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Sprott Physical Silver Premium To NAV Hits Fresh All Time High

Tyler Durden's picture




 

Several days ago there were a few rather amusing anecdotes in the blogosphere that just because Sprott filed a selling shareholder shelf in PSLV, the ETF was about to crash and burn. What was not disclosed is that in 2011 there have been about 200 comparable shelves filed for public companies, yet nobody called for the imminent anihilation of 40% of the S&P. Stunningly, just because someone requests the right to sell an asset they own when said asset is trading at all time highs, apparently does not mean they intent to exercise said right. To wit: the premium to NAV for the Eric Sprott physical silver ETF just hit an all time record of 23%. We are confident that this is due to JPMorgan being massively long the metal, and also because anywhere one walks these days, physical silver lying on the ground is more prevalent than dog excrement. Also, those who decided to play the premium-NAV compression trade, are advised to promptly close it unless, of course, they are a TBTF bank.

 

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Wed, 03/23/2011 - 10:34 | 1089927 Paul Krugman
Paul Krugman's picture

Silver is breaking out here folks. Straight shot to 40 in my opinion.

Wed, 03/23/2011 - 10:45 | 1090001 unwashedmass
unwashedmass's picture

LONG AND STRONG SINCE THE FIRST DAY THE PUBLIC COULD BUY.

FUCK YOU JPM. FUCK YOU.

Wed, 03/23/2011 - 10:52 | 1090070 Cash_is_Trash
Cash_is_Trash's picture

$40 would make my day!

Fuck JPM, switch from SLV to PSLV; it's highly recommended.

Sprott is the shit.

Wed, 03/23/2011 - 11:10 | 1090187 DarkMath
DarkMath's picture

PSLV, SLV, what's the difference?

PSLV - Sprott will rape you in premium

SLV - JPMorgan thanks you for allowing them to take your Silver to satisfy their massive Short liability (by using newly printed Fed dollars silly; to buy baskets of SLV silver and temporarily satisfying their Short obligations).

Unless you can hold it you don't own it.

BUY PHYSICAL everyone.

 

Wed, 03/23/2011 - 11:18 | 1090291 Pladizow
Pladizow's picture

Agreed, physical when possible.

But for qualified retirement accounts I choose PSLV.

Wed, 03/23/2011 - 11:30 | 1090361 MaxVernon
MaxVernon's picture

My local "real money" store, if you will, is now selling Canadian Maple Leafs at $40.20 per, with a 2+ week lead time.  And they buy directly from the Royal Canadian Mint in bulk.   Can you say silver shortage?  I knew you could.

http://www.gatewestcoin.com/markets.html for anyone interested.

Oh, and nice tits btw!

Wed, 03/23/2011 - 11:31 | 1090403 Cash_is_Trash
Cash_is_Trash's picture

Pladizow,

I can't read this shit with that massive supple rack avatar at work.

; )

Wed, 03/23/2011 - 13:40 | 1091089 Strider52
Strider52's picture

Those are NOT massive...

Wed, 03/23/2011 - 12:08 | 1090654 doerr
doerr's picture

Speaking as a former SJR student running dikes, I would say that having Gatewest as a "local coin store" would be one of the few reasons to think of Winnipeg as a good place to live when the winter wind is blowing down Portage Ave.

Wed, 03/23/2011 - 12:26 | 1090727 MaxVernon
MaxVernon's picture

Too True!

Wed, 03/23/2011 - 22:46 | 1093345 sullymandias
sullymandias's picture

When I was first driving in to Winnipeg on the bus, I overheard two natives talking to each other. The guy said, "Are you going to Winnipeg? Last place on Earth!"

 

I soon found out what he meant on my 8 hour stopover there.

Wed, 03/23/2011 - 13:27 | 1091045 Drachma
Drachma's picture

I'm picking up pre-orders of Maple Leafs, Rounds at a premium discount. Delivery time; 3-6 weeks. Premium for silver coins is typically around 16% in my area, but on pre-order my dealer will take 8-10%. Gold coins vary from 3-6% premium. RCM was recently advertising only a 1 oz. wafer for $1545 when spot was in the $1350 range. They have no silver bullion coins now. Only collectibles and commemoratives.

Oh, and I agree, those are great titties.

Wed, 03/23/2011 - 11:37 | 1090451 vas deferens
vas deferens's picture

+1

Wed, 03/23/2011 - 12:11 | 1090470 Sophist Economicus
Sophist Economicus's picture

Physical is best -- BUT, when you add in the premium over spot for a bullion coin, postage and storage/security (be it at home or elsewhere), an NAV of 15% or so isn't outrageous.    Also, the market is liquid for PLSV and it sets the NAV (not Sprott). Wait for times when the NAV is reasonable to buy. 

 

 

Besides, unlike physical, the premium to NAV doesn't go to zero -- so chances are you'll recoup some of it.   If it ever trades at a discount, well, that would be a screaming buy, wouldn't it

 

Thu, 03/24/2011 - 09:45 | 1094828 KevinB
KevinB's picture

CEF traded at a discount for years, and was uniformly ignored.

Wed, 03/23/2011 - 11:06 | 1090195 Dr. Richard Head
Dr. Richard Head's picture

Judging by reading Turd Ferguson, the $36 mark seems to be as precious (pun intended) as the last mark of $25.50.  Pretty significant rise after the $25.50 mark was breached and contained, so I anticipate a similiar rise after $36 is sustained. 

Wed, 03/23/2011 - 11:45 | 1090501 swanpoint
swanpoint's picture

FUBM

Wed, 03/23/2011 - 11:10 | 1090218 Golden monkey
Golden monkey's picture

I would not fuck JPM but, if they don't mind, they can kiss my ass.

