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Dave
My perception is that you know nothing about the accounting of an
investment bank with substantial securities trading operations, and
perhaps little about accounting generally. I have this perception
because you have ignored expenses.
The URL you kindly provided mentions that GS has $48 billion in capital.
Most of that capital is used to finance its trading and investment
positions. A fair first guess is that 3/4 of the capital is allocated to
those financing. It is probably more than that, but it is good enough to
prove the point. At 6% implied return on capital (again low, because
equity returns at GS used to be 20%+, and is probably still in the
teens, but short term borrowings will be greater and at lower rates),
that generates over $2 billion in expenses. And that is before
consideration of the monstrous salaries and bonuses traders and salesman
receive.
Regards
DanG
d graham wrote:
>
> > I think if you take a look at their overall trading record you will be
> surprised
> > at the profit and loss statements from their trading department. It is
> the
> > mergers and acquisitions that make them the money along with their
> banking and
> > IPO operations.
>
> Here we go again. Throw out a statement, no proof. Yet if you go to the
> Goldman Sachs site you will see:
>
> Revenues from Investment Banking 1st quarter 2001 $1.15 billion
>
> Revenues from M & A $730 million
>
> Revenues from Trading and Investments $2.30 billion
>
> http://www.gs.com/shareholders-docs/earnings/q1_2001.html
>
> Only gross raw figures but certainly on their face not supporting your
> statement
>
> Again, not criticising anyone in particular. We all, myself included, daily
> act on perceptions which are not necessarily based on reality.
>
> dave
>
> ----- Original Message -----
> From: "Ira Tunik" <irat@xxxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Wednesday, May 23, 2001 8:12 PM
> Subject: Re: [RT] DA moon and Delta
>
> >
> > Norman Winski wrote:
> >
> > > ----- Original Message -----
> > > From: "DH" <catapult@xxxxxxxxxxxxxxxxxx>
> > > To: <realtraders@xxxxxxxxxxxxxxx>
> > > Sent: Wednesday, May 23, 2001 7:15 PM
> > > Subject: Re: [RT] DA moon and Delta
> > >
> > > > > It is funny that those who espouse a totally scientific approach
> fail to
> > > > > realize that almost every time the theorist enters the market he
> usually
> > > > > goes broke.
> > > >
> > > > Yeah, right. I hear Goldman and Solly and all the big houses are
> firing
> > > > their quants, scrapping their Crays, and hiring astrologers and that
> > > > tarot lady from late-night TV to read the tea leaves for them. :-)
> > > >
> > > > --
> > > > Dennis,
> > >
> > > You may be closer to the truth than you will ever know.
> > >
> > > Cheers,
> > >
> > > Norman
> > > >
> > > > To unsubscribe from this group, send an email to:
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> > > >
> > > >
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> >
>
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