From The Fund Manager
The movements in the market have been staggering for the second half of this week and these spectacular drops have yielded the fund an excellent week! In fact, I will be surprised if we can beat this week any time over the next year, but I am willing to try.
Big drops are fantastic for the fund’s performance, but if we could see some growth in the major pairs over the next month, I would be very happy. My main concern with these recent drops is that it is having an effect on the confidence people are feeling toward the crypto infrastructure itself. We will make money on a rally up, too. So, at this stage, I’d prefer a bull market moving forward. With all of that being said, we would of course trade whatever market we are presented with. We know the market doesn’t care about what we would like or about anyone’s predictions.
I am sure many of you have noticed our greater absence from the social media channels this week. This has been due to the complex work load surrounding our new float on the LATOKEN exchange. We have been in discussion with them about our plans for generating more interest and because our planned methods have only been used in the fiat investment sphere. Together, we are making sure it will be in compliance with crypto regulations in major trading countries. As such, we don’t want to give away our game just yet, but once we have the all clear we will execute and inform the community of our strategy.
We are holding a Countinghouse event in Adelaide on the 30th of this month to celebrate the new exchange (and due to popular demand). If you are interested in attending you may find more details here.
Priorities going forward: Audit, audit, audit! We really want the next move from behind the scenes to be getting this audit policy written, pricing secured (for the audit we want done, not just the cheapest possible audit), non-disclosure agreement (NDA) prepared and then the audit executed. Sounds simple enough, but if my experience tells me anything, there will be unexpected things along the way and we will deal with those as the come up; progress not perfection after all.
We want this audit to show more info than the reports as far as how the funds are split up and stored, and how many wallets hold the buyback tokens, and basic calculations showing how the token values are derived. We may include a non-liquid asset value, but it will obviously not affect the liquid calculations of the tokens. We will also not be doing a company audit to accompany the fund audit, mainly due to the company not being a public listed company and it would increase costs pointlessly.
More on priorities: We will continue to work on the buyback policy after taking on more feedback, and would like to take into account trading volume on LATOKEN. We have lots of feedback also from the community looking for a market-maker-style consistent liquidity up to a percentage value of the token -- Perhaps using a fixed amount or fraction of profit to be kept in the exchanges for this purpose. These sorts of buyback methods could be employed, but will have an effect on the expected fund performance. What we may look at is doing some calculations and presenting them to the community for feedback. In the hope of setting realistic expectations, I will note that all this will be done after we have got the audit completed.
Please excuse the long letter but there was much to cover. Thank you for taking the time to read the report and have a great weekend. That is all from me for now.
Market Activity Snapshot
Weighted Average: 0.002253987 ETH or USD$0.51 per CHT
Non-Weighted Average: 0.002425000 ETH or USD$0.55 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).