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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: Metacomet who wrote (61341)	9/25/2008 9:44:01 AM
From: newfoundland1	1 Recommendation Respond to of 78439

I was suggesting that there could be more transparency as to what level of market premium would result in the issuing of more shares and how much market premium would be reduced at any one time by the announcement of that further issuance. CEF give a daily premium on NAV on their website but no one presently knows when they decide this reaches a point at which a further issuance is to be announced. What happened on Monday after close is that this gave the CEF a haircut of some 12% which is quite a loss for the unwary but such a take down (with no change in the underlying gold price) must also encourage traders who think that this is good vehicle for shorting when the NAV reaches a certain level. It seems to me that the CEF "brand" is relying on proper accounting of underlying hard assets and is not a pool where the devil is in the small print or where sharks (I don't actually mean that too pejoratively so perhaps I should say those "more in the know") can operate at the expense of others. Making the point at which an issuance would occur (perhaps a particular premium over a 3-5day period)more transparent and making the number of further issued shares such that the market premium was only reduced by a maximum (small) amount at any one issuance might further reduce the risk of the product and make it less likely that ignorant chumps like me are taken for a 12% haircut within an hour of investing ! I am clearly also not the only one - the volume on Monday at 5.4m (?) was over 200% higher than average. It looks likely that a lot of distribution was going on between those in the know and those not so. If those concerned with the small print of other gold vehicles are correct - then this is going to come to light when things really hit the fan. If it becomes well known that CEF is the safest of these vehicles then it seems to me that the problem of further issuance of shares - and how this is handled - will become more important as more and more people want to protect themselves with gold. I feel I have probably said enough about this - occassioned of course by my own loss due to my own ignorance.