What makes a great investor? 🔎

[Goldman Sachs]( [BRIEFINGS] July 7, 2022 Goldman Sachs Chairman and CEO David Solomon on the Economy, Investing and Sustainability Amid slowing economic growth and rising geopolitical tensions, what's top of mind for companies and investors? In this [special episode of Exchanges at Goldman Sachs]( David Solomon, chairman and CEO of Goldman Sachs speaks with NN Investment Partners (NN IP) CIO Valentijn van Nieuwenhuijzen at The Hague, Netherlands, to discuss the topics in focus for clients. On the GS acquisition of NN IP: "It really significantly strengthens our asset management presence in Europe," Solomon said. "It creates some new distribution channels for us. And, in particular, NN IP has been a leader in thinking through sustainable investing platforms and how to think about that on a go-forward basis." Investors are worried about inflation. “The biggest focus, as you would expect, is on the economic environment, with a particular focus on inflation, with a particular focus on the journey out of the pandemic and how that journey is affecting economic growth and activity,” Solomon says. Expect plenty of volatility ahead. “One of the pieces of advice that certainly I'd give right now is that people need to expect that the world's going to be more volatile,” Solomon says. “It's going to be more difficult to make returns on assets than what we've experienced when money was very, very easy.” And don't forget to make time for your passions. “There are different stages in life when you can do different things,” Solomon says. “But having things that you're interested in, having things that you want to invest your passion, your heart, your brain, you know, and being involved in, I think, makes you a more interesting person.” Subscribe wherever you get your podcasts [Spotify]( | [Apple]( [Google]( | [Stitcher]( [Listen to podcast]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Goldman%20Sachs%20Chairman%20and%20CEO%20on%20the%20Economy%2C%20Investing%20and%20Sustainability&body=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DEei32rXunfo) What are the Odds of Recession in the World's Developed Economies? Are we heading into a recession? According to Goldman Sachs Research, the probability of a slump has increased in developed economies. Goldman Sachs Research estimates there's a 30% risk of a recession in the U.S. over the next year, and the likelihood of downturns in the U.K. and eurozone now stands at 45% and 50% respectively. To put this in context, the average annual probability of advanced economies entering recession since the 1960s has been around 15%, according Goldman Sachs Research, which analyzed 77 recessions in advanced economies since 1961. The risk of a downturn in the U.S. is also elevated relative to its own history, given that recession probability has averaged around 12% since the 1990s. Recessions have become less common in the U.S. since the Federal Reserve was created, as inflation expectations have become better anchored and as manufacturing (which tends to be cyclical) has become less important to the overall economy. The unemployment rate, a key marker of a downturn, has risen by 2.7 percentage points in the median advanced economy recession since the 1960s. Countries that endure larger increases in the unemployment rate — such as the U.K., the Netherlands and Sweden — tend to have less frequent recessions. Countries like Germany, Italy and Japan, meanwhile, tend to have smaller increases in the jobless rate but more frequent economic downturns. If a slump is coming, how severe will it be? There are mixed signals on that one. If the economy stumbles, government officials may be less responsive than in the past. Economic overheating — rising labor costs and high core inflation — and large increases in policy rates often come before severe recessions. With that in mind, measures of economic overheating are higher in the U.K., U.S. and Canada than in the euro area and Japan, which suggests that the severity could vary depending on geography. Finally, persistent disruptions in gas exports from Russia would likely cause large contractions in Germany and Italy. But there are also reasons to be optimistic. Throughout developed economies, private-sector finances have been in better shape than they usually are before a recession, and long-run expectations for price inflation and wage growth still appear to be mostly anchored. [Read research]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=What%20are%20the%20odds%20of%20recession%20in%20the%20world's%20developed%20economies%3F&body=https%3A%2F%2Fwww.goldmansachs.com%2Finsights%2Fpages%2Frevisiting-recession-facts.html) Howard Marks’ Investing Advice: ‘Depart from the Crowd’ Above (L to R): Katie Koch of Goldman Sachs and Howard Marks of Oaktree Capital Management Oaktree Capital Management co-chairman Howard Marks famously navigated the 2008 financial crash successfully. But despite his seemingly prescient record, Marks tells Goldman Sachs’ Katie Koch in [the latest episode of Talks at GS]( he