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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: Claude Cormier who wrote (31747)	10/24/2004 8:07:11 PM
From: Andrew	Read Replies (2) \| Respond to of 39344

I like Central Fund of Canada because I can hold it in a 401k account (can't hold physical unless it is in an IRA account). Do you think the initial dollar premium (at time of purchase), as opposed to the percentage premium would actually shrink as the price of gold and silver rise. In other words, would CEF at $5.80 and a 10% premium ($0.58) still have a $0.58 premium when the share price is at $12.00? If so, I am not worried.

To: Claude Cormier who wrote (31747)	10/24/2004 8:49:41 PM
From: Taikun	Read Replies (1) \| Respond to of 39344

<This is a money losing proposition vs buying physical or a fund with no premium.> Claude, 1. Funds Most funds charge switching fees that can easily exceed CEF's premium. I can buy CDN$10000 CEF in my IB account for about CDN$17. Most funds will charge 2% to exit a position within 3 months in addition to expenses and possibly sales fees. 2. Physical Metals Most purchases of bullion involve quite a considerable premium both on the purchase and sale. For example: At current Kitco spot silver US$7.39: Silver Pool: US$7.51 1% premium (not including facilitation, shipping and insurance fees if you want delivery) Silver Bar Per Ounce: US$8.11 9.7% premium Eagles and Maples have higher premiums still. Even GoldMoney at $436 is a 2% premium over spot. I personally think CEF premiums are not too high. If I have a chink of USD in an account CEF is a nice investment that is quite negatively correlated to the index and unless you can park cash in a basket of currencies (I can't do this easily with my brokerage) that USD is a quickly depreciating asset. For cash I want to use to buy more gold juniors on dips, putting in Emerging Markets, Bonds all seem risky to me. I can hold CEF and easily sell, generate cash and use it to buy juniors on dips without worrying about significant erosion of principal. What would you do? David

To: Claude Cormier who wrote (31747)	10/24/2004 10:54:54 PM
From: studdog	Read Replies (1) \| Respond to of 39344

Claude, I came to the same conclusion about CEF. It seems much cheaper to buy the physical. You mentioned other funds without premiums, could you please list those? CEF is the only one I am aware of. Thanks Karl