A quick comment on Goldman Sachs
So you guys may have noticed in the news that GS is being charged with fraud by the SEC. It's alleged that they were partly responsible for the mortgage crisis last year because they designed financial instruments that were meant to profit as things got worse and worse. To me, I don't really think that's all that bad, but I need to defend that position a bit.
First off, the crash would have happened without their interference. House prices were insane, we can all see that looking back. Goldman made what was actually a prudent decision given market conditions. They had no guarantees that things would start to turn around as fast as they did, so they took on the same kind of risks that a short seller would. It could have kept going up for some time just as easily.
Now, with regards to the stock, I think it's an excellent time to buy, not sell.
One thing you want to consider in this situation, is GS was already low priced from an earnings perspective. They were trading at less than 8 times P/E before any of this went public. Even if you don't wait for the decline you're getting a heck of a good deal.
Something else of note. Being that earnings across the board (mostly) are rising now, low interest rates are causing this- it's lowered the costs of doing business, so even companies that have lost customers are doing better with what they have. Moving forward we could see a substantial bull market when people start moving money out of bonds. Up markets are when a lot of new companies tend to IPO and that's a big part of Goldman's business.
If you want to own the business, I would buy now instead of waiting for pullbacks that may or may not happen.
First off, the crash would have happened without their interference. House prices were insane, we can all see that looking back. Goldman made what was actually a prudent decision given market conditions. They had no guarantees that things would start to turn around as fast as they did, so they took on the same kind of risks that a short seller would. It could have kept going up for some time just as easily.
Now, with regards to the stock, I think it's an excellent time to buy, not sell.
One thing you want to consider in this situation, is GS was already low priced from an earnings perspective. They were trading at less than 8 times P/E before any of this went public. Even if you don't wait for the decline you're getting a heck of a good deal.
Something else of note. Being that earnings across the board (mostly) are rising now, low interest rates are causing this- it's lowered the costs of doing business, so even companies that have lost customers are doing better with what they have. Moving forward we could see a substantial bull market when people start moving money out of bonds. Up markets are when a lot of new companies tend to IPO and that's a big part of Goldman's business.
If you want to own the business, I would buy now instead of waiting for pullbacks that may or may not happen.