[BitFunder] TU.SILVER -- Interim Report April 12th, 2013

[usagi]

I'm pleased to announce financial reports for March 2013. I'm sorry it's a few days "late", I've been a bit ill recently

Please view our latest report online here: 20130405TSR.pdf

I've also started an archive of past reports. I'll get around to fleshing it out later.

Fun TU.SILVER fact of the day: Our 30-day turnover is now 233 shares (29.5%). This means we're more liquid than all other precious metals funds in the community combined, by an order of magnitude.

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The TU.SILVER Report
April 5th, 2013

Dear Investor; it is our pleasure to present this week’s report. In this issue, we are once again humbled by BTC’s amazing 200% rise these past two weeks. Here are the “Right Now” numbers:
kitco.com gold: $1553.9 / $129.05 = 12.04 BTC/oz.
kitcosilver.com silver: $26.87 / $129.05 = .2082 BTC/oz.

The Takeaway: BTC has continued to surprise this week, gaining 200% since our last report. The rally isn’t over till it’s over?

FINANCIAL REPORT FOR MARCH 2013
Here are our numbers as of April 5th.
• Inventory: 79oz. of Silver
• Shares outstanding / issued : 657 / 790
• Cash Balance: 0.1359 BTC / 790 = 0.00017 BTC ea. (A)
• Cash Kitty 10BTC / 790 = 0.0127 ea. (B)
• Expected value from unsold silver (spot + markup): 9.079 BTC / 790 = 0.0115 ea. (C)
• Investment Position: 24.5158 BTC / 790 = 0.0310 ea. (D)
• Our cost price (spot + coin premium/etc.) : 0.0277 ea. (E)
• A+B+C+D+E = 0.08360951 (this figure is from our BV Calculator on our spreadsheet).

This represents the cost we need to sell shares at in order to provide this service. We suggest a fair ask price of 0.085 today representing a premium of 1.67
% to BV.

These numbers have been independently checked by our financial advisor. Questions about our finances should be e-mailed to DeaDTerra or posted online. The CEO (usagi) is not responsible for financial reporting.

Any investor may gain access to our books for 1 share of TU.SILVER provided they do not violate our disclosure policy (do not disclose the information
to non-shareholders, if you do, ensure it is never published).

For more information on TU.SILVER and how to protect your money in today’s crazy BTC market, please visit the TU.SILVER page on BitFunder:

https://bitfunder.com/asset/TU.SILVER

[1714948266]

1714948266

[1714948266]

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[Deprived]

The face value of it is 1/10th of an oz of silver.  The price that you sell at is OVER DOUBLE that (around treble now) ... Silver now represents (using YOUR formula for calculating the silver element) a MINORITY of what people buying your shares pay.  It's NOT your primary business any more.

As with everything the price of TU.SILVER is driven by market demand. I am not the one selling at the ASK price right now. So you're not arguing with me -- I don't even need to say anything -- you're arguing with Mr. Market, and you're losing.

Most of your mistakes are addressed in our recent reports. You're free to disagree; and I am free not to care. I've put up bids at .1 and above, and I've written PUTs for an additional 150 shares at .1. Go ahead and put your money where your mouth is.

I stated that I turned down this offer - in fact that wasn't true: I'd already bought some.

The below are the ONLY transactions I've had on this asset recently and I hold no other units of it.


2013-03-20 21:05:34    Option Purchase: (TU.SILVER)
PUT: 35 Share/s @ ฿0.10 each    ฿0.17500000

2013-04-03 01:47:48    BUY: (TU.SILVER):
13 @ ฿0.07401000/ea    ฿0.96213000     
2013-04-02 19:20:43    BUY: (TU.SILVER):
5 @ ฿0.07310000/ea    ฿0.36550000
2013-04-01 17:31:05    BUY: (TU.SILVER):
2 @ ฿0.06000000/ea    ฿0.12000000    
2013-04-01 17:30:51    BUY: (TU.SILVER):
13 @ ฿0.07000000/ea    ฿0.91000000    
2013-04-01 16:07:19    BUY: (TU.SILVER):
2 @ ฿0.07100020/ea    ฿0.14200040    

2013-04-04 14:04:22    Option Execution: TU.SILVER
-35 Share/s @ 0.10/each         ฿3.47200000

Total spent (including option purchase) : ~2.67 BTC
Total received : 3.472 BTC
Profit : ~0.8 BTC
Percentage profit : ~23%

Maybe that also helps answer your questions in this thread:

https://bitcointalk.org/index.php?topic=129985.0

Part of the reason I consistently make decent profit is because some people insist on doing totally stupid things - like selling PUTs with a strike above actual value cheaply.  But that's the beauty of trading in these markets - loads of retards throwing money away all over the place.  That's 80% of this week's bond interest paid right there from a tiny trade that had a maximum downside of .175 BTC.

Would have bought more but think someone else beat me to the rest as they'd gone when I decided maybe I'd get a few more - plus wasn't confident there'd be enough liquidity to do a load anyway.

[usagi]

[...]
Total spent (including option purchase) : ~2.67 BTC
Total received : 3.472 BTC
Profit : ~0.8 BTC
Percentage profit : ~23%

Nice job. I've written a new series of PUT and CALLs for TU.SILVER. Three PUTS and four or five CALLS. Go to town! Good luck.

