>Apple + Microsoft in 2012 ($70b in profit) = Goldman + Bank of America + Citi + Wells Fargo + JP Morgan + PNC + BB&T + Morgan Stanley + Blackrock etc.
Heh heh.
You are conflating investment banks with commercial banks and mutual fund managers. The goal of deposit taking institutions isn't to make $70b in profit...its to safeguard deposits, make some modest profit ( if any ) by lending out to sound borrowers with collateral. Similarly, if the mutual fund guys take outsize risks by investing in high beta stocks & they end up on the wrong side of the trade, the funds would be unable to attract any investor interest in the future. Even a tiny 1% return over S&P is huge for mutual funds.
Here's a more apples to apples comparison:
a. $125 million hedge fund, run out of a 2-room office, with 3 PhDs in Finance from MIT,MIT & Chicago. All the software is VB macros on MS Excel + 3 Bloomberg terminals. Profit $7m in first year. Each guy takes home $2m
b. 5 person startup in the Valley gets bought out for $20m. Each co-founder takes home $2m, after the VCs get their share.
a == b. But which would you rather be ? I interviewed with both at one point in time...
I intentionally mixed the financial companies, because they are all run by 'money people.' That's the whole point. Did you actually think that was a mistake?
The goal of banks is to make money by doing all sorts of things, from trading government paper, to providing liquidity to businesses (credit), to issuing standard loans, to issuing mortgages, to taking standard deposits, to issuing more complex CDs, to issuing credit cards, and on and on. There's no inherent definition limitation, it's up to the banks and the regulators to decide.
The goal of all of those entities I listed is to make money. They're all publicly traded corporations.
A more apples to apples comparison? What are you talking about? The point is to note the fact that there's A LOT more profit in big tech than in big finance.
>The goal of all of those entities I listed is to make money.
No its not.You obviously know enough about this topic, yet you make this dubious claim. The goal is to be in the black to not go in the red. That's a very specific accounting goal, look it up.
> The point is to note the fact that there's A LOT more profit in big tech than in big finance.
Please dude. Apple isn't taking that "LOT more profit" and subdividing it among its employees, yeah ? Whereas when you run a tiny hedge fund and take in a tiny $7m, that turns into a tiny $2m windfall for you personally. Lot easier to do if you have the skills, and certainly a lot more lucrative.
Heh heh. You are conflating investment banks with commercial banks and mutual fund managers. The goal of deposit taking institutions isn't to make $70b in profit...its to safeguard deposits, make some modest profit ( if any ) by lending out to sound borrowers with collateral. Similarly, if the mutual fund guys take outsize risks by investing in high beta stocks & they end up on the wrong side of the trade, the funds would be unable to attract any investor interest in the future. Even a tiny 1% return over S&P is huge for mutual funds.
Here's a more apples to apples comparison: a. $125 million hedge fund, run out of a 2-room office, with 3 PhDs in Finance from MIT,MIT & Chicago. All the software is VB macros on MS Excel + 3 Bloomberg terminals. Profit $7m in first year. Each guy takes home $2m b. 5 person startup in the Valley gets bought out for $20m. Each co-founder takes home $2m, after the VCs get their share.
a == b. But which would you rather be ? I interviewed with both at one point in time...