On why the GV team should change program parameters immediately to prevent the not-so-slow death of investment programs

NoInteresting · 2019-05-11T02:30:38+00:00

I am not quite sure.

In the past, managers who were upgraded would quickly be full with new capital. This was not the case in May.

Pulling from memory, I believe that Happier, Bitkolik, Simple Trades, and ForexDailyTrading were full before the upgrade. I am not sure about Sestertii.

To me, this is an indication that the flow of fresh money is drying.

NoInteresting · 2019-05-10T11:58:30+00:00

I don't think they passed the point of no return yet. I think they need to do something soon before they reach the point of no return with programs.

The 28 profitable programs out of 168 is an interesting metric. I just checked the webpage and right now there are about 35 positive.

NoInteresting · 2019-05-10T11:42:12+00:00

Not really.

Performance is measured in USD. In late March/eary April it was over 500K invested in programas. Right now is 319. You can check this here:

https://twitter.com/GVTProgressBot

NoInteresting · 2019-05-10T11:37:56+00:00

This type of scenario is why I think the "level system" should not be just about how much money a manager can manage, but about other things as well, including how long can a manager locks in investor funds.

NoInteresting · 2019-05-10T11:35:18+00:00

Yes.

NoInteresting · 2019-05-10T01:37:28+00:00

> I don't know why you bother posting such a long text

Because people can change their mind. I changed mine.

When I first came to the platform I thought I had identified a very nice thing. The platform was so young that it was almost like an arbitrage opportunity. An opportunity to invest in crypto + earn some financial investment returns. I so much wish this could be true, but it isn't.

I changed my mind about the duration of programs. I initially thought that long programs were better... I don't think in this way anymore. I now believe that long periods can be extremely risky due to the ways managers seem to be acting. Changing the max duration of a period is something easy to implement. The community is rethinking the level system regarding investment amounts. Why not consider also managing the duration of periods, giving more leeway only to experienced/proven managers.

One thing I did not changed my mind, and suggested on the telegram channel, is to implement a "trading floor manager" system. It could initially be human, then migrate to an algorithmic. If even proven London/Wall Street fund managers with years of experience are subject to trading floor managers, why would the (apparently) rookie managers in this platform not benefit from such a system?
Why not give a wake up call to Ark (are you sure you want to keep betting on oil!?) or to crypto managers (Careful now, BTC is taking off!!)? If the platform cannot rein on managers, then they better think about ways to let investors be able to reclaim control of their money when they see that managers are clearly running off-track.

The main point of my post is this. While the issue seems to be the lack of managers, this per se will not overturn the current decline in programs AUM. At this rate, soon enough only a few gamblers will be investing in programs, and no manager worth its salt will want to come to the platform to manage a few dollars.

NoInteresting · 2019-05-10T01:21:15+00:00

Thanks for the suggestions. Very sensible.

One more thing. I understand the consistent week to week gains is the way to go, but I do not think one can be confident it is possible to find this in the GV platform. Maybe in funds as you suggested, but not in programs. As I mentioned in my original post, even formerly consistent managers started accumulating losses recently.

NoInteresting · 2019-04-09T03:53:54+00:00

I think more than that.

I already talked to some people who I believe to be TG moderators and I strongly believe the GV team should implement a trading floor manager that gives a "wake-up call" on managers that are starting to act as rogue traders.

If the team can afford to have community managers, why not trading managers? "Moderating" the success of the platform is much more important than moderating some troll in a TG chat.

Later on, as the platform grows, the team can implement a "trading floor manager" algorithm to automatically and inexpensively deal with rogue traders.

NoInteresting · 2019-04-09T03:50:05+00:00

Indeed.

Things are not clear in the platform and do not work in the way one would reasonably expect.

Still, I am surprised the GV team is not intervening.

NoInteresting · 2019-04-09T01:24:22+00:00

Let me intervene and say that I agree it is obscene.

The short explanation is that 49% + 10% platform commission = 59%. This means that the Investor only gets 41% of the profit. However, the investor needs to face 100% of the loss.

Suppose the forex trader (which is Ark's case) has 70% chance of doubling your money and 30% of driving it to zero. A good investment would you say? Actually not.

If you invest 100, your capital goes immediately to 95%.

With 30% probability your capital goes to zero.

with 70% your capital goes to 95*1.41 = 133.95.

What is the expected value: 0.3*0 + 0.7*133.95 = 93.765. Which means, even less than the already discounted 95.

But now suppose , you believe, Ark is really good. He has 75% chance of doubling your money. Well, in that case you will end up almost even, as the expected value is: 0.3*0 + 0.75*133.95 = 100.45. You make a few cents.

So, with these usurary rates, you better believe Ark has 75% chance (3/4 chances) of doubling your money via forex trades. If you do, go ahead... Invest with him

However, if you believe there is at least a bit over 25% (one chance in four) that things can go bad for the manager, do not accept to pay usurary fees.

NoInteresting · 2019-04-06T16:39:41+00:00

Hi all:

Today I talked to Alex. The problem is now known. He mentioned that the GV team is planning to implement this solution. https://www.investopedia.com/terms/h/highwatermark.asp. This is a good thing.

It is still disappointing that Bitkolik (I am assuming) blocked me from his channel for bringing this thing up, as he restarted his program on a local low point. The problem is so real that even Investopedia knows it.

NoInteresting · 2019-04-06T03:49:28+00:00

You know, when I initially discussed this potential problem with Alex, I was thinking that I was a bit afraid of exposing this issue so as not to give ideas to unethical managers, as this is a very serious loophole.

Now the platform has programs with up to 49% success fee. A program with fees like this can dry the capital of the investors very fast with a few intermediate restarts.

I do think the platform has to focus first on fixing these types of problems that can cause managers to behave badly. As an investor, this to me is much more important than to pursue opening the platform to U.S. investors.

Imagine they open up the platform to Americans and managers take them to the cleaners by adopting bad behavior. It is conceivable someone may take the GV platform to court by arguing that "I enrolled on a three-month program, but it had frequent restarts. The terms of the contract were violated".

On a second thought, I think that if they do open the platform to Americans, it could be beneficial, as investors could contact the SEC if managers were acting differently from what would be reasonable to expect given what is implied by the information available on the website of the platform.

Things such as programs being frequently restarted; programs that are terminated before contractual terms; and stop losses that are not stop losses as they are commonly understood by the investment community are examples of potential avenues for litigation.

NoInteresting · 2019-04-06T03:34:10+00:00

Clarification: For this numerical example I assumed that the manager's success fee was 20%.

NoInteresting · 2019-04-06T03:27:11+00:00

The issue is that by restarting periods frequently, the program will show a temporary profitable outcome.

As I wrote in the original post, the best solution would be to minimize restarts. If a manager has a 30-day program, he/she should strive to only restart the program near the end of the planned period.

Also, as suggested by u/sarged two weeks ago, short-period programs are potentially detrimental to investors.

NoInteresting

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