My title of my post is the statement I stuck too from the very moment this selloff started. I've stayed consistent with this belief the entire time, whether we go up or down. If you just wanted any more proof, take a look at the Twitter link, as an additional piece of evidence. It's the same case in the recent up moves (the futures are contributing to the majority of the recent up move).
https://mobile.twitter.com/bespokeinvest/status/1248368169091239937
Retail, institutional investors, pension funds, etc. - they don't trade overnight futures. However you know who does? Stat arb algos as well as option trading firms/hedge funds/prop trading firms/bank risk-mitigation algos. For example if a hedge fund was put into a dicey risk situation, they turn on these algos to offload risk overnight. If they can't sell credit risk, they have to do it elsewhere like in ES futures. If an option market maker is short gamma and realizes oh crap, this is gonna cause me to be super long tomorrow with this move in ES, I've gotta hedge and turn on my overnight algo to sell first so I get less long deltas overnight.
So when you guys want to ask "who in the world is even selling" as we sold off and now "who in the world is even buying" as we go up, it's the algos. You are right, not many actual people are buying these days. It's the algos, and when I say algos, I mean the risk/liquidity algos.
Do you want to know why the algos are buying now? It's simple. Jerome Powell said he's buying credit ETFs. If you are a market maker, you have to sell these ETFs to them. Now you have to find a beta hedge. What's the best way to find that beta hedge? Buy ES futures. This then causes SPY to open higher. Now, if your algo was fast enough, you could have front ran the FED by buying HYG and JNK (this is why their NAV is trading at a massive premium), but if you weren't, well you get desperate as you get picked off from being short credit, so now you have to buy ES, SPY, and anything else you can. You might have to then buy SPX/SPY puts with it since you then have to protect your now new ES/SPY longs (which you didn't actually want to buy but were "forced" to buy),, which is why VIX hasn't dropped that much relative to how much SPY has gone up. It's all an algorithmically driven market.
This is why the entire market, on BOTH the down move and the now up move, has decoupled from the economy. So no, you guys may think people are FOMOing in. That's not true. Most investors aren't FOMOing in right now. The algos have just gone out of control on both the down and up moves and it's all technical.
Correlation (with other assets like credit and bonds), positioning (short squeeze and forced liquidations), option gamma (short gamma makes moves bigger), and short term stat arb strategies dominate the market short term. Retail and even big firms like Blackrock or Berkshire do not. Fundamentals win out long term. It may be months for SPY, and it is years for individual companies. No short term movement is ever controlled for by actual people wanting to put on a position.
As I said a month ago when we were selling off, if Citadel and Renaissance Technologies wanted to hold up the entire market for a day, they easily could. They may not want to if it's not in their favor, but they easily could. Two firms. That's enough. That about sums up this market. (EDIT: this part may have been extremely confusing due to my bad wording, but if you read some of the posts below with like me, MasterCookSwag, and ArseneWankerer, I try to clear up my meaning)
Another interesting and true fact? If options trading was ELIMINATED, the market would NEVER have sold off to 220 and it would have never skyrocketed back to almost 280 now. You may ask it's the same fundamentals right? Yes it is, the fundamentals of the economy and virus are the same, but elimiate options, and actually the entire market changes.
Finally, to add one more thing, if this wasn't clear, there needs to be a catalyst for the first wave of selling and buying, but everything after that is purely technical. For example, the catalysts would have been the virus and the oil shock in the wave of selling. The catalyst would have been the Fed in the wave of buying. However, the catalyst in itself shouldn't have produced a very large move. For example, imagine we go from 290 -> 270 as an example. The catalyst, if only traded by itself, should have moved it from 290 -> 285. However, the algos, with all the technical details I described above, then moves it from 285 -> 270. This is what I call "forced selling" or "fake selling," and I've alluded to this in my other posts. There is also "fake buying" in the reverse. However, "fake selling" is usually more powerful because on average people leverage up to be more bullish than bearish in an average market environment. So yes, the initial catalyst is important, but it's not the reason for the majority of short term moves.
I worked in the industry so I know this. You can call it a dirty secret, but hopefully if you see some actual statistics (see the above link on Twitter), you'll understand too. Fundamentals eventually will win longer term, but you know that saying about how the market can stay irrational before you stay solvent, well that's literally true because the market is algo driven. And as we progress into a state of better technology and even more options volume (think about how many people just recently started trading options) and other assets, this will be more and more true. One of these days, which could be like in 20+ years, if some black swan catalyst happens in conjunction with all of these technical factors I mentioned, you literally can see a 20% triple circuit breaker day immediately and like 90%+ of that drop would be all technical.
I'll try to answer any questions to the best of my ability.
EDIT: So for the people who are pointing out I don't understand what a MM is, let's do a easier example with NFL betting lines. Vegas acts like a MM in this regard. When an NFL line closes, is it 50/50 on both sides of the line? Nope. Vegas is still subject to risk. That's why sometimes they win or lose a lot of money depending on the outcome of an event, even though they are a "MM" too. Yes, Vegas will adjust a line based on some order flow, but it has their OWN MODELS TOO to determine what is fair, so they will adjust accordingly to the toxicity of the order flow. They will not just completely change their line so much so simply based pure order flow to keep on capturing 50/50. If you really think an options MM for example goes home every night flat every Greek, you are kidding yourself.
The point I was making above is a firm such as Citadel does so much volume that they have a huge impact on the market, whereas if you take them out of the market for say a month, the entire market microstructure changes in options and equities. Notice in my original post, I clearly said that these firms may not actually want to do this in their favor, but I am using them as an example saying they do so much volume they can IF they wanted to (in options you are more likely to do so than equities). I was emphasizing this point to show you guys how algos play such a large role in the market. It's similar to Vegas when they act as a MM to betting lines. They control the betting line at the end of the day. They aren't always 50/50 on both sides with no risk. Of course, Citadel and SIG in options will adjust their vol curves based on some order flow, but at the end of the day, they control most of the options vol pricing, which indirectly also affects equities in a big way when we have massive short gamma moves.
Similarily, apply it to sports betting. Let's say we shut down Vegas for a month and let only DraftKings price all the betting lines. I bet you the lines would be different and the volume would be different. Would they be completely different (like a -3 to a +3 line)? No, it wouldn't be that extreme, but it would be different and volume would be different and reaction to order flow would be different. Just think about it like this and apply it to trading.
EDIT2: this was also my post like ~3 weeks ago when we were like ~230. Too bad investing deleted my context of my post (since it relates to a lot of what I said below), but you can still see my title and my comments, so you know what I was calling. Yea sure, you can say I got lucky, but I wasn't wrong.
https://www.reddit.com/investing/comments/fjtkzh/we_are_very_close_to_the_bottom/
Addressing the above link, it's the type of logic that I am using in my below posts to probabilistically call bottoms like this. I'm never 100% sure (it's impossible to even be like 70%+ sure imo), but if you put some of this together (like when does the forced selling for the risk/liquidty algos stop?), you can actually call bottoms a bit easier than just winging it 50/50. Notice that this also coincided with March options expirations, as I mention, options are a big part. It also conincided with Jay Powell saying he's going to "alleviate the risks" (this is the forced selling from algos risk) he sees in the repo and now credit market.
EDIT3: u/brokegambler posted this, if you want a real professional talking about it https://www.realvision.com/market-makers-and-coronavirus-the-mechanics-of-a-market-sell-off?utm_source=contributor&utm_medium=referral&utm_campaign=43900_HK_GH_CONT_W1_LINK
EDIT4: ok last edit but https://www.investopedia.com/terms/p/pinningthestrike.asp is just a quick example of one phenomenon that happens due to options and market makers. There's not going to be many articles you can find online on about what I'm talking about, but this pinning the strike phenomenon is a well-observed effect that's actually writen about of what market makers can do in terms of controlling price action due to their risk. Interestingly, what we have in our case the last month is the opposite of this in which rather than strikes getting pinned, strikes get blown through to cause the huge moves (since we've been in short gamma the last month). The article isn't super detailed, but can give you a general idea of one effect.
EDIT5: sorry I'll add one last edit...I do realize maybe my wording was not the greatest in my post, and after reading it again, it does sound a bit "forceful" at times, so I apologize for that. This was meant to be more informative, but please don't take it as I am trying to force any one opinion on anyone. Apologize for that!

