Were Goldman Sachs partners slightly stupid?

eFC logo

They may be among the wealthiest high achievers on the planet, but partners at Goldman Sachs don't seem to have made a particularly good call when it came to selling their own stock last year.

According to the Financial Times, Goldman partners sold almost $700m of stock in the eight months following the collapse of Lehman Brothers.

Much of the selling took place between November and March when Goldman was in receipt of TARP money and its share price was at rock bottom.

During that time, Goldman shares oscillated between $53 and $92. They've since recovered to $150.

What made the partners sell? It may have been necessity. Last year Goldman was said to

cap cash bonuses at $220k, with the remainder paid in stock and options. In February, CNBC reported that partners were having to borrow to cover margin calls.

Yves Smith at Naked Capitalism says this isn't the first time Goldman Partners have been spooked - the same happened in 1994 when many went limited and set their partnership interest according to the firm's depressed value. That, however, was a smart move which limited their exposure to further downside.

This time, however, there little evidence of such cleverness. If they'd hung for a few months the Goldman partners could have made as much as $1.3bn extra - and even more if prices rise an extra 30% as Meredith Whitney predicts.