satoshidice

[Thunderbit]

 i really have no clue about the stock market the real one or the bitcoin one.  i was excited to buy satoshidice stocks so i scraped together my last 1.7btc and bought the stock. i figured a gambling website couldnt fail and that i would recieve a nice dividend every month. i realize 1.7btc is not a huge investment but when i read the fine print it said the estimated dividend payout would be .35btc per 1000 shares a year!  really? is this a normal return for a stock? considering how much ive been winning playing poker i cant see staying invested in this stock.

 so why do people buy?   to hope the price of the share goes up so they can sell?  or sit back and recieve dividends?

 like i said i have no experience with trading so any input would be appreciated

[1713913399]

1713913399

[bitcoinbear]

i really have no clue about the stock market the real one or the bitcoin one.  i was excited to buy satoshidice stocks so i scraped together my last 1.7btc and bought the stock. i figured a gambling website couldnt fail and that i would recieve a nice dividend every month. i realize 1.7btc is not a huge investment but when i read the fine print it said the estimated dividend payout would be .35btc per 1000 shares a year!  really? is this a normal return for a stock? considering how much ive been winning playing poker i cant see staying invested in this stock.

 so why do people buy?   to hope the price of the share goes up so they can sell?  or sit back and recieve dividends?

 like i said i have no experience with trading so any input would be appreciated

Do we really need another sotoshidice thread? I think there are already at least 3!

You forgot to mention how much a share costs, currently about .0034 btc. So that 1.7 btc should have gotten you about 500 shares. The estimated return was using the current income from satoshidice, which could go up or down. As it stands now the dividend estimate is somewhere around 10% a year so your 1.7 btc will earn about .17btc in dividends. From what evoorhees has said, the site has seen an increase in traffic since the IPO was announced, so the return could be higher than that.

For a normal stock in a normal market, I would say a 10% yearly dividend is decent. Somehow, the bitcoin stocks seem a bit different, with 10% monthly being more standard, due to the high risks involved. But since SatoshiDice is already running and generating income for the owners, it is seen as much lower risk and so is not expected to have such a high yield.

[Thunderbit]

i really appreciate the info...and sorry i guess i should have checked to see if anyone else had satoshi questions.  as being a newb i guess i saw a chance to own a piece and sit back and reap the rewards. with the profits satoshi brings in i ASSUMED the payouts would be much higher. im sure 5 years from now ill be kicking myself for backing out....but i cant see investing now.

thanks again
   

[bitcoinbear]

i really appreciate the info...and sorry i guess i should have checked to see if anyone else had satoshi questions.  as being a newb i guess i saw a chance to own a piece and sit back and reap the rewards. with the profits satoshi brings in i ASSUMED the payouts would be much higher. im sure 5 years from now ill be kicking myself for backing out....but i cant see investing now.

thanks again
   

I wouldn't back out yet. The price could jump upward in a week when the dividend comes out and updated stats are published.

[freeAgent]

You should never assume anything when purchasing a stock or other investment.  The reason SDICE shares have such low expected dividends is that the stock is extremely diluted.  That's also part of the reason why it's so cheap on a per share basis.  The other reason dividends are so low is that evoorhees values his company very highly and is keeping the vast majority for himself even if all the shares for sale get bought.

[Thunderbit]

that whole market confuses me....seems almost impossible to find enough usefull info on any stock... and every stock i look at seems to have pathetic dividends...who knows... maybe its just all over my head.

[bitcoinbear]

that whole market confuses me....seems almost impossible to find enough usefull info on any stock... and every stock i look at seems to have pathetic dividends...who knows... maybe its just all over my head.

What would be non-pathetic dividends in your mind?

Most GLBSE assets are paying somewhere between 1-7% dividends PER WEEK! You might find that amount of dividends on wall street PER YEAR.

[ribuck]

For comparison, the average P/E (price-to-earnings) ratio on the London FTSE-100 is just over 20 to 1, and the average P/E ratio on the Dow Jones Industrial Average is over 15 to 1.

