Bitcoin returns for November (click for big)

We started the month towards the low 10′s, but the coins didn’t hang around there for long, shooting up immediately and finishing almost 30% higher – at which point I exited.

(You may note the monthly change in the above table only records a 11% increase for the month, and not the 30% I referenced earlier. The reason for this is I had been reporting all earlier months values in USD. When I sold I had to sell in AUD (obviously, although giving you each an envelope of greenbacks is tempting), thus the decrease.)

At the end of last month I moved a lot of value out of coinz and into cash, providing us some protection just in case everything crashed so close to the end of the investment. Around the first week of November I started to see some positive movements, and coupled with the knowledge that the Bitcoin block reward was about to halve, I made a call to go back ‘risk on’ to see how far we could push our final payout. I’m very happy to announce this was absolutely the right call.

So now let’s get onto what everyone is really interested in: pay day.

Last month I provided you guidance that the final payout per investor would sit around the $400 – $450 mark. Now the fund has exited and I have received all proceeds from sale, I’ve very pleased to announce the final return details: 

The fund has increased from $2,200 to $5,500, representing an individual return of $500 (profit of $300).

$500 was the precise mark I had been aiming for, and had been watching the market obsessively over the past fortnight as we started to flirt with this outcome becoming a possibility. I raised a standing-sell a few days ago, and was very pleased when I woke up this morning to see it had triggered.

This is frankly an outstanding result, representing a 157% return on investment (following fees). To provide some context to this: if you had placed your $200 in the Australian share market, you would now have approximately $220 – a 10% return.

It’s been a lot of fun tracking and trading on this fund, but frankly I’m tired of looking at the Mt Gox price ticker. I’m extremely happy we’ve been able to deliver a great result for everyone and hope you’ll all be able to enjoy your takings over the holiday season. I will be stuffing envelopes over the next couple of days, so when you see me next I should have a nice little Christmas bonus for you!

Yet, against all this negativity, the ASX200 appears on track for double-digit earnings for 2012. Could this be a sign the GFC bear market is finally coming to an end?

If history teaches us one thing it’s that the greatest bull runs always happen after the deepest bear markets, and in recent memory the world hasn’t seem a bear market like the GFC. So what does this mean? For those who believe the good times may be about to return, you have a very limited window of opportunity to set yourself up for experiencing what may prove be the greatest returns of the last decade.

Over the next couple of weeks I’ll be writing a number of tips in this series, first up a personal favourite of mine; Jumbo interactive.

Jumbo Interactive (JIN)

Jumbo Interactive is an online wholesaler and retailer of lottery products via the internet. These guys have been selling lottery tickets in the Australian market through their ozlotteries.com website since 1999, and recently have seen some tremendous growth, quadrupling their annual revenue from $25m to $100m in the past 5 years.

They do not own an Australian lottery license directly, instead reselling Tatts Group (TTS) products nationally. They make money through this channel in two ways. Primarily they recoup an agency fee from Tatts – similar in the way your local newsagent does, only a far grander scale. Secondary to that they also charge their own margin on tickets as a convenience fee to customers.

Why they are going to be huge in 2013

Jumbo has proven themself successful with significant sales growth in the online channel. Consumer preferences have shifted to online and Jumbo has amassed a huge database of active customers, and this is only going to get bigger. Jumbo also has a unique product offering allowing players to join syndicates, purchase via in-real-life advertising, and play via Facebook. This technology isn’t only the best in Australia, it’s world leading.

Online lottery sales currently capture only about 7% of the total market, but if we compares this industry to similarly recently disrupted business models such as real estate, job searching, or travel booking, it’s not much of a reach to think half or more of all sales could soon be conducted online.

Based on this, even if Jumbo were only to continue their current growth locally, it’s reasonable to assume the company could be multiple-times as valuable in a very short period of time. Luckily for investors, there’s much going on here.

International plans

In the last week Jumbo has released two huge announcements. First up, they have confirmed their entry into the $56b US lottery market. Jumbo has spent the last couple of years getting people on the ground in the US to start exploring opportunities, and this announcement is a huge first step into the most valuable market in the world. To assist with this entry they have launched a joint venture with Retail Gaming Solutions (RGS), a New York based company specialising in physical lottery merchandising and affinity programs.

