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Author Topic: Would there be any interest in a GLBSE stock that invested in the US stock  (Read 1568 times)
Trance104
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September 11, 2012, 04:42:47 AM
 #1

market?  Huh

Hello! My name is Gerard Manzanares and I have been a BTC miner since June of 2011. I'm 26 years old and I live in Texas.

I have an idea for a fund that would take BTC invested, convert it to USD and purchase dividend stocks with it. It would have montly or bi-monthly BTC dividends payout based on the stocks that were held with the funds. I would not seek capital gains with any of the stocks that were purchased in the fund.
I will list BTC to USD conversion from start to finish in

I have been trading in the stock market since 2008 and I have over 5 years of banking experience. I'm working on getting verified fully through GLBSE. I can't promise anything crazy like 1% a week (yes that's crazy), but I can estimate about ~10% a year.

Here is my model (all still an idea): Sell 1000 shares at 1 BTC per or 2000 shares at 0.5 BTC per or 4000 shares at 0.25 per. Once all shares have been sold, send the BTC to mt.gox to get it converted, then send that cash to dwolla. Then send it to my bank account from there and then to the brokerage account from there (a lot I know).

For this example, let's say BTC1 is worth $10(for simplicity). We can also estimate ~0.5% conversion fee. That leaves us with $9950. Then we transfer it to Dwolla and from dwolla which costs $0.50 total. $9949.50 is what ends up in the brokerage account.

Let's say a dividend is paid of $100(to be simple). 25% goes to me because of my tax bracket. I currently fall into the 25% tax bracket (for 2012)with my current income level (yes I have to pay taxes... I'm still working!) 25% would get reinvested and the 50% would be paid back as dividends. In this case, $50. $50 goes to my bank account, then to Dwolla, then to mt.gox (costs $0.50) $49.50 gets converted to BTC at $10 per BTC (to be simple) and I end up with 4.95 BTC. That then goes to GLBSE and gets divided up among shareholders. BTC0.00495 per share would be given to 1000 shares. 0.495% ROI(in this example)

**I will always own 5% as an operating cost.

**The tax bracket will change each year. I will provide you with what tax category I fall into so that we may better assess the situation.

**At least 50% of USD dividends will be converted to BTC and paid as GLBSE dividends.

**USA taxes are "expected" to increase in 2013. Mine will increase to 28% if I maintain my current income level.

**Please remember, this is not a "get rich quick" scheme. This is a chance for you to buy US stock using your hard earned BTC... If all goes well that is.

**If this takes off, I will upload account statements and show where all of the money goes.

I welcome any feedback and questions! Feel free to bombard me with them. I will try my best to take my time and answer each one. I will ignore any "aggressive" comments. Please feel free to offer suggestions as well if what I've typed doesn't sound right.

Can't stop the Trance! Dance!! DANCE!!!
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Monster Tent
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September 11, 2012, 04:46:30 AM
 #2

I dont think people are over the last "hedge fund manager" from Texas that showed up

JMAHH
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September 11, 2012, 04:49:49 AM
 #3

I dont think people are over the last "hedge fund manager" from Texas that showed up

True, timing might be off but I didn't dislike this one.
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September 11, 2012, 04:50:47 AM
 #4

https://www.facebook.com/GeMan104  is this you ?

JMAHH
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September 11, 2012, 04:56:13 AM
 #5


Marihuana, spongebob squarepants and minecraft. The average hedge fund manager.
obisunk
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September 11, 2012, 05:01:00 AM
 #6

I think this idea has a lot of potential to bring some much needed diversity to glbse.

The only problem I see is this rather unappetizing possibility.
1. Convert IPO BTC -> $
2. All assets are now in $.
3. BTC gains against $.
4. Cannot convert assets from $ -> BTC for even IPO price

Of course, the opposite can entirely happen.  What do you think about this?
stochastic
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September 11, 2012, 05:11:10 AM
 #7

I think this idea has a lot of potential to bring some much needed diversity to glbse.

