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Wednesday, May 30, 2012

thought... GS

GS - Goldman looks really interesting here. Looks like its setting up for a pop toward 101-102.

I think the negativity bank stocks are incorrect due to the lack of exposure to Europe, stronger US housing data and better MBS data. But I understand why JPM's situation causes concern, and adds fire to incorrect assumption of fallout from Europe's banks.

The time to worry about contagion was in August to Nov of 2011, not now.  If GS is firming up, JPM may benefit from the sector move. But in order for JPM to really out perform is to prove to investors that they got their shit together again.

The above is for a short-term pop, but I still very much believe the stronger US banks should at least trade at book value. For GS its around 120-130.

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