Simit Patel

Here is a video description of the fund I am launching; below the video are details in text.




What: A fund traded by me, Simit Patel, InformedTrades founder. The fund will trade only gold. Shareholders are entitled to 75% of all profits; if the fund trades negative, no fees will be deducted. The fund will discontinue trading if floating equity falls below 15% of the amount of deposits. Please see our funds terms page for all details.

Why: I believe we are at a unique point where the gold market may make some great moves, and conditions for trading are quite favorable. As a result, I think it is a particularly advantageous to launch a gold fund at this time. InformedTrades regulars know that I'm a close watcher of the gold market -- its the market I focus the most on.

Approach: Below is a basic breakdown of how the fund will be traded:

1. Leverage will most likely between 1.5X - 2X the amount of deposits
2. The fund will be closed if it loses 15% of its value (so if floating equity is ever 15% lower than the amount of deposits)
3. Buy on dips to support; sell into rallies. Short positions will not be taken; if the outlook is bearish, a cash position (US dollars) will be maintained. Candlesticks and trendlines (i.e. price action) will be the primary determinant. Daily and weekly charts will be the primary focus, but long-term fundamental analysis is driving the vision behind the fund

About the Trader: I've been long gold and silver since since October of 2008, and continue to believe we are on in a long-term bull market in precious metals. I've also been profitably trading since 2005. Below are links of interest that prospective shareholders may wish to consider:

Year End Review of My Trades in 2009
How to Spot a Bubble (And Why Gold Isn't One)
Six Things for Gold Traders to Watch
My Course on Crisis Investing (video)


Important Matters to Consider Before Investing

1. This account will be traded with Oanda, a broker I have traded with before. This means that the gold that is being traded is "paper" gold -- it is not allocated and stored in a vault. I think this gold market is susceptible to more issues, and while I think it is preferred due to its low spreads and opportunity for leverage, I recommend purchasing gold through Bullion Vault (see review) or through Golden Eagle Coins (see review) for safety. As such, this fund should be viewed as a speculative opportunity.

2. The 15% loss cap does not cover scenarios in which the broker cannot execute orders and the market gaps deeply below the stop-loss in place to cap losses at 15%. I find such a scenario to be unlikely, but do want to note it as a precaution.

3. The bailout fund currently contains 3,000 IP. This means that the first 40 shares purchased by members with at least 1,000 IP in assets are fully insured -- any losses in trading will be covered by InformedTrades LLC*. (ADDED 9/9/2010: There are no longer any remainin insured shares -- they have all been sold.)

3. Please read and review terms for IT funds.

4. Have questions? Ask them in the comments below.

How Can Shares Be Liquidated?

1. Shares can be liquidated at any time; simply send me a private message when you'd like to liquidate. The liquidation price will be posted daily here.

2. US residents must submit a W9 form for tax compliance reasons prior to converting their funds into US dollars. A W9 form can be downloaded here.

3. While funds will typically be able to be converted into legal tender in a much shorter amount of time, it may take up to three weeks before funds can be sent to you, especially for purchases of more than 10 shares.

4. You can see what assets you have in your possession on your assets page.

5. Based on the methodology I will be using to trade this fund, I recommend shareholders give 3-6 months before withdrawing. That is simply a recommendation; withdrawal requests at a sooner point will be happily honored.

Ready to Become a Shareholder? Here's How

NOTE: This fund is no longer issuing new shares. Shares will be made available if any current shareholder wishes to liquidate prior to the fund closing.

1. First, you need to be registered member of InformedTrades. Click here to register.

2. Once you've registered, you need to purchase InformedPoints. (Click that link for a full description of InformedPoints, or to purchase them via credit card or Paypal, click this link).

3. Now that you've got points, you're ready to purchase shares! Click here to purchase shares in our store. If you purchase 10 shares or more, you'll be provided with access to a premium forum where I share my trades and the rationale behind them, and where you are invited to ask me questions about trading as well (you'll likely get more benefit from asking those questions in our public forum where all can see and participate in the discussion, but if you feel more comfortable asking in private, this is a forum for you to do so). You can also purchase ten shares via our payments page.

4. If you plan to purchase more than 25,000 InformedPoints (i.e. $2,500 US dollars) worth of shares, please contact me first.

5. Trading will not commence until after September 12, 2010.


Have questions? Feel free to ask them below.




*The only risks are outlier risks related to banks not delivering funds or the broker not executing stop-loss orders and the market gapping severely.

__________________
My IT Blog | My Trading Bio | My Investing/Trading Method Explained

Thank

 

Unregistered

Hi Sumit,

I am interestded in this fund. But I have to questions:

1. Are you regulated by the SEC (basic requirement for an IPO) ?
2. Can someone based outside the US invest in your fund?

Simit Patel

hi unregistered,

no, these shares are not regulated by the SEC or any "real world" regulatory authority. see our funds terms page for more.

yes, any registered member of InformedTrades can purchase shares through our store regardless of their real world location.

Thank

 

Tom

Let me see if I have this straight. I can purchase 10 shares @ $50 each, then watch your analysis/thinking/logic behind the trades and ask questions, in your private forum. Is this correct?

Now about the bailout funds, particularly this statement:

The 1,000 IP in assets, can these be purchased or do you already have to have them?

Does this mean the folks, that are first to invest, are protected in case of the 15% drawdown/seize trading and will be bailed out?

If I've interpreted correctly, how long does this offer stand? Thanks,

Thank

 

Simit Patel

hey tom,

yes, your understanding is correct. to confirm:

1. purchase 10 shares, and you will be able to my blog posts that highlight my trades and my thinking here. i'm planning a short post daily -- maybe just a couple sentences, sometimes a link -- as well more extensive posts with charts on the weekend, and when trades are placed.

2. at the time of this writing, 26 shares with insurance have been purchase, so 14 insured shares remain. insurance means if there is a drawdown of 15%, i will pick up the tab. this is basically insurance against my trading errors, although if the broker (oanda) does something crazy or there is a banking collapse or something like that, insurance will not cover that. i do consider such events to be extremely unlikely, but i do want to account for all possibilities. so, if your shares are insured, i think this is a very low-risk opportunity.

3. i plan to keep the insured shares offer open until all the insurance is used up, or until the fund is closed. the fund will be close if floating equity reaches 15% below of deposits, or if i think the rationale behind launching this fund (that there is a bull market in precious metals) is no longer applicable. at the time of this writing i expect the bull market to go on for at least several more years.

if you have any other questions/comments feel free to share.

thanks
simit

__________________
My IT Blog | My Trading Bio | My Investing/Trading Method Explained

Thank

 

forexer

I would have to wait till i got more cash inflow before i buy these points to purchase the fund. My bank requires me to maintain $1000 with them at all times... loosers

Thank

 

Tom

Sounds like a fairly risk free deal to me. Thanks for the reply.

Thank