[BTC-TC] Deprived Mining Speculation (DMS)

[FloatesMcgoates]

This round's dividends for Selling will be significantly lower than usual because of massive investment losses on just-dice and low volume in general, that is why I sold out of Selling at least.

[odolvlobo]

I guess I just don't understand how it works.

You and me both....I think many people don't.

Investing in something that you don't understand is not very smart.

[carnitastaco]

This round's dividends for Selling will be significantly lower than usual because of massive investment losses on just-dice and low volume in general, that is why I sold out of Selling at least.

How much are we in for at Just Dice?  I know we started with 100 and that Deprived added more at some point, but I can't seem to find a post showing how much we added?

[twentyseventy]

This round's dividends for Selling will be significantly lower than usual because of massive investment losses on just-dice and low volume in general, that is why I sold out of Selling at least.

Yeah, pretty bummed about that. Hoping for an upswing in the next week.

How much are we in for at Just Dice?  I know we started with 100 and that Deprived added more at some point, but I can't seem to find a post showing how much we added?

Was just going to ask that - It would be good to know how much we're short

[odolvlobo]

This round's dividends for Selling will be significantly lower than usual because of massive investment losses on just-dice and low volume in general, that is why I sold out of Selling at least.

I'm not sure that was the rational thing to do. The losses in just-dice are already reflected in the PURCHASE price and therefore are probably already reflected in the SELLING price. In other words, you probably sold after the drop, not before it.

[somestranger]

How much are we in for at Just Dice?  I know we started with 100 and that Deprived added more at some point, but I can't seem to find a post showing how much we added?

Was just going to ask that - It would be good to know how much we're short

Around 10% is invested in just-dice and a maximum of 15% was lost... less than 2% of the total funds were lost which is insignificant. We could be in the black by the time SELLING dividends go out.

[gski]

This round's dividends for Selling will be significantly lower than usual because of massive investment losses on just-dice and low volume in general, that is why I sold out of Selling at least.

How much are we in for at Just Dice?  I know we started with 100 and that Deprived added more at some point, but I can't seem to find a post showing how much we added?

From memory another 60BTC was added. But as the poster above me has stated the amount lost on just-dice is fairly insignificant in the grand scheme of things and we may have recovered from that loss by the time dividends come around. Although you always need to remember there is a chance that we could lose more money on just-dice.

[Deprived]

Total deposited into Just-Dice was 160.   We're down 15 and a bit on it - but some of that was made back by selling some LTC-ATF.B1 at 15-20% over face value.

Even without what was made back it would only be a a loss of under 1% of capital.  We've made more than that just on markup on new sales of Purchase since last dividend (approx 200 in sales at 2% markup is 40 BTC gain for those already invested), so I can't see it being a rational reason for any loss in SELLING value.  Though all investment losses SHOULD apply to SELLING - but, as already noted, SELLING by default  should rise slowly anyway due to sales of new PURCHASE (if we assume difficulty isn't about to go flat before next difficulty change).

There IS one obvious reason why prices would drop - that's if the market agreed in general that prices were actually correct and represented a fair split between Mining/Selling.  In that situation everyone would be thinking prices were about fair - meaning they'd actually like to sell (as no real gain holding when prices are fair - as you just take on CP risk for small profit).  I find it hard to believe that's the case - given PMBs are selling at far more per MH/s - but it's definitely one possibility.

I'll train to explain it with an example with imaginary numbers.

Say PURCHASE sold at 105 (100 + management fee and markup)
Then ignoring profits there's be 100 that would be split between Mining and Selling eventually.
If everyone agreed Mining was worth 60 and Selling was worth 40 then noone would want to pay more than 60 for mining or more than 40 for selling.  And most people would rather sell what they had at 60 or 40 than just hold it to get back not a lot more over a longer period of time.

If you THEN add in J-D making a loss and people decide that in fact they won't make much profit if any, then you end up with the prices falling so that they end up BELOW the cost of a Purchase less fees.

But for that to happen needs everyone to agree on what a fair price is for Mining -  and I really don't think we've got to that point as there's other PMBs selling for significantly more.  Now that difference COULD be that all the buyers just don't shop around, or that they don't trust me or that they believe difficulty is about to go flat making Mining no longer pay out like a PMB.  But I think the difference is too large for that to be the case - which suggests to me there's still no commonly accepted value for the future output of PMBs and hence no consensus on value for Mining (and thus for Selling as well).

[joele]

Actually, its the best time to buy SELLING while price is too low.
If SELLING will pay dividend today it will be 0.00368, so if you compute the price and the dividend you will get in around 4 days or after diff adjustment you can easily make profit.

