Goldman Sachs CEO is worried about excessive market greed
Unlike Michael Douglas' Gordon Gekko character, Goldman Sachs (GS) CEO David Solomon thinks greed is not good for Wall Street.
"When I step back and I think about my 40-year career, there have been periods of time when greed has far outpaced fear. We're in one of those periods," Solomon said during an interview at the Bloomberg New Economy Forum in Singapore on Wednesday.
"Generally speaking, my experience says that those periods are not long-lived. Something will rebalance it and bring a little bit more perspective," Solomon added.
His comments come at a time when the broader market is near all-time highs, and meme stocks and cryptocurrencies are surging on social media hype. Meanwhile unprofitable electric vehicle makers with little, if any, sales — such as Rivian and Lucid — are worth more than established auto companies.
The Goldman Sachs CEO isn't the only one who's worried about excess and froth in the market.
The CNN Business Fear & Greed Index, which measures seven indicators of investor sentiment, has been showing signs of Extreme Greed for much of this month.
Solomon told Bloomberg he's concerned about how the pandemic-fueled "massive amount" of stimulus from central banks and governments around the world is pushing inflation higher, along with prices of assets like stocks.
That's why the US Federal Reserve is now looking to pull back some of its crisis-era support by starting to unwind, or taper, the amount of bond purchases that have helped keep long-term rates low.
Market unprepared for more volatility?
Solomon said it's unclear if the market is prepared for how quickly the Fed is looking to taper, not to mention the possibility of interest rate hikes after the taper is done.
"There is a chance that central banks can unwind this massive stimulus in a way that doesn't create some sort of a taper tantrum or some sort of real shock to markets, but there's also a chance that they can't be done that way," Solomon said.
He also told Bloomberg that if long-term interest rates continue to move up, "that in and of itself will take some of the exuberance out of certain markets."
Solomon warned that many investors don't remember, or weren't yet around, when inflation skyrocketed during the 1980s and the Fed was forced to drastically raise rates: "It's been a long time since we operated in an environment where the general trend on interest rates has been higher."
What's more, with so many stocks and other assets performing so well, investors may be fooling themselves by thinking that it's easy to make money in the market, he added.
"Everyone feels quite smart right now because most of the things you invest in are going up. That's not the way it normally works," he said. "My experience tells me this is a moment in time that's not a sustainable moment."
Of course, Solomon's own Goldman Sachs has benefited handsomely from this environment. The bank's stock is up nearly 50% this year, making it one of the top performers in the Dow.
Goldman Sachs said last month that it posted profit of $5.4 billion for the third quarter, topping forecasts. Revenue also surpassed expectations, surging 26% from a year ago to $13.6 billion.
Bonuses are expected to rise sharply at Goldman Sachs and other top investment banks this year as a result.
高盛CEO担心市场过度贪婪
与迈克尔·道格拉斯饰演的戈登·盖柯角色不同，高盛 (GS) 首席执行官大卫·所罗门认为贪婪对华尔街不利。
“当我退后一步，回想我 40 年的职业生涯时，有一段时间贪婪远远超过恐惧。我们正处于其中一个时期，”所罗门在接受彭博新经济论坛采访时说新加坡周三。
“一般来说，我的经验表明，这些时期并不长。有些事情会重新平衡它并带来更多的视角，”所罗门补充道。
他的评论是在大盘接近历史高点之际发表的，模因股票和加密货币在社交媒体的炒作中飙升。与此同时，不盈利的电动汽车制造商（如 Rivian 和 Lucid）销量甚微（如果有的话），其价值超过成熟的汽车公司。
高盛首席执行官并不是唯一一个担心市场过剩和泡沫的人。
衡量投资者情绪的七项指标的 CNN 商业恐惧与贪婪指数在本月的大部分时间里都显示出极度贪婪的迹象。
所罗门告诉彭博社，他担心大流行引发的“大规模”刺激措施如何推高通胀以及股票等资产的价格。
这就是为什么美国联邦储备委员会 (美联储/FED) 现在正寻求通过开始放松或缩减有助于保持长期利率低位的债券购买量来撤回其在危机时期的部分支持。
市场对更大的波动毫无准备？
所罗门表示，目前尚不清楚市场是否为美联储寻求缩减的速度做好准备，更不用说缩减完成后加息的可能性。
“中央银行有可能以不会造成某种缩减恐慌或对市场产生某种真正冲击的方式解除这一大规模刺激措施，但也有可能无法这样做，”所罗门说。
他还告诉彭博社，如果长期利率继续上升，“这本身就会削弱某些市场的繁荣。”
所罗门警告说，当 1980 年代通货膨胀率飙升，美联储被迫大幅加息时，许多投资者不记得或还不知道：“我们已经很长时间没有在总体趋势上升的环境中运作了。利率已经更高了。”
他补充说，此外，鉴于如此多的股票和其他资产表现如此出色，投资者可能会认为在市场上赚钱很容易，这是在自欺欺人。
“现在每个人都觉得自己很聪明，因为你投资的大部分东西都在上涨。这不是通常的运作方式，”他说。 “我的经验告诉我，这是一个不可持续的时刻。”
当然，所罗门旗下的高盛也从这种环境中受益匪浅。该银行的股价今年上涨了近 50%，使其成为道琼斯指数中表现最好的公司之一。
高盛上个月表示，其第三季度利润为 54 亿美元，高于预期。收入也超出预期，同比增长 26% 至 136 亿美元。
因此，今年高盛和其他顶级投资银行的奖金预计将大幅增加。