RGS has only recently incorporated, primarily to service the joint partnership with JIN. As such, information about the organisation is fairly light on. FAR more interesting is the man behind the business, Jeff Perlee. Jeff is a pervious director / CEO of the New York lottery, and managing director of Lottery.com. Not a bad pedigree for an Aussie company  looking to break into the US market.

And this isn’t just an announcement that they’re going to start negotiations. They’ve completed a pilot, signed the contracts and are rolling out to 15,000 locations from next month.

Up until recently the US department of Justice had banned lottery sales online, this changed in December of 2011 when it was declared the Wire Act was not applicable to lotteries. This was a very important first step into lottery providers jumping online, and with Jumbo’s entry into the market, and their experience with delivery of these products in the Australian market, they are a guaranteed ‘partner of choice’ for any of the numerous US entities looking to start selling online.

While these US plans had been somewhat expected, what Jumbo announced next has taken may analysts by surprise. Less than a day after their announcement of US expansion, Jumbo followed up with landmark confirmation they have entered the online lottery market in Latin America. This is hugely important for two reasons. Firstly, this introduces a brand new revenue stream outside of the Australian market, but in my opinion even more important is that this will provide Jumbo with a tangible case study of the implementation of their technology with a group based outside of the Australia. With this venture they further solidify their skill and experience as a partner of choice; a key differentiator for their US negotiations.

Finally, we are aware Jumbo has also engaged consultants working the UK and European markets, increasing the possibility of a further details across multiple continents.

Risks

Jumbo is not without it’s risks. They have already experience some spectacular growth for the YTD, and some may argue the future value of the business is already priced in.

While they are continuing to make great revenue growth in the Australian market, they will start to experience increased competition from Tatts, as they continue to grow their own online sales. A further Tatts risk is the withdrawal of their mutually beneficial sales agreements, however investors can hold some comfort in Tatts recent signing of a 5-year agreement, giving Jumbo a bit of breathing space for the immediate future.

Should I invest in this business?

Well of course that is completely up to you. The questions I would suggest you consider asking yourself are “do I believe lottery sales with continue to move online”, “have I researched the management team and do I think they are serious about international expansion plans”, and “what are the potential risks for this business”. For me, this is a great business with a huge amount of potential.

Do your own research, and please let me know if you’ve got any comments or questions.

Two months to go and we’ve finally hit a loss.

We saw a 10% drop just before the end of the month, resulting in an overall 9% loss for the October.

Click for big

During the month I moved another heap of cash out of the coinz, providing us some downside protection in case they continue their slide. This is the prudent thing to do considering how close we are to cash out, but it does mean we won’t benefit as strongly from any upwards movement.

So now for what everyone is really interested in: pay day.

I am looking to wind down the Coinz by mid-December. Hopefully delivering everyone a nice pre-Christmas bonus. Mt Gox is making me jump through a variety of hoops to do this, so I’m probably going to start the sell down process for the remainder of the Coinz by the end of November, with the final performance report and final payout figures dropping early December.

Currently, individual holding are equal to around $450 per person. No a bad return on a $200 investment. In reality (assuming no big swings in the coinz), the final pay-out is going to be somewhere between $400-$450. This is due to cost associated with international bank transfer fees, Mt Gox fees, and currency exchange. I’ll be in a position to provide better clarity on this next month.

August performance (click for big)

I moved a little bit of money between coinz and cash at different stages during the month. This has dropped our cash holding back down to around $1000 (from almost $2000 last month).

Values for Aug (click for big)

As you can see, we are now sitting on another great result for August with a 11% increase for the month.

I’ve also now included an individual holding column on the right side of the above table. Based on this I’m happy to report your initial $200 investment is now worth about $500.

August chart (click for big)

Based on August’s correction, I have moved a proportion of the coinz into cash and will be holding them there for the short term, while I wait for a clear signal on the future direction of the market. I suspect this is not the last of the volatility we will see in the coming weeks.

Values for Aug (click for big)

Despite this volatility we are sitting on another big increase for the month of August, finally cracking the 100% growth mark at 130% increase since inception. In case you don’t feel like doing the  maths yourself, this means your $200 is now worth almost $450.

In other Bitcoin news: Two weeks ago Bitcoin investors were fleeced to the tune of 5 million dollars, after placing their trust in a guy calling himself  ’Pirate’ who offered 7%  guaranteed interest per week.  I won’t do that. Probably.

