[LTC-GLOBAL] LTC-ATF

[Deprived]

Note that price have fallen also for stocks like LTC-GLOBAL and LTC-MINING.LTC -- this must be not due to a lack of trust.

Also LTC-GAMING and LTC-CHARTS are not backed by anything, so their price simply reflects the mood on exchange.

I think falling prices means that people are withdrawing litecoins: i.e. they sell assets they have and do not buy another assets... Also new people with money do not come. So there are too few litecoins for too many assets, which produces weird prices.

Maybe they withdraw litecoins to sell them on btc-e while prices is high?

I suspect that the increase in LTC value on the exchange probably has a lot to do with it.  Now is definitely a good time to cash out if you've been sitting on your coins for a few months.

It's also expected for mining assets to swing roughly in step with difficulty.  No one wants to spend 100 LTC on a mining bond that will produce half the coins it would have produced a couple weeks ago.  With difficulty twice what it was, I would expect the mining bonds to trade at half what they were.  That seems to be playing out on LTC-MINING.LTC as expected.

(Replying tyo both quoted posts)

Yeah the drop in mining-bonds was perfectly normal.  In part due to rising difficulty, in part due to the exchange-rate rise.  When buying a 1 Mhz bond one of the obvious comparisons is to the cost of mining hardware that would produce 1mhz of mining power.  The cost of mining hardware is denominated in fiat - so a steep rise in exchange-rate SHOULD be accompanied by a fall in mining-bond prices.

Yeah - a desire for liquidity (maybe in part to take advantage of the high LTC prices) could well have something to do with it too.

And totally agree about LTC-CHARTS/LTC-GAMING - an investment there is in the hopes that they'll successfully monetise somewhere down the line.  Plus, in the case of LTC-CHARTS, buying at IPO would have been a way to thank the site operator.

No real change in LTC-ATF overnight - exchange-rate dipped a tiny amount but seems to still be trading in the same small range its been in for a few days.  Have tightened my spread slightly as I'll be around for a fair while now to keep an eye open for any sudden currency movements.

[Deprived]

Current exchange-rate 0.00747
Current adjusted NAV/U : 8.1796

Slight rise in unit value due mainly to the change in exchange-rate.  Bids/Asks have been adjusted accordingly (spread is slightly wider than earlier whilst I wait to see just where the exchange-rate settles down).

[guruvan]

Pretty consistently I see flow out of securities when the denominating currency moves up significantly & back in for a safe haven while it moves down.

Investors are generally not sophisticated & make wild moves. Fund managers are not necessarily sophisticated investors  (You're doing pretty well, especially considering the treacherous marketplace)

It's a real challenge to make profits in a highly volatile, illiquid, generally unsophisticated, fraught with scams, market. Risk is, well....off the charts in most cases, but - it's really the wild west still, so that's to be expected.

There are a lot of young holders of LTC (especially), and they tend to trade more impulsively.

[Deprived]

Pretty consistently I see flow out of securities when the denominating currency moves up significantly & back in for a safe haven while it moves down.

Investors are generally not sophisticated & make wild moves. Fund managers are not necessarily sophisticated investors  (You're doing pretty well, especially considering the treacherous marketplace)

It's a real challenge to make profits in a highly volatile, illiquid, generally unsophisticated, fraught with scams, market. Risk is, well....off the charts in most cases, but - it's really the wild west still, so that's to be expected.

There are a lot of young holders of LTC (especially), and they tend to trade more impulsively.

Would agree with this - and it's actually not an entirely irrational thing for investors to do (if LTC is rising then just holding LTC will usually outperform every security on LTC-GLOBAL).  Have definitely noticed an increase on the Bid side on LTC-GLOBAL now LTC has started falling against BTC.

Certainly LTC-ATF isn't a good investment any time you believe LTC is going to rise significantly vs BTC (unless you're using it as a hedge - when you get the benefits of a hedge + trading profits instead of actually having to pay to hedge).

