[PrivFund] jdany's bitcoin fund

[kittucrypt]

If I understand correctly, as per your worksheet you are :

1. Long Bitcoin
2. Long Asicminer company via havelock
3. Long Your own miner - hoping that mining BTC will cost less than BTC's value.
4. Some portion in cash.

How do you divide your fund amount amongst the 4? completely your discretion?
if you run a miner physically(as per 3), do you have out/adjust for any expenses that you might be occurring?

[jdany]

If I understand correctly, as per your worksheet you are :

1. Long Bitcoin
2. Long Asicminer company via havelock
3. Long Your own miner - hoping that mining BTC will cost less than BTC's value.
4. Some portion in cash.

How do you divide your fund amount amongst the 4? completely your discretion?
if you run a miner physically(as per 3), do you have out/adjust for any expenses that you might be occurring?

This fund is very heavy in Asicminer, gearing up for Gen3 production.
I don't have any of my own mining operations involved in the fund you were looking at.
The fund is opportunistic and is simply mimics my own investing strategies - which each fund I operate has different motives.
This one is pretty simple.  Bitcoin will be at $700 by September and Asicminer will be at 1BTC per share by September.
Between now and then, we buy more of each when they are below our cost basis and we engage in as much commerce (localbitcoins) as we can to accumulate our position.
Everything is reinvested.  Cash accumulates until a buying opportunity presents itself in either BTC or AM.
We bought a ton of BTC on the way down and then converted that to a ton of Asicminer shares as it came down.

Great questions.

[kittucrypt]

This fund is very heavy in Asicminer, gearing up for Gen3 production.
I don't have any of my own mining operations involved in the fund you were looking at.

I am not sure then what do the two Asicminer heads mean? How are you invested in Asicminer directly?

The fund is opportunistic and is simply mimics my own investing strategies - which each fund I operate has different motives.
This one is pretty simple.  Bitcoin will be at $700 by September and Asicminer will be at 1BTC per share by September.

I think "WILL BE" is a strong preposition. I believe you quote these numbers to justify your target return. I would suggest you form a grid of different possible scenarios to disclose future outcomes as fairly as possible to investors. This will come handy if you intend to scale up(which I believe you should).

Between now and then, we buy more of each when they are below our cost basis and we engage in as much commerce (localbitcoins) as we can to accumulate our position.
Everything is reinvested.  Cash accumulates until a buying opportunity presents itself in either BTC or AM.
We bought a ton of BTC on the way down and then converted that to a ton of Asicminer shares as it came down.
Great questions.

So the Buying opportunity is just the price dipping under your cost basis? How do you arrive at cost basis? Is it the initial buy in cost or some other costs are also included?

[jdany]

I am not sure then what do the two Asicminer heads mean? How are you invested in Asicminer directly?
-----
One is direct shares.
One is shares on havelock.
The first column is just a bunch of notes to remind me about cost basis, etc,

I think "WILL BE" is a strong preposition. I believe you quote these numbers to justify your target return. I would suggest you form a grid of different possible scenarios to disclose future outcomes as fairly as possible to investors. This will come handy if you intend to scale up(which I believe you should).
-------
I agree.  Just to give the rational to the investors that if I should happen to sell next week - my intentions were known.
I only brought this to the forum as an idea for others.  I had no intention of pitching it for myself.
I would say the entire thing is under-developed by normal investment standards.  That will all change as this thing takes shape.

So the Buying opportunity is just the price dipping under your cost basis? How do you arrive at cost basis? Is it the initial buy in cost or some other costs are also included?
-------
I think I am in a very good position right now.  But, if I dip below my cost basis - and I have a chance to get in a better position, I'll take it.
For instance.  The fund believes both BTC and AM are undervalued and will return to a higher level within the next 6 months.
I believe BTC will go up by 40% and AM will go up by 100%. 
I want to be heavier on AM, but not as heavy as we are.  10% in BTC and 90% in AM.
So, if we can move some of the fund to more BTC without giving up cost basis, that's what we'll do.
Cost basis for me is going to be when the asset was entered into the fund as a percentage of total value.

Awesome questions!   I appreciate your interest.

[kittucrypt]

I am not sure then what do the two Asicminer heads mean? How are you invested in Asicminer directly?
-----
One is direct shares.
One is shares on havelock.
The first column is just a bunch of notes to remind me about cost basis, etc,

I think "WILL BE" is a strong preposition. I believe you quote these numbers to justify your target return. I would suggest you form a grid of different possible scenarios to disclose future outcomes as fairly as possible to investors. This will come handy if you intend to scale up(which I believe you should).
-------
I agree.  Just to give the rational to the investors that if I should happen to sell next week - my intentions were known.
I only brought this to the forum as an idea for others.  I had no intention of pitching it for myself.
I would say the entire thing is under-developed by normal investment standards.  That will all change as this thing takes shape.