Disclosure - Big fan of Esports and in @ 1.86
https://www.businesswire.com/news/home/20200820005020/en/Allied-Esports-GRID-Announce-Esports-Betting-Licensing
IRVINE, Calif.--(BUSINESS WIRE)--Allied Esports, a global esports entertainment company and a subsidiary of Allied Esports Entertainment, Inc. (NASDAQ: AESE), today announced a licensing agreement with GRID, a leading esports data provider, for the monetization of data and video rights to the company’s popular Counter-Strike: Global Offensive (“CS:GO”) Legend Series events. The multiyear deal will launch with the VIE.gg CS:GO Legend Series tournament beginning Monday, August 31, 2020.

“With a global network of properties and popular tournament brands endorsed by leading data platforms, Allied Esports is well positioned to be a major content provider for the projected $20 billion esports betting market.” Tweet this

Through the agreement, which also includes options to add supplementary programming from Allied Esports, GRID’s innovative, proprietary data solution will be directly integrated into Legend Series events to deliver real-time, official data to regulated bookmakers and sports betting platforms. The partnership, along with the licensing and sponsorship deal with naming rights partner VIE.gg, marks the first time Allied Esports will offer the use of data and video rights for the enhancement of regulated consumer betting.
“The interest and growth of esports wagering creates an incredible amount of value around secure, official statistics, and we’re excited to partner with GRID to deliver an enriched, data-driven version of our Legend Series events to an even broader audience,” said Frank Ng, CEO of Allied Esports Entertainment. “With a global network of properties and popular tournament brands endorsed by leading data platforms, Allied Esports is well positioned to be a major content provider for the projected $20 billion esports betting market.”
“Our vision to unlock the potential of official data and video from high-quality competitions by leveraging the digital nature of esports to provide value to the regulated betting market becomes realized when we partner with companies the likes of Allied Esports,” said Moritz Mauer, CEO of GRID Esports. “GRID and our clients are ecstatic to utilize GRID’s industry-leading platform to enhance the already stellar Legend Series.”
Created in 2017, Allied Esports’ original Legend Series tournament brand was designed to expand the competitive ecosystem and total prize pool for up-and-coming teams. The VIE.gg CS:GO Legend Series, which will feature 12 European teams competing online for €50,000 in total prize money and will be streamed live on twitch.tv/alliedesports August 31 through September 13, will be Allied Esports’ thirteenth edition of the Legend Series and sixth season of the CS:GO Legend Series. Additional versions of the series have previously included Overwatch, League of Legends, FIFA, COD Blackout and VALORANT.
About Allied Esports
Named one of the World’s Most Innovative Companies by Fast Company, Allied Esports International, Inc. is at the forefront of esports entertainment with a global network of properties designed to serve as competition battlegrounds, community experience hubs and content production centers.
Through direct operation or membership in the Allied Esports Property Network, the world’s first esports affiliate program, Allied Esports’ facilities span North America, Europe, China and Australia, and include the world-renowned HyperX Esports Arena Las Vegas, a fleet of mobile arenas, the HyperX Esports Trucks, and the HyperX Esports Studio in Hamburg, Germany.
Allied Esports’ properties serve as the home to a number of online and offline proprietary productions and events, including Friday Frags and Saturday Night Speedway, as well as original partner programs like the Simon Cup.
For more information about Allied Esports, visit AlliedEsports.gg and follow @AlliedEsports. Allied Esports International, Inc. is a subsidiary of Allied Esports Entertainment, Inc.
About Allied Esports Entertainment
Allied Esports Entertainment, Inc. (Nasdaq: AESE) is a global leader in esports entertainment, providing innovative infrastructure, transformative live experiences, multiplatform content and interactive services to audiences worldwide through its strategic fusion of two powerful brands: Allied Esports and the World Poker Tour (WPT). For more information, visit AlliedEsportsEnt.com.
About GRID
GRID is a technology-as-a-service platform designed to unlock the potential of esports data with the goal to improve fan experiences and contribute to the sustainability and growth of the esports ecosystem as a whole. GRID provides data services for over 70% of competitive esports, covering DotA 2, CS:GO, PUBG. Working hand-in-hand with rights holders to maximize the value of their official data assets, GRID protects partner competitions from malicious actors while ensuring competitive integrity. For additional information, visit grid.gg.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of us, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include: our ability to execute on our business plan; our ability to retain key personnel; general economic and market conditions impacting demand for our products and services; adequacy of our funds for future operations; our future expenses, revenue and profitability; our ability to develop new products; our dependence on key suppliers, manufacturers and strategic partners; and industry trends and the competitive environment in which we operate. These and other risk factors are discussed in our reports filed with the Securities and Exchange Commission. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

