Goldman Sachs (GS) 01 (Jun 08 - Apr 10)

[kennynah]

solid hor this GS....sell additional $5Bil common shares and share price can be up ~$4...hahaha ...just bcos WB buys into preferred shares...as if he cannot be wrong...of cos, that chance is rather remote...

[ishak]

... as if he cannot be wrong...of cos, that chance is rather remote...

Success to the successful.

[LenaHuat]

WB on GS last nite on CNBC :

BUFFETT: (Laughs.) Well, the pain has worn off. That won't be happening with Goldman, but I -- That was a very unfortunate experience, and it was actually caused by just a couple of people out of a workforce of 8000 that got the company into big trouble. And I had the help of a lot of people at Salomon in getting out of it. But I don't think this experience will be similar. Goldman has been extremely well run. My experience with Goldman goes back, when I was nine or ten years old my parents took me back to the New York World's Fair, and by an odd chance I got to sit down with Sidney Weinberg, who was the dean of Wall Street then, and he talked to me as if I was a grown-up for 45 minutes. I've never forgotten the experience. Gus Levy (who later ran Goldman in the 1970s) was a good friend of mine when I worked in Wall Street. In 1955, we only had four wires to Wall Street firms and one of them was to Goldman Sachs and Gus was on the other end of the phone. So I've had a long experience with Goldman and they've done a lot of things for me recently.

I think WB reads faces, seriously too He's certain to like faces in GS better than LB n MS.

[kennynah]

In 1955, we only had four wires to Wall Street firms and one of them was to Goldman Sachs and Gus was on the other end of the phone. So I've had a long experience with Goldman and they've done a lot of things for me recently.

very long time relationship....who knows...besides this being a good investment to him...it could be to return some favours... anyways...the deal is done and GS got what they needed....capital and a boost to their stock's confidence..

[financecaptain]

Goldman have good people because success breeds success. They are the most envied house on Wall Street. The ambitions of most gratuates' from ivory leauge business schools are to join Goldman. In fact, Goldman pioneered the model of investment bank taking proprieory investment positions and became very successful. So successful that almost all major investment banks want to follow this model. Before that, investment banks make most of their income from fees. At one time even, people questioned this model because it would conflict with the interests of the clients that they advise.

Even with large proprietory positions, Goldman did not suffer any loss so far. This means either their risk management is dam strong or they are not valuing some of their assets correctly, I do not know and market is nervous. With Warrant Buffet's investment, it is definitely a confidence booster.

A few years ago, The Economist has a special write-up on Goldman on how they have changed investment banking with proprieitory trading becoming the main source of income. Guess what was the average salary of all the staff globally including janitors, secretaries and support staff in that year ? If I am not wrong, it was a whopping US$500,000-US$700,000 per annum....

[financecaptain]

Goldman Sachs

Into the whirlwind
Sep 25th 2008
From The Economist print edition

As Goldman Sachs faces its greatest challenge, an important new history shows that the American investment bank is no stranger to adversity
Illustration by Daniel Pudles

WHEN Marcus Goldman, a Jewish immigrant from Bavaria, founded a small commercial-paper dealer in New York in 1869, he hardly could have imagined it would one day become the world’s most envied and profitable investment bank. Equally shocking to him would have been the hurricane that has descended on markets this year, wrecking the investment-bank business model, which relies on fickle short-term funding, and laying low entire institutions. Three of America’s five independent investment banks have been swallowed by rivals or the abyss. The two that remain, Goldman Sachs and Morgan Stanley, have opted under intense pressure from market forces to become bank holding companies, a move that will subject them to tougher capital requirements and supervision.

A year that has seen the emasculation of America’s brokerages may not seem the ideal time to reflect on what made the erstwhile industry leader great. But, amid the torrent of negative news, Charles Ellis’s exhaustively researched history of Goldman Sachs paints a convincing picture of an institution that has got most of the important things right. It is an organisation America can be proud of, even as it is forced to reinvent itself to survive.

