As of 8/2/2012, GIGAMINING had yielded exactly negative 0.4% per week compounded since approximately four months ago (and that's with reinvesting all your dividends). Investment research is a bummer, huh?

That said, I think the massive upgrade path that the issuer offers will turn it into a strongly positive investment, which is its saving grace and a good reason to buy it. It has a higher yield than most other ASIC-pending offerings, and the behavior of the issuer to take action to protect his investors is excellent, and lends immense trust to his future offerings.

You see, this is what you need as an investor: an offering in an actual company that looks out for its shareholders, not just a contract. Bonds and equities are great most of the time, but contracts are much more speculative and dangerous.

I believe it's not the issuer's fault here for the losses; rather it's up to each investor to do their due diligence and only buy mining companies and bitcoin denominated bonds, and stay away from fixed rate contracts. You want to invest with someone that has an incentive to keep you happy because you will reinvest with them, both in their current capacity and in their future endeavors.

For issuers that do not protect their investors, it is your job as an investor to simply filter out those assets from your buy list, and don't give them any capital: problem solved.

Same with me. It takes between 1-5 trys each time.

For these reasons I am planning on buying a few shares, mainly because I like to buy a bit of everything with a positive expectation to keep it on my radar.

But as everyone else has said, there are much better investments out there; however, capacity and diversification are very important to me, so if this bond is going to be around a *long* time, then that's a very good reason to grab some. I hate rolling over my portfolio, so having some things that I can just hold long-term without having to think too much about are nice (unlike equities and mining bonds, which require constant supervision).

BTW was the IPO postponed? I have some bids out at 1.0 and was expecting them to get filled today.

Another major change coming this week, or next at the latest...

Thus far, I've been running the system based on actual trading prices, which makes perfect sense for a liquid exchange. However, since the GLBSE is so illiquid, I need to look at market depth - that is, rather than treating each asset as a separate entity for analysis, I need to look at every ask price for every asset as a separate entity, so that we can pick up the best asks every day on the entire GLBSE.

The problem with our current approach is that we end up paying higher prices for good assets, and it would be better to buy these assets when the occasional "dump" occurs; however, the problem with placing bids based on volatility is that it sucks away all the time value of money: sure, we may pick up a great price if we bid well, but all the time waiting for the bid to be hit costs us. So I'd prefer us to be market takers and pay the fees, but have zero time value cost and, of course, the knowledge and advantage of knowing exactly which asks on the GLBSE represent the best investment each day.

I think this will give us a huge leg up once this is implemented. I'll let you know when it is done.

OP is correct in his analysis, but this does not apply to every mining bond. Some are fantastic, but the vast majority are indeed, as he puts it, "turds."

The trick is to have a method of buying gems and selling turds. It's not rocket science, but I would never, ever invest a penny into any market without a well defined objective investment strategy.

This is due to the fact that I use the last trade price for each asset when I do the NAV per share, and GLBSE assets are volatile, especially due to the huge gaps between the bid and the ask. The two main culprits for this particular dip are COGNITIVE and PUREMINING, but nearly all assets were affected somewhat negatively this week, and for obvious reasons:

We were up a huge ~15% last month primarily due to a rally from an oversold condition, so it's entirely normal for the market to mean revert after big moves, especially when the base BTC value has jumped so dramatically in real terms lately (which is strongly deflationary from our perspective, but means the USD value of your shares has greatly increased). Nothing in the markets moves in a straight line; it is the nature of a fund that you are exposed to this volatility. I expect the fund's NAV to vary each week, both up and down, but what I care about is maintaining the long term upward trajectory, not short-term fluctuations which are impossible to avoid.

Finally, it's worth mentioning that the current high water mark is 1.1694110613, so I don't get paid a single bitcent until I beat this level. If my investors aren't making money, I don't make money either.

I think all it takes is 20K BTC, but that's highly speculative based on the idea that BTC value will increase and interest rates stay high for a while.

