Sure Fire Sign of a Stock Market Long Term Peak? Goldman Sachs goes public. : LUSENET : TimeBomb 2000 (Y2000) : One Thread

The world's most elite financial organization, Goldman, Sachs & Co. is about to sell up to 15% of its shares to the public. Goldman, founded in 1869, is a private partnership of 221 people.

Understand the significance of this move. Goldman's profits for 1998 were $2.92 billion. That is profit, not merely sales. That is $13.2 million dollars of profit per partner.

It is estimated that Goldman earned $1 billion for the first quarter of 1999. In other words, each partner's share of profits for the last 90 days is just over $50,000 per day, seven days a week.

In their benevolence, the good-hearted partners have decided to cut the public in on this deal at a price of between $2 and $4 billion.

The partners need no reminding of the maxim, "Buy low, sell high." And it's corollary, which applies here, "Sell high, buy low."

A Puddintame prediction: This maneuver became well-worn in the 1980's when many individual investors were whipsawed by management insiders. Go public at a peak in the market to extract all possible money from the gullible public. (Of course, do not give up control shares.) When the market explodes on the downside and hits rock bottom, it will stay there for several months or years. During this time, insiders can live quite well off the cash so eagerly surrendered by the public. When insiders see that the market is about to rise from the ashes and generate more royal wealth, then take the company private again so none of the greedy little public investors are around to demand dividends and the like.

For anyone who is not well versed in corporate finance, rest assured that management has a number of tools to divest you of your so called "ownership" regardless of your desires.

Are you going to buy from the world's savviest traders? Be my guest. Happy trails.

-- Puddintame (, March 09, 1999


Greetings Puddintame! This sounds interesting also in that, if one has any cash after what I expect will be an aggressive stock market crash, this may be a good place to invest a small amount and hope for major returns if one waits for about 10 years. Just a thought! Thanks for the info. I have appreciated all your notes on this site.

Sincerely, Apple

-- Apple (, March 09, 1999.

Ever see "The Hudsucker Proxy"? Dumb movie, but same idea. <:)=

-- Sysman (, March 09, 1999.

Might add that recently a seat on the NYSE sold for a record 2.6 million. This has been a pretty good indicator of market tops.


-- Ray (, March 09, 1999.

Wasn't there also a story out today that one of the bigs at Citigroup was bailing out? Something about a $26 million salary plus a $30 million "golden parachute". Sure would buy an awful large ranch in Montana and stock it *very* well.


-- Wildweasel (, March 09, 1999.

I bet that Citigroup guy gets migraines since he has so many bugout options. Private island? Diamonds or emeralds? Sailboat + helocopter? Me?... corn or wheat? Spam or Treet? Boy am I glad I don't have his problems.

-- Puddintame (, March 09, 1999.

I love it, Puddintame,...reminds me of a Joni Mitchell song called "Bar and Grill"...lyric goes: "No trouble in their faces, not one anxious voice,...none of the crazy you get from too much choice. The thumb and the satchel, or the rented Rolls Royce."

-Donna, the baby cyber bear, with oil lamps, rice and beans, and a handmade solar oven.

-- Donna Barthuley (, March 09, 1999.

For what it's worth, I actually had to think for a while about the thumb and satchel line. I haven't seen anyone thumbing a ride in the city limits in ten years. I'd love to know the name of the last college kid to hitchhike a hundred miles back to school after the holidays. I wonder when it was? 1975? I guess everyone's got their own SUV now. What an amazing place to be in time and space.

-- Puddintame (, March 09, 1999.

Moderation questions? read the FAQ