Richard,
I just found this interesting thread and, while I normally limit my activity to lurking, I do buy Barron's every week and note that, on Feb. 19, the GMI was 370.86 so the ratio was about 126. This is another indication that we have seen the bottom or are very close to it.
The attached, concerning the Central Fund of Canada, may also be of interest to those who follow this thread. I posted it on another thread a couple of days ago.
Regards,
Larry Smith
In response to requests from new subscribers, McAvity included the following with all of the appropriate qualifiers (he is a Director of the fund) in the latest issue of his news letter. He also recognized the funds ASA Ltd. and BGR Precious Metals as alternatives. He notes that it has been years since he mentioned the CEF in his newsletter.
" -----
CEF is a closed end fund that holds 130,800 ounces of gold and 6.54 million ounces of Silver - physical, in Canadian bank vaults. They are passive holdings - in a ratio based on 50 ounces of silver for each ounces of gold. The bullion holdings are 99.4% of total assets. (Small periodic sales are made to cover expenses only, which tend to run about 1 % per annum - about the cost of, or a little less than physical storage for private holdings.)
At the bearish extremes in December, it got down to 10% to 12% discount to NAV for the first time in many years! (Buffett was paying full price for his silver!)
We created it in 1983 to provide a bullion proxy with the convenience of a tradable share, fully invested - with no leveraging - in gold $ silver bullion for regulated accounts (like Pension funds, Insurance Companies, IRA's or RRSP's) that could not buy physical metals.
CEF has served those ends very efficiently over the years and tracks the metal prices very efficiently, ranging from 10% to 12% discounts at the true extremes to as much as 10% premiums over NAV in periods of high enthusiasm. Net Asset Value is published weekly in the closed end fund tables of Barron's, the Monday Wall Street Journal, Canada's ROB and Financial Post on Saturdays as well as many other newspapers.
It's also available daily by phone at (905) 648 7878 from Investor Relations Office. They can also provide SEC filings, Annual Reports and a form sheet for estimating new asset value to enable you to track it even more closely, if you are interested.
CEF offers a unique was of participating in silver and gold bullion in a conventional portfolio. The bulk of the volume occurs on the AMEX where the Specialist has done a great job for years, maintaining a liquid market. (I often remind people that on a $5.00 stock, every 5 cents is 1% --- so if you're trying to take advantage of an extreme discount or premium over NAV, be patient,. Don't try to buy it on the offer side on up days in metals prices. I see too many reach for it on up days. In recent years, a 2% to 5% discount has been the norm - if you pay up to 10 to 25 cents, you are giving the edge away.
------" |
