#$%$ yahoo post tool cuts off content with no warning at all? Here's the rest of what was originally there:
It's been a kicker. But to put it in perspective, it's as if something at $100 went to $1, and then rose to $4. A 300% gain, but on the big chart, still massive room to run to get back to proper valuations. The pricing for bankruptcy of the entire mining industry was exactly the kind of big money leveraged overshoot you'd expect from mo-mo hedge funds and day trading raiders. IHMO action to-date is just them starting to pull away; the rise from money "flooding" into a teeny hot sector is just getting started.
But it's not just MUX. Here are my various mining/pm related holdings, winners and stinkers. More than half of them are now back to green (yes, some are *still* red and need to keep cooking). I love the current trend...
Performance YTD from the yahoo finance charts...
AKG - 198%
AUY - 210%
CEF - 48%
Alice, GGN's distributions are classified "Return of Capital". You likely need to get tax consequences of ROC in a ROTH answered by someone who is qualified to address the long term tax concerns (not simple board followers). I've learned that other types of investments (MLPs, for instance) when held in a ROTH, can still generate taxes owed.
You might be onto something sweet; but check with a tax professional to be sure.
Go easy on him. A lot of us lived through years of gut check (I owned MUX back when it was UXG, and was one who exercised the rights option to purchase even more shares at $2.25) Being somewhat stubborn and insane, my reaction to sub $1 prices with an existing DCA above $3 was to quadruple down and buy even more.
I'm glad I did, but I have acid holes in my stomach lining from that and similar experiences.
Think of Al as someone true to his own convictions who damned well deserves the luxury of rooting, cheering and enjoying the sunshine when it arrives.
Sentiment: Strong Buy
Agree, don't count them before they hatch.
But also keep in mind moves of these magnitudes sometimes take days or weeks to play out. Initially the major reversal means big money types often have to dump winners (like gold, and miners) to raise money to cover their #$%$ bets on a levitating market, deal with margin calls, or handle floods of client redemptions.
It will be interesting to see if this marks a notable acceleration in an already strong pm bull over the coming weeks. GLTA
GGN's success has made it a major component in a number of ETFs that go after income. They are large holders, and are sitting on over 40% gains on the year if they were here at the start. The security itself is still a pretty small market, so if an ETF starts buying or selling in quantity, we'll see big up or down days. The fund locking in the profit was likely quite happy to finish selling at the $6.26 area.
Could be just ignorant of tax consequences, or misleading; both?
GGN distributions are Return of Capital. There are initially no taxes due on that, but all return of capital reduces your basis cost. If you ever sell, you'll be assess capital gains on the difference between the sold-for cost and the basis cost.
Further, if you should ever receive enough return of capital to drive the basis cost of all of your shares to $0; you must start declaring all further distributions as ordinary income. And when you sell the shares, the entire amount of the sale is capital gains since your basis was $0.
So... the money coming in is "tax free" for a bit; not forever.
Although this fund is a closed end fund, its rules allow the managers to both buy (retire) and sell (issue) shares as they see fit. When silly premiums are present, a great deal of what keeps things going is new investors being sold shares at double the cost of actual underlying assets.
Look into the semi annual and annual reports, and you'll find that PGP has a constantly growing share count, and that the plot of shares outstanding over time has humps in it whenever there is a high premium.
Point being, a quick assessment of out-of-wack may be overlooking the underlying facts that the world at large is gasping for funds that pay, will pay double the cost of NAV, and the fund managers have found a fairly sustainable way to milk that into survival in an ongoing fashion.
Pretty easy to show that regulation hasn't been working, therefore even more regulation isn't the answer.
How about a competing exchange, one where short selling is simply forbidden; can't sell what you don't own? Then the answer is simple competitive capitalism: company's can agree to have their shares listed/traded on exchanges where short selling is supported or on exchanges where it isn't.
Just a few tax rule reminders for the dreamers:
1. GGN produces distributions (not dividends) classified as Return Of Capital (ROC).
2. ROC reduces your cost basis (buy a share for $10, get $2 in ROC back over time, and your cost basis when you sell it will be $8).
3. You pay capital gains on any gain when you sell shares; either short term (your income tax rate) if held for less than a year, or 15% to 20% (depends upon your tax bracket) long term capital gains if the shares sold were owned longer than a year.
4. Should your investment end up producing ROC equal to the entirety of your invested dollars, the ROC begins to be treated as income (cost basis cannot go below $0), and is subject to your income tax bracket. Further, if you sell shares with a $0 cost basis, the entire proceeds are further subject to capital gains.
This action is more commonly seen from short covering. GSS has one of the higher short ratios among the miners, and has likely been a running gift to shorters for a few years. It looks as if a number of players have concluded that bankruptcy (pps - $0) is not going to occur after all, and they are exiting (likely still at a very good profit).
This phase will be a back and forth between old shorts looking to buy, and new shorty arrivals selling to them, as most GSS longs won't be playing the in-and-out game. As the phase progresses, the mix of old-term shorts declines and new-term shorts increases; the new comers have a lot less tolerance for pps increases.
A future phase, assuming the pm bull is in fact stirring, will bring actual new long buyers, and a different kind of price rise. (IMHO, current action is enjoyable, but still early game action).
Came to check in on the board after a few years absence. My screen shows 20 topics per page.
All 20 topics in the CEF board were adverts by bots for stock picking services. Gives me an idea for my next investing ploy: short yahoo; their uses stats must be massively bogus.
GGN (mainly) works via options on volatility of gold/nat resource shares. They sell "protection" against volatility, and when it doesn't materialize, they get to keep the protection money. In times of actual rapid price rises, they can (and should) under-perform, as they will essentially have to pay up on some actual protection that turned out to be worth something for the buyer.
They also have a history of announcing their div policy (really mostly ROC classified profits from the protection activiey) every 3 months. They are due for another announcement this Feb; so there may be a bunch of money stepping out of GGN to avoid risk of a payout cut.
So there you have 2 more factors that may be influencing pricing. GGN pricing in general is severely disconnectd from reality/fundamentals, so trying to "understand" the logic behind things may be something of a hopeless quest...
Best of luck to all.
Look into EXK, HL, PAAS, CDE, AG, SSRI for direct miners.
Then check out SLW and SAND for financing deals for miners.
CEF is a bullion fund that holds 50/50 Au & Ag (I'm not a fan of GLD or SLV).