Yep and most Elitetraders are in the "industry" too like you. If you think Obama is going to let Goldman off with a simple fine...the man who came hell or highwater pushes through the Healthcare bill...well I have some Florida real estate to sell to you. As for Buffet, he is just opining this weekend to keep the GS stock floating so his buddies can get out while there is still time. He doesnt care about you or me. He wants to keep his investments floating.
NoDoji, you're just bitter you didn't get in on the GMCR bandwagon. The only thing that's going to derail the GS money machine is much higher interest rates and Glass Steagall. Those are definite possibilities. I would be much more afraid of Glass Steagall than this criminal investigation. The stock will probably tank 15% if criminal charges are filed. But I'd be hard pressed to see GS at $50. Only Glass Steagall is gonna do that.
The enforcement division of the Securities and Exchange Commission brings between 400 and 500 civil enforcement actions every year for violations that include insider trading, manipulating market prices, stealing funds or securities, breaching fiduciary responsibility, conducting brokerage activities unfairly, selling securities without proper registration, accounting fraud and releasing false or misleading information about a company and its securities. And yes, it's no secret that SEC lawsuits have a negative impact on the share price. But are some violations worse than others? Is there a difference between litigation being settled with fines and without? What happens if it's just left pending? These questions and more are answered in a paper from Gulnur Muradoglu from City University in London and Jennifer Clark Huskey from Coulter and Justus Financial Services in Tennessee. Their paper, The impact of SEC litigation on firm value examined 269 litigation events involving 296 companies for breaches of insider trading, improper accounting, violations of SEC procedures or guidelines and fraud. They found that the market reacts quickly but necessarily with the same impact. It depends on the circumstances. When, for example, litigation is announced by many different sources, such as the SEC, The Wall Street Journal and company websites, there is a smaller negative effect on the share price than when it's announced by the SEC alone. Litigation that is settled with fines has a bigger impact on the share price than litigation that's settled without a fine. The findings also suggested that companies that communicated with the market regarding their enforcement cases were treated more favorably than those that didn't. They also found that markets were able to differentiate between what investors considered to be major and minor infringements. Companies in trouble for fraud and insider trading were punished. But investors seemed to have more tolerance for procedural violations and improper accounting. The hidden message in the paper is that the SEC's enforcement regime rates highly with investors. "The negative reaction of market participants to SEC enforcements, indicates that investors see value in the enforcement action,'' the authors write. "Therefore, SEC enforcement litigation has important implications such as compliance, deterrence, and possibly increased confidence in capital markets leading to increased efficiency." http://www.soxfirst.com/50226711/sec_litigation_and_share_price.php http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1094948
I don't know much about this situation, so I'm grateful for everything I've learned from your post. But I would like to correct the above statement. 7 out of 10 believe goldman committed fraud, BUT Goldman's clients are still largely supportive of them, and so the resulting 70% number is probably not the case. Though it's a good call that people may move to MS, the first statistic shouldn't be related to the second statistic.
Not sure. You have to be careful because you can rationalize any view you want to have. You can't knock a guy for trying, but the thought process assumes you are accounting for a lot of stuff you can't account for. GS up as of noon off a Buffett bounce. Can't say where it will close - but its up right now. You're welcome.
No prob - that's what I thought you were saying... Its pretty tough to see where a news-driven stock is going to be headed next. All you can do is 1) manage it, or 2) close your eyes and go to sleep. #2 is not recommended.
Some of you guys are in obvious denial. Usually when a stock starts dropping there is that initial denial of what is really going on. If the public opinion was not so important, then why did Lloyd get on all the talkshows? Why did he waste his time trying to sell us on the fact that Goldman didnt do anything wrong? Why do we need to be sold on this? Here is the cold hard facts. GS has not gone anywhere since June of last year. Its churning and running in place. It has failed to get over its last high. In fact, on the approach to the last high price failed big time. If none of this really mattered then why was there this wild high volume selloff? No one is questioning how good Goldman is at what they do...in this thread the question is at what price should GS be trading at. I see GS as a broken stock and it will probably be a year or so before all of the issues are resolved. So congrats Goldman employees for your achievement, however, the present stockholders will roast. Thats just how it is folks...thats just how it is...