CTMike

Bearish Sentiment in the Gold, Stock and Commodity Markets

Seems like neither of you have your fact right or I can't read. I just checked the GTU website and as of 5:00 PM 11, March, they are reporting a 22% premium. I've seen other references to a 33% premium but don't no the origins. If I'm reading GTU's web site wrong, let me know. Why would anybody pay that kind of a premium unless they are blindly buying based on somebody's recommendation or "misinformation"?


On Mar 11 05:42 PM Sakata wrote:

> "... the premium to net asset value of GTU, surged from an already-high
> 20% on Wednesday to a new all-time high of 33% in response to Thursday's
> technical rebound. Buyers of GTU near the close of trading on Thursday
> were, in effect, paying about $1250/ounce for gold while the spot
> gold price was in the $930s. No well-informed investor would do this."
>
>
> This is utter nonsense. NAV-premium for a fund is pretty close to
> price-to-book value for a stock. (OK, not exactly, but it is more
> like Granny Smith to Golden Delicious than it is to apples to oranges.)
> A quick check on Yahoo Finance of the current P/B of each sector
> shows most sectors with a value higher than 1.33. Even the financial
> sector has a P/B of 1.38 with most other sectors much higher. Now
> maybe those people are paying that premium because they happen to
> think that there is a good chance of a return on their investments,
> but maybe they are just uninformed investors who randomly chose the
> financial sector instead of precious metals.
>
> To categorize a puchaser of GTU as uninformed is insulting. I notice
> you don't mention GLD, which has a much lower premium. Perhaps you
> don't know enough about gold to appreciate that the purchasers of
> GTU are VERY well informed. Informed enough to know that GLD is a
> bigger risk than GTU but gold itself has much better potential than
> all those sectors with a P/B of 1.33 all the way up to 14.28.
>
> Perhaps you could also explain why your only other article on SA
> about gold was entitled "Gold Is the Only Long Term Bull Market",
> published only 6 weeks ago.