[Deprived]

On a more general note I'd recommend against trying too hard to make sense of how markets here price things.  We routinely see stupidity such as shares trebling or more when a company's ASIC arrives - which could only make sense if prior to arrival consensus was there was less than a 50% chance of the ASICs arriving within the next 6 months.  And people happily throw away money on mining investments that can never make a profit even with a fantasy scenario for difficulty.

Most 'investors' just buy and sell at whatever the price on market is - and, perversely, prefer to buy something that just rose in price than something that just fell even when there's no rational reason for the price change.  Which is why pump and dumps are so common - and work so well on anything with limited supply and an unclear value: the manipulator just has to start the pump and the sheep keep it going.

[FloatesMcgoates]

Let me know if something is wrong in the following series:

1.) Just dice profits were at +8 prior to last selling dividend
2.) Selling dividend readjusts NAV to be 400 days of mining dividends remaining, thus factoring in the +8 from Just-Dice
3.) Just dice goes south, for a loss of around 15 BTC

4.) Because the Just-Dice was at +8 prior to the last dividend, DMS has actually lost (15+8) or 23 BTC for this Selling dividend cycle
5.) At current rates, that would mean selling would receive .0004 BTC/share less than it would receive otherwise.

[Deprived]

Let me know if something is wrong in the following series:

1.) Just dice profits were at +8 prior to last selling dividend
2.) Selling dividend readjusts NAV to be 400 days of mining dividends remaining, thus factoring in the +8 from Just-Dice
3.) Just dice goes south, for a loss of around 15 BTC

4.) Because the Just-Dice was at +8 prior to the last dividend, DMS has actually lost (15+8) or 23 BTC for this Selling dividend cycle
5.) At current rates, that would mean selling would receive .0004 BTC/share less than it would receive otherwise.

That's correct.  Assuming SELLING receives dividend at next difficulty change (looks likely but can't be certain obviously) and assuming J-D doesn't change in either direction then the dividend would be somewhere around .0004 per share less than it would have been had the J-D investment remained unchanged since the time last dividend was paid.  Exact amount obviously also depends on precisely how many more Purchase are sold by then.

[xiaopeifeng]

how do i swap a dms.purchase for one dms.mining and one dms.selling?

[twentyseventy]

how do i swap a dms.purchase for one dms.mining and one dms.selling?

Send them to DeprivedMining on BTC-TC

[Deprived]

Sold   175
Swapped   0
Total   175
Price   0.039505
Total   6.913375
Less Fee   6.89954825
Man Fee   0.206986448

BTC Balance (BTC-TC)    1,346.51207158
11417 LTC-ATF.B1    114.17000000
Coinlenders CD 29/7    202.68310874
Coinlenders CD 13/8    100.35464266
Just-Dice Balance    146.70748229
TOTAL ASSETS    1,910.42730527
   
Outstanding MINING   49022
Outstanding SELLING   49022
Outstanding PURCHASE   1740
Effective Units   50762
   
Block reward   25
Difficulty   26,162,876
Hashes per MINING   5000000
   
Daily Dividend    0.00009611
50 days (Min Liquid)    0.00480554
100 days (Forced Close)    0.00961107
365 days (Buyback)    0.03508041
405 days (IPO)    0.03892484
400 days (Post SELLING div)    0.03844428
410 days (Pre SELLING div)    0.03940539
   
NAV Post MINING Div    1,905.54853342
NAV/U Post MINING Div    0.03753888
Days Dividend Post Div   390.58
SELLING Dividend    -         
NAV Post SELLING Div    1,905.54853342
NAV/U Post Selling Div    0.03753888
PURCHASE selling price    0.03941582
PURCHASE buy-back price    0.03678810

[eltopo]

I made about 4 BTC on SELLING last week and immediately the share dropped and has CONTINUED to drop.  I'm actually in the red by about 2 BTC on this investment. 

I guess I just don't understand how it works.

You and me both....I think many people don't.

Just hold. It seems there simply haven't been enough SELLING buyers around for the time while some people sold because of some... irrational thoughts (sorry Floates )

I repeat myself: Don't try to value SELLING. The easy way is to value MINING, and substract this from PURCHASE price. Now you have your value of SELLING. If you are not able to or don't know how to value MINING, don't invest in DMS assets.

[FloatesMcgoates]

I made about 4 BTC on SELLING last week and immediately the share dropped and has CONTINUED to drop.  I'm actually in the red by about 2 BTC on this investment.  

I guess I just don't understand how it works.

You and me both....I think many people don't.

