Assume you're doing the MPOE (paid out on MPEx a week+ ago) and BBET (paid out on MPEX about 5 days ago) dividends at same time.  Not sure why they have to wait until the S.DICE one though.

So because other coins fucked it up, this one should too?

I don't mine ANY coin - so not fussed about missing any boats.  But we could do with more genuine alt coins and less of the premine then pump then dump then vanish kind.  Just shuffling around bits of existing coins, premining a load and hoping to sell them off before the coins dies isn't any useful kind of progress - it's been done to death already.

Now you mention it yeah - seems like ALL pump and dump coins start off with tiny difficulty and what amounts to a premine in practice.  Well spotted!

So you KNEW the problem had occurred with other launches - so did nothing to fix it?

Smells more like a poor attempt at justifying an effective pre-mine than a genuine confession of ignorance/incompetence.

Here's how you should launch new coins:

1.  Announce the launch and provide downloadables at least a day before it gos live.
2.  Start off with a reasonable difficulty.

Not exactly hard to work out.  But of course then there'd be no pre-mine to sell off - which would defeat the whole object of starting a new coin I guess.

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.

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.

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).

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.

That's compounding - namworld's figure is non-compounding.

If you have DRIP switched on (or manually buy more with dividends each day) then you'd get nearer your value (to get exactly it you'd have to receive dividends that could precisely be reinvested for a full number of shares every day).

If you don't reinvest then you get namworld's figure.

Actually you wouldn't have to charge when they redeem - the purchase price in the first place would include a markup to cover shipping.

For investors who wanted to redeem the markup covers purchase.
For those who want to hold it covered storage costs.
For those who want to trade they get it back when they sell.

In reality shipping isn't free in your current model either - at some stage it HAS to be paid for.  Right now it's paid for by them giving up the non-silver part of the assets backing their shares when they redeem: which is essentially no different to what would happen in what I suggested.  Minor theoretical difference is the shares would ONLY 'own' the silver - the markup for shipping would go to the investment 2nd company (who would pay it when necessary) - but in practice that's not really any different.  Where the difference lies is in the seperation of the two elements allowing those who only want to invest in one to do so.

Which brings me to the main point - why does the percentage of each currency matter anyway?

Well there's two reasons:

1.  The general one which applies to many people (I hope).  Some investors like to manage their investment across different currencies so that in the event of a major swing in the exchange-rates/value of one they keep their losses to a reasonable level.  The most obvious such pair being BTC/USD.  Obviously there ARE people who just invest blindly without consideration of that - and no doubt some such 'investors' got horribly burned buying in at the top of the recent BTC bubble (then compounded it by selling at the bottom).  The degree to which each investor spreads their funds, the extent to which they maintain their preferred ratios and what those ratios are will obvously vary from investor to investor. 

Now some will have their USD investment (and for simplicty we'll consider silver to be such - though it obviously isn't precisely) offline.  Those are irrelevant to this discussion as they won't be buying TU.SILVER anyway (not for the silver anyway).  For the ones who keep their silver/usd investments online they HAVE to know what percentage of an investment in TU.SILVER is (and WILL be) silver to maintain whatever ratios of exposure they wanted.  Otherwise they could end in the nasty situation where BTC crashes, they look at their TU.SILVER investment expecting to see a major rise and instead see it's barely risen - because it happened to have more BTC than silver in it when the BTC price crashed.  And so their attempt to mitigate risk totally failed because of something they had no control over and no way to predict (in fairness THEY are largely at fault in that as they must have bought when the shares contained a large BTC element).  So TU.SILVER ceases to be a useful investment for those who want to use it hold the USD-denominated portion of their investment.

2.  The specific which probably applies to few people.  Sometimes an investment opportunity or potential position exists where something is underpriced but bears a heavy risk if exchange-rates move in the wrong direction.  We're talking about something effectively leveraged into a long position on BTC (unfortunately there's not that many such things around).  For me to safely take advatange of that I need to hedge it with something that's short on BTC - which, if done properly CAN lead to guaranteed profit (provided the discount on price exceeds the cost of hedging).  A pure silver asset is one good way to do this - how good depends on my perception of the likley strength of silver vs USD over the period the other side of the pair is expected to last.  As soon as there's any significant BTC element in the asset it ceases to become useful for this - not so much because it HAS BTC in it (I can manage that) but because it becomes inefficient.  I have to tie up BTC to hold BTC and, worse, if I do it through options a large part of the premium is for BTC that I don't want or need an option on.

