Goldman Releases Quarterly Compendium Of Large Numbers

Goldman Releases Quarterly Compendium Of Large Numbers

In news that probably won't surprise anyone, Goldman easily beat estimates Tuesday when the firm reported fourth quarter results.  Revenue of $11.74 billion was up 18%, and topped even the most optimistic forecast. The range was $8.81 billion to $10.97 billion. EPS was $12.08. I'm not even sure that's comparable to estimates. Consensus was apparently looking for $7.31. (Pour one out for consensus.) Net revenues were higher across every segment. The bank called the increase in trading "signifi
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5 thoughts on “Goldman Releases Quarterly Compendium Of Large Numbers

  1. I dunno about God but one thing I’ll say about working with Goldman PWM. Their IT systems are antiquated, their research is… in line with most sell-side research I’ve seen but their people are first rate. In a business where there are constant admin snags and snafus, that’s very very appealing.

  2. I jsut finished Rana Foroohar’s excellent “Makers and Takers” and the question that comes to mind is: Did all this activity create a single job for an American outside the financial sector and Goldman itself?

    1. Maybe all those charitable contributions in the 4th quarter created demand for gift coordinators at the not-for profits that were on the receiving end Goldman’s altruistic disgorgement of wealth.

      I will go out on a limb here and say that if all the talent at Goldman over the last two generations had instead gone into adding to the future, productive capacity of the economy (robotics, AI, biotechnology, batteries, becoming entrepreneurs), the nation’s economy would be in a better position to compete against China.

      What value add do they contribute? It would seem to a reasonable observer that they skim and take. Astute viewers of the landscape would expect to periodically hear about their successes at investing in new businesses, or emerging industries. Goldman does seem to be an epitome of financialization, sad to say.

  3. When it comes to banks, I think of fee vs lending. Fee business is activity like asset and wealth management, investment banking, FI and equity trading, consumer banking. Lending is activity where the bank takes credit risk and does the borrow short / lend long thing. Most of 2020 you wanted (I think/thought) to stick to the best-positioned banks in the fee business. As long as wealth is abundant, fees will be had; it doesn’t matter to the fee businesses if the wealth is unequally distributed, lower-income families and small business are not their customers. Regulation was not a risk, other that the Fed’s stress testing. In 2021, you want (I think) to also be in the best-positioned banks in the lending business. They have lots of cash to lend and reserves to release, the economic picture is getting clearer, spreads are growing (fitfully), and you can avoid the ones with too much exposure to the more challenged credits. Regulation will start to be a risk again, but probably not until much later in the year. That’s how I see it, anyway. Not that the big and medium banks will be as sexy as some fintech rocketship, but if you’re reluctant to absorb $40 swings on LMND, there’s still reasons to look at the MS and JPM type of name.

  4. I guess go significantly or go home is corporate policy. Goldman’s occasional missteps can cost billions but they do know how to make it back. I’ve never been inside the place but a few years ago I had the pleasure of being a pre-publication reviewer for the best business case study I’ve ever read which was set at the time when one of their trading execs was proposing a final pivot from a net short to a net long position in the subprime debt market. This was the move out of the big short. The case was over 100 pages and was based on a couple hundred citations including thousands of pages of documents submitted by the company at the time of Blankfein’s Congressional testimony on this topic. The machinations going on at this time were utterly fascinating and revealed a highly complex decision process. After reading about them at this level nothing about them, surprises me any more. However, they probably think they pay too much in taxes. My effective rate has averaged around 9% for the last decade. It will go up two brackets this year a bit because I’m now a widower.

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