In all industry segments, companies have to determine who are their customers and concentrate on them. Sometimes the customer is the general public, but often the public is a segment of the public. Hopefully the company understands and serves that segment very well and those customers are loyal repeat business and the company has reasonable margins to be profitable. In the world of investment banking, Goldman Sachs is an institutional focus which includes governments around the world, the large corporate companies, investment managers, pension funds and hedge funds and their own fund. The good news is institutions tend to pay their bills and are regular users of Goldman Sachs expertise. The bad news is they are looking to save money and outperform the markets on a yearly basis, without being indexed.

In an article by Noor Zainab Hussain and Matt Scuffham of Reuters, Goldman executives said a record backlog of deals will help drive profits for the rest of the year after the bank smashed 2nd quarter estimates. In the 3 months ending June 30, Goldman announced $1.5 trillion in deals, up 13% from the first quarter.

Goldman’s investment banking’s revenue rose 36% to $3.61 trillion in the last quarter, which allowed them to retain the top ranking of global M&A advisory according to Refinitiv.

Total net revenue increased to $15.39 billion or $15.02 a share, beating estimates of $10.24 a share.

The global markets business which includes the trading business reported a 32% decrease in revenue.

Linking to dividend paying stocks, as you examine your investments pay attention to what market segment they target and whether they are maintaining or increasing market share. In the institutional field, a few percentage increase can generate extra profits because of the volumes. (Goldman CEO noted a 160 basis points of market share). In the institutional market execution is very important or firms move money to other firms.

There are more questions than answers, till the next time – to raising questions.