has doubts about the value of macro forecasting. “It’s hard to predict the future. It’s not that hard to predict the present,” he said. “There is really no such thing as analyzing the future…but we look to the past for analogies and there was no analogy to the Lehman bankruptcy but the past says we have crises and they end...so we bought.” His investment advice? “Depart from the crowd,” Marks said. “You have to hold a different position. And you have to have resolve to do it…Tomorrow’s winners are usually found on the pile of today’s losers, not on today’s pile of winners.” In other words, you have to be comfortable taking idiosyncratic positions and dare to be different. And if you're worried about failure, just remember: It's good to be humble. “I believe strongly that success carries within itself the seeds of failure. And failure carries the seeds of success…. Success teaches terrible lessons, because it plays to our egos. And I think you learn more from your failures. And hopefully, you learn humility.” [Watch video]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Great%20Investors%20%E2%80%98Depart%20from%20the%20Crowd%E2%80%99%2C%20Howard%20Marks%20says&body=youtube.com%2Fwatch%3Fv%3DwkJXQ46ma8I) Meet the Investor with a $1.3 Trillion Portfolio Ever wondered what it’s like managing the revenue of a country’s oil and gas resources? Nicolai Tangen, the Chief Executive Officer of Norges Bank Investment Management, does it every day. In the latest episode of [Exchanges at Goldman Sachs: Great Investors]( he spoke to Katie Koch about the world’s largest sovereign wealth fund and his work managing about $1.3 trillion in assets for Norway. Although the fund was set up to safeguard the money generated from country’s oil reserves, it has grown into the single biggest investor in the world, owning 1.4% of all listed companies. And Tangen hopes he can leave his mark on the fund, through greater communication, transparency, talent development and crucially, financial performance. But running the world’s largest sovereign fund is not a simple feat, especially when Tangen expects the next 10 years to look very different from the last 25. “I think it’s going to be much, much more difficult to generate returns…it’s going to be a different ball game,” he said. Rampant inflation, deglobalization and geopolitical friction will all make financial markets more difficult to navigate, says Tangen, who acknowledged the limits big shareholders like NBIM face when responding to a changing global environment. His advice to emerging investors? Patience. [Find out more about Nicolai Tangen and Norges Bank Investment Management here.]( [Listen to podcast]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=The%20Investor%20that%20Manages%201.3%20trillion%20in%20Assets%20for%20Norway&body=https%3A%2F%2Fwww.goldmansachs.com%2Finsights%2Fpodcasts%2Fepisodes%2F07-01-22-nicolai-tangen-katie-koch.html) BRIEFINGS Brainteaser: The Real Black Gold It’s World Chocolate Day, an annual celebration of chocolate in all of its forms. But how well do you know the sweet treat? For this week’s BRIEFINGS Brainteaser, which historic civilization is thought to have used the principal ingredient in chocolate — cacao beans — as a form of currency? A) The Romans B) The Incas C) Ancient Egyptians D) The Mayans [Check the answer here.]( [Take quiz]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=BRIEFINGS%20Brainteaser%3A%20Chocolate%20Makes%20the%20World%20Go%20Round&body=https%3A%2F%2Fonegs.iad1.qualtrics.com%2Fjfe%2Fpreview%2FSV_eKE1ZVhKkYm8W6G%3FQ_CHL%3Dpreview%26Q_SurveyVersionID%3Dcurrent) Goldman Sachs Media Highlights CNBC - July 5 [There's still an upside risk to oil markets in the near term, says Goldman Sachs' Jeff Currie]( (04:49) Bloomberg - July 5 [Goldman Sachs' Boak on RBA policy, Australian economy]( (8:14) Bloomberg - June 30 [Goldman Sachs’ Galliers on auto sector outlook]( (5:11) [Subscribe]( [Unsubscribe]( Some of the images used in this newsletter are sourced via Getty Images. The data provided in this newsletter is for information purposes only and should not be construed as investment or tax advice nor as a recommendation to buy, sell, or hold any particular security. Goldman Sachs believes the data in this newsletter is accurate, but does not verify its accuracy independently and does not warrant or guarantee that it is accurate or complete. Goldman Sachs has no obligation to provide any updates or changes to the data. No investment decisions should be made using this data. To the extent this newsletter includes material from the Goldman Sachs Securities Division, please click [here]( for information relating to Securities Division material and your reliance on it. To the extent this newsletter includes material from the Goldman Sachs Asset Management Division, please click [here]( for disclosures. © 2022 Goldman Sachs, All rights reserved. 200 West Street, New York, NY 10282, USA [GS.com]( | [Careers Blog]( | [Privacy and Security]( | [Terms of Use]( [Facebook]( [Twitter]( [LinkedIn]( [YouTube]( [Instagram](