There's two basic models to use for allowing increased risk:

1.  The one you describe - where those willing to risk over 1% only get 'extra' action on bets exceeding 1% of all capital.
2.  Allocating ALL bets based on ALL risked capital - so those who risk more get a bigger slice all the time.

You MAY be correct about risking all at 5x outperforming a martingale but it IS the case that there's differences between risking 100% of BR at 5x and risking 5% of BR at 100x.  The detail of the difference varies depending on which model you use - certainly in case 1. my instinct is that risking 100% at 5x is far superior due to picking up 20x as much of smaller bets - though you do then stand the risk of losing the lot over a fairly short series of max bets (though for that to be a real risk it involves an idiot gambling on the horribly priced bets where they're odds-on to win but pay through the nose for the privilege - at the 98% level the house edge is effectively 50% : you only make half the profit on winning bets that you would on a fair bet).

It's BFL making them - EVERYTHING poses a problem (other than taking cash for pre-orders).

How does what it's trading at come into it?

The 30% applies where the issuer is constantly selling more - that isn't the case here.  Friedcat has already paid back over 2.5 times ALL the cash he ever received from investors.  Not sure how you managed to get so confused on that rather simple point.  Of the 3.5 BTC shares are changing hands for, only 0.1 BTC has ever gone to friedcat - the other 3.4 has gone to previous owners along the way.  We know he wasn't issuing more (unless he didn't sell the 160k+ in the first place) as the dividends and ownership is trackable via the block-chain and hasn't increased.

Market prices (on pass-throughs remember) have zero relevance to what cash friedcat received in the past.  So how can it be a scam when he received about 16K BTC in total from investors and has already given back over 40K BTC in dividends?  That's probably more in dividends that S.DICE, S.MPOE and S.BBET added together - with only a tiny percentage of what they raised from investors ever taken in.

Do the math for MPOE and ASICMINER side by side - see how much was taken from investors and how much given back (even discounting that MPOE has been running longer).  Then maybe remove your blinkers and look at the market valuations again.

The market sorts that itself.  If ROI falls then at some point it'll drop below some people's threshold and they'll pull out their cash.  Maximising capital is in dooglus' best interest - as it also maximises possible revenue.  What you propose also potentially loses gambling customers - as when they finish a session of play and want to sling their BR into investment mode until the next day they sometimes won't be able to.  And that then encourages them to withdraw - adding a delay/barrier against them resuming play later.

dooglus should just focus on getting as many people gambling as possible - and let investment sort itself out.  If capital becomes too excessive then the easiest way to handle it is increase his own cut - if he's getting far more capital than he needs then clearly he isn't taking enough.

I considered the other implementation but rejected it as you'd end up with the perverse situation of players running martingales on the investment side where they actually work.  That's the problem with allowing minnows to act like big fish - you can't allow them to risk ANY portion of their balance without also allowing them to change it frequently to make it +EV.

I can't see a 'fair' way to allow different degrees of risk whilst preventing people using it to gamble (and in the process removing benefit from all other investors as well as allowing them to sit at the wrong side of the table for what they're doing).

Hadn't noticed that - it really seems to have shot up suddenly in last few hours.  Either a bunch of machines have been turned on or there's been goof network luck and blocks have been found faster than standard.  There's only a few days until next difficulty change - and it's still possible for SELLING to get a very good dividend or no dividend at all.  Which is why any decent model predicts a range NOT a fixed value.

Even if some participants in DMS lose money (and it's a certainty some will - just unknown which ones) they'll hopefully learn enough from it that the loss doesn't sting too badly and saved them more on future trades in other securities.

That happens from time to time - its a problem that should be sorted once burnside finishes moving balance queries away from accessing bitcoind and onto reading from a database table.

Basically the system struggles when there's a lot of activity occurring - as it's taking way to long to carry out actions.

Another symptom you'll sometimes see is that when you load market it shows an out of date or empty values for number of shares held and/or available balance.

Both problems are solved by refreshing every few seconds until it works.

I'm by no means convinced allowing investors to take on more than 1% risk is a good thing.

The problem I see is that if they can take on significant risk per bet then it removes all incentive for anyone to actually play the game.  Why would someone take on the role of player (with the odds against them) if they can expose their capital rapidly but with the odds in their favour?

Investment MUST be slow and steady profit - to force gamblers into taking on the player role and accepting the bad odds.

I think pass-throughs in general will always get a much easier ride from Moderators because:

1.  Moderators assume (rightlyy or wrongly) than the security has already passed some detailed examination,
2.  Moderators know the contract for the underying asset can't be changed whatever they say.