[Deprived]

Current Exchange-rate 0.0074
Current Adjusted NAV/U : 8.25757

Not much exchange-rate movement overnight.  We made a few profitable trades as well.  Unfortunately we're not gaining value as quickly when the exchange-rate falls as we lost value when it rose.  This is because most of the time whilst the rate was rising we had the majority of our holdings in BTC-denominated, now we have most (just over 60%) in LTC-denominated.

Bid at 8.0, Ask at 8.45

[Deprived]

LTC/BTC exchange-rate currently in a bit of a free-fall: at about .0067 with no downward resistance left until .006 or lower.

Asks will be kept high (or removed totally) until price settles down - we don't desperately need new cash injections right this second so not going to risk someone buying in just before/as price of LTC tanks and devaluing the NAV/U for current investors.  Bid will move up if/when support solidifies at a new range.

[Deprived]

Fun day with the LTC/BTC exchange-rate.  It plummeted down to almost .005 then rebounded back up to over .007 before settling down in .0066 area.  Managed to trade a small profit on currency, which made up for LTC-GLOBAL being inaccessible for much of the evening so no trading profit on there.

Current exchange-rate : .00665
Current adjusted NAV/U : 8.8001129

Exchange-rate is far from solid - it could move significantly either way, so leaving a pretty wide spread up overnight.  Bid at 8.4, Ask at 9.6.

For the bid to be decent value you'd be wanting an exchange-rate of .0072 or higher.  For the ask to be a fair price you'd want the exchange-rate to be .0055 or lower.  As always I'm erring on the side of caution to protect existing investors.  Hopefully rate will be more stable tomorrow and I can set a tighter spread.

[Deprived]

UPDATE AND REPORT

Going to do a report now.  The fund has appreciated significantly - and without doing a report it's hard to set a tight spread.  The reason for that is because I report adjusted NAV/U (NAV/U less projected management fee) but I have to set Ask price based on unadjusted NAV/U - or anyone buying in would reduce the NAV/U (and also Adj NAV/U) for existing investors.  When the fund's up over 10% (as it is) that adds over 1% to the spread.  It's made worse this time, as the adjusted NAV/U is actually artifically low as a decent chunk of the "profits" are ones caused solely by the exchange-rate change, upon which no management fee is due.  So I end up pricing Asks too high.

SPREADSHEET



SUMMARY

The fund's grown back nicely over the 4 days or so since we received back our GLBSE funds and started trading again.  I'd guess about half the growth is down to the exchange-rate change and the other half actual trading profit (will calculate exact figures as I type this report).

Just to clarify about our GLBSE funds: we were in the first batch paid who received back 100% of BTC from GLBSE.  We weren't in the batch who received 90% (some got it twice).  So we don't have any over-payment to return or anything.

Exchange-Rate : .00685
NAV/U : 8.87679642
Adjusted NAV/U : 8.752765997

From the spreadsheet it can be seen that I'm enttled to 5.8 units as management fee, however (per contract) that needs to be adjusted down to address the fact that the exchange-rate dropped a lot, so a lot of the "profit" for this period isn't down to my trading and I shouldn't receive a management fee for that portion.  Here's the calculation for it:

Exchange-rate at last report was .0078
HWM at that point was set at 7.63649216 LTC
Converted into BTC (at the rate then) that is .0595646388

Current NAV/U in BTC if the exchange-rate still were .0078 is .06577216
So the gain per unit (in BTC) if exchange-rate hadn't changed is .00620752
Multiplied by 409 outstanding units that's 2.53887615 BTC
10% of that profit is .253887615 BTC - the actual management fee I'm due.
That's now converted back to LTC at the CURRENT exchange-rate (as the units are being paid now) and is 37.063885 LTC
That should actually be divided by a corrected adjusted NAV/U (which would lie between the reported NAV/U of 8.876 and the reported adjusted NAV/U of 8.75) but luckily it's pretty clear that rounded down it'll be 4 units (4*9 < 37 so we know it's 4+), so it saves a bit of nasty math.

