Wall Street firms seem to be of two minds, when it comes to investing proprietary funds. The conventional wisdom seems to be that Goldman Sachs is returning to its old (very profitable) ways. Judging by its VAR, it is making more proprietary bets and few would be surprised if its principal investment gravy train started rolling again. Others, like Morgan Stanley, seem to be going the other direction.

Bloomberg reports that JPMorgan Chase has shuttered the principal investment management unit's hedge-fund business and its private-equity division, except for a team that focuses on Asia. In November, the bank shut down its global proprietary trading unit. These moves make a lot of sense given the new reform movement underway, which makes the case of Goldman Sachs all the more interesting. As all this settles out, don't be surprised if Goldman is accorded the lowest PE multiple of the group, but it's used to that. 

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