Mr Ellis, a consultant who has worked with the bank for more than 30 years, sees strengths aplenty. Goldman attracts the best and, with a recruitment process that redefines rigorous, hires the very best. The accent has always been on regeneration: partners are encouraged to move on to allow fresh blood to come through; many go on to public service. Hank Paulson, America’s treasury secretary and the architect of the restructuring of the banking system, and Bob Zoellick, head of the World Bank, are two examples.

The dedication of employees is legendary. Lloyd Blankfein, the chief executive, describes the culture as a blend of confidence and “an inbred insecurity that drives people to keep working and producing long after they need to. We cringe at the prospect of not being liked by a client.” Even before the crisis, when Goldman was earning profits to make Croesus blush (it is still profitable), Mr Blankfein seemed more anxious than arrogant. Yet loyalty sometimes spills over into inexcusable behaviour, as when a female job candidate was asked if she would have an abortion rather than lose the chance to work on a big deal.

Much of the success comes from daring to think big. When Goldman said it wanted to break Deutsche Bank’s stranglehold on Germany’s biggest corporations, local staff laughed. But after years of persistence it managed to do just that, prompting Deutsche’s then boss, Hilmar Kopper, to declare: “Nobody irritates me like Goldman Sachs. You get mandates we have not expected you to be even considered for!”

But in fighting for business, Goldman never reached the lows of brazenness of, say, Salomon Brothers in the 1980s. Indeed, its bankers were once dubbed “billionaire boy scouts”, due to their talent for making lots of money while keeping their noses clean. It is, as one partner put it, “long-term greedy”. Better to forgo profit today than take it and alienate a client that might produce a lot more business over the long haul. Goldman refused to advise on hostile takeovers until the late 1990s.

It has also trodden gingerly when it comes to grand strategic moves, avoiding the headline-grabbing mergers embraced by so many of its rivals. When he ran the firm, Mr Paulson nearly tied the knot with JPMorgan (now JPMorgan Chase) but balked at the last moment, fearing the deal would dilute Goldman’s close-knit culture. One of the firm’s 14 guiding “Principles” is that it should be big enough to serve any client, but small enough to maintain its esprit de corps.

Yet Goldman’s progress has been interrupted by the occasional revolution. The biggest was its own flotation in 1999, after years of often rancorous debate among the partners. The move gave the firm permanent capital with which to expand, but exposed it to the vicissitudes of stockmarkets and, some felt, loosened the ties that had bound the firm’s leaders closely together.

After its public offering, Goldman, long a leader in “agency” businesses such as underwriting and merger advice, moved aggressively into “principal” investing, risking its own capital in markets. The profit margins on the latter are bigger, but so are the risks, as the credit crisis has so brutally illustrated. In magnifying its bets with large dollops of borrowed money and peddling subprime securities, Goldman played a part in bringing America to the brink of financial catastrophe.

Thanks to sharp risk management, the investment bank has managed to navigate the turmoil better than its peers. While others were still loading up on subprime mortgages, it sensed a market turn and hedged its bets; Goldman traders made a mint betting house prices would drop even as the bank continued to sell mortgage-backed securities, leading some to question its claim that clients come first.

The challenge Goldman faces may be its biggest yet. It was almost felled by Goldman Sachs Trading Corporation, a Ponzi-like misadventure that unravelled in the 1929 crash; and by Penn Central, a rail company whose collapse in 1970 left Goldman exposed to piles of worthless debt. Two market quakes in the 1990s also left it badly shaken. Each time it managed to survive, learned its lessons and emerged stronger. This time may be no different, and backing from Warren Buffett, America’s most admired investor, can only help. But, as Mr Ellis points out, its most valuable asset has always been its freedom to choose its own course. And that, for now, has been severely curtailed.