Double-checking this, with the old exchange-rate plugged in, the spreadsheet shows a management fee of 3.9 units (based on valuation in LTC).  Why the difference?  Well, the precise calculation of what amount of profit is down to management fee (by the method I'm using) will vary depending on whether it's done in BTC or LTC.  BTC was chosen in the contract as, at that point, the bulk of our trading was done on GLBSE and so was denominated in BTC.  Thus using BTC as the base currency to revalue to exclude exchange-rate impact made sense.  Now the situation is less clear - as we have a small majority of our assets LTC-denominated, though at times (e.g. yesterday when exchange-rate hit a low) we still have a majority BTC denominated.

Any calculation will only be approximate.  We can do a simple check to see if it's in the right ball-park as follows:

NAV has increased by 16.24%
LTC has weakened by 12.1%, but under half our assets were in BTC at the time (and that valuedropped during the week) so very clearly this accounts for well under half the growth in the fund (the holdings denominated in LTC aren't impacted at all by the exchange-rate change).

I will therefore be taking 4 units as management fee as per the calculation done according to the contract.

With those units added into the spreadsheet we end up with a new NAV/U of 8.79082261.

That's slightly higher than the adjusted NAV/U at the beginning of this report due to me only taking 4 units instead of the 5.8 the spreadsheet was assuming.  HWM is now also adjusted to that value (and, of course, that is also the current Adjusted NAV/U).

Bidding at 8.45
Asking at 9.1

[Deprived]

Exchange-rate 0.00747
Current NAV/U : 8.6147

Exchange-rate rose a fair bit yesterday evening, but now seems fairly solid in the .0072 - .0078 range.  Obviously NAV is down a bit - but has been offset a bit by trading profits.

FOr comparison, exchange-rate was the same 3 days ago:

Current exchange-rate 0.00747
Current adjusted NAV/U : 8.1796

You can see we're up about 4% from where we were the last time this was the exchange-rate (about 3.5% after taking into account that the old adjusted NAV/U was slightly undervalued).

Setting bid at 8.4, Ask at 8.9.  Will widen the spread before I log off for the night.

[Deprived]

Exchange-rate 0.00748
NAV/U : 8.63078

Bid at 8.45
Ask at 8.85

Exchange-rate has stayed in the same band.  There's been little trading activity - and our ability to trade is slightly restricted as I can no longer comfortably trade esecurity.SA securities.  If those were a scam then now's whem it would become apparent (market price holding below cost meaning no likelihood of being able to sell more/an esecurity3).  Neither of them paid its dividend yesterday and neotrix' pool website is totally down without any explanation.  So I won't risk holding any unless they're picked up at a tiny percent of their theoretical value or some update is provided.  We haven't actually traded them much anyway - think last was a week back when we picked up a hundred or so and sold them back off same day for a 10-30% markup.

[Deprived]

Exchange-rate 0.00747
NAV/U : 8.6410939

Bid at 8.5
Ask at 8.8

Exchange-rate has been stable for a few days now.  Will try to keep a tight spread as long as I can.

[Deprived]

Exchange-rate : .00748
NAV/U : 8.707926

Exchange-rate feels like it's going to move soon - the walls either side of it have largely vanished.  I would tend to expect an upwards move given that next difficulty change is upwards - but in a purely speculative currency like LTC moves aren't always rational and are often just the herd stampeding in whichever direction somewhat started a move.  Hopefully I'll be around and watching when it happens to trade some profit from it.

For now putting Bid : 8.55 , Ask 8.85

That spread will widen later this afternoon whilst I'm out.

[Deprived]

Exchange-rate : .00746

Current NAV/U : 8.72846

Exchange-rate moved around a bit but ended up pretty much back where it started.  Will be out for next 4-8 hours, so setting a widish spread - will narrow it once I get back.  Bidding at 8.45, Asking at 9 whilst I'm afk.

[Deprived]

Exchange-rate 0.00747
Adj NAV/U : 8.796833

Bid : 8.65
Ask : 9.0

[Deprived]

Exchange-rate : .00779
Adj NAV/U : 8.901517

Bid : 8.75
Ask : 9.05

Pretty hectic day yesterday with the exchange-rate.  It dumped down to around .007 then was pumped to .0082.  It then fell to .0073 before being repeatedly pumped back to 0.0081.  I managed to trade decently on one of the cycles, so although LTC has gained aboout 4% vs BTC since last update (which would have been a fall in our unit price of ~1.5%) we''re actually up a bit over 1% on the day.

