Walmart has cut price up to 60% which will no doubt depress the margin for retail industry. Goldman (GS) did some PR today and it's difficulty to change the image. GS gets most of its profit from trading while protected by the FED. That's the reason people do not like GS. Why GS can continuously outperform the market in their trading desks? Are they smarter than others? I doubt about it. I dealt with mutual fund managed by GS before and its performance is average to below average. One reason the traders are doing better is information advantage. GS releases its research reports to its best clients before the public. Traders are probably the first group to receive information. So on normal conditions, their traders are making lots of money. However, in extreme conditions, GS is far more riskier than JPM or MS. It is basically a giant betting machine.
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Any trade today (HXD)?
ReplyDeleteAre you saying that the GS produces very good research reports and these reports go to GS traders first so that their traders get "smart" ahead of others on the floor? Why other firms don't fare well in their research reports?
First, you are not suppose to front running on your clients. But this is a grey area. Second, GS has more impact than other firms because of their size and perceived accuracy.
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