If you think that Satoshi Dice will continue to earn at or above its current rate over the long term (a couple of decades, say), it would be a great investment at a P/E ratio of 10 to 1.

Aye, but there's the rub. A decade is a long time in the Bitcoin world, and many things could happen to Satoshi Dice during that time. For that level of risk, 10/1 was too high for me. I would have invested at 5/1 though.

[bitcoinbear]

For comparison, the average P/E (price-to-earnings) ratio on the London FTSE-100 is just over 20 to 1, and the average P/E ratio on the Dow Jones Industrial Average is over 15 to 1.

If you think that Satoshi Dice will continue to earn at or above its current rate over the long term (a couple of decades, say), it would be a great investment at a P/E ratio of 10 to 1.

Aye, but there's the rub. A decade is a long time in the Bitcoin world, and many things could happen to Satoshi Dice during that time. For that level of risk, 10/1 was too high for me. I would have invested at 5/1 though.

So if SatoshiDice reports a 2x jump in earnings next month, then you will buy some shares?

Just in case anybody is confused, the lower the P/E ratio the more you make on a given investment.

[freeAgent]

For comparison, the average P/E (price-to-earnings) ratio on the London FTSE-100 is just over 20 to 1, and the average P/E ratio on the Dow Jones Industrial Average is over 15 to 1.

If you think that Satoshi Dice will continue to earn at or above its current rate over the long term (a couple of decades, say), it would be a great investment at a P/E ratio of 10 to 1.

Aye, but there's the rub. A decade is a long time in the Bitcoin world, and many things could happen to Satoshi Dice during that time. For that level of risk, 10/1 was too high for me. I would have invested at 5/1 though.

So if SatoshiDice reports a 2x jump in earnings next month, then you will buy some shares?

Just in case anybody is confused, the lower the P/E ratio the more you make on a given investment.

That depends on the price of the shares.  If earnings double and share price doubles, P/E is the same.

[evoorhees]

that whole market confuses me....seems almost impossible to find enough usefull info on any stock... and every stock i look at seems to have pathetic dividends...who knows... maybe its just all over my head.

Dividends are always going to roughly be proportional to risk involved. Anything with "highly attractive dividends" will necessarily be very high risk. In the normal finance world, a 10% dividend on a stock which also has large growth potential is an excellent deal. In Bitcoin world, however, people tend to expect returns that are (in my opinion) unrealistic and extremely suspicious.  For example, Pirateat40's fund was offering 7% per WEEK. An amazing return... but then he disappeared as we knew he would, and the investors lost everything.

Within the Bitcoin world, SatoshiDICE should be considered a reasonable place to park some money, with relative security, and a reasonable return given that security. It will not make you rich overnight... to do that, you need to play SatoshiDICE

[DeathAndTaxes]

that whole market confuses me....seems almost impossible to find enough usefull info on any stock... and every stock i look at seems to have pathetic dividends...who knows... maybe its just all over my head.

What would be non-pathetic dividends in your mind?

My guess is 7% a week from some bitcoin buccaneer.
All the HYIP/ponzi stupidity make it hard for real commerce to cut through the noise.  Hell 99% of the assets on GLBSE offering dividends probably shouldn't.  You got 1 day old mining ventures paying out 100% of earnings in dividends.

For the record I think SD is overpriced but it IMHO more like overpriced by a factor of 50% to 100% not 1000%.

[Factory]

Dividends are always going to roughly be proportional to risk involved.

This is completely incorrect.

Dividends are for the most part based on free cash flow. 'Price/Earnings ratio are nearly always going to be proportional to the risk involved' - that would be a much more accurate statement. We can observe this by looking at very similar companies (with similar risks) within a sector and see that many have similar P/E ratios. However, within that same sector, you will see a wide range of % earnings paid out as dividends. *Although REITS and other similar investment vehicles will not have a wide range of % earnings paid out as dividends, as law states they must past out 90% minimum.

