'Good As Goldman' Not So Good

by: Bespoke Investment Group November 10, 2008 | about stocks: GS / MER / MS    

Bespoke Investment Group

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When the credit crisis first hit last year, Goldman Sachs (GS) was crowned the king of Wall Street due to the fact that they not only had little or no exposure to subprime, but they were actually short the stuff.  When the rest of Wall Street was starting to 'fess up to losses in their subprime mortgage portfolios, Goldman was announcing record profits. The aura of Goldman spread across all asset classes.  They became a modern day EF Hutton.  Whenever an analyst from Goldman made a call, it made headlines.  When Goldman said oil was going to $200, it wasn't a matter of if, but when.

Today, however, things for Goldman aren't much better than they are for the rest of the brokerage sector.  As shown below, Goldman is now down more than 70% from its peak of over $250.  While this is still considerably better than the rest of its peers, unfortunately for Goldman, it is catching up to names like Morgan Stanley and Merrill Lynch.  It just goes to show that even the best storm preparations don't always stand up to the elements.

In order to completely catch its peers in terms of declines, GS still has a ways to go, however.  To match the declines in its two closest competitors (Morgan Stanley (MS) and Merrill Lynch (MER)), Goldman would have to fall to $51 and $41, respectively.  To match the decline of Bear Stearns, the stock would have to fall to $11, and if the unthinkable were to happen and Goldman had a decline similar to Lehman, the stock would have to fall to 20 cents.

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This article has 21 comments:

  •  
    Nov 10 08:15 PM
    Another worthless article from these retard authors
    Reply | Link to Comment
  •  
    Nov 10 08:26 PM
    Give me an injection of stem cells to replace the brain-cells that died from reading this article.
    Reply | Link to Comment
  •  
    Nov 10 08:52 PM
    This article is really useless.
    It's a shame that the quality of articles of this low caliber have to reflect negatively on seeking alpha.
    Reply | Link to Comment
  •  
    Nov 10 09:08 PM
    we know to filter goldman predictions
    Reply | Link to Comment
  •  
    Nov 10 09:11 PM
    I thought the comments were much better than the article, what a POS
    Reply | Link to Comment
  •  
    Nov 10 09:11 PM
    I thought the comments were much better than the article, what a POS
    Reply | Link to Comment
  •  
    Nov 10 09:12 PM
    not a prediction-its not my business. just a perspective after doing a bit of work on the topic...

    On Nov 10 09:08 PM junkinthesack wrote:

    > we know to filter goldman predictions
    Reply | Link to Comment
  •  
    Nov 10 09:12 PM
    not a prediction-its not my business. just a perspective after doing a bit of work on the topic...

    On Nov 10 09:08 PM junkinthesack wrote:

    > we know to filter goldman predictions
    Reply | Link to Comment
  •  
    Nov 10 09:12 PM
    not a prediction-its not my business. just a perspective after doing a bit of work on the topic...

    On Nov 10 09:08 PM junkinthesack wrote:

    > we know to filter goldman predictions
    Reply | Link to Comment
  •  
    Nov 10 09:12 PM
    not a prediction-its not my business. just a perspective after doing a bit of work on the topic...

    On Nov 10 09:08 PM junkinthesack wrote:

    > we know to filter goldman predictions
    Reply | Link to Comment
  •  
    Nov 10 09:12 PM
    not a prediction-its not my business. just a perspective after doing a bit of work on the topic...

    On Nov 10 09:08 PM junkinthesack wrote:

    > we know to filter goldman predictions
    Reply | Link to Comment
  •  
    Nov 10 09:13 PM
    not a prediction-its not my business. just a perspective after doing a bit of work on the topic...

    On Nov 10 09:08 PM junkinthesack wrote:

    > we know to filter goldman predictions
    Reply | Link to Comment
  •  
    Nov 10 09:14 PM
    not a prediction-its not my business. just a perspective after doing a bit of work on the topic...

