Opinion: Goldman Sachs and Warren Buffett start PR campaign to repair damaged reputation

You know things must be really getting out of control when Goldman Sachs, the bastion of capitalism according to some, starts being criticized by conservatives, who tend to be supportive of capitalists. One just needs to peruse the user comments at a news site like MarketWatch, which, like most business sites, is heavily represented by conservatives, to notice all the harsh comments and attacks.

Thus it should not be a surprise to see something that has probably not happened since the 1930's: a public apology by a powerful investment bank. Llyod Blankfein, CEO of Goldman Sachs, is said to have said "We participated in things that were clearly wrong and have reason to regret..." Such an apology from a leading investment bank would have been unthinkable as recently as two years ago.

Warren Buffett is also chipping in to repair the damage. Apparently, Goldman Sachs will provide $500 million to support up to 10,000 small businesses with financial support and business education, channelled through colleges, universities, and the like. Warren Buffett and Michael Porter will be playing an advisory role. The program appears to have been set up several years ago but Goldman Sachs is significantly increasing its contribution.

It remains to be seen how much of an impact this has on public opinion and government policy. It's probably not an understatement to suggest that Goldman Sachs is public enemy #1 for the typical American. Michael Moore may have attacked AIG but my feeling is that Americans are more disgruntled with Goldman Sachs. Rightly or wrongly, it has come to symbolize all that has gone wrong in the financial services industry in the last decade.

Comments

Post a Comment

Popular Posts

Thoughts on the stock market - March 2020

Image
Right now, DJIA has a P/E of 16.8 and forwand P/E of 15.1, whereas S&P 500 is at 20.1 with forward P/E of 15.8. Source: WSJ market Data If you ignore interest rates and inflation expectations--both of these influence valuations but depends on your macro call-- the market is not cheap. Long-term P/E is around 15. Trailing P/E is around 20% (Dow) to 40% (S&P500) higher than average. Forward P/E is in line with long term average but that assumes a strong V recovery. Consensus forecast is for profits to drop 1.2% in 2020. In 2008, it dropped 25.4% so current forecast is a very mild recession. Covid-19 coronavirus is not going to last more than a few months but these forecasts are still too rosy in my opinion. So I wouldn't rely on forward P/E. The richly valued (mostly tech or high quality) have not fallen much but the distressed ones have. So if you want to outperform in the long run, I think one’s choice right now is to: • Wait for market to fall another, say
✖ READ MORE >>>

Warren Buffett's Evolution and his Three Investment Styles

Image
A Young Warren Buffett In a comment to one of my posts , Mark Carter, who incidentally appears to have a  good blog worth checking out , asked: "Buffett Prime is 1970's to early 1990's" Could you elaborate? I have vaguely indicated how I view Warren Buffett in the past, but I thought I would detail my view of his investing behaviour. This is more of an opinion piece and many others would disagree with me (if you do, I'm curious to hear your thoughts). I don't follow Warren Buffett as closely as many value investors so I may get some facts wrong. My view is that Warren Buffett went through three different phases, with each consisting of different investment techniques. The overall investment theory remained the same—what people call value investing—but his execution, tactics, and strategy differs across the three phases. Some people may break up his career into additional periods but my feeling is that the three I will describe essentially capt
✖ READ MORE >>>

Hugh Hendry discussion at the Alternative Investment Conference

Thanks to Value Investing World for bringing this Hugh Hendry interview to my attention. I may not agree with all the things—short-term orientation of hedge funds is actually worse IMO; the sharp pencil effect doesn't always work—but Hendry is a true contrarian and worth listening. Like Marc Faber or Jim Rogers, you also can't take everything Hugh Hendry says seriously. I had always felt Hugh Hendry was firmly in the deflation camp but I get the feeling that he is now opening up to high-inflation possibilities. Otherwise, his stance appears to be similar to past opinions.
✖ READ MORE >>>