Jase

Buffett's Financial Bets

He's a smart lad, indeed. But his kindness or soundness of character aren't what one ought to pay attention to in the end. What matters is his judgment. As of late, he's been making more than his fair share of mistakes. Long term investments are oftentimes short-term trades gone awry. In that respect, Buffet has been making a lot of investments of late. I've been short BRK/B since last year, I intend to cover my position at some stage. Oddly, when I do, I'll be going long BRK/B for my children's college fund. "I like buying quality merchandise when it is marked down." I couldn't agree with you more, Warren.

There's Only So Much That Goldman Can Do

mythreecents,

The context of my sentiment was directed at the fact that if you look at the laundry list of IPO's, what sense does it make to kill the beast itself? "You can shear a sheep many times, but..."

I'd be delighted to send you a t-shirt silk-screened with my pre-market short order ticket for GS at 138.00; believe me, I remain entirely unemotional.

You can't play tennis if you kill the company that produces the tennis balls.

There's Only So Much That Goldman Can Do

Have you forgotten what this company has done? Seriously? How quickly we forget. He's a partial list of some of the companies that GS has underwritten. These would not be household names without Goldman. Do we really want this company crushed?

1-800-Flowers.com Inc//AFC Enterprises//ANDA Networks Inc////Acme Packet Inc//Active Power Inc//Active Software Inc//Actuate Software Corp//Advertising.com Inc////AeroVironment Inc//Agency.com Ltd//Alaska Commun Sys Grp Inc//Allied Riser Communications Co//Allied World Assur Co Hldgs//Allscripts Inc//Amscan Holdings Inc////Anteon International Corp//Anthem Inc//Archipelago Holdings Inc//ArrowPoint Communications Inc//Asbury Automotive Group Inc//Ashford.Com Inc//Aurora Foods Inc//Axcelis Technologies(Eaton)//B... Escentuals Inc//Barnesandnoble.co... Inc//Bill Barrett Corp//Blue Martini Software Inc//Bluelinx Holdings Inc//Bucyrus International Inc//CP&P Inc/////Cabot Microelectronics Corp//Calico Commerce Inc//Calumet Specialty Products//Capital Maritime & Trading///Capstone Turbine Corp//Carters Inc//Charter Communications Inc//ChemConnect Inc////Citadel Broadcasting Corp//Classic Communications Inc//CoSine Communications Inc//Coach Inc//Cobalt Networks Inc//College Park Communities Trust////Columbia Sportswear Co//Commerx Inc///Convergent Communications Inc//Convio Inc////Corio Inc//Crystal Decisions Inc/////Cytokinetics Inc//DJ Orthopedics Inc//Directed Electronics Inc//Dorel Industries Inc///DoubleClick Inc//E-Loan Inc//E-Tek Dynamics Inc//EBay Inc//EToys Inc//EXE Technologies Inc////Edocs Inc////Education Management Corp////El Paso Energy Management LLC///Elmos Semiconductor AG///Enbridge Energy Management LLC//Encore Acquisition Co//Engage Technologies Inc//Entrust Technologies Inc//Equinix Inc//Esprit Europe AG///Evolving Systems Inc//Exelixis Inc//Exodus Communications Inc//First Marblehead Corp//Fitness Holdings Inc///Focus Media Holding Ltd//Furniture.com Inc////GTx Inc//Galyan's Trading Co Inc//Garage.com Inc///GeoCities//Glass... Technologies Inc////Glu Mobile Inc//Golden State Vintners Inc//Goldman Sachs Group Inc//Goldman Sachs Group LP////Greenhill & Co Inc//HOB Entertainment Inc////Heller Financial Inc//Hewitt Associates LLC//Holly Energy Partners LP//Hornbeck Offshore Services Inc//Hornbeck-Leevac Marine Svcs////Hugoton Royalty Trust//Hutchison Telecommun Intl Ltd//IAsia Works Inc//ISS Group Inc//IVillage Inc//IXOS Software AG//Icon PLC//Idealab////Idenix Pharmaceuticals Inc//Illumina Inc//Inet Technologies Inc//Infinera Corp//Inforte Corp//Initiate Systems Inc////Inktomi Corp//InsWeb Corp//Internet Initiative Japan Inc//Intira Corp////Ipass Inc/////Julius Baer Americas Inc////Juniper Networks Inc//Kana Communications Inc//Kinder Morgan Inc////Kinder Morgan Mgmt LLC////Las Vegas Sands Corp//Lazard Ltd//LeMaitre Vascular Inc//LeadersOnline Inc////Leadis Technology Inc//Liberty Lane Acquisition Corp///Limelight Networks Inc//LookSmart Ltd//Lydian Trust Co///MONY Group Inc//Marvell Technology Group Ltd//MatrixOne Inc//Maxygen Inc//Medibuy.Com Inc////Mercata Inc///Metals USA Holdings Corp////Metropark USA Inc////Microtune Inc//Mobius Management Systems Inc//Monolithic Power Systems Inc//Monsanto Co//Move.Com Inc (Cendant Corp)///Net2000 Communications Inc//NetScreen Technologies Inc//Netcom Systems Inc///Network Plus Corp//Netzero Inc//Neuberger Berman Inc////Newpage Group Inc///Nextel International Inc//Nextel Partners Inc//Niku Corp//Noosh Inc///NorthPoint Communications Grp//Novirio Pharmaceuticals Inc///Nuance Communications Inc//ONI Systems Corp//Ocean Energy Inc//Ocean Energy Royalty Trust///OpNext Inc//OptionsXpress Holdings Inc//Orbitz Inc//Organic Inc//Orion Power Holdings Inc//PYA/Monarch Inc///Packaging Corp of America//Palm Inc//PaperExchange.com Inc/////PcOrder.com//P... Exploration & Prod////PlanetRx.com Inc//Plug Power Inc//Plumtree Software Inc//Portal Software Inc//Principal Financial Group Inc//Prudential Financial Inc//Red Hat Inc//Reliant Pharmaceuticals Inc/////Reliant Resources Inc//Renovis Inc//Resonate Inc//Restoration Hardware Inc//Rivals.com Inc////Riverbed Technology Inc//Saba Software Inc//School Specialty Inc//Seminis Inc//Shamrock Logistics LP//Shanda Interactive Ent Ltd//Shopping com Ltd//SkyStream Networks Inc////Snowball.com Inc//Solarfun Power Hldgs Ltd//Sonic Innovations Inc//Sonus Networks Inc//Sparkling Spring Water///StanCorp Financial Group Inc//StarMedia Network Inc//Steelcase Inc//Stereotaxis Inc//Storagenetworks Inc//Strategic Hotel Capital Inc//Strategix Solutions Inc////Sun Apparel Inc////Synchronoss Technologies Inc//TC Pipelines LP//TIBCO Software Inc//TRX Inc/////Tality Corp///Telenor ASA//Telergy Inc////TenFold Corp//Texas Genco Inc////Texas Permian Royalty Trust//TheStreet.com Inc//Timberland Growth Corporation///Times Company Digital///TradeOut.com Inc////Tritel Inc//Turner Investments Inc//Turnstone Systems Inc//Under Armour Inc//United Pan-Europe Comm NV//Universal Access Inc//ValueClick Inc//Verigy Ltd//Viant Corp//Viasystems Group Inc/////Virtual Radiologic Corp//VistaPrint Ltd//Visual Networks//Volterra Semiconductor Corp//WP Stewart & Co Ltd//Wavesplitter Technologies Inc///WebEx Communications Inc