July update – Click for big

So after such a big month, what does the spreadsheet tell us?

Topping even last years meteoric rise, this month has delivered an absolutely massive 38.70% increase has resulted in total gains since inception of 94%

Great news right? Well I’m not so sure. There’s a lot of talk about manipulation in the market and I have no doubt that these massive gains over the past couple of months can not be sustained. As a precaution I’ve now started moving parcels of the coinz out of the market and into cash.

This move to cash will help us do a couple of thing. Primarily, it’s about locking in profit and removing some of the risk, but it also gives us a warchest to jump back into the market if we see a big retraction – something I think is a very likely possibility over the coming months.The plan from here forward is to lock in approximately $500 cash for every $1.00 rise in Bitcoin value.

As always, let me know if you’ve got any questions. Look forward to providing a further update next month.

Bitcoin chart for June (click for big)

• Recent opening of the first exchange in Colombia.
• BitInstant offering cash deposits at Walmart, CVS, 7-11.
• BitInstant offering deposits in Russia and Brazil.
• Recent releasing of Diablo III, gamers exchanging Diablo gold and bitcoins.
• Recent spike in Chinese exchange volume.
• Stable exchange rate for last several months inspiring confidence.

There’s a lot going on, and unlike twelve months ago, I believe this to be substantial, not just hype.

So after such a big month, what does the spreadsheet tell us?

An absolutely massive 30.02% jump for the month has resulted in total gains since inception of close to 40%.

I’m going to closely monitor this one over the coming weeks, as we might be in for a correction shortly. Regardless, it’s a substantial result five months in.

Bitcoin chart for May (click for big)

See that black line? Check out how it’s on the up and up! That’s right guys, we are now filthy fucking rich!

…well, actually, no we’re not, but May did see some good gains for our coinz.

After a slight dip below $5.00 around mid month, the coins rebounded quickly and sat comfortably above $5.15 for the remainder of the month. The upswing represents a 5.10% gain for the month, bringing total gains since inception to a huge 7.55%.

Not to toot my own horn, but for comparison: if you put your money into Australian shares, you’d be sitting on a 3.67% loss for the corresponding period. This makes me the best fund manager in Australia.

I’m also happy to report this upward trend has continued into June, so with a bit of luck I’ll have more good news to report in the next update.

Here’s where we stand after 4 months:

Launch 48 provides a place for Zuckerberg-wannabes to link up with like-minded co-founders to dive into the world of wireframes, pivots and (hopefully) monetization.

By providing attendees a loose structure to guide them on their way, access to a panel of awesome mentors, and just the right amount of beer and pizza, Launch48 gives teams the tools they need to build their ‘next big thing‘ during an action packed 48 hours.

The Launch48 weekend is a unique experience for building online businesses with a group of teams from a range of backgrounds and different sets of skills.

For each team, the goal is simple: pitch, build and launch an online business in 48 hours.

All Photos with thanks to Simon Walker

The Launch48 weekend is different from most hack-days and entrepreneurial events because:

1. They offer a great set of mentors that work with groups to develop their web business
2. Each team has about 15 people working on each idea from a broad range of backgrounds
3. Participants meet, learn from, and work with many people throughout the event
4. All aspects of a business are covered including planning, marketing, PR, branding, design, finance, and development

The first Aussie Launch 48 was held in Melbourne in April 2011. During that weekend I was fortunate to be in the team that worked on what is now successful Melbourne learning start-up, We Teach Me (read more about the Whiteboard to Working Prototype of We.Teach.Me).

Later that year, organisers Grant Downie & Daniel May run the format for a second time, this time in Sydney. Out of that weekend, gift discover site Present Pod was born.

Fair to say, it’s a pretty impressive track record to have two executed start-ups delivered as the result of two Launch 48 weekends.

All Photos with thanks to Simon Walker

Having attending other hackathons I really enjoy the business style format of the weekend; meaning anyone – technical or otherwise – can get involved and provide value to their respective teams. Indeed, our team of 15 contained only a single developer – lucky he was an absolute gun, cause we worked him hard!

Our team worked on a product we named Skiip. Skiip wants to make it easier for builder and renovators to buy and sell material.

