You’re Goldman, And If You Ask You, Investors Need To “Sharpe”n Up
Look, here's the thing: you're Goldman and you like to chat with clients.
Just to feel 'em out and kind of get an idea of how gullible they are on any given week.
That's part of trading against them. I mean, it's hard to fuck people over if you don't know what they're thinking.
So you have conversations, figure out where they're zagging and then zig.
It's a great way to make money.
Sure, once in a blue moon it doesn't work out well. Like that time a one-eyed doctor who you suspected was mil
Michael Burry: My one concern is that when the bonds fail I want to be certain of payment in case of solvency issues with your bank.
Goldman Sachs Sales Rep (Lucy): I’m sorry, are you for real? You want to bet against the housing market and you’re worried WE won’t pay YOU?
Goldman Sachs Quant (Deeb): [confers, whispering with colleage, in a lengthy sidebar] Dr. Burry, we could work out a pay-as-we-go structure that would pay out if the bonds fail. But it would also apply to your payments if the value of the mortgage bond goes up, You’d have to pay us monthly premiums.
Goldman Sachs Sales Rep (Lucy): Is that acceptable, Dr. Burry?
Michael Burry: Yes… yes. I have prospectuses on the six mortgage-backed securities I want to short.
Goldman Sachs Quant (Deeb): [Lengthy silence as the Goldman reps scan and review the thick booklets] Dr. Burry, these should be fine.
Goldman Sachs Sales Rep (Lucy): We’re prepared to sell you five million in credit default swaps on these mortgage bonds.
Michael Burry: Could we make it a hundred million?
well played sir.
watched the movie last night.
sb
Is there an ETF for the Goldman High Sharpe Ratio basket?
I saw that they filed for one in ‘16 but I can’t find it anywhere.
Thanks!