Wed, 03/23/2011 - 11:12 | 1090233 DarkMath
DarkMath's picture

I would fuck Blythe Masters. Seriously, I would fuck her. I'm not kidding.

Wed, 03/23/2011 - 11:24 | 1090359 tmosley
tmosley's picture

Your dick will have a look of terror, like your avatar.

Then it will probably melt off.

Wed, 03/23/2011 - 11:29 | 1090398 Bastiat
Bastiat's picture

LOL!!

Wed, 03/23/2011 - 19:04 | 1092672 KinorSensase
KinorSensase's picture

Agreed.  There's something about a powerful evil woman that's an undeniable aphrodesiac.  I assume something's wrong with me for thinking that.

Wed, 03/23/2011 - 15:56 | 1091833 Island_Dweller
Island_Dweller's picture
Will JPMorgan Now Make and Take 'Delivery' of Its Own Silver Shorts?

 

http://seekingalpha.com/article/259549-will-jpmorgan-now-make-and-take-d...

Wed, 03/23/2011 - 11:43 | 1090482 SilverRhino
SilverRhino's picture

just broke 37.00 this morning.

Wed, 03/23/2011 - 10:36 | 1089931 billwilson
billwilson's picture

Because the JPMOrgue is buying so it can redeem and pay off its shorts. Such is the true price of unavailable physical silver.

Wed, 03/23/2011 - 13:55 | 1091145 SilverBaron
SilverBaron's picture

Not to mention the need for more tomahawks to bomb Gadaffi out of his gold and oil.  More explosions = more silver that will never be seen again.

Wed, 03/23/2011 - 10:36 | 1089933 xPat
xPat's picture

Tyler, repeat after me:

PHYS IS NOT AN ETF. PSLV IS NOT AN ETF.

PHYS IS NOT AN ETF. PSLV IS NOT AN ETF.

PHYS IS NOT AN ETF. PSLV IS NOT AN ETF.

PHYS IS NOT AN ETF. PSLV IS NOT AN ETF.

PHYS IS NOT AN ETF. PSLV IS NOT AN ETF.

PHYS IS NOT AN ETF. PSLV IS NOT AN ETF.

PHYS IS NOT AN ETF. PSLV IS NOT AN ETF.

PHYS IS NOT AN ETF. PSLV IS NOT AN ETF.

PHYS IS NOT AN ETF. PSLV IS NOT AN ETF.

PHYS IS NOT AN ETF. PSLV IS NOT AN ETF.

PHYS IS NOT AN ETF. PSLV IS NOT AN ETF.

PHYS IS NOT AN ETF. PSLV IS NOT AN ETF.

PHYS IS NOT AN ETF. PSLV IS NOT AN ETF.

 

Dude, they are both closed-end funds, not ETFs. Get it?

xPat

Wed, 03/23/2011 - 10:51 | 1090079 markmotive
markmotive's picture

Won't Sprott issue new shares at the NAV...not the market price?

Wed, 03/23/2011 - 10:56 | 1090104 Cash_is_Trash
Cash_is_Trash's picture

Good question.

So can the shares be diluted by a secondary offering or does that counter what xPat says?

Wed, 03/23/2011 - 11:04 | 1090147 43 Steelie
43 Steelie's picture

Yes they can. He did for PHYS around $11.30 when it was trading closer to $12.00. However, he called that move a big mistake and said he wouldn't do it again.

Although, with how strong the demand is and how much Sprott would love to see more physical removed from the market, I'd be surprised if they were not in the process of doing a follow-on offering here. No one knows at what premium though. 

In any case, unless you have an IRA or another illiquid (without a huge penalty) vehicle why wouldn't you just buy physical at a less than 10% premium?

Wed, 03/23/2011 - 11:33 | 1090406 Pegasus Muse
Pegasus Muse's picture

Eric Sprott said in a recent King World News interview he would not dilute existing shareholders by doing a follow-on offering of shares of PSLV.  He said he “learned his lesson” about doing that after the PHYS follow-on offering fiasco.  

If Sprott goes back on his word I will be done with him and his firm.

If Sprott wants to take more physical gold and silver off the market he can create new physical bullion trusts -- call them PHYS II and a PSLV II.  

If he does another follow-on offering --- after he said he would not --- he will lose the trust and confidence of a lot of investors.  A money manger's word is his bond.  

Wed, 03/23/2011 - 11:35 | 1090429 43 Steelie
43 Steelie's picture

Fair point. I would agree with you.

Wed, 03/23/2011 - 11:45 | 1090499 KidDynamite
KidDynamite's picture

not to belabor the point, but creating PSLV II would be the exact same thing. After all, assum he creates PSLV II and satiates some of the demand, so it only trades at a 10% premium to NAV.  Are any of the PSLV I holders really not going to sell their PSLV 1 at a 24% premium and buy PSLV II at a 10% premium?

Wed, 03/23/2011 - 12:04 | 1090630 tmosley
tmosley's picture

He could, but this way he is not the one pocketing the premium.

My guess is that the same thing would happen as happened with the first follow-on offering--the premium would plunge, and then go right back up as people continued to buy more.

Wed, 03/23/2011 - 15:26 | 1090767 GoinFawr
GoinFawr's picture

So SLV is definitely the way to go, right KD? 

http://abstrusegoose.com/348

 

Wed, 03/23/2011 - 11:53 | 1090554 vas deferens
vas deferens's picture

Issuing more shares and keeping the same amount of silver would dilute shareholders but that is not what Sprott did with PHYS.  There are the same amount of shares to physical gold and NO DILUTION of PHYS.

Creating PSLV II, with the same prespectis, would have the same effect as adding silver and more shares to PSLV. 

If you own PSLV in a taxable account sell it, take your premium, and buy physical!!  If Sprott has a secondary offering, to me, that would be wonderful;

1) Taking more physical off the mkt.

