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CHT Monthly Report - June 2019

June 22, 2019

 

Hello CHT Investors,

 

Market commentary

 

Though we have seen a positive yield this month, we have been hitting some rough patches in the markets in the form of market gaps/price jumps. In the past two weeks, this trend has increased, particularly in our most profitable pair ETH/USD. The reason that this is not a desirable market phenomena for Countinghouse, is that our trading algorithm, Mintie, has low tolerances to such moves and as such, we will be making some adjustments and changes to our trading strategies over the next few weeks and months. This moves us to our next topic for this month’s update -- Changes in our strategy.

 

 

Change of Trading Strategy

 

Due to the increase in occurrences of market gaps in the crypto markets, we feel it will be prudent to begin decreasing lottage sizes per trade to allow us to increase the exit and entry scatter tolerance without increasing the risk above what we are used to, which is already very high and we wouldn’t want to be trying to push that any higher.

 

We also have the option of using already developed algorithms for other forex instruments as part of our trading portfolio mix to help smooth equity lines and possibly add some negative correlation to existing pairs being traded, thus reducing overall risk. This will be brought in slowly to find the right balance. Forex trading is where we have many fully developed and tested algorithms as it is where we started our trading. So, you could say that we will be in our comfort zone.

 

The effect on performance from the increased gapping is yet to be fully quantified and the changes we make will all be aimed at either increasing profitability or reducing risk. The upside is the fund will be more future proofed against any drastic changes to the crypto markets and will be more diversified by incorporating other instruments into our trading mix.

 

 

Investor Portal

 

Our investor portal has been in an alpha testing phase with a few volunteers from our social media channels. We have been gathering feedback and will be tweaking a few things to improve user experience over the next couple of weeks. Chris will have another update on this next week.

 

The portal should be open to all investors within 2 weeks and then we are one step closer to our vision of a more structured and governed CHT!

 

 

Halt of Buybacks and Restructuring

 

Over the past 12 months, the compliance and reporting requirements for entities providing financial investment products has increased substantially, both within Australia and internationally. As part of the process for transitioning Countinghouse to our new structure and operating model, we have been working through a number of steps to meet these increased requirements, and you may have noticed our focus on KYC/AML in recent months. Another step the new fund must take relates to the specific compliance and licencing requirements from a regulatory body. Now that we have commenced this process, we have passed a point of no-return: we can no longer operate under our previous model, yet we cannot operate under our new one until the relevant regulatory bodies have processed our submissions. We do not anticipate any issue with this; it is a matter of following the process and waiting. If for some unseen reason our applications are denied, there are multiple other avenues available to us. However, the current option we are pursuing is the most desirable and our efforts will be focused here. The current hold on buyback, brokering of CHT to any other currency and over-the-counter buying or selling of CHT from Countinghouse Fund is temporary and will be lifted as soon as we are able to do so compliantly.

 

Just to add to the approved message above; audits are going to be a part of the new structure as well. I have had some people contacting me concerned that the wouldn’t be audits due to the changes, but in fact the audits will be required for the new structure whereas before they were done optionally by us to add value to the investor experience. The redemption gates, dividends, etc. are still in the plans to be part of the new CHT, but as you can see, we need to get the first box ticked so to speak and then everything else can follow.

 

 

Updates from Tim

 

This last section of the monthly update is more casual and not as business related.

 

As you may know from previous updates, the Countinghouse Team have been hit with a number of different medical issues. Some of them have taken a couple of individuals (including myself) out of the game for a couple of weeks at a time. Fortunately most of these medical situations have been on the improvement but that hasn’t been true of all cases, in fact this brings me to my next update.

 

One of the original team members, not just of Countinghouse, but DPP before that, Steve has had to leave his position due to medical complications. At this stage, we are calling this an indefinite leave in the hope that he makes a full recovery and that we can look forward to welcoming back aboard the good ship Countinghouse. That aside I would just like to thank Steve for all is hard work and efforts at Countinghouse on behalf of the team and myself and I am sure our investor community also, would like to send the appreciation and well wishes, too.

 

As you can see, a busy month we have had and a busy month ahead. Thank you for taking the time to read the update, have a safe and happy weekend. If you want to hear from me more than once a month, feel free to follow our social media channels and you will see us pop our heads in every now and then.

 

 

Best Regards,

 

Tim Dawson

Fund Manager

Countinghouse Fund

 

Photo credit: Aleksi Räisä on Unsplash

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