COMPANY IS HEADED NOW.
VAMPIRE SQUID OR COLD FISH?
GOLDMAN SACHS INVESTOR DAY
CROWD CAME AWAY WITH MORE
QUESTIONS THAN ANSWERS.
ON "BARRON’S ROUNDTABLE," BEN
LEVISOHN, CARLETON ENGLISH AND
JACK HOUGH.
THE DOW SNAPPED HER FOUR WEEK
LOSING STREAK.
DID PEOPLE GET TIRED OF SELLING
OR IS THERE NEWS I DIDN’T
NOTICE?
JACK HOUGH: AS JACK LIKES TO
TELL US, THE STOCK MARKET GOES
UP 80% OF THE TIME.
IT GOES UP 80% OF THE TIME.
THIS IS ONE OF THOSE TIMES THE
MARKET HAD BEEN FALLING.
IT HIT THE 200 DAY MOVING
AVERAGE AND STARTED DOWN
DESPITE THE FACT WE HAD THE FED
GOVERNOR TELL US WE NEED RATES
TO GO HIGHER AND YIELDS
FOLLOWING, WE HAD THE TWO YOUR
HIT 5%, THE TENURE OVER 4% FOR
THE FIRST TIME SINCE NOVEMBER.
EVERYTHING KEPT GOING UP.
TECH STOCKS KEPT WINNING, THE
ONLY SECTOR THAT WAS POSITIVE
IN FEBRUARY AND UTILITIES FELL
0.8%, THE WORST PERFORMER, THEY
FALL BECAUSE DIVIDENDS DON’T
LOOK AS GOOD WHEN YIELDS ARE
RISING.
JACK OTTER: THE INVERTED YIELD
CURVE IS AN OLD STORY.
IF RATES KEEP ON RISING, CAN INVESTORS KEEP ON SMILING.
INVESTORS KEEP ON SMILING.
WHAT DO YOU SEE?
JACK HOUGH: A STRATEGIST I KEEP
FOLLOWING PREDICTED WE WILL GET
A SIX MONTHS RALLY, GOING 15%
AND END IN APRIL AROUND 4300
AND HE PUT OUT A NOTE FRIDAY
THAT HE BELIEVES THAT WILL
HAPPEN.
I THINK HE’S RIGHT.
YOU DON’T HAVE TO LIKE THE
STOCK MARKET TO THINK IT’S
GOING TO GO UP.
IN A SECULAR BEAR MARKET, IT
MEANS WE GET GROUPS OF 20% IN
BOTH DIRECTIONS HAPPENING ALL
THE TIME AND TAKE ADVANTAGE OF
THEM.
THAT IS WHAT WE ARE IN.
HE IS WORRIED WHAT COMES NEXT,
WHAT COMES IN SEPTEMBER BUT FOR
NOW --
JACK OTTER: CYCLICAL BEAR.
NEXT TWO WEEKS, A LOT COMING
UP.
THE JOB NUMBERS COMING UP. ANYTHING YOU SEE TO END THE
ANYTHING YOU SEE TO END THE
BANISTER RALLY?
JACK HOUGH: A STRONG JOBS
REPORT IN JANUARY.
IT COULD KNOCK THINGS DOWN
AGAIN BUT WE ARE LOOKING AT
200,000 IN THAT LEVEL.
JACK OTTER: THERE IS A CERTAIN
THING CALLED INVESTOR DAY.
IT HAS A CERTAIN PURPOSE, TESLA
DID NOT GET THAT MESSAGE.
JACK HOUGH: YOU DON’T HAVE TO
HAVE ONE.
THEY DID, DURING THE TEN YEARS
IT WENT THROUGH 2,020 ONE, THE
STOCK WENT UP 18,000%, YOU
DON’T NEED INVESTOR DAY FOR
STOCKS GOING UP LIKE THAT.
THE STOCK WAS WRECKED LAST
YEAR.