People need to stop focusing on dividend yield and focus more on earnings. Earnings are what truly matter. This obsession and focus on dividend yields is a common occurrence in both BTC markets and major markets, and it demonstrates a clear misunderstanding of business operations and financial analysis.

[evoorhees]

Dividends are always going to roughly be proportional to risk involved.

This is completely incorrect.

Dividends are for the most part based on free cash flow. 'Price/Earnings ratio are nearly always going to be proportional to the risk involved' - that would be a much more accurate statement. We can observe this by looking at very similar companies (with similar risks) within a sector and see that many have similar P/E ratios. However, within that same sector, you will see a wide range of % earnings paid out as dividends. *Although REITS and other similar investment vehicles will not have a wide range of % earnings paid out as dividends, as law states they must past out 90% minimum.

People need to stop focusing on dividend yield and focus more on earnings. Earnings are what truly matter. This obsession and focus on dividend yields is a common occurrence in both BTC markets and major markets, and it demonstrates a clear misunderstanding of business operations and financial analysis.

Ehhh yeah I agree with you.  Absolutely, earnings are what truly matter for any investment. When I said "dividends correspond to risk" I should have said "dividend yield corresponds to risk".  If a company is paying X in dividends, and it's a safe investment, the price of the share will be bid up to reduce the dividend yield, not the dividend itself.  Apologies for not being careful with my terminology.

[bitcoinbear]

Dividends are always going to roughly be proportional to risk involved.

This is completely incorrect.

Dividends are for the most part based on free cash flow. 'Price/Earnings ratio are nearly always going to be proportional to the risk involved' - that would be a much more accurate statement. We can observe this by looking at very similar companies (with similar risks) within a sector and see that many have similar P/E ratios. However, within that same sector, you will see a wide range of % earnings paid out as dividends. *Although REITS and other similar investment vehicles will not have a wide range of % earnings paid out as dividends, as law states they must past out 90% minimum.

People need to stop focusing on dividend yield and focus more on earnings. Earnings are what truly matter. This obsession and focus on dividend yields is a common occurrence in both BTC markets and major markets, and it demonstrates a clear misunderstanding of business operations and financial analysis.

If a company is paying out 100% earnings as dividends, then it can get confusing wether to say dividends or earnings. Your point is good, people around here tend to focus too much on the dividend and ignore the growth.


Although, it is understandable that people want to have a high dividend, that way they know the company is not running off with the money.

[dree12]

The earnings of SatoshiDice are sufficiently high for me. I'm more concerned about the risk:

• SatoshiDice Failure (level-0 risk): If Bitcoin's economy explodes, then SatoshiDice's relative importance can diminish greatly.
• MPEX Failure (level-1 risk): A lack of ability to be polite and a refusal to move off a tainted domain gives MPEX a high chance of disappearing.

Further increased with the passthrough:

• GLBSE Failure (level-2 risk): GLBSE has a chance, however small, of failing.
• DeadTerra Failure (level-2 risk): DeadTerra is well-respected, but still has a chance of default.

[Factory]

Dividends are always going to roughly be proportional to risk involved.

This is completely incorrect.

Dividends are for the most part based on free cash flow. 'Price/Earnings ratio are nearly always going to be proportional to the risk involved' - that would be a much more accurate statement. We can observe this by looking at very similar companies (with similar risks) within a sector and see that many have similar P/E ratios. However, within that same sector, you will see a wide range of % earnings paid out as dividends. *Although REITS and other similar investment vehicles will not have a wide range of % earnings paid out as dividends, as law states they must past out 90% minimum.

People need to stop focusing on dividend yield and focus more on earnings. Earnings are what truly matter. This obsession and focus on dividend yields is a common occurrence in both BTC markets and major markets, and it demonstrates a clear misunderstanding of business operations and financial analysis.

If a company is paying out 100% earnings as dividends, then it can get confusing wether to say dividends or earnings. Your point is good, people around here tend to focus too much on the dividend and ignore the growth.


Although, it is understandable that people want to have a high dividend, that way they know the company is not running off with the money.