2)lowering the premium hopefully low enough I have a nother option to buy silver.

Wed, 03/23/2011 - 14:21 | 1091281 Diogenes
Diogenes's picture

As an owner of Sprott's gold fund I would not mind if he did a follow on offering PROVIDED he offered the shares to existing shareholders, at cost.

Wed, 03/23/2011 - 14:34 | 1091356 Flakmeister
Flakmeister's picture

If you will not ever be in a position to take physical delivery, sell your PSLV, recoup the premium and buy CEF....

Obviously if you intend to cash in one day...

Wed, 03/23/2011 - 11:43 | 1090493 vas deferens
vas deferens's picture

Yes, but he can set any price and it will not be NAV. He will also need the physical silver.  

Sprott issued a secondary offering on PHYS (his gold trust) when there was around 20% premium.  Sprott priced the secondary offering around 10% premium making the PHYS fall to near the new issuing price.

 

 

Wed, 03/23/2011 - 10:37 | 1089937 BrianOFlanagan
BrianOFlanagan's picture

proof that there is no limit to the stupidity of retail investors.  

Wed, 03/23/2011 - 10:54 | 1090087 Apostle of Unknown
Apostle of Unknown's picture

yup. People who buy at 23% premium are absolutely nuts. Might as well give that to VAT and have the real physical stuff. (I can already picture the replies: "if you can buy it"... well, last time I checked I could)

Wed, 03/23/2011 - 11:10 | 1090211 Fenlander
Fenlander's picture

Serious question from me.  I own physical, and am not interested in paper having done my research a couple of years ago when I woke up to what was going on in the world.  But from what I have read, Sprott's fund is fully backed, and one of the things it offers investors is confidence of ownership, without the expense of storage or worry of it being stolen.  But at what point does the premium over NAV get so much that people either just buy and install a safe at home, or bury it very well?  I'm not talking about hedge funds or mega investments, but regular individual investors.

Wed, 03/23/2011 - 11:31 | 1090387 43 Steelie
43 Steelie's picture

I think it's a good question and you're right about individual investors..there is no reason anyone with less than $1MM in assets should be buying into it at such a high premium. 

The best part about the fund is that you can exchange it for physical. But you would need close to $400K invested to make it work. 

The fund garners a premium for a few reasons:

1. Assets are held outside the U.S.

2. Don't have to worry about storage costs

3. Can exchange shares for physical

4. I'm assuming most holders of it don't day trade it so liquidity and turnover is fairly low meaning those that would sell would only sell at decent enough premiums

5. Day traders who aren't looking at the premium but rather only that day's + or - percentage in underlying silver spot price and assigning it blindly to PSLV

Wed, 03/23/2011 - 11:36 | 1090443 Apostle of Unknown
Apostle of Unknown's picture

For me the ultimate criterium is Value Added Tax in my country, storage costs should be negligible for the average retailer.

If you want a closed fund, let's compare Sprott with CEF. CEF is 54.9% silver and 43.6% gold. If we make a similar mix using Sprott's current intraday premiums, we get (54.9% * 24.94) + (43.6% * 6.14) = 16,36%. The CEF(US) premium is currently 8.5%. This makes Sprott ridiculously expensive and in my humble opinion only a retard would not switch at this point.

Wed, 03/23/2011 - 17:45 | 1092445 Montecarlo
Montecarlo's picture

I purchased PSLV with a self-directed IRA spun off from my 401K.  No other way to access the money...

Wed, 03/23/2011 - 17:55 | 1092477 mraptor
mraptor's picture

All of you guys complaing about 23% markup, chill out ;).. yes it is a big premium no doubt, but it is generated primary by the day-traders....

As many mentioned here , they are relucant to buy... and I gather that most of the ppl on this site are long term holders..

So yes 23% is big premium, but we will see even bigger premiums in the future, when the ppl pile up...

Buy on the dips and lower premiums.. otherwise just trade it..

Wed, 03/23/2011 - 10:37 | 1089939 duo
duo's picture

CEF used to issue new units every quarter or so.  They stopped doing that, probably because they couldn't find any physical silver.  Telling.

CEF premium now over 7%, per Harvey.

Wed, 03/23/2011 - 10:37 | 1089944 Xibalba
Xibalba's picture

Sprott needs to issue a secondary and stand for another delivery.  Crash the Death Star!

Wed, 03/23/2011 - 10:37 | 1089948 Bastiat
Bastiat's picture

physical silver lying on the ground is more prevalent than dog excrement

That's what people are picking up with those little plastic bags!


Wed, 03/23/2011 - 10:37 | 1089959 xPat
Wed, 03/23/2011 - 10:53 | 1090091 Dr. Richard Head
Dr. Richard Head's picture

Yoooooooo GATA GATA!!!! Their really friendly. 

Wed, 03/23/2011 - 11:06 | 1090176 BeeTee
BeeTee's picture

That is one teeeeedious animation. It could be edited to 1 minute and make the same point.

 

Fri, 04/01/2011 - 05:27 | 1124340 ultarnerd
ultarnerd's picture

it really looked like biased anti gold propaganda to me

and I am well read on this subject.

Noticed it had no comments added there yet,

wonder why?.

I agree that GATA must have made some real

mistakes but to almost call us at zerohedge

all quacks did anger me a bit.I still do not

know how much of

silver is leveraged, and in reality that's not really

whats important as I am almost certain now

that there is far more silver sold than can be

accounted for in physical. Whether leveraged or

instead is just vastly naked short selling of this

by unbacked paper silver and gold scam that, I like

to call shenanigans gold, as the results will be

more or less the same

in the end.The problem is still one of

people thinking they are buying gold but are not

and will get burnt in the end

unless they really are just buying gold

for day trading only but unfortunately is

not always the case.I wish I knew the

percentages here.