More interestingly the opposite direction is more useful (because there's far more opportunities to go short on BTC than to go long).  Here's an example (doesn't apply to my fund - COULD apply to some of my personal.  I give a USD-denominated loan to someone paid and repayable in BTC (but obviously calculated based on exchange-rate).  Because it's USD-denominated I can charge a far higher interest rate than if it were BTC-denominated.  What I now want to do (if I don't want to convert other USD into BTC to rebalance my personal ratio across currencies) is protect against a large rise in BTC (a small rise doesn't matter - the extra interest rate covers that).  Buying PUTs on silver could serve that end (there's other ways to do it of course - options on MPEx, a leveraged position on Bitfinex etc) and would likely be cheaper than the alternatives.  But again it's not really feasible if I'm paying a premium that's largely to sell BTC for BTC.

If you're aiming to get the share price back to somewhere near Spot + small markup (small markup being well under 50% of spot) then that's great.  But it then leaves the rather obvious question of where do the funds to buy new silver come from?  I know your initial silver was bought with a (presumably interest-free) loan from yoruself - but that's not really a great business model (a business shouldn't rely on regular free handouts - and an interest-free loan IS a handout).  With the model I suggested obviously the silver is bought by the investors in the second asset - who get the profit on selling it (but then have to pay some it back for shipping/storage etc).

But that's exactly what I CAN'T do.  As one of the first criteria I use when looking at an investment is to determine to what extent it is effectively denominated in each currency.  Which is what I can't tell for yours over any length of time (I can estimate it now - but have no idea what it'll be at any future point in time).


Nah the LTC-ATF comparison is a different issue.  With LTC-ATF they don't know the specific securities being traded but they DO know that the fund's exposure constantly remains within a few percent of 85% LTC, 15% BTC.  With TU.SILVER the point is that we don't know what X and Y are if it's X% Silver, Y% BTC investments - knowing the detail of the BTC investments is a seperate issue (and not actually one that massively concerns me).

Yes - I COULD calculate what X and Y are right now.  But the problem is that I have no way of knowing whether those percentages will be the same tomorrow, next week or next month - or what impact an exchange-rate move will have on those percentages.  It's what will hapen in the future that I care about - NOT what a current snap-shot is.  I don't invest because of what something's current price/composition is - but because of how I expect that to change over the period of my investment.  Without a clear stated policy on those percentages there's zero way I can predict the extent to which changes in the price of silver and/or BTC/USD exchange-rate will impact the price of your shares.


Well there clearly IS some demand for one - as some people have actually redeemed silver from you.  I have no intention of running a PM fund myself.

But if your argument is that there isn't much demand for one - then what makes you believe demand for your shares would be lower if you didn't bother holding any silver at all?  People investing in your shares are most likely doing so because:

a) It's there - absolutely terrible securities with no prospects get sales (NOT saying yours is one), just being listed gets some sales anyway.
b) It's paid decent dividends - that'll sell anything.
c) Maybe some people invest because they have faith in your investing ability - if so it's DESPITE the silver holdings not BECAUSE of it.
d) Some people day-trade anything which has activity.

I don't see how you have ANY basis for assuming investment is because you happen to hold a bit of silver.  If you believe people want to own a mix of silver/BTC-denominated assets then a pure silver asset satisfies that BETTER than a mixed one - as it adds the ability for them to choose the percentage of each they hold.  A hybrid one gives the worst of all worlds - the inability to invest in just one or the other AND the inability to choose the extent of your holdings in each.

So if there IS interest in silver then a pure asset is attractive to more people (e.g. those who want to own/trade/deal options on silver).
If there isn't interest in silver then you should drop the silver totally - as it's deterring investors who may like your trading but don't want silver.

You widen your potential pool of investors from those who want a fairly random mix of silver/BTC holdings in an asset (they can still get that buy buying shares in both assets).  That's the benefit of splitting it.

It's fine as an answer IF you look at the investment in isolation rather than as part of a portfolio or larger position.

