Raj Rajarantnam bought Goldman Sachs stock on September 23, 2008 for $125 a share, and sold it on September 24, 2008 for $133 a share. But, had he been smart enough to hold onto the shares until today, they'd be worth $165.(If you've been living with goats in rural Wisconsin, Rajat Gupta, the one time Managing Director of McKinsey & Company has been accused of leaking confidential information to Rajarantnam while Gupta served on the board of Goldman. This topic pains me, as I wrote here.)
Don't let James Stewart manage your money. Raj made 6%, essentially without taking risk, over night. James made 32% in two and a half years, with lots of risk. Heck, Raj didn't even have to put up the cash to settle the trades. James held a very risky stock for two and a half years. (Remember, GS fell below $60 in November!)
So, why insider trade? Very good returns for Raj. If Rajat did it, your guess why is as good as mine.
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