Shenanigans gold sounds so much

like a dishonest leprechaun and that's just so fitting

here.

For the few who do not know

see http://harveyorgan.blogspot.com/

and lets see him try to discredit that guy as he

has real numbers.

Also as to getting info from real traders I often

read http://marketwatching.freeforums.org/index.php

and usually every one of them

also believe the markets are manipulated and even plan to

make their profits and do well assuming the

manipulations are real.I could see myself why that

knowledge would help as one can see the

associations too.

Outstandingly smart people there too for anyone

who wants to take a look.

Most of the people there are the real thing and

they would be bewildered and angered by this

poorly informed cartoon and

while polite I do

not think they would have much good to say

on it.

Actually now that I think about it I will post it

there and see what they actually do say.

 

 

 

Wed, 03/23/2011 - 10:40 | 1089972 youngman
youngman's picture

The Comex had two days of non deliveries....approx 700,000 oz a day now to the end of the month

Wed, 03/23/2011 - 11:01 | 1090144 Robot Traders Mom
Robot Traders Mom's picture

Just curious why you are so trusting of the Comex to be truthful? Really, not just you but pretty much everyone. Harvey breaks down the Comex like it is fact. Why would they not doctor the numbers?

Wed, 03/23/2011 - 11:19 | 1090281 H. Perowne
H. Perowne's picture

According to Dan Norcini, they are. And the band played on . . .

Wed, 03/23/2011 - 10:40 | 1089982 Bearster
Bearster's picture

Physical silver is getting less scarce these past few weeks... Make of it what you will.

Wed, 03/23/2011 - 10:44 | 1090015 EscapeKey
EscapeKey's picture

Source?

Wed, 03/23/2011 - 10:49 | 1090058 Kegfreak
Kegfreak's picture

My personal observations here tell me supply is tight.  I have been in three different shops that always have bullion have none.

 

Wed, 03/23/2011 - 11:23 | 1090324 The Fonz
The Fonz's picture

Well, scarcity at certain dealers isnt' always all that meaningful. Long before this started I began using silver to save money. Often I would goto a coin dealer that would have very little silver. Once I discovered the shops that really want to deal in bullion instead of numismatics I have always been able to buy at a retail volume (small). However those shops that are dealing in bullion are increasing their stocks and buying and selling FAR more often. I see lines at those shops every day now. They seem to be keeping inventory tight relative to increasing number of transactions on both sides and simply passing cash and silver back and forth between buyers and sellers and taking their cut. So far at least for an ordinary man I have not found silver scarce at spot price.  We'll see what happens. 

Wed, 03/23/2011 - 11:40 | 1090462 tmosley
tmosley's picture

Yup.  I find that APMEX is one of the better gauges of physical supply.  It looks to me like the higher price has brought out SOME supply.  They don't have a lot of small bars (about 3000), but they have more than 1000 100oz bars right now.

After the crash in 2008, they sold out of all their non-numismatic silver inventory, IIRC.  I was stuck with buying junk silver.

Wed, 03/23/2011 - 22:32 | 1091223 SilverBaron
SilverBaron's picture

@kegfreak

I've had the same experience.  We've got a pretty good shop in town that used to always be loaded with bars and coins.  I went there two weeks ago and he had almost no bullion.  I got all he had left.  I asked him if people had been selling and he said no, mostly buyers.  The little that I got had just been sold to him that same day.

Wed, 03/23/2011 - 13:13 | 1090989 vas deferens
vas deferens's picture

Source?

The US mint and Canadian mint states otherwise. Try and find 2011 silver eagles and when you do look at the premiums.

Still much lower premium then PSLV.

Fri, 04/01/2011 - 05:43 | 1124349 ultarnerd
ultarnerd's picture

I have a hunch that you can guess that

the last place they would want any

shortages to show up is for the small

mints.For example as long as

I can call the small mint and they say

they have gold and silver avaliable, I wont

panic. but I guarentee I will panic when

they can not get it.

I do not really care somuch about

what is said about the Comex or etc.

So its a good guess that if the markets

are full of fake, scam, unbacked paper

shinaigans gold and silver, that the big

buyers you can pay off a few of them

but 1000's times more of the smaller buyers

and thats harder

to hide.Ask yourslves would you panic too

if your favorite small mints get into tight 

trouble getting silver, bet you would panic

a lot more than rumpors of Comex

troubles geting silver.Things get personal

when they get to your house.And you can bet

the big guys will think this too.

Small mints will be kept supplied at all costs.

 

Wed, 03/23/2011 - 10:41 | 1089986 cosmictrainwreck
cosmictrainwreck's picture

topic of silver makes me think of Blythe & Jamie....then by association: the Lloydster. Any word, Tyler, on L-l-loyd's testification in trial this AM? 

Wed, 03/23/2011 - 11:29 | 1090321 CD
CD's picture

Max Keiser, with his usual tact, says Lloyd is currently getting a BJ on witness stand:

http://www.businessinsider.com/lloyd-blankfein-raj-trial-2011-3

Jamie is working on his tan in Tokyo at the moment...

http://www.bloomberg.com/news/2011-03-23/dimon-makes-20-billion-at-t-loan-deal-in-bid-to-be-dominant-.html

They've tried everything else, would it not make sense to move onto a Joe vs. the Volcano type solution, über-bankster vs. reactor?

Wed, 03/23/2011 - 14:22 | 1091279 SilverBaron
Wed, 03/23/2011 - 10:42 | 1089987 metastar
metastar's picture

I'm not the heavy duty investor, but a 23% premium-NAV sounds high to me. This has me rethinking my positions in PSLV!

