Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: Square_Dealings who wrote (21099)	11/21/2004 6:06:04 PM
From: rubbersoul	Read Replies (3) \| Respond to of 312411

I'm not sure how I feel on the subject of the ETF yet. But this paragraph is quite disturbing in Turk's article: Thus, for example, when GLD adds a gold bar, there is no assurance that the gold bar really exists unless it is in the vault of the custodian, HSBC. But the prospectus discloses that HSBC uses subcustodians and even sub-subcustodians, and what’s worse, "the Custodian is not liable for the acts or omissions of its subcustodians". In other words, if the subcustodian does not have the gold, GLD "Shareholders cannot be assured that the Trustee will be able to recover damages from subcustodians...for any losses relating to the safekeeping of gold by such subcustodian". This means that "Because neither the Trustee nor the Custodian oversees or monitors the activities of subcustodians who may hold the Trust's gold, failure by the subcustodians to exercise due care in the safekeeping of the Trust's gold could result in a loss to the Trust." To be blunt, these disclosures mean that there is no certainty that the gold supposedly owned by GLD really exists. After all, if there was complete certainty that the gold did exist, the objective of GLD would be to provide investors with the opportunity to own gold bullion by investing in shares of an ETF, rather than its stated objective to just track the price of gold. Also this: And why doesn’t the prospectus disclose the big risk that there are serious restrictions on auditing the gold supposedly owned by the fund? John

To: Square_Dealings who wrote (21099)	11/21/2004 6:35:50 PM
From: Claude Cormier	Read Replies (4) \| Respond to of 312411

Michael, Do you understand clearly what James Turk is saying? Do you believe that those entering GLD understand what they are buying? I know James and he is an honest person and not an opportunist. He need to do this because any problem that could arise from this ETF would affect the confidence the market place in all similar products including his own Goldmoney. The warning is important, IMO. GLD maybe an appropriate vehicle for traders and those wishing to park money for a short period, but a poor one for those who want to save gold for the long term