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.

 

Related Articles

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.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

116
116 rated 1
284
284 rated 2
461
461 rated 3
671
671 rated 4
628
628 rated 5
618
618 rated 6
615
615 rated 7
495
495 rated 8
347
347 rated 9
115
115 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
DYNDYNEGY Inc10
TAT&T Inc9
VZVERIZON COMMUNICATIONS9
EXCEXELON CORPORATION8
AAPLAPPLE Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.