I agree; dividends are an excellent way for issuers to reward shareholders, and provide a certain level of consistency within a portfolio. Though a high % of earnings paid out in the form of dividends is a concern. High payout percentages restrict the total amount of working capital if the company is going to always maintain their dividend rate.

[freeAgent]

Dividends are always going to roughly be proportional to risk involved.

This is completely incorrect.

Dividends are for the most part based on free cash flow. 'Price/Earnings ratio are nearly always going to be proportional to the risk involved' - that would be a much more accurate statement. We can observe this by looking at very similar companies (with similar risks) within a sector and see that many have similar P/E ratios. However, within that same sector, you will see a wide range of % earnings paid out as dividends. *Although REITS and other similar investment vehicles will not have a wide range of % earnings paid out as dividends, as law states they must past out 90% minimum.

People need to stop focusing on dividend yield and focus more on earnings. Earnings are what truly matter. This obsession and focus on dividend yields is a common occurrence in both BTC markets and major markets, and it demonstrates a clear misunderstanding of business operations and financial analysis.

If a company is paying out 100% earnings as dividends, then it can get confusing wether to say dividends or earnings. Your point is good, people around here tend to focus too much on the dividend and ignore the growth.


Although, it is understandable that people want to have a high dividend, that way they know the company is not running off with the money.

I agree; dividends are an excellent way for issuers to reward shareholders, and provide a certain level of consistency within a portfolio. Though a high % of earnings paid out in the form of dividends is a concern. High payout percentages restrict the total amount of working capital if the company is going to always maintain their dividend rate.

Though with only 10% (or less as the IPO isn't selling out) of the stock paying out dividends (that we know of), there is still a bunch of income left over.  I wouldn't be too worried about that.  That doesn't strike me as too much of a concern, the fact that none of the IPO investors will have any say whatsoever in the operation of the company is very troubling to me.  That also means there's no check on evoorhees' decisions.  He could include his own salary in the "costs", for example, and decide to set his salary equal to 100% of the profits.  Nobody could stop him (though it would make the stock worthless).

[Factory]

Dividends are always going to roughly be proportional to risk involved.

This is completely incorrect.

Dividends are for the most part based on free cash flow. 'Price/Earnings ratio are nearly always going to be proportional to the risk involved' - that would be a much more accurate statement. We can observe this by looking at very similar companies (with similar risks) within a sector and see that many have similar P/E ratios. However, within that same sector, you will see a wide range of % earnings paid out as dividends. *Although REITS and other similar investment vehicles will not have a wide range of % earnings paid out as dividends, as law states they must past out 90% minimum.

People need to stop focusing on dividend yield and focus more on earnings. Earnings are what truly matter. This obsession and focus on dividend yields is a common occurrence in both BTC markets and major markets, and it demonstrates a clear misunderstanding of business operations and financial analysis.

If a company is paying out 100% earnings as dividends, then it can get confusing wether to say dividends or earnings. Your point is good, people around here tend to focus too much on the dividend and ignore the growth.


Although, it is understandable that people want to have a high dividend, that way they know the company is not running off with the money.

I agree; dividends are an excellent way for issuers to reward shareholders, and provide a certain level of consistency within a portfolio. Though a high % of earnings paid out in the form of dividends is a concern. High payout percentages restrict the total amount of working capital if the company is going to always maintain their dividend rate.

Though with only 10% (or less as the IPO isn't selling out) of the stock paying out dividends (that we know of), there is still a bunch of income left over.  I wouldn't be too worried about that.  That doesn't strike me as too much of a concern, the fact that none of the IPO investors will have any say whatsoever in the operation of the company is very troubling to me.  That also means there's no check on evoorhees' decisions.  He could include his own salary in the "costs", for example, and decide to set his salary equal to 100% of the profits.  Nobody could stop him (though it would make the stock worthless).

True. The entire S.DICE offering (like pretty much all btc-based securities) is little more than an extremely vague gentleman's agreement. This is just one a long list reasons why it is drastically over-priced on a purely logical basis.