If you are able to earn at least 1%/week on that, that's 200 BTC/week. Then, assuming the amount you can earn by lending out that btc is reduced each week in the future as the market is saturated (plus defaults on loans), you'd need to re-invest at least half your earnings just to keep your future earning potential the same, which still leaves you with around 100 BTC/week to spend, which is $4,000 USD per month @ $10 a coin.

Of course, interest rates will probably fall even more than that, but assuming $100/coin, you could reinvest 90% of your earnings and only spend 10% and still have $4K USD per month in spendable income.

That's enough to live on. So if you've got ~200K USD lying around, and want to be able to potentially retire on that completely, investing in the BTC economy now and aggressively reinvesting your earnings for the next few years is your best shot to make that happen.

Just my .02 btc

Will you give us any more information about the purpose of this bond? I.E. Is it just going into a pirate account, or is it used to arb the rate of of higher paying bonds, or something else entirely?

Shhh... 

Doing some major surgery today, which is exciting! It's time for some changes.

Things have been steady for us for a while, but now we need to rotate a lot of the portfolio out and buy into promising new companies, and sell off some of the old ones that have turned to crap. Except of course for trusty old COGNITIVE, which is probably my favorite asset on the entire GLBSE (it has a great yield, is low risk, is tied to btc value, has increased in value substantially since we bought it, and represents actual ownership of a company rather than just a bond which may be callable later). I've also made some minor tweaks to the model to give us a better look at the overall market.

FYI one of the reasons I like doing monthly updates rather than weekly is because inter-month I don't want to publicly talk about what I'm buying - otherwise others may bid up those shares. It's best that I just do what I need to do each month and then let you know about it after the month is over.

That's all for now

Same here, I have 2211 shares remaining out there @ 0.0999999

Thanks again for buying these back so quickly!

I have 13612 11774 8774 shares of TYGRR.BOND-B, and given that the contract has been changed to lower the interest rate to 0.3%, please buy them back from me ASAP and PM me as a heads up. I have a sell order out at .1 0.0999999 per share.

Thanks mate!
-cyto

First off, thank you Nefario for your wonderful creation! The amount of productivity that the GLBSE has enabled is astounding and growing every day.

Here are my particular pain points:

(1) Dividend data API needs to have a way to specify a date range. I have local copies of this data, so each day I only need the "most recent" dividend payments from the last date I ran the update. Otherwise, it takes a long time to update all of my dividend data.

(2) Twitter for trades is OK for now, but won't scale in the future. My main worry is that eventually we will have too many trades in a single 24-hour period, and then when I go to update my trade database I will miss some of the trades (because Twitter only lets you go back so many tweets...)

That's really all of the essential stuff. This next one would be nice to have, but it's not critical by any means:

(3) The last-trade price listed next to each security in the portfolio, along with last-trade price * # shares to see the value of each holding. And then a total value for the entire portfolio.

MOVETO.FUND Monthly Report 8/1/2012*
*Report issued 7/27/2012

Portfolio (Using last trade prices as of 7/27/2012 @ 10:00 AM EST)

SYMBOL	SHARES	PRICE	VALUE
TYGRR.BOND-B	13601	0.121	1645.721
COGNITIVE	2000	0.79	1580
FPGA.CONTRACT	62	0.205	12.71
BDK.BND	5946	0.1015	603.519
PUREMINING	3209	0.21	673.89
TYGRR-TECH	153	2	306
GIGAMINING	259	1.165	301.735
NCKRAZZE	2400	1	2400
BTC	0.03383413	1	0.03383413
ABM	18	0.15000001	2.70000018
TEEK.B	160	1.09	174.4
IBB	6	0.64	3.84
ZIP.A	139	0.69	95.91
BTC-MINING	1	0.96	0.96
MPOE.ETF	4	1.1	4.4

Valuation
Total: 7805.81883431
# Shares before fees: 6675
NAV per share before fees: 1.1694110613
Last HWM: 1.025688372
New HWM: 1.1694110613
Earnings per share: 0.1437226893
Fees per share: 0.0287445379
NAV per share after fees: 1.1406665235
Buyback Price: 1.1292598582
Fees in BTC terms: 191.869790242
Fees in share terms (rounded down): 168
# Shares after fees: 6843

Summary
This month was a great time period for us. The markets rebounded sharply from an oversold condition, creating a large net gain for us. I am quite happy that we finally got some price increases in our stronger assets - namely, in our large holding of COGNITIVE shares - which is what I had expected a long while ago due to its relative undervaluation to other mining assets. Our weakest asset is FPGA.CONTRACT at present, but luckily we own very few shares of it anyway.

