Stocks for the Rest of Us
Posts tagged GS
Kudos To John Thain
Sep 14th
I have to give it up for John Thain over at Merrill. According to CNN, Merrill Lynch has reached a deal with Bank Of America to be acquired for $44 billion, or $29/share. That’s nearly a 50% premium over the last trade on Friday. I’ll bet Lehman could have done the same thing several months ago had they had the foresight. I think Thain realized that once Lehman was gone the spotlight would turn to them. I wouldn’t be surprised if he’s had this deal in the back of his head for awhile now. Although Thain has been very aggressive in raising capital and selling assets it’s simply not enough, the bears smell trouble brewing and have been hammering the stock. With both Lehman and Merrill out of the way the spotlight will now turn to Goldman Sachs and Morgan Stanley.
Monday’s Open Is Going To Be Rough
Sep 14th
With Lehman Brothers facing bankruptcy protection and Washington Mutual teetering on the edge it looks like we’re going to be testing the July lows sooner rather then later. Monday should provide for some extraordinary trading opportunities as we will most likely open down 3% on all the major averages. If you’ve got the stomach, you’ll be able to pick up some Goldman Sachs on the cheap. So far, my best trade to date this year was buying Goldman Sachs the day Bear Stearns collapsed. It was an 18% trade overnight. This Lehman debacle will undoubtedly produce the same opportunity but whether or not the outcome is going to be the same is anyone’s guess. Let’s not forget that Goldman Sachs is actually still quite profitable. If you’re going to trade tomorrow be sure to keep those stops tight.