#$%$ 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.