Just hold. It seems there simply haven't been enough SELLING buyers around for the time while some people sold because of some... irrational thoughts (sorry Floates )

I repeat myself: Don't try to value SELLING. The easy way is to value MINING, and substract this from PURCHASE price. Now you have your value of SELLING. If you are not able to or don't know how to value MINING, don't invest in DMS assets.

Heh well my decision wasnt completely based on the valuation of SELLING, as I wanted to get in on AMC at .0025 before the wall fell. Luckily I managed to get in and then flip for 25% profit before losing 10% of that on Just-Dice

Anywho, If I wanted to get back into Selling I could maybe get back in 2 days before the dividend at the same price as what I sold at (.0226)

In any case, this dividend cycle isnt looking to promising.

[Deprived]

I repeat myself: Don't try to value SELLING. The easy way is to value MINING, and substract this from PURCHASE price. Now you have your value of SELLING. If you are not able to or don't know how to value MINING, don't invest in DMS assets.

I should correct this as potentially it could mislead some investors.

If you assume zero growth from investment then if you work out the lifetime expected earnings from MINING you can subtract that from (PURCHASE - fees) to get the expected earnings from SELLING.  An easy simplification is to ignore the fees and assume they'll be made back from investment/expansion (already the case for earlier sales despite J-D losses - nearly half of which losses were donated back by the whale after today's report anyway).

That does NOT give the value of MINING or SELLING - as if you assume zero growth that gives the money you'd expect to get back.  And obviously you shouldn't be buying EITHER MINING or SELLING unless you get back more than you paid.  How much more depends on what ROI you personally want/need and what growth you project from expansion/investment.

Buying ANY investment that will only ever return what you pay in is NOT smart.  Though such an investment WOULD still outperform the majority of securities here - there's very few few BTC investments that actually end up making a profit for anyone who invested at the start and held until the end (the profit is made by traders, smart speculators and issuers who sell crap pretending it's an investment when it's just a way to syphon off some of the investors' capital to themself).

Mining can also have value even if unprofitable to those unable/unwilling/too lazy to calculate proper valuations but who (for whatever deluded reason) have a fixation on investing in PMBs without determining their likely performance.  The value it has there is that they can still maintain the PMB exposure they irrationally believe is good (any investment without a valuation is irrational) with near guaranteed better performance than alternatives.  That in no way guarantees a profit - but if there IS one it'll be bigger and if there's a loss it'll be lower (assuming price per MH/s is significantly lower of course).

Short version: What eltopo describes only allows valuation of likely future dividends from SELLING - any meaningful value (which would vary from investor to investor) is below that due to CP-risk, opportunity cost etc.

[eltopo]

Correct me if I'm wrong, but nearly anything you described is a duty due to investors. As the asset issuer you have to show the risks that could occur when investing in your assets, even if they seem to be very small, like CP risk (is there an investment opportunity without CP risk in bitcoin country?)

[Deprived]

Correct me if I'm wrong, but nearly anything you described is a duty due to investors. As the asset issuer you have to show the risks that could occur when investing in your assets, even if they seem to be very small, like CP risk (is there an investment opportunity without CP risk in bitcoin country?)

Yes, issuers should disclose all risks that aren't self-evident from the nature of the investment and which apply to all investors (issuer can't predict all the ways in which people will use investments as hedges etc so can't possibly identify every risk that will apply to every investor).

What I talked about in the quoted post wasn't, however, a risk - it was a discussion in general terms of how investors should value investments and I wanted to make clear that future dividends isn't the same thing as value.  It also doesn't apply to everyone - as some may be using investments to hedge against other exposure.

CP risk is an interesting one - and so's the disclosure of it.

I'd argue that CP risk is a self-evident risk and so doesn't need to be explicitly disclosed in terms of it applying to the issuer and the exchange on which funds are held (though I've disclosed it anyway).

There's also the interesting question of whether I should disclose a risk of me running with the funds if I KNOW there's not actually any risk of it.  I tend towards avoiding that sort of discussion - same as I don't bother claiming I'm honest.  Reason why is simple - if I'm honest I'll say I'm honest and if I'm a thief I'll say I'm honest.  So me saying I'm honest doesn't actually provide any extra information on which investors can make a judgement (even if a few idiots get a warm fuzzy feeling when an issuer claims to be honest).  Same if I were to claim there's no risk of me stealing the funds - it's meaningless as there's no way I can prove it (best I can do is argue that with the profit I make from the investments I run it would be irrational for me to steal as I'd miss out on making a lot more legitimately : but even that argument fails if money now is worth a lot more to me than money later).