[blid2def]

From MarketWatch. Have to use a tinyurl because Marketwatch website urls don't work here (bleah... some bug):-
- http://tinyurl.com/4fepcj

Excerpt here, go to the site for full article.

DAVID WEIDNER'S WRITING ON THE WALL
Goldman is getting the best of the credit crisis
Commentary: Opponents have been vanquished and bad bets wiped away

By David Weidner, MarketWatch
Last update: 12:01 a.m. EDT Oct. 2, 2008
Comments: 308

NEW YORK (MarketWatch) -- Not often do you regard a company whose stock is about 50% off its 52-week high as a success story.

But a success is exactly what Goldman Sachs Group Inc. is shaping up to be at this stage of the credit crisis. If we were to begin the long journey back to stability today, Goldman would undoubtedly emerge even more powerful than before.

Did anyone expect another outcome?

A solo act

Commercial banks such as Citigroup Inc., Bank of America Corp. and J.P. Morgan Chase & Co. are obvious winners in the credit debacle. They've been able to buy battered banks at fire-sale prices. America is about to become a country with three national banks that have big broker/dealers as subsidiaries.

These new superbanks will be formidable, but there is a question of how much risk-taking they'll be willing to stomach. Logistics are an issue too. They're integrating firms that may have been priced like single-branch banks but, from an infrastructure standpoint, are giants of American finance.

Morgan Stanley , whose stock is 65% off its high, has shored itself up by selling a 20% stake to Tokyo's Mitsubishi UFJ, but will still need to add deposits, just like Goldman.

Only Goldman, by virtue of its investment from Warren Buffett and its ability to buy retail bank deposits, will be the last bulge-bracket investment bank unencumbered by commercial-bank ownership.

Origins
You don't have to be a conspiracy theorist to recognize that a series of decisions and events have transpired to put Goldman at the top of the heap. Well before the credit crisis, people worried about Goldman's influence in the markets. Several former executives of the investment bank have senior roles in government and at the New York Stock Exchange, and its analysts are among the most powerful in the space.

Let's limit the discussion to the start of the credit crisis in the summer of 2007. Just before the market turned, Goldman traders got a hunch and began shorting and hedging the mortgage securities that were eating away at rivals' revenue. Trading revenue soared 70% that quarter to $8.23 billion.

It was Goldman's last quarter in a series in which each new profit report exceeded expectations and prior results. Goldman's share price was in shouting distance of $300. It was also when grumblings about the investment bank's transparency became louder. That's important because Goldman continues to give few details about its "proprietary trading" business. What is it exactly? No one knows for sure.

[kennynah]

Goldman to Cut 10% of total workforce: WSJ - Update
10/23/2008 2:08 AM ET

(RTTNews) - Goldman Sachs Group Inc. (GS: News ) is likely to announce about 10% cut in its 32,500 employees, the Wall Street Journal reported on Thursday, citing people familiar with the matter.

The cuts, expected throughout the New York-based company, shows that the financial giant, which has sailed unshakably till now, has also been affected by the deepening 16-month credit crisis.

.......blah blah blah...

Thousands among Merrill Lynch & Co.'s (MER) 61,000 employees are likely to lose their jobs as part of the agreed takeover by Bank of America Corp. (BKC). Merrill Lynch already has eliminated 5% of its jobs this year. At Morgan Stanley (MS), employment as of the end of August was down about 3% from last year to 46,383.

[kennynah]

this is delayed news.... reported on 10 Oct 08

*********
Goldman Sachs Slumps In Pre-Market After Moody's Puts Credit Ratings On Negative Watch
10/10/2008 9:09 AM ET


(RTTNews) - Goldman Sachs (GS: News ) slid in pre-market trading, after the company had its outlook revised to negative by Moody's.

The stock was down $19.88 just after 9:05 am ET, slipping to $81.47. If pre-market losses hold, the stock will open at a new 52-week low.

[blid2def]

Eh... wahlao I was confused when I read this... hahaha...