{ "docId": "019dd923-5e88-73ef-bd5a-0711e901e65d", "docSlug": "10b0bc5400154c9b", "documentTitle": "why invest in goldman sachs", "authorId": "GoldmanSachs", "authorName": "St. John's University Student Managed Investment Fund", "documentKindSlug": "consulting-deck", "documentKindLabel": "Consulting deck", "sourceTypeSlug": "equity_research", "sourceTypeLabel": "Equity research", "presentationDate": null, "orientation": "portrait", "aspectRatio": 0.773, "pageNumber": 25, "pageCount": 28, "prevPage": 24, "nextPage": 26, "slideType": "risk_register", "function": "diagnose", "density": "overcrowded", "nDataPoints": 0, "notes": "This slide is a text-heavy diagnostic overview of firm-specific risks.", "elementsJson": [ "paragraph" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-5e88-73ef-bd5a-0711e901e65d/25", "deckHref": "/decks/019dd923-5e88-73ef-bd5a-0711e901e65d", "deckJsonHref": "/decks/019dd923-5e88-73ef-bd5a-0711e901e65d.json", "deckAnchorHref": "/decks/019dd923-5e88-73ef-bd5a-0711e901e65d#slide-25", "components": [ { "bbox": { "h": 0.08, "w": 0.72, "x": 0.14, "y": 0.57 }, "kind": "paragraph", "text": "Increases in Interest Rates tend to reduce the value of a client's portfolio. It may also entice clients to transfer their assets out of their portfolio to other products. This will cause a decline in assets, a decline in investment performance relative to benchmark or competitors. As a result there will be decline in management fees, and reputation damage.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "4e39c969-5628-4586-a1bc-94f72f62416e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.72, "x": 0.14, "y": 0.81 }, "kind": "paragraph", "text": "Liquidity Risk may be due to the inability of accessing secured and unsecured debt. It can arise from either general market disruptions or operational problems. Because Goldman Sachs develops complex structured products for both clients and institutional investors, these complex products do not have a readily available market to access in time for liquidity purpose. Investing activities may be restricted to these markets. In addition, Goldman Sachs ability to sell their assets may be limited due to other market participants", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "68359f9c-085f-451e-8127-7f3e477def60", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.72, "x": 0.14, "y": 0.13 }, "kind": "paragraph", "text": "Goldman Sachs is subjected to certain risk which affects the operation of the firm. These risks include Market Condition and Market Risk, Liquidity Risk, Credit Risk, Operational Risk and Legal and Regulatory Risk.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "72a56665-e984-4fad-952a-897d9bbc6de5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.72, "x": 0.14, "y": 0.75 }, "kind": "paragraph", "text": "In the specialist business, Goldman Sachs is obligated by that stock exchange to purchase securities even in a declining market. This may result in a trading loss and an increase in liquidity.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9900ab10-06cc-4d36-bcd4-81611e9b79e0", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.72, "x": 0.14, "y": 0.2 }, "kind": "paragraph", "text": "Goldman Sachs revolves around Market Condition and Market Risk. Ultimately the company is faced with any changes produced by either one, global financial market or two, economic conditions. These conditions are subjected to sudden and dramatic changes. A favorable Market Condition will be define as one that has high global gross domestic product growth, stable geopolitical conditions, transparent and efficient markets, low inflation, high investor confidence and high business earnings. Unfavorable market conditions are those which have been caused either by outbreaks of hostility, geopolitical instability, decline in business confidence, increase in inflation, corporate, political or other scandals that may reduce investor confidence in capital markets, and natural disasters. There can be any combination of these factors that will impact Goldman Sachs opportunities.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c91fb5c8-f200-431b-8241-4c96147b1a75", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.13, "w": 0.72, "x": 0.14, "y": 0.43 }, "kind": "paragraph", "text": "For the past few years, Goldman Sachs had been operating in a market with low Interest rates. Increasing Interest Rates or High Interest Rates will widen the credit spread. However, market volatility may aversely affect some of the products offered by Goldman Sachs. For instance, an increase in Interest Rate may aversely affect currency, commodity, equity and merchant position of the company. Furthermore, certain trading business depends on market volatility to provide trading and arbitrage opportunities.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d8312b67-bae7-4086-bd2e-8884932714a9", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.72, "x": 0.14, "y": 0.66 }, "kind": "paragraph", "text": "Industry wide declines in the size of underwriting and mergers and acquisition may have an effect on revenues (making it unable to reduce expense as well as profit margins). A significant portion of revenue is derived from participation in large transaction. A decrease in large transaction due to market uncertainty may aversely affect the investment banking business.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f8c9d73c-32ba-4abc-847d-322c17ce544a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.3, "x": 0.14, "y": 0.09 }, "kind": "title", "text": "VII. GOLDMAN SACHS' RISK", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ea641da7-e105-45a0-91b4-95c993fea43c", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [], "loops": [ { "to": 26, "from": 25, "name": "Cost Of Inaction", "slug": "27-cost-of-inaction", "bestFor": "Urgent budget requests, compliance, risk mitigation", "matchId": "a83656ae-f7d1-468e-a822-d428dc7f426b", "evidence": "The document provides an analysis of Goldman Sachs' risk profile.", "position": 1, "objective": "To highlight the risks associated with not investing in Goldman Sachs.", "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point", "confidence": 0.6, "description": "Quantify what happens if the audience does nothing" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }