Gyroscopic Investing

haha, love it!

What's going on here? I've been receiving some notices, but I was ignoring them. Sprott managed to take over?!

Not that I know of. I've gotten offers again pretty recently.

It seems that Sprott can continue this process ad infinitum, in which case they will probably win eventually. One thing that I have noticed is that the NAV of GTU has been outperforming GLD over the past 3 months by 3.5%. Mere coincidence?

I capitulated, I sold all my GTU that was held in taxable account to take advantage of a tax loss harvest, I bought IAU which has a low expense ratio. With Sprott extending the offer another time I thought this was a good time to get out. GTU expenses have been going up because of the Sprott hostile take over battle, I know that I do not want to own Sprott PHY because of high expenses and the way the company operates so for now I'm out. One of the key things about the PP is that you do not have to worry or follow it so close. I was happy with GTU and more then likely I would have just held without doing a tax loss harvest, but the thought of having to figure out my taxes and new tax forms  if Sprott takes over succeeds  was part of my reasoning to get out.

I'm envious, Steve. For me it would not be a loss harvest, just a loss.

Now Sprott is attacking the GTU trustees for running up legal bills defending against a hostile takeover... initiated, of course, by Sprott!

"Over the first nine months of 2015, the GTU and SBT Trustees have spent in excess of US$7 million of unitholders' money on litigation they initiated and campaigns against parties seeking change at the respective funds."

(from http://www.marketwatch.com/story/sprott ... 2015-11-11)

I think they have generated a new entry for the definition of "chutzpah". 

I'm going to start mailing all of the notices I get in the mail back to Sprott.

They will have to hire hundreds of new employees to manage this volume of mail.

I'm with you, AdamA. Getting pretty tired of the junk mail Sprott is sending. Was even called at home, ugh.

http://m.marketwired.com/press-release/ ... 074806.htm

Maybe this is their way of trying to get Sprott to leave them alone.

11/26/2015

"Today, Central GoldTrust ("GoldTrust") entered into a new definitive agreement with Purpose Investments Inc. ("Purpose") regarding the conversion of GoldTrust into a gold bullion exchange traded fund ("ETF") managed by Purpose and Central Gold Managers. The proposed ETF conversion,  which is subject to unitholder approval,  has the unanimous support of your Independent Trustees and represents an exciting opportunity for GoldTrust unitholders."

"The proposed conversion is expected to immediately result in the units trading in-line with net asset value ("NAV"), to eliminate any material future discounts to NAV and provide unitholders with significantly enhanced liquidity,  consistent with other gold bullion ETFs."

"Put simply: the proposed ETF conversion represents a clearly superior alternative for all GoldTrust unitholders compared to Sprott's inadequate offer."

Interesting development.

What does that mean for us?  Higher expenses?  Different taxation?

I've owned GTU for years and I haven't been interested in the Sprott offer until now.  I bought GTU for four reasons: 1. It's in Canada, giving me at least some level of international diversification (I live in the US). 2. It's a closed end fund, which has lower tax rate than gold ETFs.  3.  In the very unlikely event gold in the US is confiscated like it was an 1933, it may not be affected and 4. I had the perception that it was less likely to be leveraged (have fractional reserves) than an ETF like GLD or IAU. 
I chose GTU over Sprott because Sprott's redemption feature can cause the fund to realize capital gains, triggering capital gains taxes that are to be absorbed by the shareholders.  GTU dos not have this issue.
Now GTU is saying they are changing over to become an ETF??  That makes little sense to me.  Anyone who was looking for an ETF would have bought IAU, GLD, etc., not GTU, right?  Am I going to lose all benefits that made me choose to buy GTU over IAU in the first place?
If so, I think I will vote to accept the Sprott offer.
But then there is a chance that both the Sprott offer and the ETF switch over could both get voted down. 
So, I am conflicted - should I vote to accept the Sprott offer, or should I just do nothing?  What I really want is to just keep GTU, with no changes.
It seems like there is a chess match going on here that I don't really understand.
Thanks!

I just saw a notice from Fidelity that said that GTU's trustees have been replaced, effective immediately, by a board selected by a Sprott entity. Here's the relevant part of the announcement:

'GTU (US$)) announced today the removal of Brian E. Felske, Glenn C. Fox, Bruce D. Heagle, Ian M.T. McAvity, Michael A. Parente and Jason Schwandt as trustees of GoldTrust and the appointment of Marc Faber, James R. Fox, Sharon Ranson, John Wilson and Rosemary Zigrossi (the "Appointed Trustees") as trustees of GoldTrust. The removal and appointment of trustees was made pursuant to a written resolution of Sprott Asset Management Gold Bid LP, as the holder of powers of attorney from unitholders owning approximately 55.11% of the outstanding units of GoldTrust. The Appointed Trustees, in addition to J.C. Stefan Spicer, who was nominated as a trustee by Central Gold Managers Inc., the administrator of GoldTrust, shall remain trustees of GoldTrust until the next annual meeting of GoldTrust or until such trustees cease to hold office prior thereto.'

I find it very hard to believe that the unitholders realized that they were giving Sprott powers of attorney that authorized that. I also find it hard to believe that the "former trustees" are going to take this lying down, especially since I'm pretty sure that they got a court to tell Sprott they couldn't do that, as it violates Canadian security laws.

It's also not mentioned on the GTU website. I wish I had seen this earlier today so I could contact GTU and ask them what is going on.

Interesting that GTU says "The ETF Conversion is not expected to have any material adverse tax effect on GoldTrust or its unitholders and will preserve GoldTrust’s tax efficient structure"

Since I did buy some at a premium, however, I'd like the opportunity to liquidate at a premium in the future

So how are you guys votings?

This is getting annoying. Not sure what to do...

MangoMan wrote: I don't think it matters any more. Sprott now controls >50% of the voting shares.

I thought some votes needed more than a simple majority

dragoncar wrote:

MangoMan wrote: I don't think it matters any more. Sprott now controls >50% of the voting shares.

I thought some votes needed more than a simple majority

They decided to replace the trustees to make an end-run around the rules.

Whether they will get away with this is another matter.

Libertarian666 wrote:

dragoncar wrote:

MangoMan wrote: I don't think it matters any more. Sprott now controls >50% of the voting shares.

I thought some votes needed more than a simple majority

They decided to replace the trustees to make an end-run around the rules.

Whether they will get away with this is another matter.

There's still the vote for ETF conversion though

dragoncar wrote:

Libertarian666 wrote:

dragoncar wrote: I thought some votes needed more than a simple majority

They decided to replace the trustees to make an end-run around the rules.

Whether they will get away with this is another matter.

There's still the vote for ETF conversion though

so how are people planing to vote on the etf question?

Would the etf not require actual physical gold backing and would GTU then lose its tax advantages?

I held GTU for years and was quite happy until Sprott got into the picture. Discounts and premiums never bothered me because I follow the PP and it only benefited me. Not long ago I sold all my GTU for tax loss harvest purposes and picked up more physical bullion to add to my core gold and switched the rest to IAU.  Not long after I had the opportunity to do another tax loss harvest with IAU and now have GLD.  Other options I am looking into are Merk gold trust ticker OUNZ.  I like to have some online gold for easy re balance and tax loss harvest purposes  I have also found a reasonable cost safe deposit box insurance that I am looking into which helps minimize risks if a large amount is held.    https://safedepositboxinsurance.com/  If anyone has information about safe deposit box insurance I would love to hear from you.

steve wrote: If anyone has information about safe deposit box insurance I would love to hear from you.

See http://gyroscopicinvesting.com/forum/go ... your-gold/