No wonder they get the "big bucks". http://www.bloomberg.com/news/2012-05-10/goldman-sachs-traders-lost-money-on-one-day-in-quarter.html How many traders on this site can beat this one-losing day statistic ?
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key words from the article: "according to the filing". Do you have any idea the voodoo their accountants are capable of? As long as the end-quarter lines up, they are fine, but in the mean time they could have reported 0 negative days if they really wanted to push it. And it's not even straight accounting, there's so much going on hardly anyone could tell you how they fabricate figures any more. Further: no one trader could beat that statistic, but if we had the top 1000 traders all bunched up into one result, it's a lot more likely, and much closer to what GS does. They have a lot of "accounts", many of which are trading against eachother at some points.
No question about this "portfolio" effect. I just wonder why someone doesn't create a prop firm using this same model: good traders pooling the profits with some sort of bonus system in place as well to reward the great traders. Payouts made monthly. Sounds good, no ?
sometimes around 2001-2002 I had a 6 month period of trading without a losing day, without trying to manufacture the streak
The lack of responses to this thread MAY be indicative of the quality of the traders here. Are there any Goldman traders subscribed ?
I think that this is ultimately what a lot of hedge funds end up being, isn't it? A core group that comes together, each with a different approach, then grows its headcount as conditions warrant. Not all of them, obviously. But, I think that more importantly, independent traders who are profitable and have something scalable, don't necessarily want to share it with other independent traders. Think of the difficulty of even finding another trader to share with, once you get profitable. It's kind of a game of chicken where the first one to reveal how he got profitable loses because then the other trader can either reveal or continue to keep his path to profitability secret (or he can tell you some BS strategy that isn't profitable and then say you're doing it wrong when confronted). It's just very tricky and not necessarily worth the effort for most, I think.
GS probably gets 50MM everyday in free money (commissions, fees, agency orders, etc). Plus they control their own marks on OTC and structured products that they can massage the pnl. It's nowhere as impressive as a hedge fund or prop trader not having a losing day in a quarter.