The Goldman Sachs Share Price And The Wisdom Of Crowds

There has not been any collapse of the prospects of Goldman Sachs Group (NYSE: GS), at least as far as traders are concerned. At $158.85, the stock trades well above its lows last February and in the summer of 2009. In the first case, investors were worried about the attacks on Goldman’s compensation and in the second the recession was still hurting the company’s financial results.

Goldman’s shares fell on Friday, but has held their own since, bolstered in part by the results of its most recent quarter. The media believes that the investment bank has a reasonable defense. It did not work to harm investors who bought mortgage derivatives which were created in part by a third-party which was short the housing market–Paulson & Co. Goldman bet against its customers the way it has always been willing to do if there is a profit to be made.

Goldman has also believed that the SEC voted along political party lines just as the Democrats who were in the 3-2 majority are allies of backers of the financial reform being debated in Congress.

On the SEC’s side are a number of damning e-mails from a member of its sales staff, evidence that senior management was “in the room” as questionable trades and decisions were made, and companies lost $1 billion on Goldman’s “advice.”  The Paulson recommendations and short position were part of a scheme set up by the bank to allegedly bilk investors out of their money while Goldman made a profit on the transactions.

For what it is worth, many investors, probably in the tens of thousands, have traded tens of billions of dollars of Goldman shares over the last four trading days and the stock has remained about 35% above its 52-week low.

Douglas A. McIntyre