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The Golden Child

Todd Harrison Jun 11, 2008 12:30 pm


		Goldman still best in breed.

They say the first step in solving a problem is admitting that you have one.

Back in October, when “write-down fever” was sweeping the Street, the good folks at Goldman Sachs (GS) offered words of assurance that the company wouldn’t get caught up in the murky muck. Given it had deftly maneuvered the first wave of sub-prime fallout, few folks on the Street doubted the moxie.

It was reminiscent of the blind ambition in Blackstone (BX) following its initial public offering. It’s hard to argue with success and there was no denying that Goldman was the best shop on the Street.

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Eight months later, despite continued insistence that it's insulated from write-down risk, the contagion has caught up with Goldman. The stock, once the rock star in the financial universe, is off 35% and in the crosshairs of the short-side community.

As the market is a leading indicator, the latest round of rumors may be late to the party. While the financials continue to encapsulate a finance-based, credit-dependent machination tied together with $500 trillion of derivatives, the onus is on us to synch the time horizon and risk profile of our positions.

With a conscious nod that technical analysis is a better context than catalyst, I’m watching GS $160 as the level of lore. The financials are oversold and, with all due respect to Jamie Dimon and JP Morgan (JPM), Goldman continues to be best in breed.

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Enter positions in Goldman at your own risk and remember that sometimes the ability not to trade is as important as trading ability.

FOLLOW TODD'S TRADING MINUTE BY MINUTE EACH DAY ON OUR BUZZ & BANTER


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Comments (7)

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06-11-2008, 9:41 pm
man, geeze, all the talk about a bubble in oil, what gives??? can't we all see that what we are seeing right here right now is the bursting of the long, long, long, long, long running STOCK BUBBLE? i mean, it's j Read More

Rick Spung

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06-11-2008, 9:47 pm
I'm in 100% agreement and have some July and Aug index put spreads. Also some TWM and GDX but most is still cash. I am surprised and disappointed by the strength of the "unseen hand". How do you bet against that? How Read More

Back Lash

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06-11-2008, 9:48 pm
RUN-N-N TO THE HILLS-S-S RUN-N-N FOR YOUR LI-I-IFE! (iron maiden) Read More

Back Lash

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06-12-2008, 7:49 am
u can't really know for sure, but knowing is not a prerequisite to trading against them they have tried just about every jawbone in the book to talk down oil, now they will try to directly jack w/ the nymex (and possibly harass the Read More

Rick Spung

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06-12-2008, 8:27 am
Agreed. Those 2X ETFs are cat's meow. I want to buy them all. They're so cute, the way they zip up and down the handles. Just like us in the school yard, way back when we was young. Read More


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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

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