So the Buying opportunity is just the price dipping under your cost basis? How do you arrive at cost basis? Is it the initial buy in cost or some other costs are also included?
-------
I think I am in a very good position right now.  But, if I dip below my cost basis - and I have a chance to get in a better position, I'll take it.
For instance.  The fund believes both BTC and AM are undervalued and will return to a higher level within the next 6 months.
I believe BTC will go up by 40% and AM will go up by 100%. 
I want to be heavier on AM, but not as heavy as we are.  10% in BTC and 90% in AM.
So, if we can move some of the fund to more BTC without giving up cost basis, that's what we'll do.
Cost basis for me is going to be when the asset was entered into the fund as a percentage of total value.

Awesome questions!   I appreciate your interest.

Thanks for the answers and sorry for more questions. Again, I believe these questions would help you create a strong pitch.

1. How liquid are ASICMINER direct shares? Where do they trade? Are they privately held or publicly traded? If, I as an investor have no clue about ASICMINER or BTC, I would want to know whether what price impact will you have if you were to liquidate your fund tomorrow morning.

2. Your calculations show a term value. What happens at that time? Do you just liquidate all the fund and take your fee? What happens if you have investors who want to stay in?

3. I believe the performance of this fund and future fund of yours will depend a lot on when you start them(as per your cost basis explanation). Right now there is a general consensus that the price of BTC will go up and thus your future expectations should yield good results. In the future, as long as you can have a "VIEW" of the markets and can sell it to investors, you should be in good shape.

Again Good Luck!

[jdany]

1. How liquid are ASICMINER direct shares? Where do they trade? Are they privately held or publicly traded? If, I as an investor have no clue about ASICMINER or BTC, I would want to know whether what price impact will you have if you were to liquidate your fund tomorrow morning.
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Direct shares are not liquid at all.  They can be sold or auctioned through private sale or converted to Havelock shares, but it takes time.   I'm holding half through havelock and half through Direct shares.    In a pinch, I have at least half the fund liquid.

2. Your calculations show a term value. What happens at that time? Do you just liquidate all the fund and take your fee? What happens if you have investors who want to stay in?
--------------
All of my funds have either overlapped or run consecutive.  If the fund's term or objective ends, it's reevaluated, closed out and a new fund takes its place. (with a new set of calculated goals and a new term) Anyone who wants to stay in, they just enter the new fund at exactly the same level. Since all of the funds include the same 6 assets, it's just a shuffle of percentages.

3. I believe the performance of this fund and future fund of yours will depend a lot on when you start them(as per your cost basis explanation). Right now there is a general consensus that the price of BTC will go up and thus your future expectations should yield good results. In the future, as long as you can have a "VIEW" of the markets and can sell it to investors, you should be in good shape.
-------------
This fund is going to be a good example of low hanging fruit.  But these set of circumstances offer a nice balance of risk and upside, perfect for testing the logistics behind running a public fund.


Again, thanks for questions.  I think the BTC world needs Entrepreneurs and Finance guys to come together and make it safer and more stable place to do business.
I'll be leaning on guys like you to get this right.

[kittucrypt]

1. How liquid are ASICMINER direct shares? Where do they trade? Are they privately held or publicly traded? If, I as an investor have no clue about ASICMINER or BTC, I would want to know whether what price impact will you have if you were to liquidate your fund tomorrow morning.
-------------
Direct shares are not liquid at all.  They can be sold or auctioned through private sale or converted to Havelock shares, but it takes time.   I'm holding half through havelock and half through Direct shares.    In a pinch, I have at least half the fund liquid.

2. Your calculations show a term value. What happens at that time? Do you just liquidate all the fund and take your fee? What happens if you have investors who want to stay in?
--------------
All of my funds have either overlapped or run consecutive.  If the fund's term or objective ends, it's reevaluated, closed out and a new fund takes its place. (with a new set of calculated goals and a new term) Anyone who wants to stay in, they just enter the new fund at exactly the same level. Since all of the funds include the same 6 assets, it's just a shuffle of percentages.

3. I believe the performance of this fund and future fund of yours will depend a lot on when you start them(as per your cost basis explanation). Right now there is a general consensus that the price of BTC will go up and thus your future expectations should yield good results. In the future, as long as you can have a "VIEW" of the markets and can sell it to investors, you should be in good shape.
-------------
This fund is going to be a good example of low hanging fruit.  But these set of circumstances offer a nice balance of risk and upside, perfect for testing the logistics behind running a public fund.


