NEW YORK -(Dow Jones)- Goldman Sachs Group Inc. (GS) Chief Executive Lloyd Blankfein touted his firm's risk-management prowess, saying the secret to Goldman's success is its ability to gauge the assets it is holding on its balance sheet. Blankfein, speaking Friday at a New York conference organized by University of Pennsylvania's Wharton business school, said Goldman places special emphasis on mark-to-market pricing of securities and other assets. "If you rigorously mark to market every day...it's not impossible to have a very big problem, but it's less likely," he said. "It's annoying from time to time, but it's the single most important thing at our firm." Blankfein spoke at the end of a week in which Wachovia Corp. (WB) and Morgan Stanley (MS) added their names to the list of companies that have said they expect to take fourth-quarter hits of at least $1 billion stemming from the eroding value of assets tied to subprime mortgages. Some banks have struggled to accurately value their mortgage-related holdings, many of which are thinly traded and therefore hard to determine their prices. Goldman surprised Wall Street in September when its fiscal third-quarter earnings exceeded expectations, even as peers suffered amid the credit crunch and violent market swings. Goldman so far hasn't warned of writedowns in its fourth quarter, which ends Nov. 30, but rumors have swirled in recent weeks that the firm has racked up hefty mortgage-related losses. Blankfein told the audience of MBA students and others that after the recent " sunny" period for financial firms, the market turbulence that started this summer means nobody is necessarily safe from sudden losses. He said he often cautions Goldman employees against hubris. "Even with only two weeks left (in a fiscal quarter), there's plenty of time to have the worst year ever...because things can change so quickly," Blankfein said he tells employees. Blankfein noted that the recent credit crunch stemmed in part from risk being priced at extraordinarily cheap levels. Today, he said in a brief interview after his speech, risk pricing has moved "in the right direction," but he said he is "not sure" if pricing needs to rise further. http://money.cnn.com/news/newsfeeds/articles/djf500/200711091658DOWJONESDJONLINE000815_FORTUNE5.htm Hopefully, Blanky, you guys understand more then the rest of Wall Street rookies about risk management !