qantwar's Profile
qantwar's Posts
I just got my brokerage 1099-B and ECU shares show as sold on 9/7/2011, and thus taxable. It's a loss, so it actually helps my tax bill, but I always thought that when 2 companies merged, or one bought another and the old share owners got shares in the new company, that this was just a continuation of the investment - not a taxable event.
Does anyone have any insights into this? thanks.
You have to also remember that JP is a money manager for his clients and it's really hard to ask them to sit for a long period (years) without seeing any results, even if over the long term (say 10 years) a junior may have the biggest gains of all.
After the 2008 crash, JP's attitude on his show seemed to change; he talked about sleepless nights, dealing with unhappy clients who got hammered in the crash, etc... My assessment is that he was seriously rattled. He also mentioned that the tech analysis work his son was doing had shown indications that the crash was coming, but he ignored it, or at least didn't do enough to prepare his clent's portfolios. After this, the whole tone of his show changed, and it became less about buying fundamentals and sitting, and more about watching technicals and being 'nimble'. My impression is that he decided 2 things 1) that that he would act upon the technical stuff his son was coming up with, 2) that he had to reduce the timespan over which his client's investments started showing results, even if this meant playing things safer - it's easier to keep a client satisfied with 10% gains a year, rather than small losses for 7 years followed by a 10 bagger blow off.
Anyway, with 'the year of the junior' not panning out as he thought, I understand why JP seems to have moved away from steering clients into juniors. I don't think it was as much Tyhee specific, as it was a decision to move away from the junior sector as a whole.
Large Move in the Gold stocks Imminent?
By Adrian Douglas
There is much concern among investors with respect to the performance of mining equities. There is a view that, in general, mining equities have been poor performers. However, one has to distinguish between mining companies that are aggressively acquiring mineral resources and exploration companies that are in the early stages of mineral exploration. It has only been the mining companies that have seen large gains in the value of their stocks.
The performance of these mining companies overall have been excellent. From 2001 to 2009 the mining equities notched up a gain of a stunning 12.5 times, with respect to the HUI (index of un-hedged miners). In 2008, despite the HUI falling below 200, it has recently regained new highs just below 600. If someone had bought the HUI at its low in 2001, and held it until today, it would have returned 15 fold despite the damage wreaked in 2008. This has to be compared with a return on gold of seven times over the same period. It must be admitted that Junior Exploration stocks have not participated in the same gains as mining equities who have established resources in the ground.
In the figure below, the red line represents the price of gold while the blue line represents the value of the HUI. It can be seen that the HUI is stalling out at approximately the 600 level.
Given the stalling of the HUI, could one be justified in believing that the HUI has reached its potential, as indicated by the dotted blue line? We believe this is not the case and the strongest argument for this is the latest quantitative easing newly announced. This could well blast mining equities to new levels and is the likely trajectory of the mining stocks, demonstrated by the blue arrow.
Mining shares give large leverage to gold prices due mainly to acquisition and the devaluation of the currency.
The growth in the value of the mining equities has not been mirrored in the Junior exploration sector. We expect this to change when new real growth over takes consolidation. The Seniors desperately need new resources which will bring in new funds and will drive new exploration. This is where the biggest gains can be made if appropriate due diligence is performed to choose Junior Exploration companies that have good chances of finding significant new resources in the ground. The potential to turn a Junior Explorer into a company with significant resources could multiply the stock value as much as 100 times.
The very large gains in precious metals over the last 10 years are finally translating into a scramble to secure resources from much smaller companies. It should be noted that this is essentially consolidation of resources from the smaller to the larger miners. The only way that significant resources can be added is to develop organic growth. This will be the next phase of the precious metals bull market as new equity pours into miners providing them with a flood of new capital that will seek out opportunities to grow the desperate need to increase precious metals.
Fortunes will be made in the coming frenzy as investors scramble to seek out scarce resources.
Adrian Douglas
Editor of Market Force Analysis
Board Member of GATA
Speaking of Golden Minerals, which is still my largest share position, there is no longer any doubt in my mind there are malign forces out there bent on keeping this share price going from where it ought to. This is probably the case in many of the gold/silver shares, which is why they have acted so poorly for so long.
What happened today blew me away and convinced me what the extent of this short selling of the precious metals shares really is. Let me explain.
Last year Golden Minerals merged with ECU Silver on a 20 to 1 basis, or one share of GM for 20 ECU shares. During the debacle of the last few months of the year, GM was taken down to $5.23, which was the equivalent of 26 cents ECU, a total disaster for any of us who invested in them a decade+ ago at the same price or more. During the downturn over the past couple of years, there were a couple of visible short sellers trashing ECU publicly and making a big deal what a short it was. For whatever the reason they've won out thus far. That’s the way it has been.
However, during the month of January GM has stormed back, still rinky-dink in terms of ECU of old, but still quite an impressive performance, rising all the way to $9.55 this morning. Technically it achieved a major breakout. When, out of nowhere it began to collapse today with the HUI up 10, gold flying, and silver sharply higher. It was clobbered down to $8.78, down 57 cents on the day. We contacted the company to find out if there was any news out, or was there any announcement of insider selling? The answer was no.
What I did learn was that as of January 13 there were still 2,343,799 shorts still on the books. That is the official number. Our guess is that the real number is double that. Today’s action suggests the shorts are not throwing in the towel yet, even with the dramatic inflation announcement by the Fed which ought to send gold and silver shares soaring in the months ahead.
It is my bet that these bums have overstayed their welcome at the party and are going to get blown out over those months. It couldn’t happen to a creepier bunch of fellows. It is also my bet that GM is going to $90 per share when silver soars toward $100 per ounce.. That might sound like a stretch, but it is only a triple from GM’s old high … which is only a ten bagger from here, a move that will be commonplace in the years ahead when the gold/silver share mania kicks in. It is only a question of time before the shorts in GM, and in a number of other precious metals shares, cry "UNCLE." It is only a question at what price they surrender.
What the heck? I wrote the above with GM below $9 per share. It is now unchanged at $9.35. I asked my friend Wistar Holt if he knew what was going on. He came back with:
As of 12:00 CST, AUMN has made a 180 degree turn and is unch at $9.35 on 300M shares.
With gold/silver prices fairly stable over the past 1-2 hours, I can only ascertain three possibilities to this bizarre trading:
1. An ignorant institution bailing the stock recklessly—he won’t be employed long!
2. A brokerage firm haphazardly liquidating a margin call of an institutional client.
3. A short protecting the already-existing 2.3 million share short position and preventing the stock from closing above a technical level of 9.40, as well as an effort to push it below the benchmark $9 level. Then, buying/covering the new shorts placed earlier once the stock began to recover from the $8.78 low. If this is the case, it has only required 50,000 shares to fully recover the loss and the short might be even further exposed.
Wistar
GM closed at $9.16, below its breakout point.
"I recall this same type of question came up with JP's holdings of Tyhee at one time. Someone (maybe Baires?) stated it did not show up because it was a personal holding of JP and not of PFS (Puplava Financial Services)"
At some point, Puplava stopped reporting stocks such as Tyhee that list on the TSX and do not have a listing on any American stock exchange (pink sheet doesn't count). I do not know if this is because 13F reporting rules changed or if Puplava's team decided to take a closer look at them. He also mentioned in a q-call at the time that 13F rules were complicated and not all his holdings would show up there.
I beleve you'll find that all the Sprott stocks listed in the 13F have a non pink sheet listing on an American exhange (whether NYSE, AMEX, NASDAQ etc..).