[Deprived]

[...]
Total spent (including option purchase) : ~2.67 BTC
Total received : 3.472 BTC
Profit : ~0.8 BTC
Percentage profit : ~23%

Nice job. I've written a new series of PUT and CALLs for TU.SILVER. Three PUTS and four or five CALLS. Go to town! Good luck.

I'm tempted by one of the options but there's an issue which makes your options less useful than they could be.

In general I'd LOVE to be able to buy CALL options on Silver/Gold at reasonable prices (and your prices aren't unreasonable on the face of it) as they allow me to hedge other trades I do vs BTC down-swings.

But at present the majority of the value of your shares is actually BTC - cash/LTC-ATF.B1/BTC-BOND (and the last 2 are basically cash equivalent as both offer fast redemption).  So if I buy optons on the shares right now, 2/3 of that option is for value that's basically BTC - so can't possibly be used to hedge vs exchange-rate movement (price movement of silver/gold is in my view always going to drowned out by BTC/USD movement).

That makes the cost less attractive - and also means if I buy then get to execute (for CALLs I'd generally prefer I did NOT ever get to execute) then I have to tie up 3 times the capital I otherwise would for the same profit.

This is one of the reasons I've been so vocal about you no longer just selling silver - as your shares COULD have been something I could make a lot of use of (either by buying as a hedge or better still by using options to gain leveraged protection), but because they're now mainly backed by BTC rather than silver they have a lot less utility for me.

[Francesco]

[...]
Total spent (including option purchase) : ~2.67 BTC
Total received : 3.472 BTC
Profit : ~0.8 BTC
Percentage profit : ~23%

Nice job. I've written a new series of PUT and CALLs for TU.SILVER. Three PUTS and four or five CALLS. Go to town! Good luck.

I'm tempted by one of the options but there's an issue which makes your options less useful than they could be.

In general I'd LOVE to be able to buy CALL options on Silver/Gold at reasonable prices (and your prices aren't unreasonable on the face of it) as they allow me to hedge other trades I do vs BTC down-swings.

But at present the majority of the value of your shares is actually BTC - cash/LTC-ATF.B1/BTC-BOND (and the last 2 are basically cash equivalent as both offer fast redemption).  So if I buy optons on the shares right now, 2/3 of that option is for value that's basically BTC - so can't possibly be used to hedge vs exchange-rate movement (price movement of silver/gold is in my view always going to drowned out by BTC/USD movement).

That makes the cost less attractive - and also means if I buy then get to execute (for CALLs I'd generally prefer I did NOT ever get to execute) then I have to tie up 3 times the capital I otherwise would for the same profit.

This is one of the reasons I've been so vocal about you no longer just selling silver - as your shares COULD have been something I could make a lot of use of (either by buying as a hedge or better still by using options to gain leveraged protection), but because they're now mainly backed by BTC rather than silver they have a lot less utility for me.

+1.

You should buy silver, in order to keep it not only covered anyway, but covered with silver.

However, it's the only asset of this kind on the marketplace. So I guess I can't be too fussy, also considering the situation...

I just sincerely hope you really have learnt from last time. I still have those NYAN.B taking rust...

[usagi]

TU.SILVER interim report

http://kongzi.ca/silver/TSR/20130412TSRi.pdf

forum version (for your convenience):

The TU.SILVER Report
Interim Report
April 12th, 2013

Dear Investor; welcome to our interim report.

At TU.SILVER, our goal is to keep the price of our units very close to the price of silver, plus a small and reasonable premium which is used to cover secure storage fees.

Fortunately or unfortunately, in March and early April 2013 we experienced an unusual surge in trading profits due to a string of lucky trades. As a result, we made far more money than we needed to guarantee secure storage and cover the other expenses of the fund.

As a result of this and due to the rapidly rising BTC price, management carefully and wisely invested in BTC denominated securities such as BTC-BOND, as well as keeping 10 BTC in the TU.SILVER kitty.

While this had the effect of saving our current unitholders from a complete 95%+ collapse in our BTC share price as BTC moved from $10 to over $200 (such as what happened to unlucky investors in other dollar-denominated investments), this is a poor long-term strategy. No one wants to buy a coin for 3x what it’s worth – and what’s the point of selling silver if units of the fund do not leverage to the price of silver? Silver investors will shun the fund and no one will redeem their coins because it is no longer an effective vehicle for owning silver.

Therefore, we will now execute on the original business plan to “sell options and invest the cash position to generate revenue and pay for secure storage fees” as we have been mandated to do since day 1. We are pleased to announce a special dividend of 0.017 per share on an audited and approved book value of 0.08480918. This represents a one-time special distribution of 20%.

This will lower our (immediate) unit price by exactly 0.017 BTC/unit and bring us much closer to parity with the spot price of silver (plus a fair and reasonable coin premium and vault storage premium). This will make the fund much more attractive to silver investors while still retaining the ability to offer free shipping worldwide to all of our customers.

We will review these policies on a weekly basis depending on mtgoxBTC and other factors.




For more information on TU.SILVER and how to protect your money in today’s crazy BTC market, please visit the TU.SILVER page on BitFunder:
https://bitfunder.com/asset/TU.SILVER