• 03 Dec 2013 at 1:26 PM

How To Be More Like Goldman Sachs, Part Four

Kicking off this week, ignore history and gamble that Chinese companies will grow—but that their favorite metallic addiction will get cheaper, anyway.

“Open long China equities via HSCEI index and short copper Dec 14 LME future, opened at 0.0% (on return basis, corresponding to respective price levels of 11542.1 and 7064.5) on 2 Dec 2013, with a target of 25% and a stop on a close below -13%.”

Confused? You should be.

As the bank notes, copper prices are usually positively correlated to Chinese equities….

“This long equity/short commodity trade is a way of isolating exposure to China equity risk via a long HSCEI position, which we think is underpriced by the market given our views of stable growth and ongoing rebalancing there, while the copper short hedges out exposure to China’s economic growth, which we think will be stable but not stellar,” Goldman’s analysts wrote in a note to clients Monday.

Goldman Sachs’s Big Idea #4: Pounce as China and Copper Diverge [WSJ MoneyBeat blog]

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Comments (8)

  1. Posted by OpportunityCost | December 3, 2013 at 1:50 PM


  2. Posted by Guesto Joe | December 3, 2013 at 1:55 PM

    Shazar taking a good 5 hours to get out 20 words…5.5 hours to master dat copy/paste yo.

  3. Posted by I man half shaz | December 3, 2013 at 1:59 PM

    At least he doesnt suck as much as the schlong suckers over at Above the Law. Those queermos could suck a basketball through a pool noodle.

  4. Posted by Shaz's beard | December 3, 2013 at 2:15 PM

    Yes, very confusing concept of long/short pairs trade of positively correlated assets to hedge out beta risk. Shaz writing for the WSJ now too?

  5. Posted by ThatsVVacc | December 3, 2013 at 2:19 PM

    How to be more like Matt Levine (I'm kind of surprised this isn't carved into stone tablets at the DB office, but nonetheless):

    1. Learn to write intelligently while using the diction of, like, a 10th grader
    2. Find things to write about you think we might enjoy to read
    3. Charts
    4. Graphs
    5. Footnotes
    6. ???
    7. Profit as a Bloomberg columnist.

    Take some notes Shazzypants.

  6. Posted by Commando Shaz | December 3, 2013 at 3:55 PM

    Who says I wear pants?

  7. Posted by Guest | December 3, 2013 at 4:49 PM

    Shaz have some respect for yourself for christsakes. Hes prob an IT guy doubling as a journalist for a blog site.

  8. Posted by Guest | December 4, 2013 at 12:08 PM

    I don't have a problem with his copy-pasting, it's just that his writing is not only scant but terrible.