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Goldman serves as a "prime broker" to many hedge funds. Not to mention intimate financial relationships with the largest corporations in the world. It would be

by biznerd 17y ago

Goldman serves as a "prime broker" to many hedge funds. Not to mention intimate financial relationships with the largest corporations in the world. It would be naive to think that it did not have any advantage because of its position in the financial industry. Having only one losing trading day in a quarter could not be accomplished without insider information.

andylei 17y ago
actually, it's entirely possible. i know of prop trading groups that have been around for ten years with only one or two down months. in dislocated markets, making markets is actually relatively easy, so it's not that surprising that they usually don't lose money. they also have hundreds of traders. each one of them probably had many losing days, but in aggregate, they have good traders and systems, so they rarely have losing days now. also, how do you know that it's impossible without insider information? what reason do you have to back up your claim?
- mynameishere 17y ago
  they also have hundreds of traders Most of this is from computers trading >billion shares per day.
- biznerd 17y ago
  months, yes this is possible. But only one day, that comes to almost a perfect score. And no one else has a perfect score. GS has turned into a giant hedge fund. And their numbers are consistently better than any other fund or investor. Better than Warren Buffet or George Soros. They're impossibly good.
cynicalkane 17y ago
Almost all large short-term trading desks make a conscious choice to insulate themselves from directional price changes. Either with delta-netural strategies--strategies where reasonable changes in price don't make a difference--or just by having a mix of favorable bets in all different directions, so that the majority of them going sour is unlikely. I know traders who think that many price moves in the market are due to insider trading they're not privy to. Since every trader, to my knowledge, seems to think this--even the ones at big investment banks--it's hard to say whether it's superstition or not, but it doesn't stop them from being profitable with only "outsider information".
lhuang 17y ago
You can really say the same for most of the big dealers... In fact there are a few who actually are BIGGER brokers who serve more institutional clients than GS...

by biznerd 17y ago

andylei 17y ago

actually, it's entirely possible. i know of prop trading groups that have been around for ten years with only one or two down months. in dislocated markets, making markets is actually relatively easy, so it's not that surprising that they usually don't lose money. they also have hundreds of traders. each one of them probably had many losing days, but in aggregate, they have good traders and systems, so they rarely have losing days now. also, how do you know that it's impossible without insider information? what reason do you have to back up your claim?

mynameishere 17y ago
they also have hundreds of traders Most of this is from computers trading >billion shares per day.
biznerd 17y ago
months, yes this is possible. But only one day, that comes to almost a perfect score. And no one else has a perfect score. GS has turned into a giant hedge fund. And their numbers are consistently better than any other fund or investor. Better than Warren Buffet or George Soros. They're impossibly good.

cynicalkane 17y ago

Almost all large short-term trading desks make a conscious choice to insulate themselves from directional price changes. Either with delta-netural strategies--strategies where reasonable changes in price don't make a difference--or just by having a mix of favorable bets in all different directions, so that the majority of them going sour is unlikely. I know traders who think that many price moves in the market are due to insider trading they're not privy to. Since every trader, to my knowledge, seems to think this--even the ones at big investment banks--it's hard to say whether it's superstition or not, but it doesn't stop them from being profitable with only "outsider information".

lhuang 17y ago

You can really say the same for most of the big dealers... In fact there are a few who actually are BIGGER brokers who serve more institutional clients than GS...