"So, when I think about it, margins, energy and China, are your three big issues to be focusing on for this year and margins are the most fundamentally driven, in terms of stock selection," he said. "The reason this is so important is that margins have been flat across the market for five years, so it becomes more difficult to identify those companies."
Kostin made his remarks four days after cutting his earnings per share forecast on the S&P 500 for 2015 by $3. In his note, he said the reduction was due to the collapse in energy profits.
"Energy companies are now contributing $3 per share in S&P earnings," he told CNBC. "In 48 years, the energy sector has never lost money; it will post a loss in 2015."
U.S. crude hit a fresh 12-year low on Tuesday as oversupply concerns persist.
Earnings season unofficially kicked off on Monday, with Alcoa reporting mixed fourth-quarter results.
DISCLOSURE: Starbucks and Amgen are banking clients of Goldman Sachs.