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--- Begin Message ----Caveat Lector- ------------------------ Yahoo! Groups Sponsor ---------------------~--> <FONT COLOR="#000099">Buy Ink Cartridges or Refill Kits for your HP, Epson, Canon or Lexmark Printer at MyInks.com. Free s/h on orders $50 or more to the US & Canada. </FONT><A HREF="http://www.c1tracking.com/l.asp?cid=5511";><B>Click Here!</B></A><FONT COLOR="#000099"> </FONT><A HREF="http://us.click.yahoo.com/mOAaAA/3exGAA/qnsNAA/WfTolB/TM";><B>Click Here!</B></A> ---------------------------------------------------------------------~->8:23p ET Monday, October 6, 2003 Dear Friend of GATA and Gold: This article from Canada's Financial Post is interesting for acknowledging, in passing, that gold has "powerful enemies." The author doesn't go into details, but he may have figured that this was the most he could get published at the moment without risking transfer to the sewer commission beat and that you could figure it out. CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. * * * Gold's glitter a gamble; new funds, tactics let you ride the bandwagon � By Jonathan Chevreau Financial Post (National Post), Canada Saturday, October 4, 2003 http://www.nationalpost.ca/financialpost/story.html?id=D926CED2-A7A7- 4CF3-8AA0-2ED The US$14 plunge in the price of gold yesterday was a vivid warning for investors tempted to jump whole hog on the precious-metals bandwagon. Gold fell to US$374 an ounce, the lowest level in two weeks, as the greenback rose against the euro and the yen. Of course, those gripped by gold fever -- many speculators and hedge funds are long on gold -- may view the sell-off as the proverbial buying opportunity. Latecomers who joined the party only after gold mutual funds rose 16% in August (and 30% over the past 12 months) may be feeling buyer's remorse today. Such outperformance should have served as a flashing yellow warning signal. Mutual fund investors are notorious for jumping on a trend only after it's been established. Chasing recent performance is what got investors into trouble in 1999, when they piled into the Nasdaq and technology funds. But what if gold bugs are ultimately right and we are still in the early stages of a gold bull market? If that's the case, the recent dip creates an ideal moment to leap aboard the bandwagon. The latest issue of The FundLetter urges investors to waste no time in joining the gold rush. Fully five of the newsletter's eight pages are devoted to precious-metals funds and the other three cover resource funds that own gold stocks. As a moderate "bug" holding 10% of my portfolio in gold, the newsletter got my attention. While discussing this with an editor, a colleague confessed he holds fully a third of his portfolio in gold. That got me thinking that if gold aficionados are infiltrating the financial media, the general public can't be far behind. My friend's 33% position exceeds the more prudent 5% or 10% financial advisors recommend as a "hedge" against economic calamity. But it's in line with a call by Dow Theory Letters editor Richard Russell, who recently bumped his suggested gold allocation from 10% to 33%. However, mere hours before yesterday's sell-off, Russell warned that "gold and gold stocks are tired, and might even be ready to correct." Gold has powerful enemies in government and the banking sector, groups that favour "fiat" currencies no longer backed by gold. Accordingly, those contemplating jumping into gold should first assess the pros and cons of holding the actual metal -- "real money," the bugs call it -- versus the stocks of companies that explore and mine it. Bullion reached the lofty height of US$393 last week, but gold stocks rose even more. Portfolio manager John Embry says the stocks were factoring in a bullion price well into the US$400s. In his Sprott Gold and Precious Metals Fund, he's been selling some stocks to buy more bullion. However, he still believes bullion will easily pass the US$500 level, due in part to heavy buying by China. Embry's fund, recommended by The FundLetter, is now open to small investors following the lowering of the minimum investment amount from $25,000 to $5,000. It used to be hard to find mainstream advisors who believed in gold. Today, RBC Investments' Nathan Mechanic, for one, suggests those who don't have at least a market weight in gold stocks run the risk of lagging indexes such as the TSX. Mechanic warns, however, that gold is not a buy-and-hold investment but a "trade" -- exposure and risk must be carefully managed. Anyone tempted to go overboard should check the charts of gold funds over the last 10 years. They'll see many lost money for four years straight. These volatile funds often move from first quartile to fourth quartile and back again relative to their peers. Mechanic says there are four phases of gold fever: the first sees the stocks of major gold producers such as Barrick and Newmont rise; the second spreads the fever to smaller majors; the third to the juniors; and finally the speculative exploration stocks you'll find in Embry's fund. Most gold stock funds rise with the price of gold, although The FundLetter singles out Dynamic Global Precious Metals as a buy. Those who find its 4.68% management expense ratio (MER) too hefty can take an indexing approach through an exchange-traded fund (ETF). Barclays iGold provides a basket of 12 Canadian gold stocks at an MER of just 0.55%. These days, what has gold fans really excited is a global ETF that will hold gold bullion rather than stocks. Sponsored by the U.K.