From The Fund Manager
We started off with a quiet weekend in the market, followed by a nice big spike up early in the week. The early week spike was where most of this week’s profit was captured, and then we saw some small up and down moves which caused a lot of hedging and very little profit.
The direction and volume then returned to finish the rest of the week off with predominantly long trades and just a few short trades. We look forward to this volatility continuing in the markets for next week.
As most of our investors are now aware, Countinghouse is growing as a company with a new fund just on the horizon -- This growth requires more staff and infrastructure. As such, Countinghouse will be moving to a new location, and negotiations have begun with a local real estate agent to take up a whole floor of an office building in Adelaide. All going well, we will film a vlog of our new premise before and after we have moved in to share this progress with our investor community.
The development of new coding for Mintie has been going very well. We are currently testing an exclusivity bias or pair-gate as a way of managing risk but running more and more pairs in the fund. Basically, we are looking into the effect of a trade management switch that triggers a first-in-first-serve trade selector allowing a maximum of 2 pairs to be traded at any one time unless they have a negative correlation. This will hopefully prove to either maintain or reduce the current risk, but of course we still need to fully test all scenarios for both viability and reliability before running it live in the fund. We will keep our investors posted on the progress going forward.
On the audit front, we have received our first invoice from the firm conducting our audit, and so we are pleased to see this moving in the correct direction. As of this point I don’t have a timeline as to the completion date of the audit but all seems to be moving at a steady pace. More on this when we have more to report.
Another short one from me this week as I am trying to keep my head down and plough through all the coding and testing work. I will still be away from Telegram this coming week, but you will still have Chris, Bruce, Antidote and Anders there to keep you company, and for one last week, you will have our friends at AmaZix. Then sadly, we have to say goodbye to them and we would once again like to thank them for all their hard work and support. We want them to know they will be missed!
That’s it from me, have a safe and happy weekend and thank you for taking the time to view this week’s report.
Market Activity Snapshot
Market Data Source: Telegram @BazzWatkins
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 Vladimir Solomyani on Unsplash