I think Sprott should get some more silver.

Wed, 03/23/2011 - 10:43 | 1089991 tmosley
tmosley's picture

Sell out and buy physical.  If you can get it.

Wed, 03/23/2011 - 11:39 | 1090455 Cash_is_Trash
Cash_is_Trash's picture

The fund has received all its orders.

Agreed, 23% is financial rape.

http://www.sprottphysicalsilver.com/News_Details.aspx?cid=6

Wed, 03/23/2011 - 10:41 | 1089989 tmosley
tmosley's picture

No, no Tyler, the Premium didn't go to 23%.  The price went to $23 dollars.

That's what Math Man told me.  I trust him over any news and/or exchange information I see anywhere.

Wed, 03/23/2011 - 10:45 | 1090000 EscapeKey
EscapeKey's picture

He told me that silver is only worth $6/oz, as that's what it costs to dig out of the ground.

He also told me a man with a shovel is worth the same as a man operating a digger. Wahey for the Marxist labour theory of value.

Wed, 03/23/2011 - 11:35 | 1090410 depression
depression's picture

Tell me about it !

I spent the morning shoveling silver off my sidewalk so I could get out to my mailbox and see if my Unemployment and SNAP Checks arrived in today's mail delivery. God Bless the good men and women of the USPS. Can you imagine if they had to deliver boxes full of physical silver instead of these nice convenient US Treasury checks.

Wed, 03/23/2011 - 12:40 | 1090813 Ruffcut
Ruffcut's picture

SFW, citi and bank of amerika, are really worth what?

SIlver is going to be worth whatever someone is willing to pay for it. Nothing more and nothing less.

Wed, 03/23/2011 - 10:47 | 1090022 metastar
metastar's picture

(17.39 - 14.1831) / 14.1831 = 0.226 (or approx 23%)

I am thinking now about buying the physical.

Wed, 03/23/2011 - 10:50 | 1090056 tmosley
tmosley's picture

It was a joke...

Math Man is/was a top calling troll who was lurking around here telling everyone the price of silver was about to collapse, acting as if he had some sort of credibility.  Now, just like I told him, he's just another troll corpse on the side of the road.

Wed, 03/23/2011 - 10:52 | 1090086 Bastiat
Bastiat's picture

Yep.

Wed, 03/23/2011 - 10:45 | 1090026 Ruffcut
Ruffcut's picture

Picked up a few hundred shares, 12 to 13 a share. It has ramped well. Planning to hold a while.

I think peeps like me are getting away from the comex scams of SLV and GLD. It appeared to be the best alternative to physical holdings.

Wed, 03/23/2011 - 10:48 | 1090049 metastar
metastar's picture

What's the premium to NAV for SLV? (If you can believe the The Morgue actually holds the silver).

Wed, 03/23/2011 - 13:42 | 1091099 GoinFawr
GoinFawr's picture

KD would love to field that one for ya. KD?

Wed, 03/23/2011 - 11:00 | 1090131 Ruffcut
Ruffcut's picture

Sprott on how he says gov lies about silver supply

http://news.silverseek.com/SilverSeek/1300386121.php

Wed, 03/23/2011 - 10:46 | 1090031 halcyon
halcyon's picture

So Sprott can sell his shares, arbitrage to physical silver and issue more shares with the new physical he just acquired?

Sounds too good to be true to me.

 

Wed, 03/23/2011 - 10:48 | 1090054 Bastiat
Bastiat's picture

Yeah,  if he can find the silver.  But I do like the idea of him doing that if it involves the Comex, heh.

Thu, 03/24/2011 - 08:27 | 1094508 halcyon
halcyon's picture

Not sure I buy the silver shortage rumors:

http://kiddynamitesworld.com/five-of-the-biggest-etf-myths/

 

 

Thu, 03/24/2011 - 10:32 | 1095021 GoinFawr
GoinFawr's picture

Not sure if I buy a pseudonymous blogger talking his book over Eric Sprott talking his... though if you go solely on who has more wins I suppose there is no contest.

Wed, 03/23/2011 - 10:57 | 1090108 Paul Krugman
Paul Krugman's picture

Sprott has stated in a King World News interview that he won't expand the amount of silver in PSLV and crush the premium. He did this in PHYS and it upset some holders. I think he is wrong and should expand the holdings but he doesn't want to upset the current holders. 

Wed, 03/23/2011 - 10:54 | 1090097 Oh regional Indian
Oh regional Indian's picture

Last week was th efirst phys shortage I saw in 5 years of buyign here in India. 

Dealer says all well now, but I suspect not for long.

I got rebuked by CDiddy for suggesting this, but what does blowing up 2-3000 Kilos per day in a war do to the price/demand for silver?

Eh?

ORI

http://aadivaahan.wordpress.com/2011/03/22/interesting-times-sweet-validations/

Wed, 03/23/2011 - 11:05 | 1090114 lawrence1
lawrence1's picture

I like, trust and respect Sprott but just closed my small and only non-physical investment account with Fidelity because I dont trust the Govt, the brokerages nor the banks in case of a currency crisis which appears coming down the tracks at full-speed. Too many problems, too, with stops sometimes being ignored. Was rewarded by a local dealer who offered me 100 ounces of assorted .999 silver rounds at spot yesterday, payable when my fiat funds arrive. Closed, too, a long standing Wells Fargo account and opened with a small local bank. And sold all physical assets in the US years ago and bought a house in a small, corrupt Central American country.
And married a gem of a local girl... took some find to find her,having to kiss a lot of pretty working girls along the way, poor me. Small country corruption is peanuts compared to this neo Nazi corporate fascist state. STARVE THE FUCKING BEAST, GO TOTALLY HYSICAL.

