Goldman Sachs: A story for "Opportunists", "Vindictives" and "Realists"...
April 16, 2010
– Comments (8) |
RELATED TICKERS: GS
Goldman Sachs VS the SEC.
Crammer use to work for Goldman Sachs.
Blogs are lite up and the market tanks.
Personally, besides overhyped and overcooked, and a little redundant, (like many of you thought when you saw the title of this blog), the exercise today was a good test of the market. The concern of whether the market was getting top heavy got a decent response today. It seems that many people who still disagree with the market uptick, (foreclosures, unemployment, consumer confidence, dollar printing press...etc) are becoming resigned to it.
All in all, I really don't think "The Sky is Falling" today, even for Goldman Sachs. The market drop was rather orderly and many were looking for an excuse to sell or a better entry point to add.
Goldman Sachs helped to create "collateralized debt obligation" for a hedge fund. They claim to have lost $75 Million doing so. They claimed purchases were either educated or had material to educate themselves. The SEC files charges because they need to hang someone. "Others" may be guilty. The market plunges. Goldman Sachs drops $23 per share. $23 per share is worth about $10 Billion in market cap in a few minutes. Estimates are that "if guilty" Goldman Sachs will have a liability of between $700 Million and $1 billion, (the amount lost by investors who didn't do their homework).
I have no idea how to value a bank or investment firm before or after the recession. Goldman Sachs is one of the most rated equities here on CAPS. Many have already expended their "ammo" with an up or down thumb, so today's calls are not really a very good sample size. However, of the 66 Caps players who made a call after the news hit the markets, 43 gave upthumbs and 25 gave downthumbs.
Slightly more interesting, the thumbs seemed to be entered in a similar "system" as my thoughts went during the day.
In the first 20, Upthumbs, outnumbered down by 2 to 1. Telling me that CAPS "FOOL" opportunists reacted for a chance to get a swing trade going.
The next 20 were mostly downthumbs. Implying that those with a personal thought to how Goldman and the market deserved to get their dues reacted. 23% down was clearly not enough punishment. Surely Goldman deserved more, much more. Downthumb!
The last group of 20 was again 75% upthumbs. Time to reflect, evaluate, and make a call what all this means.
I certainly don't want to catagorize anyone who played Goldman Sachs today and became part of my informal polling. I'm certain there were those with a mix of these three traits, as I am, but I'm equally certain that the calls fell somewhere in these groups.
From my "limited" experience in following equities that have had a major catalyst, the pain lasts 2-3 days. In this case the weekend is here, Goldman Sachs is an expert at damage control for others, and no doubt will be for themselves. Crammer, for what's it's worth, is fully on their side.
Damage could include penalties, which to me seem already baked in. It can mean a loss of business, but I really don't think so. Goldman is well respected and this economy requires their services more than ever. Their discretions, if guilty, are far removed from those that occurred to an Enron or a SAY. I give them a strong possibility of getting out of this, SEC manhunt or not, with much less damage than they received today.
Number me a Realist, maybe a misguided one, toss in some opportunists, a risk taker, and someone easily bored if my account doesn't move one direction or another.....
Discloure. Buyer in RL at $160.
TSIF, The Sky is not falling today....Goldman or not....
RSS Headlines
Fool UK