GO
Loading...

Dare Bet Against Goldman?

Wednesday, 19 Sep 2007 | 9:18 PM ET

Finding a Wall Street analyst who recommends sellingGoldman Sachs (GS) is about as hard to find as Big Foot. In fact, only one made that call and we tracked him down!

Punk Ziegel's Dick Bove is the only Wall Street Analyst who recommends selling Goldman. He joins the panel for this conversation. Here are excerpts from what he said.

Tomorrow's Headlines #1
Talking to the one analyst that recommends selling Goldman Sachs, with the Fast Money crew.

Why are you bearish on Goldman?

“I think the company has something like $700 billion in securities on its books and we have no idea what those securities are...." explains Bove. “I’m convinced that a lot of those securities have been overvalued which means we don’t know what the book value of Goldman Sachs is. And if you don’t know the value of a brokerage stock, you ought to sell it.”

He adds, “A number of brokerage stocks went down (Wednesday) because the whole structure around their trading operation has changed. There are fewer instruments that are coming along that are highly profitable….What I think you’re going to see over the next couple of years is a gradual working out of problem debt at Goldman Sachs and other brokerage firms.”

But under that rationale you wouldn’t own any investment firm?

“When the market is going up you buy them and when the market is going down you sell,” replies Bove. “But it’s more of a religious experience, because you have faith that the company will do well when the market is doing well.”

He adds, “The turn hasn’t really happened yet (in GS share price). I think it’s going back to $160 where it was a couple of weeks ago.”

He also adds “For three years we were on the buy side of this.. but ultimately you reach a point where the company overstretches itself to serve its markets.”

Pete Najarian tells the panel he thinks GS is a sell right now – but only because the run has taken place. (Pete is bullish on GS long term.)

______________________________________________________
Got something to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! Prefer to keep it between us? You can still send questions and comments to fastmoney@cnbc.com.

Trader disclosure: On Sept. 19, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (SWY); Najarian Is Short (ETFC); Najarian Owns (GS) Options; Finerman's Firm Owns (BWS), (COP), (GCO), (NMX), (LTD); Finerman's Firm Owns S&P 500 Puts And Calls; Finerman's Firm Owns Russell 2000 Puts

Dick Bove and or his company owns Goldman Sachs Group (GS), Morgan Stanley (MS), JPMorgan Chase & Co. (JPM), Lehman Brothers Holdings (LEH), Bear Stearns Companies (BSC), Citigroup (C), Bank of America (BAC), Merrill Lynch & Co. (MER), E Trade Financial (ETFC), TD Ameritrade Holding (AMTD), Charles Schwab (SCHW)

A Member Of Bove's Family Owns (JPM), (C), (BAC)

  Price   Change %Change
GS
---

Featured

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.

  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

Halftime Report