Comments on: Stock Thoughts: Goldman Sachs

By: Winston

Winston — Mon, 18 Feb 2008 16:41:17 +0000

From what I hear GS has more exposure to corporate and commercial debt (which is good because liquidity isn’t as big of an issue as it is in individual), with little on the individual side. However, as aggresively and creatively as those individual loans were packaged together it would be hard to tell, probably even for GS, if there’s big exposure there. Buying in small chunks is the key I think.

I don’t like Bristol because I think they’ll get whacked too hard from the generics. They’re management has also been sketchy. Everyone seems to be saying that the drug sector will outperform in ‘08, I’m wondering when it’s going to start kicking in….if I had more cash I’d be buying small chunks of TEVA against BMY, buying aggressively above 50.01.

By: rob

rob — Mon, 18 Feb 2008 02:56:15 +0000

gs will be ok in long run, but speculation will drive this down further. if it drops below $170 in the next week, buy it. remember, the problems start with the individual loans first, and corporate notes are second to follow… just wait.

By: MoneyMakker

MoneyMakker — Mon, 18 Feb 2008 02:53:30 +0000

Awesome discussion going on here. I too am bullish on Goldman and I think they’ll weather this storm dandily.

Seems like Winston has a good handle on things. Winston, what don’t you like about Bristol?

Grant, I think this is a fine place to pick up some GS, but buy in small chunks. mM

By: Grant

Grant — Mon, 18 Feb 2008 02:44:56 +0000

Not bad, Winston.

You mentioned Treasury funds. What does a guy need to look for in treasury funds right now?

By: Winston

Winston — Mon, 18 Feb 2008 02:37:23 +0000

40 may be too agressive, but will continue to evaluate as information comes out and markets continue to play out. Unlike you, I’m not trying to pick a bottom in this stuff. For all I know it may go to 100 before it goes back to 250, but I’ll be buying incrementally should it continue to selloff. Should it begin to rally I will buy dips. My first target will be it’s high of 250, then 300, then a trailing stop. So far I’m down about 7% on the position, however my preliminary outlook for this is atleast one year, if not 3-5. This is my exposure to the beaten down financial sector, even if it falls more in line of a broker/i-bank.

Furthering my full disclosure, primarily because I really don’t care what people think of my investing philosophy, I’ve got about 25% in ADM which I’m up 25% and have no plans of selling, only adding to; about 20% in PVX, which I’ll be reducing if it continues towards $12; 10% in GHI, a high-yield emerging market bond fund, which I would like to add to on dips; 10% in BMY which I’m down about 15% and no plans of adding to, only liquidating on a move back up to recent highs of 28-30; 12% in GS, which as previously stated I’ll add to. The rest is in cash and Treasury funds. Frankly I would like to be a bit more diversified, have contemplated adding a tech, but for the moment I think my allocation is fine….

By: Grant

Grant — Mon, 18 Feb 2008 01:02:18 +0000

Wow, 30-40% of your overall portfolio, Winston?

You must have some insight as to where GS is going. Where do you plan on selling it?

By: Winston

Winston — Sun, 17 Feb 2008 21:31:51 +0000

Goldman may indeed have more exposure to bad credit issues than investors know of, however I’ve been buying shares here and there all the way from 205 and am not worried at all. Goldman is the Warren Buffett of the investment banking and trading world: power and money is what makes them the best. Example, their commodity index, GSCI, rolls every month, rolling expiring contracts into the next months. Every commodity trader knows about the roll and knows when the roll period occurs, it’s stated in the GSCI prospectus. But the way they spread their orders out amongst different brokers and firms is truly an art, making it pretty much impossible to front run the roll. But here’s the kicker, because they’re Goldman, the price at which they roll their contracts isn’t what shows up on their statements, it’s wherever the contract settles for the day. So, people wonder how they can make money off a ‘tracking index’, that’s how. Over the next 4-6 months I would like for GS to be approximately 30-40% of my portfolio.

Lastly, I use GS as an indicator for my active trading….if GS is trading down and starts rally aggressively, I do not want to be short the overall market!