Posted by mamaduck on 17th of Aug 2011 at 02:28 pm
That is correct cufuzzy. Currently CEF has roughly 45 oz of
silver for every oz of gold, which matches the gold silver ratio
(as of yesterday, it was 44.84 or approx. 45)
Now,when you translate it into dollars, they have about 1/2 the
assets in dollar terms in each metal - which I understand to be
their overall philosophy.
No, that's the point I was trying to make. They do not
have a 50/50 dollar split. They have a 50oz silver/1oz gold
split from 2001 up until 1Q11. In 2Q11 they made a 9:1 oz
purchase for the first time I can see bringing the ratio to about
45.44:1. Not sure why they suddenly changed the ratio, but I
can't find the ratio mandated anywhere. I just started
looking into this today, so perhaps you can explain that history to
me better or why the sudden shift in strategy?
The last page of most of these has a pie chart showing the ratio
is 50:1, others you have to do the math yourself to see the
ratio. Always 50:1 in the ones I spot checked up until 2Q11
at 45:1.
First of all, my apologies if I gave the impression that the
50-50 was mandated. Historically it has been a general target and
approach, but because of the price fluctuations, if they mandate
it, then they would have to enter active trading, which defies the
whole point of CEF.
Also as of the prospectus of
the last offering, (see page 10) the board
has authorized approximately 50 oz of silver for every oz of gold
(just as you stated - and I stand corrected). These are for new
purchases resulting from issuance of shares. I am sure as the ratio
changes in favor of silver, the future new issues will reflect that
change.
Also the pie chart on the last page is somewhat distorted. If
you look at the silver portion, it says 50.2% but it shows a less
than 1/2 segment.
Plus if you take the silver and gold prices as of Jan 31, they
were 1334.50, and 28.17. If you then multiply it by the oz in that
report, you will see that there is about $11 million more silver
than gold.
Also on that date, the gold:silver ratio was 47.37, but the pie
chart assumes 50 - which perhaps accounts for the distortion.
Finally, if you look at the NAV figures from yesterday, you will
see that the CEF holdings ratio is 45.4 compared to the price ratio
of 44.46, while there is about $8 million more silver than gold, or
roughly 0.2% more silver than gold, which is well within the weekly
fluctuations of the ratio.
I am not sure how many people are truly interested in CEF but I
have to say that what you two did today (mama and fuzzy) is exactly
what the board is for. You engaged back and forth,
respectfully, and ultimately reached a form of clarity. I am
going to shock some people here but Matt, Steve and myself do not
know every thing about every stock.
I will give you a minute to pick yourselves up off the
floor.
The research you two did was great and I learned from it so
thank you.
Thanks Tom for the kinds words, and thanks mamaduck for the
info. I had overlooked the part of the prospectus that
mentioned the 50:1 ratio for new purchases. That makes their
recent 9:1 purchase even more curious though considering it's the
first time in a decade they strayed from a 50:1 purchase
ratio. I would assume since that was during the parabolic top
they had a hard time getting enough silver. It will be
interesting to see how they maintain the ratio going forward
nonetheless. I spent way too much time looking at this today,
and decided to run it to ground by e-mailing the company as someone
suggested.
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CEF
CEF
Posted by mamaduck on 17th of Aug 2011 at 02:28 pm
That is correct cufuzzy. Currently CEF has roughly 45 oz of silver for every oz of gold, which matches the gold silver ratio (as of yesterday, it was 44.84 or approx. 45)
Now,when you translate it into dollars, they have about 1/2 the assets in dollar terms in each metal - which I understand to be their overall philosophy.
CEF
Posted by cufuzzy on 17th of Aug 2011 at 02:40 pm
No, that's the point I was trying to make. They do not have a 50/50 dollar split. They have a 50oz silver/1oz gold split from 2001 up until 1Q11. In 2Q11 they made a 9:1 oz purchase for the first time I can see bringing the ratio to about 45.44:1. Not sure why they suddenly changed the ratio, but I can't find the ratio mandated anywhere. I just started looking into this today, so perhaps you can explain that history to me better or why the sudden shift in strategy?
The last page of most of these has a pie chart showing the ratio is 50:1, others you have to do the math yourself to see the ratio. Always 50:1 in the ones I spot checked up until 2Q11 at 45:1.
http://www.centralfund.com/quarterlyreports/2011%20Quarterly%20Reports/CFOC%20-%201st%20Quarter%20Report%20FINAL%201%20MAR%20%2011.pdf
http://www.centralfund.com/Financials.htm
CEF
Posted by superdupa on 17th of Aug 2011 at 03:44 pm
Call them and ask I have found them very open and willing to talk
CEF
Posted by mamaduck on 17th of Aug 2011 at 03:20 pm
First of all, my apologies if I gave the impression that the 50-50 was mandated. Historically it has been a general target and approach, but because of the price fluctuations, if they mandate it, then they would have to enter active trading, which defies the whole point of CEF.
Also as of the prospectus of the last offering, (see page 10) the board has authorized approximately 50 oz of silver for every oz of gold (just as you stated - and I stand corrected). These are for new purchases resulting from issuance of shares. I am sure as the ratio changes in favor of silver, the future new issues will reflect that change.
Also the pie chart on the last page is somewhat distorted. If you look at the silver portion, it says 50.2% but it shows a less than 1/2 segment.
Plus if you take the silver and gold prices as of Jan 31, they were 1334.50, and 28.17. If you then multiply it by the oz in that report, you will see that there is about $11 million more silver than gold.
Also on that date, the gold:silver ratio was 47.37, but the pie chart assumes 50 - which perhaps accounts for the distortion.
Finally, if you look at the NAV figures from yesterday, you will see that the CEF holdings ratio is 45.4 compared to the price ratio of 44.46, while there is about $8 million more silver than gold, or roughly 0.2% more silver than gold, which is well within the weekly fluctuations of the ratio.
I am not sure how
Posted by tom on 17th of Aug 2011 at 03:31 pm
I am not sure how many people are truly interested in CEF but I have to say that what you two did today (mama and fuzzy) is exactly what the board is for. You engaged back and forth, respectfully, and ultimately reached a form of clarity. I am going to shock some people here but Matt, Steve and myself do not know every thing about every stock.
I will give you a minute to pick yourselves up off the floor.
The research you two did was great and I learned from it so thank you.
CEF
Posted by cufuzzy on 17th of Aug 2011 at 05:16 pm
Thanks Tom for the kinds words, and thanks mamaduck for the info. I had overlooked the part of the prospectus that mentioned the 50:1 ratio for new purchases. That makes their recent 9:1 purchase even more curious though considering it's the first time in a decade they strayed from a 50:1 purchase ratio. I would assume since that was during the parabolic top they had a hard time getting enough silver. It will be interesting to see how they maintain the ratio going forward nonetheless. I spent way too much time looking at this today, and decided to run it to ground by e-mailing the company as someone suggested.