Wed, 03/23/2011 - 11:02 | 1090160 DarkMath
DarkMath's picture

Tyler,

Check out Kid Dynamite's post regarding Sprott's recent F-1 filling:

http://kiddynamitesworld.com/pslv-sprott-files-to-sell-sold-to-you-sucka/

Long story short: Sprott is going to cash in on the ridiculous %20 premium on PSLV at the expense of his captive Silver Bugs.

 

Wed, 03/23/2011 - 11:25 | 1090366 JohnG
JohnG's picture

Have to call BS on that, no shelf announced.

That daid, even if he does it won't hurt, but I seriously think that he can't.  Physical is very scarce, read Harvey Organ.

Wed, 03/23/2011 - 11:39 | 1090461 Tyler Durden
Tyler Durden's picture

The market's response to this "telegraphing" of the cashing in on the "ridiculous" premium: a new all time high premium (as this post indicates).

Wed, 03/23/2011 - 11:43 | 1090500 JohnG
JohnG's picture

:)

Wed, 03/23/2011 - 11:51 | 1090548 KidDynamite
KidDynamite's picture

eh eh eh Tyler - it's not "The Market's" response - i went through great lengths to explain this very simple concept:

http://kiddynamitesworld.com/on-misinterpreting-pslvs-premium/

It's a one sided trade - can't create new shares, can't short - so there's no way to correct the mispricing.

As long as there is an ample supply of "suckers" willing to pay the premium, which there is, thanks to the contstant flow of misinformation and hype in the silver community, then the premium won't collapse.

 

 

Wed, 03/23/2011 - 12:06 | 1090641 tmosley
tmosley's picture

Uh, those "suckers" ARE the market, moron.

I don't even know what you need to do to correct your tremendous misunderstanding of how markets work.  As such, I would suggest you just shut up, because you don't know what you are talking about.

Wed, 03/23/2011 - 12:11 | 1090666 KidDynamite
KidDynamite's picture

in fact, they're really not. as many intelligent commenters in this thread have noticed, PSLV's premium means there is an ample supply of retail "idiots".  It doesn't mean anything else, but I already wrote a full post on this, which I'm sure you ignored, although it's not debatable, especially for someone who is purporting to understand how markets work.

Wed, 03/23/2011 - 12:52 | 1090891 tmosley
tmosley's picture

Yes, I did ignore it, because you are a moron who doesn't even know what a market is.

You aren't worth talking to.  But I will continue to berate you for being so stupid anyways.

Wed, 03/23/2011 - 23:23 | 1093528 Flakmeister
Flakmeister's picture

You know I am no gold troll, but paying the PSLV premium is bad form when other investments are possible. The only reason for PSLV if if you anticipate having enough shares to redeem. But then why not directly buy physical in bars?

Sat, 04/02/2011 - 00:59 | 1127449 GoinFawr
GoinFawr's picture

Trust + not having to leave the office? XAg not stored in the US or by a group that likely has a huge conflict of interest (to say the very very very very least)? Storage fees?... do I really need to continue?

Disclosure: No PSLV SLV GLD PHYS on me as of writing this.

Disclaimer: I'm not your fucking Daddy.

Wed, 03/23/2011 - 12:56 | 1090901 Ruffcut
Ruffcut's picture

But using the 1/10 ounce of gold coins and their premiums were nearly 20 percent, from spot.

I appreciate your opinion on these sprotts deals and their inherent issues. But if investors demand of these shares are high, so is the premium. Investors have money and don't trust the fundamental games that financial credos are playing. They don't trust SLV and GLD much either.

The shares I have are up more than 20 percent anyway. If currency goes buggy, then you maple syrup is going to worth its weight in silver.

COming next, sprotts syrup holdings, LTD.

Wed, 03/23/2011 - 13:19 | 1091010 SRV - ES339
SRV - ES339's picture

+1 Tyler!

KD... u r wrong here, and all the other sites you advertise your lack of knowledge on the subject.

How about just buy your SLV at spot(with no tie to physical), and stfu... hey, maybe "Charlie" could use an opening (Train Wreck II) act... if you don't mind, I'll stick with my six figure investment in PSLV purchased at < 5% premium, if it's OK with you... lol!

Wed, 03/23/2011 - 15:07 | 1091494 BrianOFlanagan
BrianOFlanagan's picture

delete - my mistake

Wed, 03/23/2011 - 18:01 | 1092495 Frederic Bastiat
Frederic Bastiat's picture

Tyler, This happened to UNG in Sept. 2008. Different commodities, very different situations, but in the end the larger group of equity investors was telegraphing a rise in the price of the commodity, and they were right.  However, their percentages gains were muted by the falling premium. 

 

Just invest in SLV, why buy silver at a premium.

Thu, 03/24/2011 - 08:30 | 1094525 halcyon
halcyon's picture

The problem with people believing in you is that you write way too much sense, use way too little exclamation marks and miss the obligatory NWO, comex, default, illuminati, fascism & nazi references.

 

Withe rhetoric like that, do you think anybody is going to believe you?

:)

 

Wed, 03/23/2011 - 11:05 | 1090168 JohnG
JohnG's picture

And to think, I bought the IPO HEAVILY between 10.30 and 10.51.

It's made several years for me since November.  Up 70.15% as of now.

WOW!

Never seen seen anything run this fast in this short time.

And yeah, when somene makes claims like this, I ask for trade confirmations.  I have them.  And will show them.

I am one happy camper :)

Wed, 03/23/2011 - 11:10 | 1090217 KidDynamite
KidDynamite's picture

Tyler,

Sprott didn't file a shelf, which is totally different.  He exercised one of three options he has to get his PSLV control shares registered (it's right there in the PSLV prospectus).  If he doesn't sell them, he's used one of his 3 bullets here.  Using deductive logic (the smart kind, not the crazy kind) - why would he register the shares (using one of his limited 3 options) if he didn't plan to sell?

