Goldman Sachs is out with a number of reports in recent weeks highlighting their positioning for 2013. Now, it’s important to keep in mind that these kinds of reports are no holy grail. In fact, if you review the same report from last year (see here) you’ll notice that the picks didn’t actually perform as Goldman might have expected. But it’s always good for brain storming. And after all, it’s not like Goldman Sachs is a bunch of dummies. Anyhow….
Goldman’s favorite position for 2013? They say buy US large cap banks (via Business Insider):
“This recommendation is based on several features of our 2013 outlook: (1) a fairly supportive view of the economic and equity market landscape for 2013, particularly in the US; (2) US monetary policy that remains extremely accommodative, focused on MBS purchases and the transmission of its policy through the housing channel; (3) continued improvement in the housing sector in terms of activity and prices, building on advancesalready seen in 2012; (4) transmission of the housing sector strength into large cap US banks; and (5) the fact that financials have, thus far, lagged improvements seen in other housing-related equities over the last several months.”
Some other picks Goldman recently released (via Zero Hedge):
Longer-term structural views are expressed in our Top Trade recommendations. These are typically managed with a wide stop, and assessed on the basis of whether the fundamentals continue to support the medium-term investment theme.
- Stay short AUD/NOK, opened at 5.90 on 03 Dec 2012, with a target of 5.00 and a stop on a close above 6.35, currently at 5.88.
- Stay long risk (sell protection) on the CDX High Yield on-the-run index, opened at 506bp on 04 Dec 2012, with a spread target of 450 and a stop on a close above 550, currently at 516.
- Go long the Commodity Carry Basket (Crude, Corn and Base), opened at 100 on 05 Dec 2012, with a target of 112 and a stop on a close below 94, currently at 100.
Some detail on the Commodity Carry Basket:
The Commodity Carry Basket: Crude, Corn and Base (CCB)
To take advantage of this increasing carry in key commodity markets, we recommend opening an equally weighted position in GSCI-style rolling front month indices in petroleum, corn and, for base, copper less aluminum.
Crude: long the S&P GSCI® Petroleum Index
Corn: long the S&P GSCI® Corn Index
Base: long the S&P GSCI® Copper Index against short the S&P GSCI® Aluminium Index*’
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.