Goldman Sachs is still Goldman Sachs

April 30, 2009 | By Jim Kim

There's been a lot of talk about Goldman Sachs's big rise in VAR in the first quarter--to $240 million, which is roughly nine times more than at JPMorgan Chase. What's interesting is that Goldman Sachs seems to be returning to its recent, quite successful strategy, which involves a lot of proprietary trading. After it and Morgan Stanley were forced to become commercial banks, many suggested if it would be forced to become a new kind of bank, one that took more deposits and took less risk. But it seems like the bank is once again emphasizing its trading and principal investment prowess, even as it builds cash.

TheStreet.com offers some interesting numbers. In 1999, investment banking accounted for 33 percent of revenue, "while trading and principal investments, which encompasses all investing done in proprietary accounts, took up 43 percent. By 2007, investment banking contributed a meager 16 percent of annual revenue, while trading and principal investments accounted for more than 68 percent." My guess is that intends to stay on the latter end of the spectrum. Which has worked for the company in the past. I can't see another top bank following it down this road.

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