It’s a Town Full of Losers

Today’s big story was all about Goldman Sachs and the searing New York Times Op-Ed piece “Why I’m Leaving Goldman Sachs.”

It's a Town Full of LosersThere was quite a bit of speculation that the Op-Ed’s author, Greg Smith, a 12 year  employee and one with some corporate credibility, currently at the London office, was the man behind the snarky Twitter account, GSElevator, that recounts comments allegedly overheard on the Goldman Sachs elevator.

Clearly, he couldn’t possibly be the mystery man behind that account, otherwise it would have been called “GSLift.”


When I say “currently,” I mean that Smith was a Goldman Sach employee as of yesterday. I’m  sure that if the Op-Ed appeared during his planned final few hours on the job, security would have figured out some way to escort him out the window or down the lift shaft.

When you put all of this together with the fact that Smith reportedly won a bronze metal in the Maccabiah Games in Table Tennis, you have the makings of a great John Carter-esque blockbuster.

A couple of things about Goldman Sachs.

I haven’t owned shares in about two weeks and missed yesterday’s 6% climb after JP Morgan leaked its “Stress Test” results, dividend increase and stock buy-back plans. Goldman Sachs was among a very small handful of stocks that helped lead me out of the morass from a few years ago when I picked up shares at about $85 and aggressively sold covered calls, riding it up and then occasionally down.

I last owned shares and had them assigned at $115, two weeks in a row. I like today’s drop, but it’s still not enough to entice me to get the shares again.

Nonetheless, I love Goldman Sachs almost as much as I don’t love Dick Bove.

Secondly, a high school classmate, David Viniar is their CFO.

He was a nice and softly spoken person. Having only seen him on television over the past 40 years, he still appears that way, despite the fact that the Op-Ed piece talks about how the personality of Goldman Sachs had changed over the past 12 years of Smith’s experience.

I have faith in David VIniar, although his hairstyle has changed a lot over the years, so maybe there is something to the allegations.

But writing an Op-Ed in the New York Times is a great high profile way to go.

I always envisioned sending out a mass e-mailing whenever I left a position, quoting only the simple words expressed by Bruce Springsteen in “Thunder Road.” (Speakers on, be patient for it to stream)

“It’s a town full of losers and I’m pulling out of here to win.”

I never did that. I’m all talk. Burning bridges and all that. Nowhere close to the man Robert Mitchum portrayed in the movie.

At this stage, I’ll never even ever have that opportunity again, unless I decide to give my loyal readers a middle finger salute and walk away from this great joy of mine. Not that I get paid for the joy.

Szelhamos would simply have said “Csokolj meg a seggem,” but he would have said it with a smile.

For some reason the thought of losers made me start thinking a bit as I was listening to a stream of talking heads, past present and future, as they all recounted their perfect timing.

Most recently, I was listening to those telling the tale of how they had gotten out of financials at their highs in late October and re-entered at the lows in December.

It’s not very different when it comes to claims about precious metals, technology, fertilizers. You name it.

The fertilizer one is especially appropriate.

If you believe in the concept of  “zero sum,” as I do, you really do have to wonder how exactly the loop is closed

Given that the vast majority of the trading volume is institutional, with the individual investor being just a blip, you would have to think that all of these perfectly timing traders and stewards of money were buying shares at a song from their own ilk and then dumping shares on their own ilk, as well.

For every one of these uber-successful traders, there has to be a loser. Someone is is perfectly timing things, just in the wrong direction.

The same would hold for whatever hedges the smartest and dumbest heads were using.

The claims that Goldman was acting against the interests of their clients seems amusing. The zero sum concept doesn’t necessarily have to apply within a skewed sub-set of the general population.

In the equivalent of Wall Street’s ivy covered walls, Goldman Sachs was likley one of those places that everyone could be a winner.

It seems extraordinarily unlikley to me that any of Goldman’s clients, who also probably had a bit more sophistication than the typical person and who probably exercised circumspection beyond that of most, would have believed that Goldman was offering products and services purely out of a sense of largesse.

Not that anyone should be taken advantage of, but you would also think that someone who is of the means to be a Goldman Sachs client would know when he was being taken for a ride down Thunder Road.

Even if the change to an evil corporate personna had occured in just the past couple of years, you would also have to think that there would be lots of murmurings that at some point would have leaked or boiled over. Not in an Op-Ed piece by an insider, but rather by a string of wronged investors.

I’m not certain that there’s really been much good news that’s come Goldman’s way over the past 4 years or so. Still, it’s current price is about 60% higher than it was on the day of the “Haines Bottom” which was celebrated just a couple of days ago.

In the meantime, I didn’t do very much today.

Mad Money with TheAcsManThat’s partially due to the lingering effects from yesterday, but I do need to continue with the medication and I do need to empty that 5 liter box of wine before Sugar Momma returns home.

What little I did centered around wondering how I might celebrate Jim Cramer’s seventh anniversary of “Mad Money.” I realized that with Sugar Momma away for the week, I could actually watch the show and be part of the celebration. As a Goldman alumnus, he’ll probably have something to say about today’s fleeting event, although he was a bit muted earlier in the day.

Although I don’t get the opportunity to watch him very often anymore, I still enjoy the opportunity. I also spent the time wondering what if I were the host?

More wine, or maybe just some of that stuff that Robert Mitchum favored.

Although the only trade I made today was to sell some calls on Chesapeake Energy, I was happily watching silver lose some more of it’s luster, as that also decreases the likelihood that I’ll be assigned on the put contracts that I wrote during a moment of desperation when I couldn’t generate any call option income on the all too large position on the ProShares UltraShort Silver.

That previous sentence may have been the longest I’ve ever written, but I’m entering the non-punctuation pohase of my lie in the very near future.

The fact that I mention ProShares UltraShort Silver about as often as I mention “zero sum” is not a good thing lately, but at least the past week has been kinder than the previous two months. In fact, I may yet get to write some calls, if silver goes down again tomorrow. If it does, I’ll be there to collect crumbs, as I like to do on Thursdays and Fridays, when the opportunities present themselves.

Even losers can slowly be turned into winners.



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