be profitable opportunities - but they'll be a lot fewer.  And trading spreads as a bread-and-butter element had been dieing off largely for a while.

I have no current plans to start another fund.  If I do then it would likely be structured differently - with more of a focus on piling in on profitable opportunities rather than spreading cash more widely.  And it would definitely be in BTC not LTC - reflecting where nearly all our action was.

I don't think those few who believe LTC-ATF should continue properly understand the situation - especially in respect of the bonds.

Buying the bonds out would be very expensive - but would be almost inevitable if we continued.  That's because of immediate losses looming up + the cost of relisting LTC-ATF and bonds.  Then add in the fall in LTC which was inevitable with LTC-Global closing and we'd be over the acceptable ratio on bonds.  Meaning we either had to sell more units of LTC-ATF or recall bonds.  With under-utilised BTC capital, recalling bonds would be only option - meaning more losses.

And that ignores that converting to BTC denominated totally breaks the contract - and means recalling BOTH bonds at 105% of NAV/U (an immediate 5% drop in LTC-ATF NAV/U).  And without the agreement of EVERY investor I couldn't relist with a totally new (BTC-denominated) contract anyway - you just can't make fundamental changes to contracts like that.