Goldman's Research Team Has Lost Cred

A

ASusilovic

As stocks tank and Wall Street is re-made, even the best and brightest in the financial sector are getting their reputations shredded.

Take, for example, Goldman Sachs, whose equity-research department is regarded as the gold standard on Wall Street but whose list of the best stocks to buy couldn't even keep pace with the sharp decline of the S&P 500 index, according to research done for The Post.

Indeed, Goldman's "Conviction Buy" list of 44 stocks - as its best bets list is called - of July 23, 2008, exactly six months ago last Friday, fell 38.75 percent over the half-year while the S&P 500 was off 35.55 percent over the same period.

http://www.nypost.com/seven/01252009/business/goldmans_research_team_has_lost_cred_151978.htm

I have forwarded the article to their research team. Let´s see with what kind of explanation they will come up with...:D
 
What is so funny is that they cannot even do it with "legal" inside information....and bonusing out made up prices on illiquid, risky securities where they are the market....

And openly trading against their own clients....knowing prices paid, margin, etc....and having basically unlimited margin themselves....and employees in government and media sway such as Bloomberg etc...

And amazingly grand "legal" conflicts of interest....

Too funny....

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Which does point to reasons why a new worldwide stock exchange is direly needed....

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The new stock exchange should be elegantly simple....

All countries....all stocks
Boilerplate entry and reporting
Independent factual, timely information....internet based...
Margin and size limitations per security....per account....
Available in truly universal accounts....language and currency of choice...
Universal accounts....accessible to all security types....both debt , equity, and bank cds...etc....
No commission advantages....all would be 20 cents per 100 shares no matter the size of the account with no share size restrictions.....
Computer banks would be run by companies such as "Google"....
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Furthermore brokers can handily be replaced by a few well designed internet pages....
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All mutual funds, hedge funds.....should just be another $10 stock representing the management in question....
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The GS model will go the way of the Dodo "Lehman" bird....for legal reasons
regarding conflicts being a major reason....and one of the many reasons....

Customers are wising up....as well as the politicos....

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Buffett mentions this about "anal" analysts....

They are there to make "astrology in stock analysis " seem credible....

They just blabber about their own contrived data set....

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And before one "listens" to an "anal"lyst....

Just ask them where their brokerage statements are regarding their previous advise.....They will not have any....
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People are beginning to trust WS as much as the "Rating Agencies"....

"Wall Street".....

What "Wall Street" ?

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The old WS model has served its purpose....

On to the new WS....
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The new WS has a new address.....

THE INTERNET....
 
What was the portfolio beta? What was the portfolio standard deviation? Is comparing this portfolio against the S&P the correct benchmark? Maybe the index it is more comparable against actually fell over 40% in which case this portfolio did beat the "market".

I'm sorry...but whenever I see X portfolio didn't beat the S&P in an argument meant to show how bad the portfolio did, I immediately tune out the source of the argument as not having a clue what they are talking about. The S&P should only be compared to portfolios that are like the S&P.
 
Good call, their conviction list could have some international and/or emerging stocks which could have lead to the underperformance. A blended index of who knows what would probably be more appropriate for comparison.

Quote from tradestrong:

What was the portfolio beta? What was the portfolio standard deviation? Is comparing this portfolio against the S&P the correct benchmark? Maybe the index it is more comparable against actually fell over 40% in which case this portfolio did beat the "market".

I'm sorry...but whenever I see X portfolio didn't beat the S&P in an argument meant to show how bad the portfolio did, I immediately tune out the source of the argument as not having a clue what they are talking about. The S&P should only be compared to portfolios that are like the S&P.
More...
 
Think about it: Their "conviction buys" were based on strong fundamentals and strong stock performance. Huge institutional buyers drove these stocks nicely during the accumulation phase. Once the bear awakened in July, fundamentals were tossed out the window, and once the financials went to hell and the panic selling began, and funds had to liquidate what got liquidated the fastest and hardest? The biggest institutional holdings.

Why don't they offer us "conviction shorts"? :D
 
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