> Maybe 0.1g is a bit low, but 1g shares at just above $11 a chop, might > liven up the market. We actually swapped a share account a few weeks ago > when someone urgently wanted to buy some gold and the client has been > desperately trying to sell them.
Yes, 40000 shares would be a little more liquid already. But anything less than 100000 shares will always be an extremely illiquid investment. In a very illiquid market it is always a problem when you want to sell your share(s), like your client experienced. With only 400 shares around, it is very difficult to sell them without taking a rather big loss. > > In a more liquid market environment this would have meant that the price > would have dropped more towards the 90g mark, or a 10% loss. That's what you would probably see if the stock was trading more actively: that it is going down already. Because it cannot go up as long as unsold ipo shares are hanging over the market. > > Of course, the way things are, it is unlikely that there will ever be > volatility of any sort in the shares because between JPM and two other big > shots, have of the liquidity is in effect not in the market. Sales have > been slow as well, as you point out, so thinks are not looking too well. Normal IPO, you have something like a one or two month period during which you can sign up for the shares. After that period the IPO is closed and the shares can start trading normally. An ipo is only considered a success if there are more bids than shares offered. Here we have only 60% of the shares taken up so far, which would be considered a disastrous offering in the normal ipo world. With a low 0.6 bid ratio a stock will start going down as soon as it trades freely, because it exposes that there is only weak demand for the shares at the given price. > Now JPM and others will argue about the incredible dividend et al, but the > only way to make 'real' money was really to buy the shares when gold was > at 342 and dump them on some hapless poor geezer when the market went > above 362. That's more return in 6 weeks than the dividend will amount to > in a year. As long as the TGC stock cannot go up it is more like a fixed investment, comparable to bonds. But there are plenty of bonds offering higher than 6% annual dividends... And these are liquid bonds which are easily sold if you want to invest the money in something else, no problems there... And the fact that these TGC shares pay the dividend in gold doesn't mean much. We can easily hedge any stock against the movement of the gold price, many investors are doing that. You can own Microsoft shares and they will behave as if they are trading in grams of gold and paying their dividends in gold. Todays financial instruments offer you all this flexibility. Regards, Danny --- You are currently subscribed to e-gold-list as: [EMAIL PROTECTED] To unsubscribe send a blank email to [EMAIL PROTECTED] Use e-gold's Secure Randomized Keyboard (SRK) when accessing your e-gold account(s) via the web and shopping cart interfaces to help thwart keystroke loggers and common viruses.