Where it isn't fine (and actual numbers are needed not vaguaries like "overweight") is in the following scenarios:

1.  You want to manage your exposure to various things (X% BTC, Y% silver, Z% LTC etc etc).  You can't do that without knowing what percent of exposure the fund will have to BTC.
2.  If you want to invest to balance/hedge against another investment that's long on BTC - that's entirely impossible if the majority of assets backing TU shares are actually BTC-denominated themselves (you end up increasng your long position more than you counter it).
3.  You have X BTC and want to invest X (or nearly X) in silver - impossible to do.
4.  You want to buy options.  Totally impossible to do so in an informed way - if the price of a share is .06 now then buying calls at .08 is horribly risky - as usagi may decide the portfolio is "overweight" and issue a dividend totally devaluing the calls you just bought.  It's also horribly inefficient as a lot of that price is BTC/equivalent which isn't what you want to buy an option on anyway.
5.  You want to buy silver.  Rather than paying an $X markup for postage/storage/etc you have to pay a Y*$X (with Y being way greater than 1) markup for capital sufficient to generate profit of $X to cover the postage/storage/etc.

The ONLY people the plan actually works for are those who:

a) Believe in usagi's investment skills (as opposed to just his ability to store silver)
b) Don't specifically want their investment mainly or entirely held in silver
c) Aren't fussed about managing their personal exposure to different currencies/assets to any great extent
d) Either don't want to redeem for physical silver or are happy to end up paying way over the odds (compared to buying it locally in cash with no counter-party risk) when they do so.

Now there IS a problem that has to be addressed one way or another - how to pay for storage fees etc if people just buy the shares and hold them (generating no revenue).  Writing covered calls on silver (NOT shares) was the means identified in the original contract - but that's badly flawed for various reasons.  What's happening is an attempt to address it by a different way to what most funds use (which is taking the fee from the actual silver) - which is a great objective but this isn't the way to do as the unintended consequence is that teh fund ceases to be a silver fund in any meaningful sense (i.e. the majority of assets backing each share are NOT silver any more).

Here's the easy way of doing it (there's a more complicated option where you sell BTC-denominated bonds so that BTC assets are cancelled out in terms of exchange-rate exposure by matching liabilities):

1.  Create one security (a bond in effect) which is pure silver.  Shares in it represent silver and are sold at a small markup to spot/cost - designed based on expected split between holders and redeemers so that it has a small positive expectation.  Shares in this represent ownership of silver NOT of the asset itself and pay no dividends.
2.  Create a second asset which owns the first.  Sell shares in it.  This one is a pure BTC investment vehicle - it owns the first one, pays the bills and keeps the profit.  Provided operation of 1. has a positive expectation then this is better for investors in 2. than NOT owning 1.

This way:

People who want to invest in silver or trade options on it or buy it can do so via 1 in an efficient manner.
Those who believe in usagi's investment skills but don't like silver's prospects can invest in 2.
Those who like the current setup can invest in both.

The markup at which security 1. is sold can then be dynamically adjusted so as to make a small profit for investors in 2.

Tyring to mix these two things in one security is just horrible from the perspective of any investor who wants to be able to invest efficiently in specific assets (e.g. silver) and have control over their exposure to different things.

So what percentage of assets being BTC do you consider overweight in a silver fund?

This single sentence highlights the fundamental problem with your fund - that its performance does NOT reflect the behaviour of silver.  Which means that though it MAY be a good investment it is NOT any use for anyone who actually wants to invest (or trade options) in silver.

When BTC rises heavily vs silver (as has been the case over the period from start of your fund until now) your fund will ALWAYS do a lot better than just holding silver.  But the opposite is also true - that if silver rises strongly vs BTC (most likely largely because of BTC falling vs USD) then your fund will significantly under-perform compared to just holding silver.