Talk to a securities lawyer, and you'll probably be told something like I was: "This isn't a shelf registration.  If they're going to register the shares now but not sell them until much later, then they're going to have to go keep updating the prospectus and filing prospectus supplements — a very burdensome and expensive process that no one really uses anymore. Avoiding that process is the whole reason we created shelf registrations in the first place!"

 

Wed, 03/23/2011 - 11:18 | 1090271 SDRII
SDRII's picture

But doesn't insider selling mean the "stock" goes up - works for the equity market

Wed, 03/23/2011 - 11:23 | 1090330 gwar5
gwar5's picture

Can he arbitrage his physical vs the SLV paper price to take delivery of their physical?

Would he have to put some of his physical on the block by registering to do that? 

Wed, 03/23/2011 - 11:29 | 1090399 KidDynamite
KidDynamite's picture

sure - he can buy SLV and redeem it.   If he doesn't have funds on hand to do so, then yes - he'd have to register the PSLV shares his funds own so that he can sell them (which is what he did last week) and replace them with SLV (and then redeem)

I would LOVE to see Sprott buy SLV and redeem - but the problem for him is that it's a kinda catch-22:  I think that he knows that SLV has the silver - he cites their supply in all of his papers and speeches.  Thus, if his redemption is successful, it kinda kills all the hype and the reason to own PSLV.

On the other hand, if SLV doesn't really have the silver, then getting denied while trying to redeem SLV shares would be Sprott's wet dream - he could go public with the story of the century.

Similarly, if COMEX really can't deliver, wouldn't Sprott want to buy futures and squeeze the crap out of the shorts? or cause a huge COMEX delivery failure which would be bullish for his physical trust?

In short, Sprott has every reason to try to expose SLV and COMEX if in fact they do have problems - so why doesn't he?  Perhaps because he knows that he could actually get the silver that way, and that it would kill the illusion of "there's no silver to be had"

Wed, 03/23/2011 - 11:35 | 1090438 SDRII
SDRII's picture

Yes worked out well for the Hunt Bros - Sprott as you yourself said is not stupid. What is it they say: let the market come to you

Wed, 03/23/2011 - 15:28 | 1091166 GoinFawr
GoinFawr's picture

Well, somebody certainly appears to be doing everything they can to keep some sort of an illusion goin'.

http://seekingalpha.com/article/259549-will-jpmorgan-now-make-and-take-delivery-of-its-own-silver-shorts

'You got some 'splainin' to do!"

Wed, 03/23/2011 - 11:33 | 1090415 DarkMath
DarkMath's picture

Eric Sprott only has a finite amount of shares. IF that's what he did and altruistically took his cash and then bought SLV shares and redeemed them for physical silver THEN he could only do that a few times before he ran out of money from selling his PSLV shares.

The only way he could reduce the premium on PSLV is to issue more shares but he's SAID he won't do that. That's because he got such a bad reaction from PHYS shareholders when its premium got too high and he did a secondary offering that reduced the premium.

I say all of us Silver Bugs create a NON-PROFIT EFT whose sole purpose is to drain the SLV of Silver.

Every dollar invested in our non-profit SLV draining ETF would go into buying SLV shares and then redeeming them for physical Silver.

 

Whose with me, let's GO

http://www.youtube.com/watch?v=PGIPCGyihxw&feature=related

 

 

 

 

Wed, 03/23/2011 - 13:06 | 1090956 SunSword
SunSword's picture

No need for that. Just tell everyone you know, and ask them to tell everyone they know, to buy a single 1 ounce silver coin every 3 months. Convince the older people it makes a great birthday gift. Etc. Once Joe and Jane sixpack start doing that -- it will drain the physical silver stores and drive up the price -- and as they see the price rising it will incent them to continue.

Wed, 03/23/2011 - 11:17 | 1090257 gwar5
gwar5's picture

Trust noone.

Eric Sprott can damn well do whatever he wants.

I hope he uses the physical premium to buy SLV and then take delivery from them

Buffet and Soros and their gold bubble babble are nattering nabobs.

Decoupling of the physical PM price from paper is not insignificant.

 

Wed, 03/23/2011 - 11:18 | 1090278 truont
truont's picture

How soon we forget:

http://www.zerohedge.com/article/investors-willing-pay-31-premium-nav-sp...
In May 2010, Sprott’s physical gold trust PHYS boasted a 30%+ NAV premium in May 2010.
Then, Sprott added more gold to the fund, and issued more shares. And investors saw their 30% NAV premium go back to around 5% today.
30% to 5% in months. You know those PHYS investors were cursing Sprott’s name like they do Blythe Masters.
When paying 20% NAV premiums for PSLV, ask yourself, “Will Sprott buy more silver for PSLV?”
If the answer is yes, then watchout.

Wed, 03/23/2011 - 13:30 | 1091054 SRV - ES339
SRV - ES339's picture

He was very open calling it a mistake, and has stated clearly he will not do it with Ag. I believe him for two very good reasons...

 . He is a man of his word.

 . Repeating the mistake would ruin his credibility (built over many years) and would cost him much more in the long run.

Wed, 03/23/2011 - 11:19 | 1090300 Watauga
Watauga's picture

Aside from the technical talk about shelf registration and such, does anyone else get the sense that silver today is a little like some .com company in about January 2000?  Sure, silver is "real," at least in its physical form, and it can be used as money or even, in some situations, for barter, but ultimately, doesn't it seem to be running up, presently, on sheer greed and fear backed sentiment? 