THE PURPOSE OF INVESTOR DAY,
YOU ENSURE TECHNOLOGY, STRATEGY
DIDN’T GO WELL, STOCK FELL 6%.
INVESTORS WON -- THEY WANT TO
HEAR ABOUT A LOWER COST CARBON,
$30,000 CAR, WE GET DETAILS ON
THAT.
THE PRODUCTION COSTS ARE DOWN
BY HALF, THAT IS A BIG DEAL.
THERE WERE A LOT OF DETAILS ON
ROBOTS.
ELON MUSK SAID I THINK WE MIGHT
EXCEED A 1-TO-1 RATIO OF ROBOTS
TO HUMANS.
THAT IS HOW SMART PEOPLE SAY
THEY WILL OUTNUMBER US AT SOME
POINT BUT MORE QUESTIONS THAN
ANSWERS.
ONE ANALYST, DETAILS WERE
LIMITED, SHORT ON SPECIFICS.
IT DIDN’T GO -- THE LAST ONE,
THIS WAS PART OF THE NEW MASTER
PLAN 3.
LAST TIME WAS IN 2,016.
THEY SAID WE WOULD HAVE A
FUTURE OF ROBO TAXES, I WONDER OF ROBOTS WILL TO THAT, THAT IS
OF ROBOTS WILL TO THAT, THAT IS
WHERE WE ARE.
JACK OTTER: TESLA GOES UP 77%. %.
IS THIS THE END OF THAT RALLY?
JACK HOUGH: STOCKS WENT UP
$220, 15% MORE.
IT IS DIFFICULT TO TELL.
THERE’S ONE PROGNOSTICATOR THAT
SAID STOCK PRICE IS TOO HIGH
AND LAST OCTOBER TESLA IS GOING
TO BE WORTH MORE THAN APPLE AND
SAUDI ARABIA PUT TOGETHER
MULTIPLYING SEVEN TIMES.
ELON MUSK IS ALL OVER THE
PLACE.
JACK OTTER: ANOTHER INVESTOR
DAY DIDN’T GO SO WELL, GOLDMAN
SACHS.
CARLETON: A LITTLE BETTER THAN
TESLA, YOU HAVE QUESTIONS ABOUT
STRATEGY WHICH THERE ARE PARTS
OF GOLDMAN’S VISIT THAT ARE
STRONG, INVESTMENT BANKING IN
ASPEN WEALTH MANAGEMENT,
MACROECONOMIC CONCERNS HURTING
THOSE BUSINESSES ACROSS THE
BOARD.
WHAT IS HURTING GOLDMAN IS THE
CONSUMER BUSINESS.
THOSE BUSINESSES DON’T BELONG
IN GOLDMAN SACHS.
DAVID SOLOMON SAID WE ARE
LOOKING AT STRATEGIC
ALTERNATIVES FOR THOSE
BUSINESSES.
A LOADED TERM ON THE STREET BUT
IN THE SAME BREATH WE WANT THEM
TO BREAKEVEN BY 2025 BULGE --
BOTH OPTIONS ARE NOT THAT
GREAT.
YOU GOT TO GET A HANDLE ON WHAT
YOU WANT GOLDMAN SACHS TO BE.
JACK OTTER: THEY COULD SELL IT
FOR MORE.
A KLAIN THIS BARRON HEADLINE,
FROM VAMPIRE SQUID TO MEDIA
HURTING.
CARLETON: GOLDMAN WAS BOTH
ADMIRED AND CRITICIZED FOR ITS
ABILITY TO MAKE MONEY IN ANY
MARKET AND RIGHT NOW, THEY
DON’T LOOK LIKE THE BIG GUY ON
WALL STREET.
IT IS PROBABLY GOING TO MORGAN
STANLEY.
JACK OTTER: THEY ARE AN
ASPIRING SQUID?
CARLETON: ASPIRING TO CALAMARI.
JACK OTTER: GOLDMAN FALLS BELOW
BOOK VALUE.
WE SHOULD KEEP WAITING.
CARLETON: KEEP WAITING, THE