Wall Street Journal (October 7)
“Billionaire Warren Buffett tossed lifelines to a handful of blue-chip companies during the financial crisis. Five years later the payoff on those deals is becoming clear: $10 billion and counting.” In terms of income before taxes, the investments to companies like Bank of America, Dow Chemical, General Electric, Goldman Sachs and Mars, have yielded Berkshire approximately 40%. Berkshire received an attractive premium, but provided the companies with critical capital and something even more valuable: “Mr. Buffett’s implicit endorsement of their long-term prospects. Shares of these companies generally went up after they revealed Berkshire’s involvement.”
Tags: Bank of America, Berkshire, Billionaire, Blue-chips, Capital, Dow Chemical, Endorsement, Financial Crisis, General electric, Goldman Sachs, Investments, Mars, Payoff, Premium, Shares, Warren Buffett
New York Times (March 14)
An opinion piece by Greg Smith is creating a PR nightmare for his former employer. Entitled “Why I Am Leaving Goldman Sachs,” Smith’s article has become the newspaper’s most e-mailed article. After working nearly twelve years at the firm, Smith wrote the letter on his last day. Smith longs for the once-proud culture that placed value on clients and bemoans the firm’s present atmosphere, which he describes as “toxic and destructive,” focused on making money off clients rather than providing them with the best solutions. “Goldman Sachs today has become too much about shortcuts and not enough about achievement. It just doesn’t feel right to me anymore.” Smith hopes his letter will wake up the Board of Directors. He urges them to “Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist.”
An opinion piece by Greg Smith is creating a PR nightmare for his former employer. Entitled “Why I Am Leaving Goldman Sachs,” Smith’s article has become the newspaper’s most e-mailed article. After working nearly twelve years at the firm, Smith wrote the letter on his last day. Smith longs for the once-proud culture that placed value on clients and bemoans the firm’s present atmosphere, which he describes as “toxic and destructive,” focused on making money off of clients rather than providing them with the best solutions. “Goldman Sachs today has become too much about shortcuts and not enough about achievement. It just doesn’t feel right to me anymore.” Smith hopes his letter will wake up the Board of Directors. He urges them to “Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist.”
Tags: Clients, Corporate culture, Goldman Sachs, Greg Smith, PR
Reuters (August 3)
Approximately 35% of companies in the S&P500 have used the same audit firm for 25 years or more. In fact, “Goldman Sachs has stuck with the same auditing firm since 1926, Coca Cola since 1921, General Electric since 1909 and Procter & Gamble since 1890.” Reformers argue that rotation should be required to increase scrutiny, but many oppose such a requirement.
Tags: Audit firms, Coca Cola, GE, Goldman Sachs, P&G, Rotation, S&P500, Scrutiny
Washington Post (May 12)
Hedge fund billionaire Raj Rajaratnam, who headed Galleon Management, was convicted of fraud and conspiracy in connection with insider-trading. “The verdict is a historic achievement for the Justice Department.” The government was able “to show the jury a dark side of the hedge-fund business that was long suspected.” Evidence included recorded wire taps of Rajaratnam receiving and forwarding tips. Alleged tipsters in this high profile trial included Rajat Gupta, the ex-head of consulting firm McKinsey & Co and a former Goldman Sachs board member.
Hedge fund billionaire Raj Rajaratnam, who headed Galleon Management, was convicted of fraud and conspiracy in connection with insider-trading. “The verdict is a historic achievement for the Justice Department.” The government was able “to show the jury a dark side of the hedge-fund business that was long suspected.” Evidence included recorded wire taps of Rajaratnam receiving and forwarding tips. Alleged tipsters in this high profile trial included Rajat Gupta, the ex-head of consulting firm McKinsey & Co and a former Goldman Sachs board member.
New York Times (February 5)
Bank of America lost $2.2 billion, but awarded CEO Brian Moynihan $9 million in restricted stock. At Goldman Sachs, Lloyd Blankfein scored even more. In fact, pay and benefits set a new record of $135.5 billion at the top 25 publicly traded Wall Street banks and security firms. The New York Times is not impressed. “More needs to be done to tame bankers’ appetite for high-risk financial strategies that shower them with profit in good times and leave the taxpayers holding the bag when their bets go bad.”
Tags: Bank of America, Goldman Sachs, Pay, Reward, Risk
Bloomberg (February 4)
Japan is no longer the belle of the global investment ball, but not everyone’s counting her out. At a price-to-book value of 1.1, the Topix is trading at roughly half of 2006 levels. The Topix looks even cheaper compared to the S&P 500’s price-to-book ratio of 2.3. Balance sheets are generally strong and many are poised to prosper on growing demand from China. Goldman Sachs expects “corporate profits in Japan this year will approach 2007 highs.” Deutsche Bank is forecasting returns exceeding 20% for Japanese stocks in the first half of 2011 alone.
Japan is no longer the belle of the global investment ball, but not everyone’s counting her out. At a price-to-book value of 1.1, the Topix is trading at roughly half of 2006 levels. The Topix looks even cheaper compared to the S&P 500’s price-to-book ratio of 2.3. Balance sheets are generally strong and many are poised to prosper on growing demand from China. Goldman Sachs expects “corporate profits in Japan this year will approach 2007 highs.” Deutsche Bank is forecasting returns exceeding 20% for Japanese stocks in the first half of 2011 alone.
Tags: Deutsche Bank, Equity, Goldman Sachs, Investment, Japan