Gold and silver both, but silver in particular, needs a correction if the long-term bull is to be all it can be.  Gold to $1225 and silver to $23 is almost necessary if we are to see the bull run up, long term, to $5000+ gold and $100+ silver.  If it rides this wave of sentiment up to fast, without a substantial correction, the bull will be whipped into a premature peak and collapse.

I should have sold out of all tech stocks BEFORE the collapse in 2000--I AM selling out of any paper PMs on these highs.  I may hold core physical PMs for the long run, but there is money to be made by waiting for the dip and buying it--and I don't mean some 2% or 3% dip.  Gold to $1225--silver to $23--but around those levels.

Wed, 03/23/2011 - 14:14 | 1091235 oddjob
oddjob's picture

Months ago you stated you had sold all your PM's....part of the head and shoulders crowd you were.

Anything you say is a lie, so just give up.You never held any PM's whatsoever.

Wed, 03/23/2011 - 11:23 | 1090322 unclebigs
unclebigs's picture

Buy Buy Buy Lemmings.  LOL!!!

Wed, 03/23/2011 - 11:22 | 1090328 Temporalist
Temporalist's picture

Wow lots of anti-PM trolls coming out today to warn of the bubble and dangers in PMs.  I bet they've been right on everything to date and warn people of the paper ponzi regularly too.

Wed, 03/23/2011 - 11:33 | 1090427 JohnG
JohnG's picture

Probably just pissed they missed the run :) 

Or don't understand the metals market.  Wild gyrations between SLV and GLD holdings, putting out fires.

Trolls should at least understand what they are writing about, might think them think twice.

Wed, 03/23/2011 - 12:14 | 1090673 depression
depression's picture

Exactly. The Metals market loves to shake traders out of their positions.

Really the only way to do this is dollar cost average in slowly over time and never sell ever.

Wed, 03/23/2011 - 12:23 | 1090716 slaughterer
slaughterer's picture

Tyler, my firm is fairly bummed that you spot this NAV compression silver short trade and broadcast it to your minions, as our firm is short silver as of ... yesterday.

Wed, 03/23/2011 - 22:29 | 1093284 JohnG
JohnG's picture

Riiiiiiiiight.  Sure.  Troll.

Wed, 03/23/2011 - 12:28 | 1090743 unclebill
unclebill's picture

it's Simple, Supply and Demand!!!

Wed, 03/23/2011 - 12:35 | 1090787 tradewithdave
tradewithdave's picture

"All aboard!  This is backwardation station... luggage only please... no passengers.  The Chase Debit Card $500 Local will be coming through to pick up passengers shortly.  I repeat this is the Silver Bullet luggage-only express now leaving the station!  Please load your luggage and step away from the moving train."

http://tradewithdave.com/?p=5293

http://tradewithdave.com/?p=5814

 

Dave Harrison

www.tradewithdave.com

Wed, 03/23/2011 - 12:45 | 1090837 Temporalist
Temporalist's picture

$37...WB hit her mark.

Wed, 03/23/2011 - 13:17 | 1091003 truont
truont's picture

I noticed that too, damn.

Now I will never know if WB is real or not....

She said she may take cash in lieu of delivery in March if silver spot got to $37 or so...

Now that $37 is reached, WB cannot be proved false...

Wed, 03/23/2011 - 12:56 | 1090902 Sherman McCoy
Sherman McCoy's picture

Thank God for PSLV, my safe isn't big enough for that many 100oz bars. Imean, didn't everybody buy the dip last week?

Wed, 03/23/2011 - 13:18 | 1091007 Tail Dogging The Wag
Tail Dogging The Wag's picture

If you cannot hold it in your hand, you don't own it.

Get physical folks. Get real. Switching from a paper currency to an ETF is jumping from the Titanic onto the Lusitania. Fair winds.

Wed, 03/23/2011 - 14:47 | 1091440 redpill
redpill's picture

Obviously the main firewall is physical.  But for smaller speculative accounts that you trade more frequently, PSLV works well.

Wed, 03/23/2011 - 15:32 | 1091706 GoinFawr
GoinFawr's picture

Bldg Ouhnsez.

Wed, 03/23/2011 - 13:35 | 1091075 Flakmeister
Flakmeister's picture

From a premium perspective, look at CEF... Sure it is not deliverable, but very nice for qualified account

Via Jesse's Cafe American

https://lh5.googleusercontent.com/-sfK1FejVOUc/TYoHgZhBcZI/AAAAAAAAQUY/-BTsnQqJNO4/s1600/nav.PNG

Wed, 03/23/2011 - 17:46 | 1092447 tiger7905
tiger7905's picture

Latest comments from McEwen at Mines and Money conf. In Hong Kong

http://goldandsilverlinings.com/?p=327

I'd agree CEF is the way to go if you have to hold one of these PM funds, I have more confidence gold and silver is actually there for CEF. The premium is only 10%. And yes I hold some in retirement accounts.

Also CEF is 50/50 gold/silver so you can play both.

See here for Nav updates published daily.
http://www.centralfund.com/Nav%20Form.htm

Wed, 03/23/2011 - 18:08 | 1092529 Apostle of Unknown
Apostle of Unknown's picture

When I sold my Sprott today at 23% premium, I couldn't stop wondering about who my counterparty was. Who wants to pay that kind of money? One of us was a greater fool. Given that I have yet to find a single report on scarcity coming from the industry that actually uses silver (the kind of reports that would get magnified a 1000 times on sites like ZeroHedge), I'd say the greater fool was him?

Wed, 03/23/2011 - 21:25 | 1093108 mrgneiss
mrgneiss's picture

Does this mean Kid Dynamite is a Dud?

Thu, 03/24/2011 - 13:09 | 1095813 cboewiz
cboewiz's picture

taking delivery on 5000 oz this week. email me if you want to buy any at a 20% premium.

Do NOT follow this link or you will be banned from the site!