Wednesday, October 21, 2009
Goldman on Caterpillar
Someone needs to keep their eyes on Goldman, so I just have to mention Goldman's calls on Caterpillar because they are strangely reminiscent of their conviction sell, then sell, then neutral calls on Garmin. And Goldman Sachs, had so called "huddles" with Garmin and Caterpillar to advise their institutional clients.
Because today Goldman went to a neutral on Caterpillar, from a sell and moved their target to 64 from 48.
On June 12, Goldman moved Caterpillar from a conviction sell to a sell, with a target of 36.
When Caterpillar came out with blow-out earnings in July Goldman kept it's sell target but only grudgingly later increased the price target.
Now Caterpillar has had a massive short position, that only now has trended down to less than 40 million shares. But back in May, Caterpillar did a filing to sell 25 million shares for their Master Retirement Trust. The use? Defined benefit pension plans.
It was done through Northern Trust.
Now we know that Goldman Sachs is the largest player in dark pools. They of course, trade off of that information, and also with their position as Supplementary Liquidity Providers.
Is this front running so engaged and pervasive in the mindset of Goldman Sachs, that they couldn't turn bullish on Caterpillar until after the stock had doubled?
What did they think? That the 25 million shares were in another dark pool that they could get in front of?
Or were their clients, just so short, that Goldman needed to help them?
In any event, I'm selling Caterpillar on Goldman's upgrade.
But then again, I was in at 33! And made 500% on calls to boot!
Because the market or trading isn't complicated when you're not conflicted.
And they'll understand.
Because "we have to tolerate the inequality!"
And this time, its on their research!
Posted by Palmoni at 8:15 AM