And pass-throughs should in general be approved anyway provided the contract for the pass-through itself is clear and there's reasonable grounds for believing the issuer will maintain proper backing.

All a pass-through really needs for approval is to define how its shares relate to ones in the underlying asset.  Risks associated with the underlying asset are pretty irrelevant when approving it - as those are explicitly the investors' responsibility to determine and assess (it's similar to why it wouldn't be appropriate to reject a gold fund just because you thought gold was a bad investment).  Personally I'd have voted NO because the underlying asset is so terrible - but I don't believe moderators have a responsibility to make that judgment call.

I don't have a problem with idiot investors on BTC-TC throwing their cash away either - clearly they also need a wake-up call.  I'd bet most of them don't realise that not only is their investment diluted by Ken's own but also by existing investors who bought in for a fraction of the price - with there being no significant actual new assets or improvement in outlook justifying a massive increase in valuation.

I don't think Ken's anywhere near finished milking them yet - and good luck to him.  He needs to hurt investors for a few million for there to be any chance of the message getting through when it all gos horribly wrong and the realisation dawns on them that they have zero chance of ever making back what they invested.

The announcement will be that AMC and VNC have entered into discussions with someone important but can't reveal who its with or what it's about due to an NDA.  They can, however, project that everyone should continue throwing cash in Ken's general direction.

After his first bodged attempt (where he projected they'd mine more coins that the whole network would) I did think for a while that maybe he was just very keen, in a rush and didn't proof-read things properly.  But then when he started making projections based on current difficulty it became obvious that this is just a cash grab.  There are, after all, only two alternatives:

A.  He didn't have a proper projection - in which case he shouldn't have been taking cash at all.
B.  He had a proper projection but deliberately posted an inaccurate and misleading one.  In which case noone should trust him at all.

There IS no third option where he sort of has a projection and accidentally posted one with current difficulty then failed to correct it when it was pointed out.

Bitfunder needs this anyway - some massive loss for investors that will hopefully lead to a change in attitude where people who don't get their plans right first time get told to fuck off.

BTC Bond I haven't proposed yet.  It offers very low return (about 11% per year) and I haven't been able to find namworld's spreadsheet that lists the assets he has backing it.  Last time I saw it was about a month ago (and it was a month out of date then) and from memory bulk of investments were in 3 shares on Bitfunder - one of which (Ziggap) was a scam and has vanished.  If you have the link to it then I'd be grateful for it - thought it was in the details for BTCBOND but it doesn't appear to be there any more.

Without any list of assets (and with the last list I saw having 1/3 of them something which turned out to be a scam and the rest mainly 2 shares I believe to have high USD exposure) I can't see 11% return justifying the CP risk.

I'll make a seperate post about GRAET.LOAN later - that offers a much higher rate but in my view has way to much risk for reasons that may not be immediately evident when reading the IPO details.

From my perspective as manager I'd love nothing better than if all proposals to invest got voted no - means less work for me with no change in my management fee.

As a MINING investor (I hold MINING shares) I don't really care so long as there's no risk of more than about 1/3 of capital being lost (there's no way in short-term MINING can end up entitled to more than 2/3 of capital).

As a SELLING investor I'm fine with any investment that I'd be happy with risking my money in normally.  I stand to get the profits or losses - exactly as though it were a straight investment directly into them.  In fact I'll invest in things I otherwise wouldn't - as I CAN'T invest in the things I'd usually invest in, due to them being much higher risk AND reward.

I have no problem at all if the consensus of SELLING holders is not to invest.  With current variability of difficulty I'll have to keep at least 30-40% of capital totally liquid anyway - but I'm fine with investing the rest.

There's one last point about investment that hasn't been mentioned but should.  Investing elsewhere DOES bring new CP risk - but in theory also reduces the CP risk in respect of myself and BTC-TC.  At present all capital has direct exposure to myself and burnside/BTC-TC/LTC-Global.  Investment elsewhere reduces one or both of those risks - e.g. If we had 2 CDs with TF for 200 BTC each (won't be the case immediately) then in theory there's less cash I (or burnside) could steal.  Obviously CP exposure to ME isn't something I personally have a problem with - but everyone else should at least be considering it (as you should with ALL investments you make).

Quoting as think dooglus missed it - and would like an answer about withdrawals.

Maybe he's just projecting a shit-load of transactions with enormous fees.

Heh, his is nicer than mine as well - though it seems to have a rather higher next difficulty than is likely.  I'm also not sure the arbitrage calculation is taking into account losing 0.2% to transaction fees on every buy of PURCHASE and sale of MINING.

