Central Fund of Canada (CEF.A) - Page 2
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Thread: Central Fund of Canada (CEF.A)

  1. #11
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    Question

    How come this fund is not going up, even with gold sky rocketing?? can someone please explain? this does not make any sense?!


  2. #12
    Senior Member zylon's Avatar
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    It looks fine to me. Are you comparing apples to apples?

    In $US over one year:
    CEF +65%
    Gold +36%
    Silver +123%
    Chart usd

    In $Cdn in same time frame:
    CEF.A +50%
    Gold +24%
    Silver +104%
    Chart cdn

  3. #13
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    Quote Originally Posted by zylon View Post
    It looks fine to me. Are you comparing apples to apples?
    Thanks, Zylon... I was looking at just the short term.

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  5. #14
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    Quote Originally Posted by zylon View Post
    I view CEF.A (CEF amex) as buy and hold;
    however, if I was trading,
    I would buy at 4% discount
    and sell at 6% premium

    historical premium/discount
    In most times, with this type of fund, that would be a mistake. This fund trades at a premium because more people then ever want to invest in gold and silver and it is a very easy and convenient and liquid way to do it.

    What you will find (at least the last two years has been like this) is when it is going up it tends to trade at a premium and when it is going down it occasionally drops into a discount. To wait to buy it at a discount will most likely have you buying it as it is going out of favour (going down in price).

    That is what its history has shown.

  6. #15
    Senior Member zylon's Avatar
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    Exactly.

    That's how I trade all miners and explorers;
    BUY - when they're out of favor (down)
    SELL - into strength (on the way up)

    I haven't traded CEF.A yet, but may do so if volatility increases.

  7. #16
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    The fund is down today. My question is why is it going down if gold is going up? seems counter intuitive to me?!

  8. #17
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    Gold was down today. Remember that CEF is priced in CAD, and the gold price has been rising in USD, less spectacularly so when measured in CAD. Also, the fund also holds silver.

  9. #18
    Senior Member zylon's Avatar
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    CEF.A and PBU.UN

    So that I don't forget about this again, and perhaps some others will find this useful, here are a few links to compare Precious Metals Bullion Trust and Central Fund of Canada.

    PBU.UN 0.8% premium July 28. Holds allocated physical gold, silver, platinum bars.

    CEF.A 3.5% premium July 29. Holds allocated physical gold and silver.

    live comparison chart

    Aug 14 2009 to July 29 2011
    PBU.UN .. +71%
    CEF.A .... +75%

  10. #19
    Senior Member zylon's Avatar
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    CEF.A (53% gold 46% silver) 3.5% premium

    The other day I heard some "expert" say that CEF.A is holding 30% gold, and 70% silver. I don't know where these guys get their information. The gold/silver weighting fluctuates, but doesn't get too far away from 50/50 split.

    Central Fund's site showing assets and net asset value:
    http://www.centralfund.com/Nav%20Form.htm

    I've been using profits from precious metal equities, and buying CEF.A on dips, and when the premium isn't too high.
    Here are some performance stats comparing CEF.A to a few well known companies.



    Investors want to know how to invest in gold or silver bullion and who are wrangling over whether to invest in the metal itself or in gold and silver mining stocks should realize that they are two entirely separate asset classes.

    Gold bullion is money itself, a tangible asset with eternal value. You own it for insurance against a collapsing financial and monetary system. The profit – and there certainly has been some great gains in the past decade – is gravy.

    You own gold and silver mining companies not for their eternal value (they could go bankrupt), not for insulation from the financial system (they are financial assets which are affected by credit conditions and general market volatility), but for their profit potential. You take on more risks in owning gold and silver mining stocks in exchange for what should be a larger upside if business and market conditions prove favorable to them.
    leebellingersindependentliving.blogspot.com

  11. #20
    Senior Member zylon's Avatar
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    I bought more CEF.A last week.

    As of July 6 CEF.A holds:
    gold 55.5%
    silver 43.4%

    and trades at 2.7% premium to net asset value.

    http://www.centralfund.com/Nav%20Form.htm


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