The only problem I see is this rather unappetizing possibility.
1. Convert IPO BTC -> $
2. All assets are now in $.
3. BTC gains against $.
4. Cannot convert assets from $ -> BTC for even IPO price

Of course, the opposite can entirely happen.  What do you think about this?

Maybe read up on foreign exchange risk.

Introducing constraints to the economy only serves to limit what can be economical.
totaleclipseofthebank
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September 11, 2012, 05:24:34 AM
 #8

This is a great, and much needed idea.

However, I think you might be better off if you start small and just set up a simple BTC pass-through to some index ETFs, which would allow any investor in the world with BTC to gain exposure to SP500 or DJIA. This could be used to set up the initial trust. I only say this because anyone can claim to be a master stock-picker, but without a track record this is all just hot air.

The issue of BTCUSD appreciation is always going to be a problem, but as long as you are clear about it, there shouldn't be any. No money is actually lost if BTC appreciates, its just that it adds another element of risk, since simply holding BTC is possibly going to be more profitable than holding USD equities.

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Worldcore
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Monster Tent
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September 11, 2012, 05:32:22 AM
 #9

This is a great, and much needed idea.

However, I think you might be better off if you start small and just set up a simple BTC pass-through to some index ETFs, which would allow any investor in the world with BTC to gain exposure to SP500 or DJIA. This could be used to set up the initial trust. I only say this because anyone can claim to be a master stock-picker, but without a track record this is all just hot air.

The issue of BTCUSD appreciation is always going to be a problem, but as long as you are clear about it, there shouldn't be any. No money is actually lost if BTC appreciates, its just that it adds another element of risk, since simply holding BTC is possibly going to be more profitable than holding USD equities.


One idea is to hold 50% bitcoins and 50% in USD assets as a currency hedge.

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September 11, 2012, 05:37:00 AM
 #10

Good luck with SEC and others Smiley
Add fiat:btc risk and I'll say thank you but no. 


While reading what I wrote, use the most friendliest and relaxing voice in your head.
BTW, Things in BTC bubble universes are getting ugly....
Trance104
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September 11, 2012, 05:39:59 AM
 #11


Marihuana, spongebob squarepants and minecraft. The average hedge fund manager.

Lol, yes that is I. I don't smoke weed, but I do support it's legalization. I play video games... A lot now... for a living at that. I was laid off from my recent job at Capital One due to a relocation of one of their main buildings. I now live in Austin, playing video games as a game tester for Portalarium. I didn't know that we were 100% sure that Pirate was from TX. I find that interesting however!


I think this idea has a lot of potential to bring some much needed diversity to glbse.

The only problem I see is this rather unappetizing possibility.
1. Convert IPO BTC -> $
2. All assets are now in $.
3. BTC gains against $.
4. Cannot convert assets from $ -> BTC for even IPO price

Of course, the opposite can entirely happen.  What do you think about this?

I thought about this and regardless of fluctuating BTC rates, you will always get the BTC deposited to YOU(the investor) within hours of the exchange happening. So you could in turn, sell the dividends on mt.gox (or where-ever) for a similar price. As you stated, the opposite could work in our favor and we could get more BTC per dollar. I imagine it will endlessly fluctuate. The goal is to reinvest ~25% back into the stock market so that we are also growing the amount per dollar that we get in return.

This is a great, and much needed idea.

However, I think you might be better off if you start small and just set up a simple BTC pass-through to some index ETFs, which would allow any investor in the world with BTC to gain exposure to SP500 or DJIA. This could be used to set up the initial trust. I only say this because anyone can claim to be a master stock-picker, but without a track record this is all just hot air.

The issue of BTCUSD appreciation is always going to be a problem, but as long as you are clear about it, there shouldn't be any. No money is actually lost if BTC appreciates, its just that it adds another element of risk, since simply holding BTC is possibly going to be more profitable than holding USD equities.

