Is Goldman Sachs the Trade of the Year?

Most of us were hunkered down during those bleak summer days. The days when the TSX dropped 500 points one day before lunch.

You might not have noticed that Goldman Sachs (GS) fell from $210 to about $160 at that time. As a new shareholder with a cost base of $222 or so, I certainly did. With it touching $248 on Wednesday afternoon, you would be hard pressed to find another big cap that is up more than 50% during the past few weeks. Even the unstoppable Research in Motion (RIMM) has taken most of the year to see gains of that nature. The sudden drop in Goldman’s trading price had the appearance of a firm with major liquidity problems, but of course, that just wasn’t the case.

And while Goldman has rallied, Fortress (FIG), and Blackstone (BX) are still below their IPO prices. Curious.

The GS moves are another reminder that the market might be efficient over the long term, but it certainly isn’t efficient on a quarterly basis. With another month to go before the MTIP and LTIP calculations are likely to be locked in - Goldman Sach's fiscal year ends Nov. 30th - the teams in NYC, and Toronto will feel good about where things are headed in that department.

Disclosure: The author owns GS.

Comments

[Uncle Bill:]

No alpha here. Why did you write this, Mark? "I bought GS and made money"? Not a single bit of news here. Thanks.

2007 Nov 01 07:14 AM

[Max Petrisek:]

GS is not the buy of the year. If it were, what would U call GOOG ?

2007 Nov 01 08:35 AM