Goldman Sachs, Google and General Electric…The ‘G’ Stands for Confusion

It is hard not to be aggravated with our markets and public companies, their leaders and boards. Today, I was noticing the three ‘G’s and their horrific stock performance.

I don’t see a light at the end of the downward spiral for the three ‘G’s’ $GOOG $GE and $GS

They are too confusing.  They are all countries.  They have tremendous cash flow, but who wants to own a country other than Warren Buffett who can cut his own cash flow deals off the top.  They are all their own ETF’s.

Despite all the financial cocktails and shennanigans, shareholders are voting right now and they are pissed.  These businesses have become too complicated.  Nobody wants to own them.

Goldman did not need capital when they went public, just liquidity.  They got it.  Now it’s time to go private.  The stock must go low enough that they decide to do so.

People will say it can’t happen…look at $YHOO.

Google did not need money to go public, and if they stay public, a brain drain will continue if the stock drifts lower so what’s the point.  Take it private.  Give all the goddman perks you need, buy the moon and turn it into cheese, just stop it with public shareholder money.

Nobody could describe the business of General Electric anymore so why anyone owns it is beyond me.  Privatize it and spin off the growth parts.

We need to keep the pressure up on the big three ‘G’s’.

These companies act like they do not want to be public so they should not be public anymore.  The press wastes so much time talking about them and the counter productivity has finally caught up.

It would be exciting right now if I could have faith in this ‘bear’ market.  We need a good one.  We need a clean one.  I doubt we get any of them so we get a high $VIX and volatility up the yingyang.

I don’t need to #OccupyWallStreet …i just need to stop owning public company shares and the lazy ETF’s and mutual funds that closet index.

It’s fun watching the revoution taking place with young entrepreneurs.  I get the calls post exit asking what to do with the cash.  Not one wants to own stocks.  They took the risk already by starting companies and would prefer reinvesting in other entrepreneurs.  That’s risk they can quantify.

Big changes are at hand…



    • unstoppable.  the bigger the bear, the better for amzn because of thir balance sheet and ability to invest through this meltdown…just pick your spots carefully on the downside.  i am waiting for 170’s or market strength to return

  1. ivanhoff says:

    Recency and ego are major biases that impact investors’ decision making.

    Young entrepreneurs are looking at recently successful private deals and think that it’s easy and safe without even contemplating liquidity and counterparty risk. I think many of them have seen only the growth stage of the cycle and are for some rude awakening. 

    There is a lot of hate for stocks currently, which is good in long-term perspective. Public companies will come back as popular investment and asset class when the majority of gains in the new bull cycle have already been made.

    • of course dude, but we are going to lose a generation of young investors that wont go into banking or trade stocks…trust me this trend is long underway but in inning 3.  it does make for better investing for those of us that love it though

      • jonny O says:

        Howard –

        You are dead on right.

        I’m a pro trader. Primarily ES and TF futures. When I do trade stocks, I’m appalled at the choices I have. This dinosaur or that dinosaur. For every sorta-exciting company like LULU there is a dozen GEs and Fs and CBSs. Yawn. I don’t want to trade GOOG, I want to trade TWIT or FBK. And I really don’t even want to trade those, I want to trade the unproven ideas of renegade entrepreneurs. Ideas at the edge of now.

        Somewhere in the meeting of markets and concepts like this has to lie the future:

        VSE? Venture Stock Exchange? HQ in San Diego CA, Howard Lindzon CEO?

        Build it. Traders and investors will come…

  2. googlemonopolyeu says:

    Good piece and interesting group to pull together.   Thanks for penning this.

    I could say a lot about the three G stooges at hand.  How to be concise ? :)

    Both Goldman and GE were beneficiaries of bailout money during this economic reset.  

    Google has yet to do such “officially”.   However, Google is churning public money as it invests in “green pork” projects with government money riding along.  Google also has received more than it’s fair share of tax giveaways where it has opened facilities.

    What do these three G’s of financial doom and shareholder disregard really have in common:

    Goldman Sachs effective tax rate circa 2008 was 1%. About the same time they received at least $800 billion in tax payer bailouts.

    General Electric effective tax rate 0%.  GE in recent years has carry forward losses that write down their income to negative territory, so much in fact, that GE was reported to have received over a $1 billion tax refund in one recent years.

    Google effective tax rate 2.4%.  Based on the acquisition (if approved) of Motorola Mobility, Google will inherit BILLIONS in carry forward tax credits effectively reducing their tax bills at least through 2016 to $0.  Google will, like General Electric receive big fat refunds from the IRS.

    All three companies launder their questionably accounted for gains through multiple foreign banking money laundering havens.   They do that precisely to avoid paying taxation in the United States and in other places where they generate masses of income.

    They might be smart, but what all three do is and has been very dishonest, deceptive and should be illegal under US and foreign laws.

    All three companies are heavily petitioning Congress for another tax repatriation holiday (did one before in 2004). The idea is they get a preferred 5% tax rate to bring their dirty money back as opposed to the already low rates  they face.  In return for allowing the dirty cash to come home, the three financial stooges promise to create jobs.

    Last time Congress was fooled and there were no jobs created.  Many of them actually cut jobs.

    What else do all three of these corporations have in common?

    They are in bed with the US Federal Government.   WIthout the feds wheeling, dealing, buying and muscling for them, they’d be bankrupted eons ago.  Thus, the permission to evade taxes, violate laws and make a mockery of the public’s trust.

    You can read about the repatriation mess in our piece Rolling Stone mentioned:

    We have an ongoing series about the repatriation holiday:

  3. TheAcsMan says:

    I like your content and reasoning, but when it comes to alliteration, you need to admit that Goldman, Geithner and Google works better and has a popular musical antecedent

    Back when I wrote that blog, in April, the dilemma was how to work General Motors into the title. The Spanish version took care of that. I look forward to re-reading your blog entry in Barcelona

  4. googlemonopolyeu says:

    I should note that Google’s Q3 earnings are on October 13.  Back on September 22, we called for Google to get down to the $490’s prior to earnings.   They did that today.

    We see Google heading to $475 territory prior to earnings.   Could be deeper reductions, but depends on how much info Google leaks about earnings prior to their announcement.

    If you are a shareholder, better adjust for that.   Certainly will post big income numbers like most quarters, but it won’t be without shareholder frustration and reasonable concern (spending on acquisitions like a drunk sailor away at a foreign port, unfairly competing with people while smiling and saying otherwise, and that $500 million illegal drug dealing fiasco that should have thrown Larry Page in the slammer (current shareholder litigation against Google for this)).

    Unsure why anyone would hold GOOG shares for the long term, they are doomed to decline.   

    We can’t even stage a corporate raider style take over and oust the bums at Google since they prohibit any control like such.   How they passed through regulatory controls to become public is beyond me.   Their annual shareholder meetings are doozies.  Well worth seeing the same old gripes squashed by Page, Brin and Schmidt unilaterally via their controlled proxy voting.

  5. tgorman says:

    Lindzon is out of his tree. The lower GE goes the more stock I will buy. They have tons of cash and are diversified in many markets and countries. I’m not looking for the triple digit homerun. I’m loving the dividends that I am willing to bet will continue or even grow a point or 2.

  6. Pitter says:

    This is right that  the risk already by starting companies and would prefer reinvesting in other entrepreneurs.This is well informative content for a businessman.I am very impressed to this content.Thanks to share this blog with us. 

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