So the problems (from an investors' perspective) are:

1.  Silver only represents a minority of your fund's asset value - so to expose 1 BTC to silver I have to invest a LOT more than 1 BTC into your fund.  That's inefficient.
2.  The percentage of your fund's assets that are silver (i.e. if I spend 5 BTC on shares what percentage of that is buying silver?) is neither revealed or maintained at a consistent level.  Whilst I can work out how much I'd have to spend NOW to expose X BTC to silver I can't predict how much I'd have to set aside in the future - even if I knew what silver's price would be (as I don't know how much non-silver there'll be per share in the future).
3.  For options the above is even worse - as if I buy an option on the silver then a lot of the premium I pay is actually on an option to buy the BTC denominated element of the shares.  Paying BTC in premium to get an option on BTC that is settled in BTC is NOT good - yet that's what the majority of any option on your shares is doing.

Getting back to the point - in summary if I invest in silver then I expect the results to be exactly (or as near as possible) the same as if I HAD bought silver and held it.  That's what investing in silver means - and what I expect from a silver fund.  If I want profit from an investment fund that operates in BTC then I'd invest in one of those - not a silver fund.  And if I want a bit of both then I'd like to determine the percent of each MYSELF - not have it some random (from my perspective) mix of the two that's neither declared or maintained (the percentage split that is).

If you really MUST insist on mixing the two then please at least do so in a way that allows informed investors to predict their exposure.  e.g. declare (and stick to) X BTC of investment capital per share (dividending out to keep it at that level).  I'd prefer a defined percentage but doubt that's practical (as you then need a source of BTC if silver rises).

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.

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.

I voted no.  Reason is this:


Sight of the contract between AML/VMC (and any undertakings given by VMC in respect to ability to refund preorders if VMC fails) is essential for potential investors to make any sort of informed decision on the extent to which the pre-orders with VMC have value in the event of VMC encountering difficulties.  Contracts such as this particularly need to be disclsoed in advance where there's a potential conflict of interest (which there obviously is if you're acting on behalf of both parties) - as a clear contract is what stops any such conflict arising in practice.  That's also why, of course, not only is the contract needed but an explicit answer to my question 3 (which can only be given once the contract is published) - so that the decision about when a refund would be requested is made now rather than having to be addressed later when there'd be an enormous conflict of interest (as it would NEVER be in VMC's interest for AML to cancel the pre-order).

Bit of a long shot but is your google auth working elsewhere?

If you haven't tried it elsewhere then do so - or make sure your app is properly time-synched (there's an option to do that in the google app).  Problem could be that your phone is slightly out of synch on time - which leads to generated one-time codes being out of date (or early).  Obviously if your google authenticator is working with other sites then that's not the problem.

WEEKLY REPORT




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).

Well the give-away on it is when someone starts buying/selling 1 unit into your order without there having just been action at the other side of the market (where they could be doing it just to get last traded price to change market sides).  The only person who can determine any information (on BTC.CO/LTC-GLobal) from doing that is the asset issuer.  On Bitfunder anyone can do that to get information btw.  If noone bought or sold a small amount from your order then there's no way the asset issuer could know it was your bid/ask (unless you're the only investors holding as many shares as are in an ask or something) - as they have no more information about who has placed which orders than anyone else.

That said there's still pretty little an asset issuer can do with that information.  If an asset issuer will abuse their investors' list to work out who has placed orders by selling 1 unit and seeing whose holdings changed then likely they'll also do far worse things - like deliberately giving misleading valuations to move the price or just stealing cash from the asset.  If someone has publicly disclosed that an order is theirs (by, for example, saying they're selling their holdings in X) then the asset issuer is as entitled to use that information in their trading as anyone else - as they have no unfair advantage.

Insider-trading remains the real problem (not specific to BTC.CO obviously) - where the asset issuer can use knowledge of some major change in the value of shares to trade profitably against investors who lack that knowledge.  I run 5 assets on LTC-Global myself.  4 of them that can't apply to (3 are pass-throughs, the 4th has a fixed price and fixed rate of interest) as there's nothing which changes their value that is determined by me or known by me before it's public information.  The 5th one (my actual fund) I don't ever compete with other bids/asks on as it would be unfair, for example, for me to drive Ask prices down by under-cutting then buy them up because I knew we'd made a big profit but hadn't disclosed it.  When there WAS a big change in price (GLBSE closing with a ton of our assets stuck on it) I didn't sell into orders that were still up above book price - I suspended trading (and later cleared order book before reopening trading) immediately.


There ARE examples around of people doing that sort of shady thing on GLBSE in the past - but this isn't the place to make specific accusations.