Again, thanks for questions.  I think the BTC world needs Entrepreneurs and Finance guys to come together and make it safer and more stable place to do business.
I'll be leaning on guys like you to get this right.

1. Why do you hold illiquid shares in your fund? What advantage do they provide? Yes you have half the fund liquid, but the other half is grossly illiquid. when you say it takes long, how long can it be? 1 Week? 1 month?
2. Low hanging fruit is correct. you did say you have other strategies. Do any of those involve more "skill" in investing than just being NET LONG on BTC?

[jdany]

1. Why do you hold illiquid shares in your fund? What advantage do they provide? Yes you have half the fund liquid, but the other half is grossly illiquid. when you say it takes long, how long can it be? 1 Week? 1 month?
-----------------
Trading on Havelock can be expensive.  Because I have always held more than 50% of any fund I have ever created, I have never needed to consider selling or liquidating that other half of the mining securities.  If Havelock got hacked, taken over or went out of business - I really don't want everything to be gone.  I consider the direct shares to be more safe but illiquid.  I consider havelock to be more liquid but less secure.
If the percentage of the fund crested more public ownership than what I held, I would just make the liquid portion proportional.  It's just a preference that if given the choice, I would rather hold direct.    I have never done a transfer in to havelock.  So, I am only guessing that it's probably a week. Maybe someone with experience can help with that question.  

2. Low hanging fruit is correct. you did say you have other strategies. Do any of those involve more "skill" in investing than just being NET LONG on BTC?
-----------------
Since my involvement, there has always been some low-hanging fruit angle.  If there is a true market behind this, professionals will be involved - (not just mine either)
My role is proof of concept and making sure there is a business model where the operator gets to make money and the investors do better than they could do on their own.
I am creating a product that a spec investor like myself will feel comfortable with.  Something that is has nice volatility.  Something that is well capitalized.  Something that is balanced and thoughtful.
I honestly think skill people would struggle with this right now because of the data they would have to work with.  But, once "real money" gets involved in BTC, the technicals will matter more.  To be honest, none of the assets in the fund have data or history that would satisfy any traditional investor, nor any investment manager.  So, I imagine it will go through more volatile bubbles that us low-hangers have been benefiting from for a good while yet.
But, when that time comes, I want us to be ready.  I don't want wall street dipshits to come through here and "harvest us".   We're not big enough to withstand an extraction that doesn't reciprocate.  We need BTC people to solve this, so that we are the ones handling the need for real products.  

To answer your question - when the funds need more sophistication, we'll become more sophisticated than I personally, can make them.

[NotLambchop]

OP, I was pleasantly surprised by this thread because you wanted to "share" your story without asking for money.  Now, you're asking for money.
Way to blow it, OP.

[jdany]

OP, I was pleasantly surprised by this thread because you wanted to "share" your story without asking for money.  Now, you're asking for money.
Way to blow it, OP.

Simmer down...   Just testing it.  
Adding some test money to get some guinea pigs involved.

That's how capitalism works.  If something is in demand, someone is going to do it.
As soon as I shared this idea, I had people interested in becoming involved.
Wouldn't you rather it be thought out and done this way?  
I'm not looking to have people finance my investments.  I'm sharing investments that I already have.
I don't have a NEED for investor money.  I was hoping that would be pretty obvious.

[NotLambchop]

...
I'm not looking to have people finance my investments.  I'm sharing investments that I already have.
...

+1 for "I don't need teh money, just wana share."  

...
That's how capitalism works.
...

Altruism?

[jdany]

...
I'm not looking to have people finance my investments.  I'm sharing investments that I already have.
...

+1 for "I don't need teh money, just wana share."  

...
That's how capitalism works.
...

Altruism?

More like...
I just came here to share something that I've been using to help people get involved in the real world.
And I found there are those same people here.
I'm not real sure if what I do in the real world works here - so I'm going to test it.

I'm more of a bitcoin activist than bitcoin philanthropist.

You nailed it.
Great job.

[sporket]

https://bitcointalk.org/index.php?topic=563180.0
Hunt responsibly.

[jdany]

I'm going to escrow enough BTC to cover the few hundred test shares we're playing with.
No downside risk.  But, we'll allow you to play the upside.

[jdany]

Since reception to this fund was a bit cold, I'm going to go back to running it as a private fund.
I was interested in seeing how it would work as a product, but someone will come around that actually needs the capital to open/run the fund.  Which will be better for the community because you'll get more action from a person in that position.

My accountant lectured me on "playing around" with this anyhow, when I didn't have a thoughtful plan on the return side of the ledger.

I'll still be heavily investing in Bitcoin over the years.  I'll just be doing it with my own money.   

For those of you who asked questions, thank you!  It was fun going through the exercise of thinking this one out.