2/1/2024 0 Comments Jim fink investing complaintsOnce again, it’s all about marketing, not the best interest of the individual investor. See for yourself what the market is saying. In fact, while on the outer fringe, most financial professionals would consider a 20% decline a correction. You can’t direct investors to do something with a statistical chance of 20% unless you have another motive … getting managed accounts.Īnd anyway, the last time I checked, a 12% decline is considered a normal correction from record highs. So they will give Goldman the opportunity to manage their money. Why would Goldman deliver that message? Well, they have one purpose in mind – to scare individual investors into thinking that they are not capable of managing their own money during the decline. I am bothered by the fact that Goldman is now using the fiscal cliff as a fear tactic to turn over clients’ accounts, thereby costing them money. Basically, it doesn’t matter if you are a monkey or professional analyst – the chance of you being right is 50%. I think most of you already know my feelings about directional calls made by the financial industry. Remember the vicious debt ceiling fight last summer? Well, it’s back.Īnd so is the opportunity for financial institutions to peddle fear.Īs the market has moved higher throughout the year, Kostin has repeatedly backed his 1,250 call to the detriment of those who have shorted the S&P 500 based on Kostin’s frequent mentions of a decline.īut that’s not what bothers me about Goldman Sachs and their chief equity strategist. His stated reason: “Political realities and last year’s precedent suggest the potential that Congress fails to reach agreement in addressing the fiscal cliff is greater than what most investors seem to believe based on our client conversations.”Īs a refresher, the “fiscal cliff” is the expiration of payroll, capital gains and dividend tax cuts at the end of this year. The statistical chance of that actually happening – based on options at the 1,250 strike price that expire in December – is 20% (I’ll get to the significance of this later). Essentially, Kostin is predicting a 12% decline over the next four months. The strategist fervently defended his year-end S&P 500 target of 1,250 despite the SPX’s recent climb above 1,400. Last week Kostin – who replaced famed perma-bull Abby Joseph Cohen – urged Goldman clients to immediately pull their money out of the stock market to avoid the so-called fiscal cliff. The coup launched by dissident hedge fund activists at Engine No 1 replaced two Exxon board members with its own candidates to help push the oil company towards a greener strategy.You better be, according to Goldman Sachs chief U.S. Last spring, BlackRock – which manages about $10tn (£7.4tn) in assets – reportedly threw its weight behind a shareholder campaign to oust several directors on the board of the US oil giant ExxonMobil. BlackRock had previously been criticised for not pushing hard enough on the issue. Make no mistake, the fair pursuit of profit is still what animates markets and long-term profitability is the measure by which markets will ultimately determine your company’s success.”Īfter Fink wrote two years ago that climate risk was an investment risk and that the firm would put sustainability at the heart of its investment decisions, many companies set out plans to become carbon-neutral. In his Dear CEO letter, Fink wrote: “It is through effective stakeholder capitalism that capital is efficiently allocated, companies achieve durable profitability, and value is created and sustained over the long term. The official said this would damage West Virginia’s economy. West Virginia’s treasurer said this week that the state’s Treasury investment board would no longer use a BlackRock fund, after the fund manager urged companies to cut their carbon emissions to net zero by 2050. “We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients.” It is not a social or ideological agenda. “Stakeholder capitalism is not about politics.
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