When we speak of casino gambling in Australia, we’re usually talking about new live or online pokies, fortuitous wins, or the dreaded affliction of problem gambling. That last topic has been abundantly proliferated by today’s leading politicians and anti-wagering groups. But have you ever ever stopped to ask yourself: What has gambling for you?
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There’s a powerful message that gambling is bad. It’s a degenerative activity that causes nothing quite pain and suffering. this is often what anti-pokies campaigns are sputtering in radio and tv ads – that nothing good can come of it.
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In reality, much good has come of it. The Australian government didn’t legalize lotteries because it thought the overall public needed a replacement sort of entertainment. It didn’t employ companies like Tabcorp and Tatts to officiate racing and sports betting because legislators had an excessive amount of time on their hands.
Read More pokies online
These gambling activities were authorized to assist raise money to enhance local communities.
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What Australia Casino Gambling Does For You
Were you aware that the taxes our government collects from gambling operators are wont to ensure every child is provided a free and honorable education? Did you recognize that Australia uses the cash it collects from lottery sales to send promising athletes to free training camps, where they will excel into professional, tournament-worthy competitors?
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While anti-gambling campaigners are busy spitting out problem gambling statistics, the sports, lottery and casino gambling industry is doing little or no to defend itself. likelihood is that , an informed public – one that's made conscious of all the items those taxed wagering dollars do for them – wouldn’t be so easily swayed to side with the Nick Xenophon Team (NXT) of anti-pokies politicians.
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Transition To Sustainability Messages
Hannah Harrison, SABMillerHannah Harrison is that the Senior Manager of worldwide Sustainable Development Strategy and Consumer Brands, otherwise referred to as SABMiller. She is of the firm belief that gambling operators should take a page from the book of the beer industry when it involves public messages in sustainability.
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“I really think it's interesting once you check out beer brands. you'll not think beer as being a very ethical product, but actually you'll use sustainability messages to bring a beer’s purpose to life,” said Harrison in an interview with nzpokiesonline.com/
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“Purpose are some things that's here to remain ,” continued Harrison, especially when it involves things people care about. She explained that brands can improve their sale volume compared to competitors by letting consumers know “they are buying a product that resonates their own personal values…”
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Her company played a key role in Uganda creating a sustainable source of income through harvesting Sorghum, a crop that they were ready to become a beer product. Not only did it bring down the value of beer, the govt was compelled to supply harvesters a tax benefit since it had been ready to sell the beer at lower cost. it had been clearly a win-win situation.
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How does this have anything to try to to with Australia casino gambling, and therefore the benefits it brings to the people? Harrison explained:
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“We were competing not with the prevailing beer but with the elicit alcohol market, attracting people out of the damaging and unregulated, illegal alcohol market. So, we are making beers safer for consumer, creating new revenue for our business and creating money for the govt also , which have increased their tax income for over 50 percent since 2002.”
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She went on to explain a huge opportunity for Australia’s casino gambling market to tap into unique product and repair concepts which will inevitably appeal to consumers, just by invoking the facility sustainable messages.