Think you're behind the times.  They've made an announcement announcing the date on which they'll announce the date of an announcement about ...

Sold   1425
Swapped   0
Total   1425
Price   0.053794
Total   76.65645
Less Fee   76.5031371
Man Fee   2.295094113

BTC Balance (BTC-TC)    1,235.06725040
12500 LTC-ATF.B1    125.00000000
TOTAL ASSETS    1,360.06725040
   
Outstanding MINING   26183
Outstanding SELLING   26183
Outstanding PURCHASE   341
Effective Units   26524
   
Block reward   25
Difficulty   19,339,258
Hashes per MINING   5000000
   
Daily Dividend    0.00013002
50 days (Min Liquid)    0.00650111
100 days (Forced Close)    0.01300222
365 days (Buyback)    0.04745810
405 days (IPO)    0.05265898
400 days (Post SELLING div)    0.05200887
410 days (Pre SELLING div)    0.05330910
   
NAV Post MINING Div    1,356.61854196
NAV/U Post MINING Div    0.05114683
Days Dividend Post Div   393.37
SELLING Dividend    -         
NAV Post SELLING Div    1,356.61854196
NAV/U Post Selling Div    0.05114683
PURCHASE selling price    0.05370417
PURCHASE buy-back price    0.05012389

Well I tried to ensure the contract was such that there was no conflict of interest between me in my role as manager and me in my role as an investor.

My Management fee isn't impacted by whether we invest or not (or which investments we do/don't use) - so my basis for assessing investments SHOULD be the same as everyone else's.  The only tiny bias I have is that it hurts me far more than investors if we invest and make a loss - as then the whole of DMS could become very unattractive.  But with it designed as it is, erring on the side of being cautious isn't in my view a bad thing.

ASICMINER at IPO seemed a good opportunity to me.  At the time my fund was tiny - and GLBSE happened to close when our holding of it were low.  But it was the first (and only for about 6 months) share that I intentionally purchased as a long-term holding.  That decision is documented in my thread back then.  The 2nd such investment was DMC - a totally shite investment but it became worth holding due to its own holdings of ASICMINER after ASICMINER did well.  We actually made more from DMC than from ASICMINER itself.

On the bet you linked the Yes side is actually a great bet - not because there's any likelihood of BBET becoming massive this year but because there's a not insignificant chance of an S.DICE collapse.  i.e. the bet can be won by S.DICE losing market cap to below BBET as well as by BBET gaining market cap to above S.DICE.  I'd still favour the No side but for two factors:

1.  With the current odds of about 1:3 I'd be taking on CP risk and the risk of losing the bet in return for tieing up capital for 6 months for a 30% profit.  That's just totally unattractive.
2.  If MPEx were ever to delist S.DICE they MIGHT declare a win for Yes - as immediately after delisting they could argue S.DICE had a market cap of 0 (not being present in any market it wouldn't have a market cap - even if that were only temorary pending relisting elsewhere).  With MPEx/BBET run by same people there's conflicts of interest there I wouldn't want to go near (on the No side).  S.DICE is almost certainly in breach of its contract - by charging operational expenses to investors (when the contract explicitly limits what can be charged to expenses for promotion and development) - so delisting is far from impossible.

Whether ASICMINER's worth its current value or not is open for debate.  My take on it is to look at what income you believe is sutainable for it then work out what share price would be warranted with a similar P/E ratio to S.DICE or S.MPOE.

If you're sure of the first point - that he lied about not having a GLBSE account - then YOU can be certain the truth is the second ones (he was breaching his contract).  Once you know for sure someone's lieing about a substantive issue there's no reason to start looking for scenarios where somone else also lied - Occam's razor etc.

Of course noone else can be certain you're telling the truth, so both options remain open to the rest of us.

Personally I always suspected he'd sold your shares - I'm on record raising that possibility in the thread about it in scams forum (which I seem unable to find).

With any luck MPOE-PR will show up and produce a GPG signed contract from you which makes it plain no GLBSE account was used in the agreement with you (they're big on everything being GPG signed).  Either that or state that they DID have a GLBSE account holding the shares.

Do you have the irc log in question where he denies having a GLBSE account?

EDIT: It's a pretty huge issue - if it were proven MP/MPOE-PR lied about this (or they were so evasive that was the only conclusion I could reach) then I'd have to close down the three pass-throughs I run to MPEx securities as it would constitute CP risk I was unwilling to bear or pass on.