    On Nov 10 09:08 PM junkinthesack wrote:

    > we know to filter goldman predictions
    Reply | Link to Comment
  •  
    Nov 10 09:14 PM
    Bespoke has written a useful article and recapitulate useful FACTS. We can learn from the facts, never mind opinions and interpretations. Everyone is entitled to his analysis and conclusion whether right or wrong. No one is perfect.

    Reply | Link to Comment
  •  
    Nov 10 09:27 PM
    ...there isnt much insight in that article as it relates to what the stock might actually be worth on a fundamental basis, just some basic math on how far the stock has to fall to catch the others, which isnt really that helpful for any purpose, actually. you are right though, that people look at the same set of facts and make their own conclusions,and that no one is perfect in this regard. many people however dont actually do the work and look at facts.


    On Nov 10 09:14 PM investor88 wrote:

    > Bespoke has written a useful article and recapitulate useful FACTS.
    > We can learn from the facts, never mind opinions and interpretations.
    > Everyone is entitled to his analysis and conclusion whether right
    > or wrong. No one is perfect.
    >
    Reply | Link to Comment
  •  
    Nov 10 09:51 PM
    Buffets already loosing money. Cramers $75 was incorrect as well.
    www.dhantube.com/
    Reply | Link to Comment
  •  
    Nov 10 10:08 PM
    Just belly-up to the Pelosi-Paulson welfare bar.

    GM, Ford losing $billions... NO PROBLEM!

    Goldman losing $billions... NO PROBLEM!

    AIG... How much do ya need? $50, $100, $400 billion... NO PROBLEM!

    American Express... Not a bank? Poof! Now you are! $Billions from the government... NO PROBLEM!

    Buffett losing money? They'll soon form as a bank with fed's approval... Need cash Warren? NO PROBLEM!

    Cramer... Did you give some bad advice and all of the lemmings followed you? NO PROBLEM!

    Oh! Ya! Giving out about $2 TRILLION in government loans (U.S. Taxpayer MONEY) and ya don't want to tell anybody where the money went? NO PROBLEM!

    www.bloomberg.com/apps...

    Just belly up to our new government... Pig slop tax dollars for America's business FAILURES!

    Pelosi... Paulson... Do you really expect ANYONE with a dime to their name to invest into ANY of these failed companies? Get real.

    Come on everyone! Form your own bank and Aunt Nancy and Uncle Paulson will take good care of you. They will eventually bankrupt the economy in a few months, but they'll be living in the Cayman Islands by then.
    Reply | Link to Comment
  •  
    Nov 10 10:12 PM
    I agree with other posters, worthless information about how much GS has fallen relative to other IBs. How about an article about how much leverage GS had, and how much profit came from its proprietary trading desk, and how much of that will be gone now that it is a regulated bank? I would even argue that GS is fine, but its stock price will continue to come down as its leverage is further unwound, and as investors realize it can't use leverage to get its earnings jacked like in the past, and probably can't make big bets due to regulation. But nothing like that (or anything else new) is in this article. Yawn...
    Reply | Link to Comment
  •  
    Nov 10 10:14 PM
    That silly little chart would have been better if it showed the top 10 banks in the US with revenue growth % and P/E, and then compared to GS. That alone would make the article about 1 trillion x better than it is.
    Reply | Link to Comment
  •  
    Nov 10 10:32 PM
    wow, did the authors actually go to the trouble of doing basic arithmetic themselves? please ban them from further submissions until they realize the sophomoric drivel that earned them Cs in prison GED class is only interesting to mentally deficient gorillas.
    Reply | Link to Comment
  •  
    Nov 11 10:19 AM
    Every commenter here is a scared Wall Street employee with his head in the sand. The market has spoken, GS may not get to $20 as predicted by other observers, but it has a long way to fall. Again the market has spoken, we are in a secular bear market that has years to run. I know, I've been thru them.
    Reply | Link to Comment
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