Conducted by ANON A review on what to expect from this up and coming project
Can be found on coingecko.
Within this post/document it will cover what $ACED & AceD as a whole is, what to expect, and questions you guys have asked alongside information on the current online gambling statistics for the world, especially sports betting.
> The reason I have gone to this effort is because I have never seen such a low MC project have so much potential, this is unironically a gem. I truly hope you all see the value in this. LONG READ.
What is $ACED and Acedbet.io?
> 500k MC at this current time of posting
> Ethereum-based Token Tokenomics, Symbol: $ACED, Decimals: 18, Type: ERC-20 Token, Total Supply: 200 Million AceD, Circulating supply: 190 Million AceD
> This IS A FULLY WORKING RPODUCT. They advertise: Multi Crypto, Sports & Esports, Fair Odds, and Full Anonymity for all betters.
> AceD bases its fundamentals in providing an alternative to existing centralized systems through the blockchain. Other than most cryptocurrencies that just provide anonymity, AceD plans on developing a privacy-orientated platform where the possibilities are endless. AceD’s mission is to provide online world class entertainment options while providing a secure and private platform.
> Multi Crypto Sportsbook, AceDBets, is a newly launched sportsbook that aims to provide a superior user experience. Custom-designed from the ground up, AceDBets combines a smooth, streamlined interface with social features that enable interactions with fellow cappers.
> “Our goal is to develop an appealing product that betters can enjoy, fair betting experience with 0 downtime. Place a bet from anywhere in the world, totally anon compatible on any device. Demand will increase with improvements. Poker will also be a major driver.”
What the original AceD and the recent move to being a ERC-20 Token? why it happened:
> “AceD started out in June 2018 as a POS/Masternode coin. We decided to swap to ethereum chain in June 2020. Some bad characters were exploiting the chain stealing masternode rewards and selling them on exchange. Updates were too costly with centralized exchanges so the move to ethereum chain was the direction we agreed on. So basically, the main reason why we moved to Ethereum chain is to focus on product development and not worry about blockchain issues. We have Vitalik looking after our chain, no need to develop a blockchain ourselves.”
Did any tokens get lost?
> I asked about this and they said the 200million listed on etherscan is the full amount. Investors initially assumed that tokens were lost originally with the swap, but that is not the case.
The major thing a lot of you guys wanted to know about were the Team, Whitepapers and Roadmaps:
> “Expect team info to be available within the new couple days. Whitepaper draft has already started alongside roadmap, expect publishment within 2 weeks or so.”
> “We also plan to hire more staffing to fill the downtime as our userbase is increasing rapidly need to adapt with demand Over 1200 users signed up total. The total amount of team members we have is 10 (6 developers).”
I asked about bingo not working after being advertised as working, got a nice response, good to see priorities being taken care of:
> “Bingo has been taken offline temporarily; we’ll revisit the product as it requires some attention. AceDbets.io/sports betting is our primary focus right now.”
Considering live sports betting is the only thing running at the moment, what is the current daily, weekly, total wagered through you guys, how do the tokens get redistributed?
> “We shared a chart showing steady growth in bets over the past 3 months. Betting volume is out the roof this month, NBA resumes next week expecting even bigger volumes to roll in with major sports resuming. July numbers will be shared in 3-4 days. Currently there is no dividends model for users, the bankroll profits help fund development and future marketing goals.”
I find that last part interesting, could potentially be implemented as a system to reward staking if it were introduced. Hmm.
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ACED and their future. What they plan on doing with Acedbet.io and their product as a whole.
What is there to look forward to in the next upcoming update, Any set time release? (This is in relation to the website and the extra features they plan to add to their sports betting. I have seen a lot of people comment on it.)
> “No firm date for the update, however we’re in the final stages of testing. It is a massive update for our platform need to ensure everything is down right and functional before we make the transition. Always room for improvement, the new update has many changes which will improve the user experience. We will continue to make changes, always listening to feedback and suggestions from our community.”
> “Support desk is being introduced along with update, where users will have access to knowledge tools, how to use acedbets, understanding betting odds, rules for events and quick support with ticketing system.”
> “in the near future we plan to introduce betting and bankroll management tracking tools. to help a better understand their track record.”
> “Updates will be provided in stages, we find that a more effective approach instead of blasting one big update every few months.”
This update is essential for the QOL of this product, the team seems to be absolutely working their arses off.
Ok, onto the future updates then:
THE BIG QUESTION? WHEN POKER?
> “Focus is on acedbets.io right now. There are not many bugs left, one major one with All IN freeze up issue and then a bunch of minor visual bugs that need to be ironed out. This will be revealed in our roadmap, we hope to have the product live in Q42020. It’s 80% complete with a few user facing bugs that will be addressed when we resume development in August.”
> “After poker, we will be adding more games to the platform such as Keno, Bingo, Roulette, Blackjack. Considering adding live dealers as well.”
WHEN STAKING?
> “Staking on platform will be introduced eventually not sure of the timeline for this. We would have a community vote on how to fund the staking model, a certain amount of coins could be minted for example to support long tem staking.”
I personally find this part to be interesting, if they manage to pull off a staking + betting crypto site, where potentially dividends could be paid off to stakers, etc. it would be crazy, never seen anything like this.
WHEN EXCHANGE?
> “Waiting for IDEX to reply, we have followed up and our listing request is now with their manager for review. We are actively seeking new exchanges and will find a better alternative to graviex very soon. IDEX application submitted, being reviewed by their listing manager.”
WHEN MARKETING?
> “We will be ramping up marketing after our acedbets.io update. Social media, influencers, AMA’s podcasts, some fun contests, publishing articles on major crypto sites, telegram and discord server promotions, partnerships.”
WHEN WILL YOU MAKE BLOG POSTS AGAIN?
> We will be appointing 2 team members to handle our social media profiles. This includes our medium account. All information will be available on acedcoin.com and medium.
I am unsure of anymore future updates as they have said they do not want to make too many promises. I believe with the roadmap release we will be able to get a grand idea of the project. PLEASE DO NOT BE AFRAID TO JOIN THE DISCORD AND SUGGEST IDEAS, THEY LOVE ALL INPUT AND TAKE IT SERIOUSLY.
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Why bother investing in this?
> How about you guys have a look at the online gambling market predictions for the next 10 years…
> “The global online gambling market size was valued at USD 53.7 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 11.5% from 2020 to 2027. The high internet penetration and increasing use of mobile phones among individuals for playing online games from their homes and public places are driving the market.
In addition, factors such as easy access to online gambling, legalization and cultural approval, corporate sponsorships, and celebrity endorsements are also contributing to market growth. The growing availability of cost-effective mobile applications across the globe is further expected to fuel market growth.”
THIS PUTS A $104B VALUATION EXPACTATION FOR 2025.
IT THEN GOES ON TO SAY THIS: > “ The growing number of sports followers across the globe has fuelled the demand for sports betting. The majority of bets are placed on boxing, baseball, football, and hockey sports, which is, in turn, driving the market.
Increasing the development of new technologies such as virtual reality and blockchain is also driving the growth of the industry. This may be attributed to the fact that several companies are now integrating the blockchain technology into their online gambling business. This helps them ensure transparency in gambling activities and offer enhanced user experience. In addition, blockchain-based gambling platforms are completely decentralized and are free of third-party influence.”
They LITERALLY KNOW AND INCLUDE BLOCKCHAIN in their report. THEY KNOW IT WILL BE A BIG INFLUENCE IN YEARS TO COME. Even with COVID-19, AceD covers every sport you could think of that would be running right now, it even has E-Sports. This market prediction, alongside the ACED betting website WITH FULL ANONYMITY… This is going to blow. Once more betting options are released too, especially live poker. Man, you guys better be ready, do not complain about not getting in. I have laid this all out for you, now the choice is yours.
The closest thing that even compares to $ACED is 25mc, and then the next is 40mc. Neither have Anonymous gambling. Once $ACED gains more features, they will be far ahead of these other platforms.
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EXTRAS
What are you current biggest draw backs? what is stopping you guys from really excelling and achieving these visions faster?
> “Funding, our goal is to build a self-sustainable model with acedbets.io and we are well on our way to achieving this. We would also like to introduce more entertainment options such as live streaming with tip functionality. With our growing userbase I think we can attract a lot of streamers to use our platform to share their content. In order to achieve these, we can have community votes on coins being minted and offered as OTC crowd sale.”
Legal troubles, could this happen with the anonymous betting? Once you guys do pop off and blow up, will this bite you? I don’t personally see a reason for it to but please explain if there would be.
> “Currently, we don’t offer betting in fiat currencies, our platform is strictly crypto therefore a gaming license is not required to operate in this space. However, if need be we are prepared to comply with any changes and a gaming license would be obtained if required.”
If the site does get hacked or anything happens, how safe are everyone’s funds? Sorry if this is rather random it’s just good to know.
> “All funds deposited into acedbets.io are moved over to cold storage. We only keep a small threshold to payout daily withdrawals which is replenished on a daily basis.”
Wtf went on with DGN? saw a lot of fud > “I was in touch with Bubba-Degen (founder of DGN) , announcement was made on their discord. The FUD started due to couple members requesting a refund and were unhappy with the announcement of launch date being extended to upcoming Friday. The 2 guys went ahead and started spamming telegram groups with false information and accusing DGN as scammers. The DGN token will be listed on acedbets.io this weekend and the project will be live be going live on Uniswap on Friday. “

