July 20, 2010 – Way to Go, Goldman!

Featured Trades: (GS)


3) Way to Go, Goldman! I am somewhat annoyed with the SEC’s settlement with Goldman Sachs (GS) last week, as I was within a hair’s breadth of putting out a buy recommendation. The stock hit a low of $130, but being the tightwad that I am, was holding out for $125. The deal was clearly a win-win for both sides, the announcement causing the stock to pop an instant 15%.  The Obama administration can now rightly claim that they have punished the evil banksters, extracting $550 million, the largest settlement in history. The cost to GS came in at only 1% of the high end estimate that analysts were looking at, and they are now free to rape and pillage as they wish. Best of all, they ring fenced their civil liability, shattering the wistful dreams of countless class action attorneys. ‘Kill all the lawyers’, as Shakespeare wrote in King Henry VI! Who can argue with that? The ‘fabulous’ Fabrice Tourre was hung out to dry, which we all knew was going to happen. I still think GS is the preeminent powerhouse of the financial markets, and that their shares will outperform every measure. When the fox is still running the hen house, I’ll bet on the fox any day of the week. Keep GS on your ‘buy on meltdowns’ list.

Goldman Sachs Group, Inc.