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Are Goldman’s 'Best-Of-Breed' Days Drawing To An End?

Monday, 24 Aug 2009 | 5:29 PM ET

Nobody does it better, makes me feel sad for the rest.
Nobody does it half as good as you. Baby you're the best!

- Carly Simon

Many consider Goldman Sachs the gold-standard of the Street. Fans will tell you it’s the one firm everyone emulates, but no one can imitate.

Perhaps Goldman Sachs was best described by analyst Dick Bove when he said, "Everyone can do what Goldman does. The difference is that Goldman does it!”

Part of their success comes from the firm’s uncanny ability to navigate risk. ”This company puts a huge investment into risk management that others don't. And Goldman has the discipline to get out of trades when they should," said Bove.

But for all of Goldman's prowess on the trading floor, lately they seem like a klutz on the stage of public opinion.

Over the past weeks the Goldman guys have been the object of rumors, conspiracy theories and more.

Here are just a few examples:

- When Goldman reported record earnings this past quarter, critics argued the strong numbers were nothing but a dog and pony show having more to do with accounting gimmicks than anything else.

- Because of a court case involving Goldman’s computer code, the firm faces the prospect of having to go public with its algorithms, which the New York Times says could potentially reveal it worsened market swings.

- After facing backlash from a decision to pay about $11 billion in bonuses at year’s end, CNBC’s Charlie Gasparino reports that senior executives inside Goldman are in a panic over its image, trying to hire a "brand manager"—and even blaming a prejudice against the firm's Jewish chiefs.

- And inMonday’s Wall Street Journal, the paper suggests Goldman favors some of its clients by offering them trading tips. The practice started about two years ago and since then the Wall Street firm has given preferred clients ideas on hundreds of stocks, writes the Journal.

With so much backlash some investors are starting to whisper that Goldman’s days as best-of-breed may be drawing to an end.

Goldman Sachs is a very complicated firm, explains Charley Ellis, author of 'The Partnership: The Making of Goldman Sachs. But this too shall pass, he tells the desk.

What do you think? We want to know!

Why is Goldman so Good?
Insight on why Goldman Sachs is so different, with Charley Ellis, "The Partnership: The Making of Goldman Sachs" author.





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Trader disclosure: On Aug 24th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (BUCY) & Short (BUCY) Calls; Najarian Owns (C) Calls; Najarian Owns (FCX), Is Short (FCX) Calls, Owns (FCX) Puts; Najarian Owns (MS) And Is Short (MS) Calls; Najarian Owns (MSFT) And Is Short (MSFT) Calls; Najarian Owns (PALM) Calls; Najarian Owns (V) & Short (V) Calls; Najarian Owns (YHOO) Call Spread; Terranova Owns (AMZN), (MSFT), (WFT), (BTU), (MA), (SHLD); Terranova Is Short (KBH); Terranova Works For (VRTS); J. Najarian Owns (AMD), (AAPL), (BX), (DRY), (LDK), (NTRS), (NUE), (FRE), (FNM), (NVLS); J. Najarian Owns (BAC) Preferred; Cortes Owns (SPX); Cortes Is Short Nasdaq 100; Cortes Owns (GS)

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