I thought about this, and basically it would be a pass through to the US stock market with a small fee (5%). I plan to invest in *MOSTLY* REIT's as they pay higher dividends and the housing market has already "bottomed" out. I know of a tobacco company that pays decent dividends. It also has a 5% annual split. I should probably add a disclaimer that splits will not have any payout of any kind. They will just stay in the account to help earn more dividends!(Which will be paid out)

If it helps any, I could possibly add in my own account statement. I'm currently housed at Options House. There isn't much activity on it, other than dividend payments. It's basically a high yielding savings account with a little more risk associated.

This is a great, and much needed idea.

However, I think you might be better off if you start small and just set up a simple BTC pass-through to some index ETFs, which would allow any investor in the world with BTC to gain exposure to SP500 or DJIA. This could be used to set up the initial trust. I only say this because anyone can claim to be a master stock-picker, but without a track record this is all just hot air.

The issue of BTCUSD appreciation is always going to be a problem, but as long as you are clear about it, there shouldn't be any. No money is actually lost if BTC appreciates, its just that it adds another element of risk, since simply holding BTC is possibly going to be more profitable than holding USD equities.


One idea is to hold 50% bitcoins and 50% in USD assets as a currency hedge.

I could do this, but then we would be "losing out" on dividend paymets. In the example that I used in the original post, you'd get BTC0.002475 which might be a monthly payment. Someone could always create an insurance fund against my security if any kind of crash/panic was to happen.

Good luck with SEC and others Smiley
Add fiat:btc risk and I'll say thank you but no. 



I thought about the SEC and I don't see anything wrong. The cash dividends are paid out to me, I pay taxes on them, then it's "my money" to do what I want with. It then goes to my bank account (paper trail) then to dwolla (paper trail) and then to Mt.Gox(paper trail). I don't think there is anything wrong with this, as long as I act within the law. There were other threads created to argue about SEC, GLBSE, and other trading laws in other countries. Let's not turn this thread into an argument about legality.. There are other threads that are already created for that.

Thank you for your feedback thus far!

Can't stop the Trance! Dance!! DANCE!!!
www.youtube.com/pixelfixgaming
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September 11, 2012, 06:59:39 AM
 #12

It would be interesting to create a holding company that only holds bitcoin and you issue stocks in it on the USD market. There was some talk of this before I believe.

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September 11, 2012, 07:18:02 AM
 #13

if you manage your share price to usd/btc price i would give it a try
then someone can use this to short btc.

(eg
buy 1 share at 1btc (1btc is worth 10usd)
sell 1 share at 2btc (1btc is worth 5usd)
)

^^ this means your fund will be valued in usd and you need to buy a share with btc through e.g. bitinstant.

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September 11, 2012, 12:15:22 PM
 #14

This is a great, and much needed idea.

However, I think you might be better off if you start small and just set up a simple BTC pass-through to some index ETFs, which would allow any investor in the world with BTC to gain exposure to SP500 or DJIA. This could be used to set up the initial trust. I only say this because anyone can claim to be a master stock-picker, but without a track record this is all just hot air.

The issue of BTCUSD appreciation is always going to be a problem, but as long as you are clear about it, there shouldn't be any. No money is actually lost if BTC appreciates, its just that it adds another element of risk, since simply holding BTC is possibly going to be more profitable than holding USD equities.

Agree with this suggestion. Invest it all in an index that everyone can track. You'll gain trust that way, and you'll probably get more investors too. I'd suggest a gold ETF since this crowd is more likely to jump in on something like that. And plan on leaving the funds in for a year minimum for long term gains

It would be interesting to have someone who could do a passthrough that was in a low income tax bracket. It would minimize the expenses on the fund and provide a new type of investment. (Legality and SEC issues aside)
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September 11, 2012, 03:25:16 PM
 #15

My thoughts on this are that since it will be in my name, it will be my money that goes into the stock market. I will pay taxes on it. The dividends that are paid go back to mt.gox and I purchase BTC with them. I then distribute BTC. From my understanding BTC is "imaginary" and holds no monetary value to any government entity. (I've heard the argument saying let me pay my taxes in BTC). So the government would just think the money goes to la-la land (or a Japanese bank in this case).