Evolution of Fantasy Sports

Back in the early 1600s, during the reign of King James I, the English people invented a new way of making money through betting. A group of people gathered together at horse racing events and put their money on horses. The person who had placed a bet on the winning horse acquired fortunes. Psychology professors in the 1960s extended this concept to Baseball, where a person pays a nominal entry fee and selects his team for a match. In the coming years, the idea would go on to make its way into a bunch of other sports such as Basketball, Football and Cricket. Today, the Fantasy sports market is a Billion dollar industry and is expected to grow by another 9.34Billion USD by 2024.
One of the main differences between Betting and Fantasy is that unlike in horse betting, participating in Fantasy leagues requires skill and specific knowledge. Extensive coverage and data are available for Baseball, Basketball and similar sports which a person could analyse and make predictions before nominating his team.

Why Fantasy Cricket?

The Indian subcontinent is a significant market for fantasy cricket service providers. The Fantasy Cricket space has witnessed phenomenal growth in the past five years, and a few fantasy apps have risen to the levels of becoming Billion Dollar companies and even sponsoring tournaments such as the IPL!
With nearly 100 million people regularly consuming Fantasy cricket content and the number of users of Fantasy Cricket Apps exponentially increasing, the opportunities this space provides for growth are huge. Whether you are a sports content company looking for new ways of generating revenue or a freelance programmer who wishes to earn a decent sum every month, building a Cricket Fantasy App should be in your radar!

How to build your Fantasy Cricket App?

So now that you are finally convinced and have decided to build a fantasy cricket app, it’s time to understand how these apps work from the behind. For every fantasy match that is played, you’d require two values for each athlete — the Fantasy Credit points and the Fantasy Match Points. Fantasy Credit Points is what it costs for a user to add a player to his team, and Fantasy Match Points is the points a player earns based on his performance in the match.
Sports app developers usually adopt the following strategies for getting the two values:

1. Appoint a separate team to manually create credit values and award match points for every match, and for each player based on their overall stats & recent performances. In most cases, this is a difficult, tiresome and error-prone process.
2. Focus only on building features and enhancing the user experience of the app and using readily available fantasy credit data provided by Sports analytics solution companies. This approach makes things much simpler for a developer.

Why Roanuz Cricket Fantasy API?

When it comes to analysing data and deriving insights, as in the case of deciding Fantasy credits and match points, it is always a better option to opt for utilising ready-made solutions and getting rid of redundancies from the app builder’s side. If someone out there already does a better job at things and makes your lives easier, why waste time on reinventing the wheel?
Roanuz Sports, with the Fantasy API endpoints available in their Cricket API range of solutions, have been doing a commendable job at providing fantasy credit values for matches. They seem to have got sophisticated AI-enabled algorithms that generate and update credit values in real-time. Roanuz Sports was also the first company to coin the term “Cricket Fantasy API” and to build dedicated REST APIs for delivering Fantasy Credits and Points.
Roanuz’s data is reliable, the data structure is simple, pricing is affordable, documentation is crisp, along with support for getting started, and integration. Roanuz Sports cover an enormous number of tournaments, from around the world, so you never have to worry about going through a dry season. This is exactly why over 75% of the current Fantasy Cricket Apps are powered by Roanuz Fantasy API, and why your app should be too!
Apart from Fantasy APIs, Roanuz Sports also offers Live Score and Statistics APIs for building live scorecards, providing you with another option to keep your users engaged. Roanuz Cricket API also provides solutions like Chatbot API & Performance API, helping you build efficient applications.

