From The Fund Manager
The fund has had a strong week with the quite spectacular fall in the two major crypto pairs, playing into the algorithm’s short bias. We are very pleased to see the fund moving forward, without us yet having to scale out the lot sizes or modify risk parameters.
We have seen some undervalued CHT on the market providing some excellent accumulation opportunities. The fund is exercising caution so as to not to reduce the fund size too much at the moment, but have been able to pick up for the fund’s holdings some more CHT that were well under liquid value.
I would expect this to be a mainly BUY position week within the investors’ circle, due to the availability of CHT at low prices and a very positive week of trading for the fund. We are expecting the supply of these cheaper tokens (mainly offered by bounty participants) to be decreasing to much lower volumes over the next few weeks. After this phase, I would expect that there would be mainly a HOLD position amongst most investors, particularly until our LATOKEN launch.
On behalf of the fund, I would also really like to take the time to welcome all our new investors!
We have seen our investor base grow and are very pleased to see so many holders recognising the value and massive potential of CHT. On the subject of new investors, I have had reports from the team that there have been requests for us to hold another Countinghouse event.
An event similar to our launch party could be organised, if there are enough people interested in attending (perhaps in celebration of our LATOKEN listing, if we can get the timing right). We would love to meet investors in person and talk shop over a beverage or two. A poll on our social media channels will be conducted to gauge interest.
We love and highly appreciate all the suggestions coming in around how we could structure buybacks in this early stage so as to not hinder the fund’s viability. We are listening and it is something we want to get right and make an announcement on this soon.
The fund has also seen suggestions about re-selling of bought back CHT tokens – We do want to stress that if we implement some type of re-selling back to the market, it would only be done until the fund gets to a certain size. At some stage, we would prefer to instead shrink the fund size to keep the fund primed for growth. We are always fighting a battle between not having to increase risk to make it profitable/viable for Countinghouse to run, and also having a nimble fund with high growth potential. However, that balancing act is for us to worry about, and we are always going to protect the fund as a priority. For most investors this is likely to be a longer term investment and we have to run it with that in mind. We are here for the long game!
That’s about all from me this week. I just would like to thank our investors for their patience and our amazing team and channel partners for all their hard work!
Market Activity Snapshot
Weighted Average: 0.005500000 ETH or USD$2.21 per CHT
Non-Weighted Average: 0.001818182 ETH or USD$0.73 per CHT
Valuation – Jae Jun Method
Fundamental value (sometimes referred to as intrinsic value) is a calculation to determine the actual value of a share, unit or in this case a token when looked at as an investment.
We have chosen the Jae Jun Intrinsic Value Formula. The main reason we like the Jae Jun is because it is one of the most conservative calculations there is.
Now we have kept to how this is traditionally used and that is to base it on a 10 year return, factoring in the yield reducing over time. We have also taken an extra step to be even more conservative on this calculation; Jae Jun reduced the ‘no growth PE ratio’ from 8.5 to 7 but due to the increased volatility in the crypto market we think it is more prudent to reduce this value all the way to 1 (this value operates as a multiplier in the calculation so reducing it to one is very significant in the results the formula we return).
* Conversion rate used for week 7: 1 ETH to USD $401.41