Goldman Sachs had a “stunning” first quarter profit disappointment, and the stock got creamed. The financials had nothing but blue skies ahead, because of the great “new” economy after the election. And confidence was everywhere, especially in financials. The other problem arose about the “bond market crash” which was actually an outstanding buying opportunity – this video. The steep yield curve quickly became history. The weekend video about GS and much more is here.
Comments – on January 27th, the wildly overpaid ones were bullish on Euro banks, right at the highs, when I left this comment, with the original chart:
“Of all the single banks in the world for its’ ability to cause disruption is not DB or others, but I continue to believe it’s Credit Suisse – here are the European traded shares.”
4/5 – I have talked several times about my bearishness on financials, especially Euro banks – CS and DB. I don’t like talking about shorting in general, but those two in particular are a disaster. There are ETFs in the US for bearish financials trades.
I need to add that my view of the stock market is still a huge bull market overall, and have been vehemently disagreeing with the “crash talkers” for 8 years running. All bull markets have big selloffs, but for some reason this stock bull has garnered an enormous about of “crash talking”. The people doing this usually come out of the woodwork on every minor selloff, right at the lows, and actually lend support to the market. And for the questions I received about shorting GS now, absolutely lousy time/place to short GS. A lot of weird things can happen when you’re short, and most of them not good, as far as the one who is short. Short covering rallies are brutal – it’s exactly why to take some profits on the big downwaves, and wait for the next rally. Otherwise just sit on your hands.
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