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[BOOK] 'The macabresque : human violation and hate in genocide, mass atrocity and enemy-making' Edward Weisband, Oxford University Press 2018(self) 1 [BOOK] Scotland After the Ice Age Environment, Archaeology and History 8000 BC - AD 1000(self) 1 [Book] Ethics of Captivity edited by Lori Gruen(self) 1 [Book] Aspects of American History By Simon Henderson(self) 1 [Book] The Soviet Colossus History and Aftermath By Michael G. Kort(self) 1 [BOOK] Challenges to Political Decision-making Dealing with Information Overload, Ignorance and Contested Knowledge(self) 5 [Article] The EU Competition Law Fining System: A Reassessment, Damien Geradin(self) 1 [Book] Russia and the USSR, 1855–1991 Autocracy and Dictatorship ByStephen J. Lee(self) 1 [Book] Søren Kierkegaard: Epistemology and psychology : Kierkegaard and the recoil from freedom - Daniel W. Conway, K. E. 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Protest in Turbulent Times - Cristina Flesher Fominaya, Ramon A. Feenstra(self) 4 [Book] Attorney-Client Privilege in International Arbitration(self) 1 [Article] An Alternative Ontology of Food Beyond Metaphysics by Lisa Heldke. Published in Radical Philosophy Review, Vol 15, Issue 1, 2012(self) 1 [Book] Bello, Walden 2005 Dilemmas of Domination: The Unmaking of the American Empire. Zed Books, 2005.(self) 1 [Article] Owning the PastOwning the Past Reply to Stokes(self) 1 [Article] Owning the PastOwning the Past Reply to Stokes(self) 1 [Book] McQuire, Scott. Crossing the Digital Threshold. Brisbane: Australian Key Centre for Cultural and Media Policy, Faculty of Humanities, Griffith University, 1997.(self) 3 [Book] Request: Migration and the Refugee Dissensus in Europe: Borders, Security and Austerity by Nicos Trimikliniotis.(self) 9 [Article] Masculinity in videogames: the gendered gameplay of Silent Hill(self) 1 [BOOK] 'Truth games : lies, money, and psychoanalysis' by John Forrester, Harvard University Press, 2000(self) 1 [Book] Osterloh, Jörg, und Clemens Vollnhals. NS-Prozesse Und Deutsche Öffentlichkeit: Besatzungszeit, Frühe Bundesrepublik Und DDR.(self) 2

 
In 1987, Buffett famously stated, "I'll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It's addictive. And there's fantastic brand loyalty."
“The best business to own is one that over an extended period of time can employ large amounts of incremental capital at very high rates of return.” – Warren Buffett
“Invest at the point of maximum pessimism.” – John Templeton
 
Warren Buffett’s best winners have always been stocks which were bought during times of maximum pessimism. GEICO was bought on the brink of bankruptcy. AMEX was bought during the Salad Oil Scandal. Goldman Sachs was also bought with bankruptcy looming. Wells Fargo was a bank with a largely residential loan book bought during a housing crisis. Coca-Cola was bought at a time of massive overdiversification. And so on and so forth.
It’s not often that one has the opportunity to put into practice the all-encompassing philosophy of buy low, sell high. But even when that opportunity rears its ugly head, it’s the rare investor who has the aptitude and the stomach to back up the truck. Thankfully, these opportunities do exist, but it takes a keen eye to discern the difference between a falling knife and a once-in-a-lifetime opportunity.
 
Overview
British American Tobacco (BAT) Malaysia is one such example. Currently trading at just 8x PE, sporting a 100% ROE, and giving a 15% dividend yield, it’s hard not to salivate a little at the financial statistics. But why is such a high ROI stock – a cigarette company no less – trading at such awfully low valuations?
First, some history. BAT Malaysia is the largest cigarette company in the country, with a roughly 50% legal market share and 12% total industry market share. If you’re observant, you’ll notice that Malaysia’s illegal cigarette market share takes up a whopping 65% share of the pie. This was largely due to the massive excise duty (i.e. sin tax) hike in 2015, which brought illegal market share from a reasonable 33% before the hike to 65% and rising today.
As a result, BAT Malaysia has suffered massive share price declines, with the share price falling by 85% in the past 5 years (from RM 60 in 2015) and 70% in the past 12 months alone (from RM 37 in early-2019). This was largely due to revenue declines of nearly 20% and earnings decline of 40% over the past 3 years, with a corresponding shortfall in dividends (the company has a 90% dividend policy). ROE has also fallen from approximately 200% to around 100% today.
Thus, it’s not surprising that the stock has taken such a beating. Indeed, over the past two weeks alone the stock price has fallen by about 30%. But is investing in it now simply trying to catch a falling knife?
 
Business Narrative
The source of the problem can largely be traced back to the sin tax hike in 2015, which brought illegal cigarette market share from 33% to 65% over the past 5 years. The Malaysian government has not been very accommodative to local industry players, rebuffing efforts to reduce the sin tax and dragging its feet when it comes to the enforcement of existing laws and the introduction of new ones. The local Customs department, working together with the police, has had some success in recent years tackling the illegal cigarette cartel – arresting the decline in legal market share from 20%-30% annually to just above 10% in the past year – but efforts are largely seen as too little, too late. On top of that, the illegal vaping scene has blossomed in Malaysia, with nicotine-related products claiming up to 10% of total industry market share.
This backdrop has inspired analysts to impose doomsday scenarios for the legal industry players (i.e. BAT, PMI & JTI), according present values to the companies which reflect a resumption of historical revenue and market share declines. Indeed, when parsing the financial statements of BAT, it’s not impossible to forecast revenues declining to a point where they fall below operating costs (i.e. EBITDA of zero), rendering the equity essentially worthless valuation-wise.
The main reason for the government’s lack of progress is bureaucracy. Different governmental ministries have drawn different interpretations of their legal jurisdiction regarding the matter, and thus shuffle the responsibility of arresting the illegal trade to their peers. For instance, the Ministry of Health (MOH) has stated that it has no authority to enforce legislation against illegal cigarettes, while the Customs department disagrees and says it is the MOH’s prerogative to clamp down on illegal cigarette packets which don’t portray mandatory and unsightly health warnings (illegal cigarette packets tend not to include them). As a result of the red tape, there has been little progress on the front lines, and legal industry players are lesser of for it.
BAT and JTI (the two largest cigarette players) have resorted to shutting down their manufacturing operations and implementing an importation business model, where legal cigarettes are imported from Indonesia into the country to be sold. BAT has also gone through one round of layoffs last year, with a second round expected in 2020.
 
