From The Fund Manager
The Countinghouse office has been abuzz this week with excitement!
Performance for the week has been a complete outlier, statistically speaking, and we have achieved growth that we thought couldn’t be done in just a week. However, all the planets aligned for us particularly on Monday.
On Monday, our algorithm, Mintie, was sure the market was going to go up and she started to average down trades, each trade larger than the last. Normally, when something like this happens, one of the previous trades would not have met certain criteria, and some positions would have been closed out, but this time, all three trades stayed active. Accumulatively, the trade size was 13 times greater than a normal position. Then, the market spiked and Mintie took profit right near the top of the spike! It was pure poetry in trading form. By the end of Monday, we were already in a record breaking week. The rest of the week was good to us, too. So, it was just the perfect storm.
Just to emphasize the point, this will probably never happen again. This week is a beautiful freak – So, let’s enjoy it for what it is.
Now this week has been busy and productive away from the trading, too. I would like to get all our investors up to date.
Our XRP testing continues and so far so good. It is important for us not to rush this, as we need to gather enough trade data to enable us to see the effects this will have on the portfolio. There has been a lot of excitement with this, so I wanted to highlight that patience is important here. As Chris would say ‘slow is fast’, and he is correct there. We can use this time to iron out any bumps and make adjustments without incurring any real loss to the fund.
For a few weeks we have explored listing on another decentralized exchange that would enable our investors another option to easily trade their CHT tokens, and at the same time, getting a stablecoin pairing. Countinghouse is pleased to announce that CHT will very soon be available on the DDEX platform – Pairs will be CHT/ETH and CHT/TUSD. We have also been informed by LAToken, that we could also explore a CHT/USDT (Tether) pairing, too. We believe this will minimize the risk of possibly devaluing your investment, when converting fiat into CHT, and vice versa.
Finally, we have some positive movement on the audit front. One of our CHT investors noticed our efforts in trying to source for a suitable audit firm, and introduced us to his contact in a venture consulting and auditing firm that specializes in the blockchain. Based on the communication so far, it is looking quite positive that they should be able to perform the audit! We do not yet have any time frames -- We are at the pricing stage and it looks like we will be able to secure a very reasonable rate with a long-term contract for 6 monthly audits. It is nice to be able to report some positive news on his front and all going well, we will have more good news soon. A big thank you goes to our special investor for this introduction.
A little bit on buybacks; so far everyone seems relatively happy with the queue method of buybacks and for the most part, so have we. There are still a few issues we would like to fix and fortunately for us we are not the first hedge fund to have trouble creating a good buyback process. Moving forward, we are considering some options like buyback gates or similar rules to help discourage using the buybacks as a trading tool, instead of its true intention of being to realize profits. This should not be confused with all the talk about tradable assets and 10b-18 laws, that is a legal matter and we will address any changes in laws if they arise. I anticipate that it will remain business as usual for now, despite the hype in financial journals. Similarly, our buybacks will remain a matter of business as usual until further notice.
Unfortunately, not all Countinghouse news will be positive this week. Due to changes required in our staffing structure for our new project and the related costs moving forward, we have had to make a very difficult decision. We are sad to announce that this will be the last month with AmaZix as our partners and channel moderators. It must be stressed that this was a decision not taken at all lightly and was pained over for some time, but unfortunately, to remain fiscally stable, we were required to cut our costs and this had the least impact on the fund and its performance. Please join me this month in making it the best possible month on our Telegram channel as a swansong to our valued friends at AmaZix.
As with all clouds there is a silver lining. We have taken on a new team member and he starts with us next month. Please welcome Bruce Ohta, who is based in America. He will be working under Chris as a Telegram channel moderator and Junior Investor Liaison. Bruce will be working through our night, so that our European and American investors have someone available during their day time zone. I am sure everyone will get to know him well over the coming months, just as you all have with Chris. Also, to help cover the hole left from parting with AmaZix, one of our most active Telegram members and investors, Anders (Telegram username @Ginzink), has volunteered to help moderate the channel, answer any questions when he can and remove spam and the like.
Sorry about the letter being so long but we had a lot to cover. As I said, it was a productive week!
Well please make the time to check out the rest of this week’s report and thank you for your attention. A safe and happy weekend to you and those close to you, and we will see you again next week.
Market Activity Snapshot
Weighted Average: 0.005977901 ETH or USD$1.25 per CHT
Non-Weighted Average: 0.006000000 ETH or USD$1.25 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).
Credit: Photo by Pepi Stojanovski