From The Fund Manager
Tremendous moves in the market that led to some great trades!
We had a bit of stagnation mid-week but then the movement come right back. In saying that, most of the growth came from the weekend and early Monday. Overall, we couldn’t be happier with the trading week.
On the topic of the trading itself, this week, I have started work on developing a new generation of our algorithms. This is not yet at the stage where we can trial them alongside our existing algos, but the development is positive. The hedging and risk management will remain relatively unchanged, but we are looking to improve entries with what I am calling the ‘Entry Matching Matrix’. The inspiration behind the improvements is to try and reduce drawdown and stagnation via a more nuanced approach to entries, hopefully increasing accuracy. This is all to be tested and reviewed before any live testing commences and this will give us the data needed to make further changes.
Despite how busy the week has been for the team, there have been more developments – We have seen a law firm about an NDA and they have prepared a Confidentiality Agreement that will be more suitable for the audit. I am reviewing the document and have been assured it is more suitable for the particular requirements of pursuing an audit. So, it is one more step in the right direction to having the fund audited and that audit being published. Further comment or announcements will be released as they happen.
Another development; due to the highly volatile nature of ETH, we have been looking into pairing CHT with USDT. Chris and Mike had a couple of meetings with our partners at LATOKEN, and we aim to get the ball rolling within just a couple of weeks. So it was some great work there from Mike, Chris and the LATOKEN team. The objective is to produce a more stable investing and liquidating environment.
We have also initiated discussion with another exchange, also able to list securities. An interesting feature being offered is to be able to instantly liquidate CHT to ETH directly on the Countinghouse website. There are some big changes that would have to happen for this to be realized and we would also need to get back in touch with some blockchain experts to have this set up. As this may cause undesirable consequences on the other exchanges, we will need to seek specialised advice and carefully review the matter before proceeding further.
That brings me to the Buyback Policy. As I wrote about earlier on the last report, our current Buyback Policy doesn’t fit with how the new exchange works and as such needs to go back to the drawing room. In the meantime, we are working through a Liquidation Clearing Queue (quite a few of you are already on it and this is old news).
Liquidation Clearing Queue
The process is very simple, simply contact Chris via email or via a Telegram private message (@slowisfast) to be added to the queue.
We break large liquidations up and space them through the queue to make sure not to disadvantage smaller investors. The queue is being worked through on an opportunistic basis and so far we are getting through the requests in a reasonable time frame.
This is not a permanent solution, but is what we are using as a Band-Aid-fix until a new policy or the instant liquidation on the site option is in effect.
That has been our week in a nutshell – Busy but productive and as an added bonus it looks like ETH has had a bit of a recovery. Let’s hope we see a nice big recovery like this time last year (I can dream).
Thank you for taking the time to read the report and on behalf of the Countinghouse Team and myself, we wish you a happy and safe weekend!
Market Activity Snapshot
Weighted Average: 0.002994796 ETH or USD$0.62 per CHT
Non-Weighted Average: 0.002949511 ETH or USD$0.61 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).