Whilst currency trading isn't one of my main objectives (with the tiny amount of this fund it's too much work for miniscule returns anyway) I do try to take advantage of obvious pump/dumps and minimise our losses when the rate rises.  I keep some of our funds on BTC-E for a few reasons:

1.  To allow us to trade on obvious pump/dumps,
2.  To keep some non-LTC assets (BTC) so even if LTC falls to near zero we still retain some value,
3.  To ensure I have liquid funds to keep a bid-wall up.

Point 3 may seem strange at first - surely I could just keep LTC on LTC-GLOBAL for that?  Well, no I actually can't (at least not in the asset-issuer account).  We typically have bids up that amount to more than the amount of LTC in our wallet.  If a bunch of them then get filled then the rest would auto-cancel.  That would include my bid-wall on our own units.  By keepung some funds out of that pool, I ensure that no sells to other bids of ours can use up so many funds that the obligation to keep up a bid-wall for 5% of our own units is broken (other than for the 10 minutes it takes to move funds over).

There's a decently tight spread up at moment - as we happen to not have much in BTC at moment (the serial pumper on the eexchanges always buys up to over .008 so I'm not selling LTC below that right now - may as well get as much as we can out of him on his next pump try).

One final note: If you want to buy in or sell out you DON'T have to pay the full spread I put up.  If I see a bid or ask that's within 1% of current value and it doesn't disadvantage the fund for me to fill it then I'll fill it.  The purpose of the spread is NOT to try to charge a hefty fee for buying in/out - it's to ensure that people buying in/out can't do so at prices that will cause loss to current investors.  Any time the price is pretty stable I'll happily buy anyone in or out if it doesn't cost existing investors.

[Deprived]

Exchange-rate : .00778
Adj NAV/U : 8.94165

Bid : 8.78
Ask : 9.08

Very slow day yesterday - exchange-rate was pretty stagnant and very little activity on LTC-GLOBAL.

[Deprived]

UPDATE AND REPORT



This week has ended with LTC up around 10% on BTC against last week.  Had I not been trading that would have translated into about a 4% loss in value (in LTC) for the fund.  As it is, we made about a 3% gain on the week - so trading was making about 1% per day on average.

We're ending the week with pretty much no BTC holdings (other than the few shares locked on GLBSE).  This isn't a policy change - just that the exchange-rate has fallen to a point where I believe the next move is likely to be slightly upward: so we'll be back to having significant BTC holdings before long (if I'm right).

Management fee for this week is 1 share (rounded down) - I don't get to claim for profits that were wiped by currency move.

1 share will be transferred and the HWM updated shortly after I post this.

As we're temporarily almost compeltely in LTC (and hence almost unaffected by any exchange-rate move) I can offer a VERY tight spread for the next few hours (or until the currency starts to move and I have to get back into BTC).

Bid at : 8.95
Ask at : 9.05

If you want to get into (or out of) the fund this is best chance you'll get buying from my orders (you may be able to do better placing bids/asks yourself and hoping someone else fills them).

[Deprived]

Exchange-rate : 0.00743

Adjusted NAV/U : 9.055844

Bid at 9.15
Ask at 8.96

We had a few profitable sales go through overnight.  We're no longer holding just LTC (have some BTC on BTC-E) so spread isn't quite as tight as I was able to make it last night.  I'll be only be around for a few more hours before going out - at which point the spread will widen more.

[Deprived]

Exchange-rate : 0.00753

Adjusted NAV/U : 9.099822

Bid at 8.97
Ask at 9.24

Not too much happening - currency fairly stable and only a small amount of trading happening on LTC-GLOBAL.  Slow but steady profits would be fine by me though.

[Deprived]

Exchange-rate : 0.00747

Adjusted NAV/U : 9.15587

Bid at 9.04
Ask at 9.3