Goldman Sachs back to its winning ways

The company was written off not once but twice in 2 years. Now its time in purgatory is over, and it's approaching the breakout level.

By Jim Cramer Oct 29, 2010 8:43AM

jim cramerBy Jim Cramer, TheStreet

 

Didn't Goldman Sachs (GS) have a light quarter? Wasn't it supposed to be hobbled by financial regulation? Isn't it undercapitalized post-Basel? What the heck is it doing breaking out here?

 

I think it's is because:

  1. Financial regulation means almost nothing to Goldman. It hasn't had to change any really important practices.
  2. Goldman Sachs has no mortgage exposure like the other banks, because it really never got into that line of business.
  3. The company has raised cash at an absurdly low price and will now not have a liquidity crisis again unless someone goes in and steals the darned money.
  4. The bearish crowd seems to have decided to leave it alone for whatever reason.

Now, how about that last quarter? I thought it was amazing because it showed that the company had great core earnings power away from the proprietary trading desk and that it didn't need equity trading to make a lot of money. In the meantime, it was making far more money in corporate finance and mergers than anyone thought possible.

Plus, consider the massive fine it had to pay for its transgressions!

 

Goldman Sachs has been written off not once but twice during this period: first when it crashed to the $60s during the great 2008 liquidity crisis, and the second time when it was charged with crimes by the government.

 

It beat both.

 

Its time in purgatory is done. Without any fanfare it has now approached the breakout level. Without any push or support.

 

Who knows what will happen if someone actually gets behind the stock and pushes it!

 

At the time of publication, Cramer had no positions in stocks mentioned.

 

Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.

 

Click here to follow Cramer's trades for his Charitable Trust.

 

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1Comment
Oct 29, 2010 11:40AM
avatar

Jim, that's great.  I really want to rush out and invest in a company that financial regulation means nothing to, has been accused of crimes by the US government and only have to worry about it striking out the 3rd time.

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