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Wednesday, August 17, 2011

Eric Sprott had sell for 30 million worth of Sprott Physical Gold Trust (PHY.U) units

It's been reported by the Globe and Mail that the Eric Sprott has sold his gold units hold in his Sprott Physical Gold Trust (PHY.U). And seem like he is reinvested the money into his silver darling! WOW! The amount collected by his sell is... 30 million. Sprott is trading silver again! It's getting some of interesting!!!

TSX up of a few points, I am now back on the 110K for my non-registered portfolio.


Anonymous said...

If silver is going higher, your HZD will go even lower...

Sunny said...

You are right.

I purchased HZD while performing day trading. I won't be day trading anytime soon, I learn my lesson. It something I needed to experience by myself and I did.

However, a turnaround could eventually happen. Everything is possible these days on the market.

But right now, especially after knowing Sprott recent moves, well, seem like silver is going UP ans that's very cool. As for HZD, I will keep it for now, it will protect me in case of a turnaround.

Rob said...

Hi Sunny:

What is happening here is called swapping. The precious metals guru's like Eric Sprott, Jim Rickards, Dan Norcini, James Turk understand the gold / silver ratio bounces around. For a long time it was 65-1 then silver went on a rampage and it dropped to 32-1 now back up to 45-1. Silver should move faster up in price than gold therefore the swapping gold for silver. HZD had its glory for about a month after the drive by shooting in silver when it dropped from $50 to $32. Never bet against the primary trend which is UP for gold and silver. Once silver hits 50 again (and it will) it won't stop there this time. I would not hold HZD and in this market would never recommend it. You should be happy Kinross was up 3% today. Maybe we got in at the right time.

Frank said...

This will be a good lesson to her. She purchased 400 units of HZD for $7.79. As it is a leveraged ETF, it degrades over time very rapidly. As silver is very volatile, I estimate that it will be trading at under $2 within 3 months. Then the ETF will have to do a reverse split to boost the price back up. (But Sunny will be left with fewer shares)

For the people who may not know what this means, I will explain. The units are designed to give double the percentage return of silver. They are bear funds, so they increase when Silver goes down. So imagine that Silver is trading at $30 and the HZD is trading at $10. If silver goes up 10% (to $33) then the HZD would go down 20% (to $8). Then, if the next day silver were to drop 9% (back to $30), the HZD units would increase 18% (from $8 to $9.44). So, after 2 volatile days, silver is still trading at $30, but the HZD has fallen from $10 to $9.44... you lost 5.6% and silver is still at the same place. This is called ETF degradation. This is what happens when you hold on for more than 1 trading day. If you hold on for a few months, you lose everything.

So far, HZD is down about $3 from when Sunny purchased. So in total she has lost $1200. In a few more months, she will lose everything... even if Silver remains at the same price.

Sunny said...

Hi Rob,

I won't be trading on those volatile ETF ever again that's for sure. At this time, silver investment is getting interesting!

Hi Frank,

Thanks for being yourself and being so sharp on me your bad man. I kind of like that. Do you live in Montreal by any chance?

You are getting me under the cold water. No matter how cruel you are, somewhere, I understand what you mean and you could be right. So now I have to think about a plan or something. I don't know. Help! Someone? Somebody? :0)

Its not even close of being funny. However, trading silver had been enjoyable, for the time it last. I got stuck with HZD, very unfortunate. I got seriously burn. I am confident I will come with something that will be benefit. I just have to think.

Sunny said...

Just to add that I did not invested in Kinross, yet but I should have. I was interested in, but I did not made my move. Maybe it's time for me to invest in K by using the money of HZD... it could be a way out.

pattirose said...

Don't feel bad about getting stuck with HZD, it happens to lots of people but they don't post about it, they only brag about their winners.

I played around with short term trading and am still stuck with a couple stocks, it hurts but I have faith they will come around. I still have YLO :(

but I did manage to sell TRE at a profit luckily, and no more short term playing for me either.

Sunny said...

Hi Pattirose,

Thanks for sharing. I always had shared everything I was doing on my blog. The good like the bad things. It's something that is important to me.

living this with HZD had been a learning experience. Day trading is not made for me. You need to have a genius mind and I am a very normal middle class pal girl. I don't have money to play with. What I am now looking for is good quality investment.

I sold YLO, lost about 300$. But luckily, the money lost was coming from the DRIP. I did not lost the original money invested in. I had made that investment in YLO a long time ago. There's been a lot of inside buying recently for YLO. But they could be wrong indicators. I think at this time YLO is really in bad shape. I am very happy to have sell that one when it was time to do so. Maybe the company will eventually get sold. YLO is based in Montreal and their leadership is very bad. Could not expect more coming from Quebeckers.

I think that as investor, we made mistakes, but it's important to continue to help make the gains exceed the loss and also, form now on, I am focusing in blue chips - good quality stock that are not that exciting to hold, but they will create health for the long term.

It's the reaction following a bad investment that is crucial. It's important to modify the strategy and move forward. It's important to learn from my mistakes. Day trading was tempting for the big bucks, but way too risky. Too much gamble. The best way is to move in slowly, invest from time to time in blue chips, follow the investment, hold and... tadam... hello very soon 200k :0)

Anonymous said...

The fact he is selling might mean GOLD is reaching a top. I won't be surprise if gold will tank 500+ bucks all of a sudden... IMO it's way overvalued. As another poster puts it, you are way late to game...


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