Goldman’s hot shot business is called FICC, short for fixed income, currency and commodities. It’s the unit where CEO Lloyd Blankfein got his start and it is supposed to be the smartest shop on the street.
But revenue from its principal investments grew just 55% from second quarter after losing money a year earlier. Meanwhile, the the small-cap Russell 2000 index is up an eye-popping 75% since March. The S&P 500 has climbed 58%. The Nasdaq composite index has advanced 66%.
In short, Goldman would have done better if it just abandoned FICC in favour of buying an index fund.