Financials
As alluded to earlier, revenues have declined by 20% over the past 3 years while net profit has declined by 40%. This was surprisingly not due to a contraction of Gross Margin (which you’d expect as costs go up when switching from a manufacturing model to an importation model), but largely as a result of revenues falling while operating costs remain the same. This can be seen in the Operating Margin falling from a high of 24% in 17Q3 to 18% in 19Q3, and net margin contracting from 18% in 17Q3 to 13% in 19Q3.
On the balance sheet side, things look much rosier. Intangibles take up the lion’s share of assets (40%), while Inventories and Receivables have declined slightly in line with the fall in Revenue. Net cash is negative owing to a revolving credit facility which the company has drawn presumably for tax reasons. The debt is current in nature and can be paid back in full with 2 years of Free Cash Flow. The company doesn’t have much fixed assets remaining following the closure of its manufacturing plant, indicating that liquidation value (approximately zero) falls far short of market value. Current ratio is reasonable at 0.8x. Share capital has not changed for at least 3 years.
Receivable days and Inventory days have respectively increased by roughly 50% over the last 3 years – indicating a struggling business which is facing business challenges from its illegal brethren. Payable days have remained static over the same time period. As a result, Cash Conversion Cycle stands at 79 days, up by double from 33 days in 2018.
Cash flow is still stable, with cash receipts approximating revenues. Free Cash Flow is almost equal to Operating Cash Flow, exemplifying the asset-light nature of the current business. The company pays out the entirety of its FCF as dividends (and then some), leading to a dividend yield of 15% at the current share price and a 118% dividend payout ratio.
 
Risks
The risks are apparent. If the government doesn’t do something about the illegal trade and allows it to run rampant, it’s possible that illegal market share increases from here and revenues continue to decline. In the worst-case scenario, it’s not hard to envision revenues falling below operating costs and EBITDA reaching zero, implying the shares are worthless and that dividends will be cut or even stopped entirely.
The current share price of 8x PE (RM 10.00) reflects this doomsday view. The market is basically pricing in declining earnings growth into perpetuity and giving no stock to a potential turnaround. Government intervention to address the illegal trade is widely perceived as sorely lacking and possibly not existing, with analysts imputing revenue declines of up to 30% a year into their models. Share price targets range from RM 11 – RM 15, although the share price has fallen by some 20% since the last revision of analyst reports. All in all, it seems like bad news for BAT.
 
Opportunities
The opportunities for BAT, while less apparent, do exist. For one, the government could by some miracle successfully enforce existing laws and put the brakes on illegal trade – it has already slowed the latter’s advance by some 50% since the sin tax hike. Alternatively, the government could recognize the disadvantages of the narrowing tax base from legal cigarettes and decide to reverse or reduce the sin tax, leading to a reclaiming of legal market share by industry players to previous highs. By some back-of-the-envelope calculations, if legal market share rises to just half of their historical levels, BAT’s earnings and share price could double from here. PE ratios would also expand in such a scenario.
BAT’s parent company in London could also decide to acquire the Malaysian subsidiary given the depressed prices. A fair market price given the circumstances would be roughly 15x PE, which assuming earnings continue to decline by 30% from today, would put the acquisition price at around 120-130% from current share prices.
BAT has also been experimenting with nicotine-related products, such as the Heat-Not-Burn (HNB) device known as Glo (PMI has a branded competitor known as IQOS). Both have received glowing reviews from former cigarette users and is expected to help the companies transition into the post-smoking era (i.e. 20-30 years from now). So far, Glo has developed a 1% total industry market share in Malaysia despite only being launched 2 years ago, showcasing its popularity and potential success.
Finally, the government is preparing the release of new legislation regarding vaping, which is due to see light by mid-2020. While legalization is still not guaranteed, government officials have publicly admitted the difficulty of enforcing laws if a vaping ban were to be instituted. If vaping is legalized, the legal industry could see a 10% increase in market share overnight as they introduce their own products to supplement the demand for currently illegal products.
 
Risk : Reward
In my opinion, current share prices have priced in all the risks while discounting all the opportunities. Even assuming earnings decline at an average annual rate of 10% into perpetuity, it would take just ten years to reclaim your initial investment. This is assuming illegal market share continues its rise unabated and legal market share never sees the light of day again. Keep in mind that the company has a 90% dividend payout policy, and has kept this rate despite recent struggles in its business, so you’d get a return of capital regardless of the share price performance.
In this worst-case scenario, the parent company would either push for an acquisition or liquidate the Malaysian operations. An acquisition at fire-sale prices would probably yield at least 5x PE, while a liquidation would yield nothing given the current ratio of 0.8x. The latter is highly unlikely because it would mean that BAT ceases to have a presence in Malaysia completely, a growing South East Asian nation with GDP growth of 4-5% and potentially bright future. Hence, given the probabilities and an estimate of expected value, you’d already come out on top at the current PE of 8x.
What about the alternative? Before we get into the valuation from an opportunity set perspective, let us consider BAT’s business model. As Buffett says, this is a company with unit economics of a penny per cigarette, selling them at a dollar per cigarette, fantastic brand loyalty and a captive audience. Imagine if you could have owned Altria in the USA in the 1970’s. Today, you’d own Altria, Kraft Heinz, PMI and a smattering of profitable businesses around the world. While I don’t mean to draw a direct comparison between BAT Malaysia today and Altria USA of the 70’s, it’s not hard to imagine a similarly wonderful future for a company with such an attractive business model.
As far as economic moats are concerned, the cigarette business is probably one of the few businesses you can say will be around in another 20-30 years. Sure, they’re facing headwinds in the form of a burgeoning illegal cigarette trade today, but who says they will still be facing the same demons 10 years from now, or even 5 years? If there’s one thing for certain, it’s that the business environment is fluid – and chances are good that things won’t remain the same as today, whatever they may be.
 
A Reasonable Bull-Case Scenario Valuation
Let’s put the humdrums aside for a moment and imagine a brighter future for BAT. What would this future look like? For one, it’s possible that within the next 5 years the government realizes it can’t contain the illegal cigarette problem and decide to reduce the sin tax to previous levels. The wider tax base resulting from such a move would result in the same absolute amount in taxes even at lower tax rates – so there is no financial disincentive not to do so – while at the same time reducing the illegal market share. If legal market share even reclaims half of their former levels, the share price of BAT could double from today.
Furthermore, what’s stopping BAT from resuming earnings growth, assuming the business environment recovers? Even if earnings grow by just equal to GDP growth (i.e. 4-5% a year), it would justify a 15x PE at the minimum considering a long-time horizon of 20-30 years. Combine a doubling of earnings with a 15x PE, and you’re looking at a potential quadrupling (4x) of the current share price.
 
