jakedeez

How Much of Goldman's Value is Based on the 'Pedestal' Effect?

Yeah, Goldman does get a boost from what you call the pedestal effect. Other call it, "Best of Breed," but whatever works for you. The bottom line is this, GS gets a premium multiple because they are better then the other broker/dealers. (JPM is not in the same category, nor really is C) To say there is risk because they get a boost from being the best, is in my opinion, a canard. Look at what is happening to LEH's profit levels compared to GS? And the government isn't going to attack GS, in fact they are included on the SEC's naked shorting protection list.

Is GS more expensive the LEH or MS on a relative comparison of price to book? Yeah, very... but there is a reason that the name "Goldman Sachs" turns heads...