I have learned a lot this month about how to operate on the GLBSE, and the differences between that and the S&P500 which is the arena I am more accustomed to. The largest difference, of course, is one of volume: with such light volume, short term trading is essentially impossible, and therefore you must be very careful what you buy - because you're probably going to be stuck with it. The lack of liquidity on the GLBSE is in stark contrast to the S&P500, where I am used to being able to hold a position for only a few days and then exit quickly. On the GLBSE, however, we cannot do this: consider PUREMINING, which was never meant to be a long-term hold for us, but rather had become extremely oversold and thus a great candidate for buying and flipping. However, there are virtually no bids at all in the marketplace, so it is becoming difficult to unload. Luckily, GIGAMINING's upgrade path to ASIC provides a perfect counterbalance to our PUREMINING position: if ASIC delivers, then GIGAGMINING becomes TERAMINING and we gain from that to offset losses in PUREMINING, and vice-versa if ASIC is significantly delayed.

Finally, it is worth mentioning that as the number of assets on the GLBSE increase, it is taking longer and longer for me to pull down data each day. Hopefully the GLBSE APIs will improve in the near future and this won't be an issue. However, depite the huge increase in the total number of securities, it still amazes me how few are truely great long-term investments - that is why we're still fairly concentrated. A few news buys did come up this month, which we're wading into, most notably ZIP.A which is our first asset purchase that is not related to mining or a bitcoin-denominated bond. This type of pure equity represents more risk since currency fluctations can have more of an impact, so I'm being extra careful with this investment.

I will keep you posted. Take care,
-cytokine

Thanks for catching this, I'll go back through my posts and add "per share" where I refer to NAV to eliminate the confusion. I'll also have to fix this in the GLBSE share contract.

Absolutely! I'm going to do the monthly report this weekend. Monthly reports are public and include full financials, performance information, and commentary.

For a sample, see last month's report here.

I think that's a great point. That's one additional reason why I didn't do the CPA deal, because CPA itself is backed by various bitcoin institutions pledging capital, which themselves are likely backed by loans and securities (some of which people are probably buying insurance on, creating some circular dependency). The web of interconnectedness here is probably quite mind-boggling if it could be visualized.

However, the level of risk is mitigated by the high dividends of GLBSE assets - with more risk comes more return, and the market reflects that: we have bitcoin currency risk, default risk, no real legal recourse in the event of a default, etc. But if we can get up 30% or so in a few months, then if 10% of the fund defaults we're still up around 20% in total. That's kind of the point of the fund, since you can get higher returns than a bitcoin bank ( which "guarantee deposits" ), but with more risk since you're taking on the market directly.


Not right now. We do everything on the GLBSE except for one outside investment (which is here on the forums). I've considered investing with various bitcoin banks to give us increased stability, but their returns are too low and defeat the purpose of the fund (you can always allocate some of your capital to various bitcoin banks anyway if you want more security/stability with a lower return - in fact, I strongly recommend this provided the bank is safe and trustworthy and has a high asset to deposit ratio).

If you have any other ideas that you want the fund to look into feel free to post it here, but of course you should probably just snag those for yourself if they're promising

If my investors don't want it, I don't do it. Simple as that. They have their reasons: mainly, they already have plenty of pirate exposure, and thus are seeking an investment with a return that is wholly independent of pirate's operations.

That said, anyone else should probably take this deal... esp when you can borrow at 1% and then get insurance on top - it's like printing money. But that makes me wary, because the same amount of risk is still there, it's just systemic instead of concentrated.