There's Only So Much That Goldman Can Do

Mark,

Most of the victims that you speak of made over-leveraged, idiotic bets. At the risk of sounding crass: many of the companies that have been pummeled into the ground deserved to be. Weak things die. Goldman had very little exposure to this mess, they are excellent risk managers. I agree that book value carries a lower weight in this environment, but I submit that that mainly applies to companies holding garbage asset classes. Scan Goldman's 1.08 trillion-dollar balance sheet, how much 30-to-1 leveraged real-estate excrement nonsense do you see sitting there? Now, compare that to what you saw at Lehman Brothers.

Look, I think Paulson is somewhat of a douche. I hate the fact that Fannie, Freddie, AIG, and the rest have been propped up with public funds (I'm not even American). But he's in a tough, tough spot; I understand why that course of action may have been the lesser of two evils. Even if I disagree with some of their actions, I do applaud them for acting with expedience.

As for Goldman, I won't budge on my stance. They are extremely undervalued at their current price (last print was $115.26). They may not be able to move much today as it's options expiry tomorrow. But next week is another story altogether. Price target for next Friday (26th) is $150 or higher. I owe you a pint if I'm wrong. I'll say it again, never, ever bet against Goldman.

There's Only So Much That Goldman Can Do

Never, ever bet against Goldman. Half that buying yesterday was probably GS buying back their own shares. Earnings are estimated to be $14 per share this year--if history is anything to go by, they'll probably beat by a landslide; earnings above $20 per share wouldn't surprise me in the least. They thrive in this volatile environment. Anyone that thinks the Investment Bank model is broken has to get their head checked. Read GS's earnings report issued two days ago, they actually bought back millions of their own shares at $180. GS will be fine. The shorts will get killed in the upcoming days when this thing is back above $175. There's no reason why they can't take out their old highs of $250 within the next six quarters--there are deals out there in the market and Goldman are experts at finding them and unlocking value.

Their book value is 99.30. I repeat--their book value is 99.30.

At 10x earnings on a surprise of $20 EPS next year (last year their earnings were $24 per share) they are easily a $200 stock. Way, way undervalued.

Panic on Wall Street - Fast Money Recap (9/17/08)

You must be kidding me. Never, ever bet against Goldman. Half that buying today was probably GS buying back their own shares. Earnings are estimated to be $14 per share this year--if history is anything to go by, they'll probably beat by a landslide; earnings above $20 per share wouldn't surprise me in the least. They thrive in this volatile environment. Anyone that thinks the Investment Bank model is broken has to get their head checked. Leverage (read: derivatives) are a useful instruments when used appropriately--they are excellent tools to protect wealth, for example. If you read GS's earnings report issued two days ago, they actually bought back millions of their shares at $180. GS will be fine. The shorts will get killed in the upcoming days when this thing is back above $175. There's no reason why they can't take out their old highs of $250 within the next six quarters--there are deals out there in the market and Goldman are experts at finding them and unlocking value. Their book value is 99.30; at 10x earnings on a surprise of $20 next year (last year their earnings were $24 per share) they are a $200 stock.