Is Goldman laughing at us?

Discussion in 'Economics' started by Ghost of Cutten, May 18, 2010.

  1. http://www.bloomberg.com/apps/news?pid=20601087&sid=aq1TZHxNGpWU&pos=3

    "Goldman Sachs Group Inc. racked up trading profits for itself every day last quarter. Clients who followed the firm’s investment advice fared far worse.

    Seven of the investment bank’s nine “recommended top trades for 2010” have been money losers for investors who followed the New York-based firm’s advice, according to data compiled by Bloomberg from a Goldman Sachs research note sent yesterday. Clients who followed the tips lost 14 percent buying the Polish zloty versus the Japanese yen, 9.4 percent buying Chinese stocks in Hong Kong and 9.8 percent trading the British pound against the New Zealand dollar...."

    Gotta love this part :D

    "Gia Moron, a spokeswoman for Goldman Sachs, declined to comment."
     
  2. businessstaxes

    businessstaxes Guest

    Goldman makes money commissions as a broker and makes money whether clients lose or win.

    Goldman also maker maker...makes money

    Goldman sachs makes money on wealth management fees

    Goldman prop trades it's own account on inside information and frontrunning...these guys have information that only they are privilleged to know...they have direct access to company ceo and cfo and ir. of companies and even have access to the FED chairman and even the president.

    of course these guys make money they been given a license to print money gettting free ride. market free loaders. living off the gov't handout and client fees and commissions. and these guys give bad advice too clients and companeis that do ipos...80% of their profits is from trading their own accounts these days..ipo market is dead and commissions don't pay the bills and salaries 65 million/year salary just for the ceo. why anyone want to be a shareholder of these companies is beyond me. and the ceo of home depot got paid $200 million for destroying the company etc...the shareholders are the real morons.

     
  3. In april GS lowered its forcast for gold and in a month gold hit a record high. On May 10, they raised their forcast for gold and gold is dropping like mad now.

    Its pretty obvious GS raises and lowers forcasts just so they can buy and sell into it.
     
  4. Yep, they are laughing at you. They keep putting out recommendations, they trade against their clients, and then those same clients continue to follow the recommendations.

    Seriously, you actually believe that?

    You probably also believe the reason you are an unprofitable trader is because the markets are manipulated by HFT, right?

    GS makes money on their trading business because they are a market maker, they buy on the bid and sell on the ask, so all they have to do is transact, no risk to themselves, and they make money. They can cross trades all day long and never risk a dime and come out profitable.

    Want to know why trading was so profitable during the 1st quarter? Take a look at high yield issuance year to date versus last year? It's up HUGE. New issues drive trading volumes. Trading volumes drive trading profits. The bid/ask spread in the high yield market is 1/4 point on liquid names and gets wider from there due to either small issuances, credit stresses, etc. GS's high yield group doesn't have to take an ounce of risk to make money trading high yield bonds.

    On top of that you have a hugely rallying high yield bond market thats already reached the level of stupidity last seen in early '07 just prior to the credit markets seizing up. So on top of the bid/ask spread, they've had carry on their side for any inventory they are holding.

    Any fixed income trader that didn't make money during the 1st quarter of this year should be fired on the spot. Period. It doesn't get any easier than that.

    Unlike the news media, you actually have an interest in the capital markets, which I why I would assume you are on this website. Given that, wouldn't it make sense to actually learn how the markets work rather than taking what you hear in the news, on tv, on the internet as fact and looking like a fool?

    It might even help you make money in the markets!!! Shocking, I know.
     
  5. But here's da proof in da pudding:

    http://www.businessinsider.com/gold...artners-freaking-out-tons-of-demotions-2010-5

    They are the living proof that trading can be done without losses.
     
  6. IMHO their are 2 words to describe GS business model "Bucked Shop"
     
  7. wouldn't trust my funds to any investment bank, most hedge funds, etc.
     
  8. i had a 21 day poker winning streak last month....it ended with my biggest loss of the year :D
     
  9. LeeD

    LeeD

    I disagree here. It would be virtually impossibole to call bottom or top so precisely.

    However, most analysts issue buy recommendation after the uptrend has been established and issue sell recommendation after seeing clear downtrend. The trick is by the time the existence of a trend is beyond doubt, the trend is often already over.
     
  10. Quiet1

    Quiet1

    The point is their traders don't care what commentary their analysts give out to clients etc. All that is just fluff - we all know this right? - their traders probably only half a 1/10th of an eye on what their analysts say anyway! Their traders are seeing what their research analysts don't - actual customer activity and are positioning themselves appropriately...ie taking advantage of the fact that most traders lose money by being the market maker...

    Dull, organisational, benefits of the franchise type stuff. Yawn.....
     
    #10     May 19, 2010