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catoismymotor (< 20)

Why GS?

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April 20, 2010 – Comments (11) | RELATED TICKERS: GS

Goldman Sachs Minions,

 

Okay, what is it exactly that draws you to Goldman Sachs? It is the company’s ability to make money? Is it the security of owning a large cap? Is it a quasi conspiracy theorist mentality that makes you wants to be the right hand of the devil instead of being in his path?

 

I sincerely want to know what qualities GS has that makes you want to invest in the company when there are so many others to choose from. I promise to not attack you or your answers and ask the same of others that wander across this blog.

 

Cato, The Curious

11 Comments – Post Your Own

#1) On April 20, 2010 at 11:12 AM, Nickalisk (49.05) wrote:

A company's primary objective is to increase value for its shareholders - something that barring litigious excitement goldman does quite well.

I mean, I always wonder when people say goldman (or any firm for that matter) is evil, do they really mean the entire firm?  As an investment bank goldman is comprised of many many specializations... origination and underwriting, M&A, trading etc...

 It's a long list.

 Would  you like it if you worked in M&A (merger's and acquisition)  and were therefore perceived as "evil" or "rotten to the core" just because you happened to do M&A at goldman rather than say another bank?  To label any of these banks as wholely evil is to basically to besmirch capitalism as a system.

 At any rate, I own goldman securities @ 155-165.  And my cousin works in the M&A office in NY. 

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#2) On April 20, 2010 at 11:19 AM, brickcityman (< 20) wrote:

My own assumption some degree of this is born out of the sort of schoolyard adulation that the biggest bully and/or captain of the football team gets...

 

GS has surely put up results to match the reputation, but like so many star athletes you have to wonder...  Are they juicing?

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#3) On April 20, 2010 at 11:25 AM, brickcityman (< 20) wrote:

@ Nickalisk

 

To a certain extent, yes it is unfair to all the employees that the actions of a few can damage the reputations of all who carry around a GS business card...

 

But by the same token life isn't fair, and fairness isn't required by law...  Isn't that what I keep hearing out of people defending some of GS's business practices?  (HFT, asymmetric access to trading recommendations, etc). 

 

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#4) On April 20, 2010 at 11:36 AM, Nickalisk (49.05) wrote:

I agree with that sentiment.

 I wouldn't even have the audacity to say that everyone in that firm is on the straight and narrow.

 I will however forward the opinion that I don't think this current SEC allegation has any merit... If I'm reading this correctly, while goldman didn't disclose that paulson's hedgie was on the opposing end two things seem to suggest that they're not at fault:

 

1.) Paulson wasn't well known until AFTER making his billions on this deal - therefore the investors going long would have just said "who?"  making disclosure null.

 

2.) Goldman was also leaning on the long side of the transaction, losing 90-100mil in the process?

 

Am I getting the facts right? 

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#5) On April 20, 2010 at 11:36 AM, vriguy (78.95) wrote:

Unfortunately, our political leadership on both sides of the aisle has sold us taxpayers into involuntary servitude to these big financial institutions. Why wouldn't I consider them and those who work for them evil?  

GS are clearly the cream of the crop on Wall Street based on their past performance. The hatred directed towards GS is a recognition that they are smartest, and so the hardest to defeat.

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#6) On April 20, 2010 at 11:36 AM, outoffocus (23.23) wrote:

Why not GS?  During this rally people have bought the most speculative pieces of trash and drove them up 500% in price.  GS may be pure evil incarnate (and incorporate) but they make money. After all isn't that the whole point of investing?

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#7) On April 20, 2010 at 11:55 AM, cbwang888 (25.47) wrote:

 

More money going to GS executives and traders than shareholders.

GS is probably busy selling high yield junks (bonds?) to their clients again and betting they will fall in just a few years ... 

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#8) On April 20, 2010 at 12:00 PM, brickcityman (< 20) wrote:

@ Nickalisk

 

The whole "we lost 90 million" seems like a red herring to me...  Wasn't there also CDS involved which more than amply made up for this "loss"?

 

vriguy & outoffocus

GS may well be the cream of the Wall St. crop... but relying on debt and equity trading with alot of help from uncle Sam doesn't strike me as all that much of an accomplishment.  I am having a harder and harder time seeing how all this paper trading is doing much good for anyone beyond the island of Manhattan (and the bedroom communities inhabitted by the B&T crowd).

 

 

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#9) On April 20, 2010 at 12:15 PM, Nickalisk (49.05) wrote:

@ Brick

I thought so too initially, but the fact that they loss that much on this particular deal seems to indicate that they too were of the opinion that Paulson was nutso - at least at that point in time.  If you look at the timeline, this particular structure was created in 2007?  That may have been before Goldman's conviction regarding the housing segment was realized.

I'm sure the SEC will downplay this loss or paint it was a red herring though - but for the life of me I can't understand why goldman would purposely lose money if they "knew" this deal was a stinker and actively committed fraud to hide the identity of the person on the other side of the trade.

This wasn't the typical CDO, the way the deal was structured people going long HAD to know someone was on the short side. 

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#10) On April 20, 2010 at 12:22 PM, Nickalisk (49.05) wrote:

I mean think about it.  I could potentially see Goldman (or an ambitious trader at said firm) committing fraud if they were engineering a billion dollar deal.

But Paulson's hedgie approached Goldman to ask them to construct an investment vehicle for a measly 15 mil.  Am I to believe that Goldman would commit fraud for this bantam sum? And furthermore bet AGAINST paulson netting a loss of 100 mil?

 

This doesn't seem like an intentional instance of fraud. 

 

 

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#11) On April 20, 2010 at 2:04 PM, brickcityman (< 20) wrote:

@ Nickalisk

 

I agree,  this case has LOTS of problems.  Which is why I posted in response to another thread on this topic that is very illustrative of who is in charge....

 

Think about it...  Someone needed to find something soon on one of the major players.  And by intentionally using a weak case like this it allows the whole thing to go away quickly then everyone goes away feeling like they won.

 

 

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