The construction industry generates a lot of wasted building materials, most of which go straight to landfill. Yet these materials have value and people want them. Skiip helps solve this problem by connecting buyers and sellers of recycled building materials. It makes money by clipping the ticket on each transaction.

Other products worked on at the most recent Launch 48 included:

Markive - a web based platform that allows its users to capture street art through the camera functionality of their mobile devices. Markive then acts as a map based archive of street art pieces or street art sites with the functionality to “zoom” through time and watch the evolution of an artwork or the site of an artwork.

AppyWife – a mobile app that offers husbands a way to please their woman on special occasions without having to remember the little details. It takes the hassle out of gift giving by suggesting relevant sites and one click solutions for gift ideas. AppyWife ma es happy wives by reminding men of special dates.

Qjumper – A  platform allowing consumer andkcorporate buyers special access to exclusive products, services and other scarce items. Initially focussing on the restaurant market, the Qjumpr iPhone application provides a unique opportunity to book a table via a fun and engaging auction process. Through Qjumpr, buyers will be able to bid to book tables at highly sought after restaurants that would otherwise require bookings 4-8 weeks in advance.

All Photos with thanks to Simon Walker

Fine, here’s four more awesome Melbourne Food Truck Trucks to satisfy those curb-side cravings.

5) Grub Food Van

What do you do when dreams of converting an unloved vacant block in the heart of Fitzroy into a community farm, are dashed by an uncaring local council? You pick yourself up, dust yourself off, buy  a 1965 Airstream van (hot) on eBay, and set yourself up as a brunch-cum-deli-cum-pop-up bar (of course).

Now a permanent fixture on Moor Street in Fitzroy, Grub Food Van serves up a range of tasty treats from dawn to dusk, based on simple food, backed by quality, fresh produce.

The menu is constantly changing, so you can expect everything from Argentinian pork with chimichurri-style salad, t0 chops and salad, to simple terrines, and tomatoes from Grub’s very own greenhouse.

Where to find them: 87-89 Moor Street, Fitzroy

What to order: Keep an eye out for the Grub Food Van x The Sausologist sessions for Sasuage & Salad goodness

Grub Food Van Twitter| Grub Food Van Facebook

6) Fancy Hanks BBQ

The boys behind Collingwood cafe Cavallero are bringing Texan style BBQ to Melbourne, and is it amazing.

Kent Bell and Rob Cattanach - The brains behind Fancy Hanks BBQ – have custom-constructed this iron monster (as in, crane-required-to-move, monster) of a wood-fired smoker, where they place only the finest Angus brisket, Otway pork and sticky back ribs, which they then slow cook until melt-in-your-mouth perfection.

Meat is priced by the gram so you can order as much or as little (but probably as much) as your heart desires.

This is probably getting to the upper-end of the price scale for road-side food; meaning you’re looking at somewhere between $20-30 for lunch (depending on what you pile up your plate with), but trust me, it is money seriously well spent.

Check out this great video for more BBQ goodness:

Where to find them: Due to the logistics required to move this black behemoth - not to mention the minimum 8 hour cook time – Fanny Hanks isn’t your usual ‘park where we feel like’ food truck. Currently they are completing a couple-of-week run (until June 3rd) at Joe’s Shoe Store in Northcote. As per usual, check the Facebook (below) for updates.

What to order: You are here for the meat (obviously), but don’t scrimp on the sides - zucchini, farro & goats cheese salad anyone?

Fancy Hanks BBQ Facebook

7) Dhaba Food Truck

Need a curry in a hurry? Dhaba can help!

The Dhaba Food Trucks (there’s three of them!), serve up a mix of the freshest mix of North and South Indian flavours, their beef comes from Bendigo, lamb from Kyneton and the chicken is always free-range. The menu changes every two weeks but the structure is constant. There are always a bunch of entrees and always about six curries…three to four meat ones (and sometimes fish) and two but more often three, vegetarian curries.

Most of their menu is gluten free. And of course, there is always Indian flat breads, basmati rice and desserts. So, expect something new to try whenever you visit!

Where to find them: FINALLY, you don’t need to come into Brunswick for great street food. Dharma gets out on the road all the way to Woodend and Castlemaine

What to order: Mmmmmmmm, Papadi Chaat: crispy wafers to scoop spiced chickpea, potato, tomato and coriander topped with yogurt and tamarind sauce

Dhaba Twitter | Dhaba Facebook