EOS ICO Distribution - will you make Money on the next tranche?

Hi all,

My first post here!

So let's start with my backstory, before I get to the interesting stuff ;).

My name is Jeroen, I'm from The Netherlands originally but I have been living in Australia for the last 7 years. I have been in business for most of my adult life, working in Europe and in Australia as a management consultant for a large technology company. When I reached my long service leave I went traveling with my wife for three months through Africa and when I came back, I decided it was time for a change. I gave up my job without a clear plan of what I would be doing next. Always having had an interest in investing I decided to explore this market a bit further. The exploration lead to me changing from investing to trading, and even more specific trading penny stocks. I realised a few things:

1. Trading is really hard but super interesting. It is easy...to lose a LOT of money if you don't know what you're doing, especially in the speculative end of the market. I didn't make much money but didn't lose either so I took this as encouragement to continue down this path.

2. Combining trading with another job is not impossible, but it increases the risk. I have tried to do this over the last 6 months or so and my portfolio has suffered a bit... I wouldn't recommend it, unless you rely on your job for income of course. Which leads me to the next point..

3. Don't use money you need for rent, food, etc. ! This should probably be on the top of the list to be honest. It is a mental game more than anything and having skin in the game is good, your learning curve goes up by a significant amount, but the anxiety of making ends meet by trading will drive you to make ill-informed decisions that will hurt you down the line.

4. Trading spec stocks in Australia is not as profitable as for instance in the US. Volatility and volume are key and both are not really there in the Australian market at the moment. Significant trading fees to trade overseas makes trading overseas harder (well, at least profitable :))

5. Working for yourself is the best. thing. ever. Freedom is everything.

And this list is just off the top of my head, there are many more lessons learned but for the sake of this post (and the average attention span...) these have been the main reasons for me to now venture outside of the realm of stocks into the currency world. I looked at traditional currencies first but the idea of using heaps of leverage kind of put me off a bit. Funnily enough, I'm quite a risk averse person... Anyways, I came across cryptocurrencies a few weeks back and how I have missed this up until now is beyond me. It's absolutely fascinating and for me, it feels like it allows me to combine my background in business & technology with the trading skills that I picked up so far, but on a truly global playing field! I love it so far.

So, needless to say for the ones that have been in this market for a longer time, the initial coin offering space is a super interesting part of the game. I have stepped into cryptocurrency land with a very small part of my portfolio to test and get all the stupid mistakes that I will undoubtedly make (like I did with the penny stocks) out of the way first. Since the EOS ICO is SO hot right now I decided to take part to test the water so to speak. Even though I only took a mini position I think the lessons learned so far could be valuable to others that are starting out like me, so I thought I'd share my observations so far. And I also like to share the way I am using some basic scenario modelling to determine whether any future distributions are interesting for me to participate in. Are you still with me? OK, lets go. So, first the observations:

1. When you start out it is quite daunting and challenging to understand what is required to be able to participate. It took me all the way from realising I first needed Ethereum, to start using the Metamask wallet, to using the wallet to deposit the ETH to participate in the EOS ICO, to then to use the wallet again to claim and send the EOS tokens to my kraken wallet and the decentralised app provided by ESO to generate a public key. I'm not afraid to say that most elements I just mentioned I had to research extensively to understand what I was doing or where my money went, and it has taken me quite a few hours.

2. Fees are everywhere. Below I'll post a screenshot of my excel calculation spelling out all the tx fees. In amount of dollars it is minimal for most transactions (which is great!) and obviously I only traded a mini position, but there's transaction fees sticking left, right and center.

3. It is worth it. Well, the future will tell I guess... but at the time of writing this I'm sitting on a (virtual) 50% profit after taking out all the costs.

Which leads me to the final part of my post, given the unique distribution model that ESO is running there is an opportunity to get involved in many more tranches. So I set out to do a bit of basic modelling to see if I could determine the combination of price point and participation numbers it would be most valuable for me to get involved. See the excel snapshot below... I hope it makes some sense. Obviously no one can look into the future and if you believe EOS will go to $10 in the future then this is a no-brainer exercise. And obviously everyone starting point is different given that we will all have bought our Ethereum at a different price point. This is just my way to put a bit more science to the madness!

This simple excel allows me to run some scenarios through for each of the distribution tranches. I have to say, DON'T take this as gospel, DYOR, this is no financial or investment advice and there are probably mistakes in the calculations and assumptions might be wrong. However, if you spot those - I'm keen to hear them!

I hope this was a valuable post... and well done reading all the way to the end! I'd love to get involved in the community so let me know what you think in the comments! And if you would like to receive a copy of the excel file, hit me up at thetransparenttrader at gmail.

Cheers,
Jeroen (aka The Transparent Trader)