"Capital-market activity is a bright spot...while consumer credit appears to be deteriorating by the day," wrote Goldman Sachs equity analyst Richard Ramsden in a client note last week, in which he put Morgan Stanley on the firm's Conviction Buy List. Hum...lately not a good idea to follow their "conviction buy" list... http://online.barrons.com/article/SB123698562029125353.html
Bank of America on Goldman´s conviction buy list...let´s see how it works out in sixth month time...
What is your point? Do you still not realize what their research team is? It's a bunch of overeducated idiots who write up extensive reports on companies which are selected by the heads of research, who, in turn, take orders from the CEO & his close executive team. Do you really think the tickers on their list get put there because Goldman's rulers actually think they will make their clients money? Or maybe it is because they have a few money making mechanisms for their sales & trading division, proprietary trading division & market making division which involve the use of their glorified "research" team which caters to institutional, high net worth private client groups and somewhat to the small potatoes retail crowd. Your criticism of how wrong they are is laughable, because it's not about whether they are wrong. It's whether the intended audience is still listening, and more important, is influenced by these research reports.
GS has been getting money from the fed to prop up the markets. I don't see how they can be wrong. My advice is to listen to their calls. They are telling you what they are going to be pumping up in the next 6 months. You can't fight the money gun.
Oh really? So why don't you suggest a suitable benchmark for GS's CONVICTION BUY list? I find the SPX a very suitable benchmark index for such portfolio. A lot of benchmark selecting is utter none sense, brought up by portfolio managers who have an issue with keeping pace with the broad market. A lot of BROAD MARKET funds use benchmarks other than the SPX even though all stocks in such funds are large cap diversified US stocks. Guess why...
From the FT "Eileen Rominger, global chief investment officer, says the change in market conditions is now more favourable to stockpickers. But it is notable that the former head of fundamental equities and CIO of the value and global equity teams was appointed to her newly created position in early April, the week after star quant managers Ray Iwanowski and Mark Carhart announced they were leaving. GSAM has refused to comment on the reasons for the menâs departure. Their Global Alpha hedge fund lost about 80 per cent of its value between its 2007 $12bn (£7.8bn, â¬8.7bn) peak and the end of 2008." If you lose 80% basically you are flat or have a loss overall. These geniuses can put themselves in the camp with the rest of the idiots who believe that they have discovered perpetual motion.
In the past - The only benchmark for calls made public is how much liquidity did the analyst create for the investment bank's clients to sell into - or vice versa in the case of the sell rec. I remember in the days of level two how you would sell Goldman with a buy call and them be up on the sell side of the level 2 screen in giant size. you have to be a novice to believe anything goldman says in public.
With the likes of 'star' analysts like Abby Joseph Cohen, I never realized Goldman Sachs had any credibility. Everyone do yourself a favor and conduct this simple and very little time consuming exercise - track the stocks that Goldman upgrades, and downgrades. You'll see a definite and inverse pattern emerge in short order.