A Best-Case Scenario Valuation
If BAT reclaims its former glory and returns to its historical market capitalization of RM 18 billion, we’re talking about a 600% increase in share price.
That’s just for the next ten years. What about dividends beyond that? Let’s imagine the best possible scenario for BAT. Assume for awhile that you’re planning to hold BAT for the next 30 years. Assume also that in ten years’ time, BAT’s share price skyrockets to 600% of current levels, and then grows earnings by 4% a year into perpetuity and pays out 90% of earnings at dividends. Account for 3% inflation and zero percent cost of capital (i.e. growth funded from retained earnings). By the end of year 30, you’d end up with 27x your initial investment, or 2700% of your capital. That’s a 12% CAGR.
In other words, a $40,000 investment in BAT today could potentially yield a million dollars in 30 year’s time. And that’s with reasonable assumptions. Tweak the numbers further and you’ll could potentially reach Buffett-like returns.
 
Conclusion
To sum things up, it appears that current share prices already impute the worst-case scenario, while the best-case scenario is a 600% capital appreciation potential in ten years, or 2700% over 30 years. Giving a margin of safety, let’s dial the ten-year return of 600% down by 50% - we still get a 300% reward scenario. That’s a 12% CAGR over ten years. Not too shabby.
Assuming 50% downside from today’s prices, the upside-to-downside ratio at 300% upside would still be a healthy 1:6. Now that’s a margin of safety.
If you believe that BAT has no future in Malaysia and will ultimately be acquired or liquidated, expect share prices to fall by up to 50% from here. If you expect that the legal industry will recover to former highs and that BAT is well-positioned as the largest cigarette player in an ASEAN country with 4% GDP growth (alongside Vietnam, Singapore, and Indonesia), you can expect share prices to rise by at least 300% over the next 10 years.
More realistically, share prices will fluctuate by 20% from current levels both to the upside and downside over the next year or so. If you can stomach that kind of volatility, BAT makes for a wonderful risk-reward component of your hopefully diversified emerging market portfolio.
 
A Value Investor’s Perspective
As mentioned above, Warren Buffett has a history of buying companies for pennies on the dollar when the share price reflects maximum pessimism. This does not mean to dive blindly into freefalling stocks which you do not understand. It does mean that you should do your homework, and when you spot an attractive risk:reward ratio in stocks where others are running for the exits, you should be comfortable holding a large position.
Buying a leading cigarette company in its market while it’s beaten down represents one of the most potentially profitable investments imaginable. For reference, take a look at Altria. If you had bought $1,000 worth of shares in Altria in 1970, and reinvested all the dividends, you would be sitting on a fortune worth $5 million by today. That’s an astounding 18% CAGR over an extraordinarily long period of 50 years. Can BAT Malaysia repeat this tier of performance? Probably not, but you don’t need to in order to make a satisfying profit from it.
Buffett espouses thinking long-term when it comes to investing. Think about the long-term when it comes to BAT Malaysia. Is it likely that illegal cigarette’s share of the market will remain elevated at 65% or above for the next 20 years continually? If I was a betting man, I’d wager that it won’t. More likely than not, some kind of unforeseen development will unfold which will bring market share back into the folds of the legal industry – it could be vaping, HNB products, a newly yet unrevealed form of nicotine-device, or even an evolution in the way smokers think. What can be relied on however is that in 20 years smokers will still continue to view nicotine, and by extension smoking-related products, as a form of entertainment and relaxation.
Then there’s the dividends. The dividend yield on one share of Altria bought in the 1990’s held until today would exceed 30%. This is because the dividends have grown over the years in tandem with earnings growth. Extrapolate that to BAT Malaysia, which currently has a dividend yield of 15%. Assuming an average of 4% earnings growth going forward, that dividend yield would grow to just about 45% in 30 years. That’s the power of compounding.
Buffett also champions the idea of owning companies with fortress economic moats. Some of the companies which he owns have such moats, including Coca-Cola, Wells Fargo, GEICO, American Express, etc. It’s hard to argue that BAT Malaysia doesn’t have such a moat. Even in such trying times where revenues have contracted by 20%, it still sports a high-flying ROE of 100%, and stable gross margins of 30%. I would go so far as to compare BAT Malaysia today to a Coca-Cola or American Express when Buffett bought them during times of pessimism.
Think about the future of BAT in 10 years, or 20 years’ time. It’s likely that it will have overcome the temporary hurdles which it faces today by then and resume earning high returns on significant capital invested over a long period of time. This is truly a compounding machine if there ever was one. Or as the title suggests, a wonderful company trading at a wonderful price.
Remember that Buffett’s best buys in the public markets have all been investments made during trying times, such as what BAT is facing today. AMEX could have gone bankrupt over the Salad Oil Scandal. GEICO was literally months away from being unable to service its insurance liabilities. Goldman Sachs was teetering on the brink of financial collapse under the heavy weight of subprime mortgage obligations. Coca-Cola was not the company it is today – it was an overburdened, overdiversified conglomerate with little growth outlook. Wells Fargo was staring at a huge, unserviceable loan book immediately following the Californian earthquakes given its significant residential exposure. It’s definitely nice to pay fair prices for wonderful companies, but it’s even better to be able to pay wonderful prices for wonderful companies.
 
In times like these, it pays to reflect on some words of wisdom for guidance:
Buy when there’s blood in the streets.
Be greedy when others are fearful.
In the short-term, the market is a voting machine; in the long-term, it is a weighing machine.
Price is what you pay, value is what you get.
It is far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.
Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.
 
May the investing odds be ever in your favor!
 
Stock code: 4162.KL Stock name: British American Tobacco (Malaysia) Berhad Financial information and financial reports: https://www.malaysiastock.biz/Corporate-Infomation.aspx?securityCode=4162