I appreciate your feedback and I'll consult with Nefario before setting up an IPO, as even though I don't see anything wrong, I wouldn't want to put anyone at unnecessary risk.

Can't stop the Trance! Dance!! DANCE!!!
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Trance104
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September 13, 2012, 05:08:42 AM
 #16

Just as an update to this, I still haven't heard from Nefario, but something tells me he'll get back to me by Friday.

I have a friend whom has zero income and would be willing to run this through his name. So as long as we can estimate what he'd be "making" in a year through dividends, we can deduct the appropriate tax % from it.

According to this: http://en.wikipedia.org/wiki/Qualified_dividend

It will be 10% for the rest of this year and starting next year, the lowest will be 15%. That is, if the shareholders would want that...

As for the ETF's.... The quarterly dividends are meh... I was looking at getting into two monthlies for the sake of having a payout every other week. Something like a paycheck, then from there we go into quarterly payouts. PBP doesn't look bad... I would still want to diversify, so that is an option.  Smiley

Can't stop the Trance! Dance!! DANCE!!!
www.youtube.com/pixelfixgaming
totaleclipseofthebank
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September 13, 2012, 05:14:00 AM
 #17

how about this one

https://www.google.com/finance?client=ob&q=NYSEARCA:HYG

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Trance104
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September 13, 2012, 05:25:50 AM
 #18


I like it, however it would take thousands of dollars to get a good amount of shares in. If I could get thousands of dollars from the community, that would be awesome! However I don't think that will be the case. 100 shares would cost ~$9300 which would pay out an apparently fluctuating $50 per month. Once converted to BTC, that would be ~BTC5 which would then be divided by ~1000 or so shares. So BTC0.005 in a months time. Another thing though, with the price being so high.. It would be hard to reinvest in it. From my understanding there's no way to say let's reinvest 50% of a dividend a month and take out the other 50% as cash without selling after auto-reinvesting. That issue however could just be the Options House trading platform. However E*Trade does not allow you to do this either as I did check with them. I've also used Trade King, but they didn't even have dividend reinvestment! Undecided

In summary, I like the stock, but I don't think it would be a right fit for the community currently. If I raised ~$100,000, sure! I don't see that happening however... and don't expect it to!

Can't stop the Trance! Dance!! DANCE!!!
www.youtube.com/pixelfixgaming
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September 13, 2012, 05:28:40 AM
 #19


I like it, however it would take thousands of dollars to get a good amount of shares in. If I could get thousands of dollars from the community, that would be awesome! However I don't think that will be the case. 100 shares would cost ~$9300 which would pay out an apparently fluctuating $50 per month. Once converted to BTC, that would be ~BTC5 which would then be divided by ~1000 or so shares. So BTC0.005 in a months time. Another thing though, with the price being so high.. It would be hard to reinvest in it. From my understanding there's no way to say let's reinvest 50% of a dividend a month and take out the other 50% as cash without selling after auto-reinvesting. That issue however could just be the Options House trading platform. However E*Trade does not allow you to do this either as I did check with them. I've also used Trade King, but they didn't even have dividend reinvestment! Undecided

In summary, I like the stock, but I don't think it would be a right fit for the community currently. If I raised ~$100,000, sure! I don't see that happening however... and don't expect it to!

This is actually a bond ETF, which is basically like a pass through to a portfolio of high-yielding corporate bonds. Again, holding this is quite risky, since a rise in interest rates will lead to big drops.

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Worldcore
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September 13, 2012, 08:00:41 AM
 #20

This idea is really difficult as outlines earlier due to regulation.

On the other hand, would anyone be interested in investing into a "trader"?

You receive 35-55% of payout but provide capital for me. I'm thinking about launching one for intraday trading USD/BTC/LTC etc and if that goes well move onto RL markets.

I used to be a high frequency day trader for a division of a major bank. Smiley But currently entering MBA school, and looking for something fun to try on the side.
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