Bernie Madoff. Goldman Sachs.
Those two names don’t seem like they’d have a lot in common, do they?
Madoff is a despised figure, while Goldman Sachs is a revered firm on Wall Street. Madoff just received a 150-year jail sentence, while Goldman just recorded the biggest quarterly profit in its history as a public company.
So, what do they have in common, and what can you learn from them?
Most people don’t realize this, but Madoff made a large chunk of his money over the years not through his investments but by his market making activities. For those unfamiliar with market makers, these firms maintain a market in a particular stock by buying and selling shares in it, and filling orders accordingly. Madoff’s firm was known to traders under the symbol MADF.
So, Madoff accumulated much of his fortune through trading-related activities. Meanwhile, Goldman Sachs operates in a similar manner.
You might assume that a firm that won’t even considering taking you on as a client unless you have at least $5 million to invest would make most of its money through its investments.
But, you’d be wrong.
Roughly 70% of Goldman’s revenues comes from trading-related activities; namely, through its role as a market maker and through its trading desk.
The takeaway here is that there’s far more money to be made by trading, not investing. Why else would Maddoff and Goldman be so heavily involved with trading? This is particularly true during chaotic, tumultuous times like those that we’ve experienced over the past few years.
As a trader today, you have far more advanced tools at your disposal than you did years ago. The opportunities are there for you. It’s up to you to use them as wisely as possible, and get the most profits out of your trading.
Granted, successful trading isn’t easy. But, I can teach you how to do so.
As Maddoff and Goldman Sachs showed, there’s a ton of money to be made through trading. So, why not grab your little slice of the pie?