-based World Gold Council, the ETF launches next year. The bulls believe pension funds and mutual fund managers will jump on it, adding to the momentum. Canadian fund investors likely have more exposure to gold stocks than bullion, but they don't have to wait for the bullion ETF. Three bullion funds already exist. These let you avoid the hazards of storing bullion or coins directly (which you can buy from places such as the Bank of Nova Scotia in downtown Toronto). Millennium Bullion Fund and Central Fund hold bullion on your behalf in bank vaults, and are eligible for RRSPs. The former holds equal parts gold, silver and platinum, but has a high MER of 3.5%. The older Central Fund has an MER of just 0.6%, but sells at a slight premium (9%) to its asset value. It holds gold and silver, while the new Central Gold-Trust holds only gold. Investors should understand that gold's action is part of a broader bull market in commodities and hard assets. This is occurring as stock markets flat-line and the U.S. dollar falls, all while China's economy heats up. Writer Jim Puplava says it well in Financialsense.com: "In flooding the markets with money and credit, the [U.S.] Fed has been setting the foundation for the next bull market in commodities, especially precious metals." Those wishing to play these trends can do so through a new hedge fund available later this month: the Van Eck Hard Assets Performance Trust. In addition to gold, those hard assets include energy, forest products, and real estate. In true hedge-fund fashion, it shorts overvalued gold stocks and goes long on under-valued ones. It has a minimum investment of just $1,000, but note that it's considered foreign content for Canadian registered plans. ---------------------------------------------------- To subscribe to GATA's dispatches, send an e-mail to: [EMAIL PROTECTED] To unsubscribe, send an e-mail to: [EMAIL PROTECTED] ---------------------------------------------------- RECOMMENDED INTERNET SITES FOR DAILY MONITORING OF GOLD AND PRECIOUS METALS NEWS AND ANALYSIS Free sites: http://www.jsmineset.com http://www.cbs.marketwatch.com http://www.mineweb.com/ http://www.gold-eagle.com/ http://www.kitco.com/ http://www.usagold.com/ http://www.GoldSeek.com/ http://www.capitalupdates.com/ http://www.goldenbar.com/ http://www.silver-investor.com http://www.thebulliondesk.com/ http://www.sharelynx.net http://www.mininglife.com/ http://www.financialsense.com http://www.goldensextant.com http://www.goldismoney.info/index.html http://www.howestreet.com http://www.depression2.tv http://www.moneyfiles.org/ http://www.howestreet.com� http://www.minersmanual.com/minernews.html http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html http://www.goldcolony.com http://www.mineralstox.com Subscription site: http://www.lemetropolecafe.com/ http://www.hsletter.com Eagle Ranch discussion site: http://os2eagle.net/checksum.htm ---------------------------------------------------- COIN AND PRECIOUS METALS DEALERS WHO HAVE SUPPORTED GATA AND BEEN RECOMMENDED BY OUR MEMBERS Centennial Precious Metals 3033 East 1st Ave. Suite 403 Denver, Colorado 80206 www.USAGold.com Michael Kosares, Proprietor US (800) 869-5115 Canada 1-800-294-9462 European Union 00-800-2760-2760 Australia 0011-800-2760-2760 [EMAIL PROTECTED] Colorado Gold 222 South 5th St. Montrose, Colorado 81401 www.ColoradoGold.com Don Stott, Proprietor 1-888-786-8822 [EMAIL PROTECTED] Investment Rarities Inc. 7850 Metro Parkwa Minneapolis, Minnesota 55425 http://www.gloomdoom.com Greg Westgaard, Sales Manager 1-800-328-1860, Ext. 8889 [EMAIL PROTECTED] Kitco 178 West Service Road Champlain, N.Y. 12919 Toll Free:1-877-775-4826 Fax: 518-298-3457 � and 620 Cathcart, Suite 900 Montreal, Quebec H3B 1M1 Canada Toll-free:1-800-363-7053 Fax: 514-875-6484 http://www.kitco.com Lee Certified Coins P.O. Box 1045 454 Daniel Webster Highway Merrimack, New Hampshire 03054 www.certifiedcoins.com Ed Lee, Proprietor 1-800-835-6000 [EMAIL PROTECTED] Miles Franklin Ltd. 3015 Ottawa Ave. South St. Louis Park, Minn. 55416 1-800-822-8080 / 952-929-1129 fax: 952-925-0143 http://www.milesfranklin.com Contacts: David Schectman, Andy Schectman, and Bob Sichel Resource Consultants Inc. 6139 South Rural Road Suite 103 Tempe, Arizona 85283-2929 Pat Gorman, Proprietor 1-800-494-4149, 480-820-5877 [EMAIL PROTECTED] Swiss America Trading Corp. 15018 North Tatum Blvd. Phoenix, Arizona 85032 http://www.buycoin.com Dr. Fred I. Goldstein, Senior Broker 1-800-BUY-COIN [EMAIL PROTECTED] ---------------------------------------------------- HOW TO HELP GATA If you benefit from GATA's dispatches, please consider making a financial contribution to GATA. We welcome contributions as follows. By check: Gold Anti-Trust Action Committee Inc. c/o Chris Powell, Secretary/Treasurer 7 Villa Louisa Road Manchester, CT 06043-7541 USA By credit card (MasterCard, Visa, and Discover) over the Internet: http://www.gata.org/creditcard.html By GoldMoney: http://www.GoldMoney.com Gold Anti-Trust Action Committee Inc. Holding number 50-08-58-L Donors of $750 or more will, upon request, be sent a print of Alain Despert's colorful painting symbolizing our cause, titled "GATA." GATA is a civil rights and educational organization under the U.S. Internal Revenue Code and contributions to it are tax-deductible in the United States. -END- Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/ www.ctrl.org DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, mis- directions and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRLgives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply. Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at: http://www.mail-archive.com/[EMAIL PROTECTED]/ <A HREF="http://www.mail-archive.com/[EMAIL PROTECTED]/">ctrl</A> ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED] To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED] Om
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