Comments on: Credit Suisse ETNs Now Trading OTC

By: Ron Rowland

Ron Rowland — Tue, 07 Apr 2009 19:50:18 +0000

ETF Securities does not have any products listed in the US. Therefore, I do not follow them currently. They have filed with the SEC to offer both a gold and silver ETFs here, but they are not available yet.

By: Tony B

Tony B — Tue, 07 Apr 2009 12:00:18 +0000

I guess it goes without saying that a greater amount of due diligence is required before jumping into these products.
What about ETF Securities Ltd.? I know they are not based in the US, but do you follow them? They offer a wide variety of ETF/ETC’s. Are they worth looking into?
Thanks

By: Ron Rowland

Ron Rowland — Mon, 06 Apr 2009 22:41:12 +0000

The situation with the Jim Rogers Elements ETNs can be found here:
http://investwithanedge.com/more-trouble-for-elements-etns

They claim that everything will be back in order by the end of the month. However, I have lost faith in Elements. It appears that they do not respect the concept of ETFs and ETNs having the ability to perform in-kind exchanges.

If I owned RJA and wanted to continue to have exposure to agriculture, then I would sell RJA and buy PowerShares DB Agriculture (DBA). But you have to do what you think is best for you.

By: Tony B

Tony B — Mon, 06 Apr 2009 22:24:06 +0000

Thank you Ron, I appreciate your comments and advice.
You are much more informative than contacting the representatives for Elements.
I would like to add that I was able to get through to Credit-Suisse and they have not started to issue bids for the delisted products yet, but hope to by mid-week.

I am also an owner of Rogers Agriculture (RJA). Can you explain their situation?
I understand that you recommend avoiding all Elements products, however, many people already own these ETF/ETN’s, especially the ones with Jim Rogers name on it. Can the Rogers products over come the current problems or would it be wise to look for an exit?

Thanks again

By: Ron Rowland

Ron Rowland — Mon, 06 Apr 2009 15:51:12 +0000

Sorry Ike, but you’ve been taken. When you bought GOE at $54 it was only worth $10. It’s true value/worth has not changed “relatively” much the past few months, ranging from about $9 – $10.

http://investwithanedge.com/goe-trading-at-1000-premium-sell-now

You can try to sell with a high limit price and hope that the buyer doesn’t realize it is only worth about $9 today. But the bottom line is that you paid $54 for something that was only worth $9 or $10.

By: Ike

Ike — Mon, 06 Apr 2009 14:28:09 +0000

I bought 295 shares of GOE at 54 not knowing it was going to do this. Ron, do you recommend that I dump it or hold on to it in hopes it will recover some of its value? Thanks!

By: Ron Rowland

Ron Rowland — Mon, 06 Apr 2009 05:24:36 +0000

Tony,

Unlike other ETF/ETN providers, the Elements brand of ETNs generally do not liquidate. They have now delisted eight ETNs, but have not liquidated any of them. You can check the indicative value of what used to be known as PMY here:

http://www.elementsetn.com/MLCX-Precious-Metals-ETN.aspx

As you can see, the last posted value was $7.99 on 4/2/09. You should be able to sell your shares back to Credit Suisse at or very near the indicative value. You can either get out now (at ~ $8) or hold out for a better price down the road. Just don’t sell with a market order like that $5.50 trade that went through on Friday.

Good luck.

By: Tony B

Tony B — Mon, 06 Apr 2009 03:56:40 +0000

I own PMY at 8.50 . I was not aware of the delisting until it happened. It now appears to be trading 5.50-7.50. Will the fact that its now OTC suggest it will not retain its value? Is this thing headed to 0.
If the product is liquidated, isn’t it liquidated at NAV? Which I think is around 8.00. What is the best course of action to take to get out of this product with the least amount of damage?