David BaskinGoldman SachsGSTOP PICKMay 09, 2014

Equities revenue was up 72% last quarter.

This has sunk a lot since last July, sinking from $1,154 to under $894 before yesterday when it reported. They reported a monster top and bottom line beat, 23% revenue growth, and 39% earnings growth. Global markets and banking revenues were up 32%, investment banking fees 21%, and equity revenues up 72%. Though fixed income, commodities and currencies was flat (for every bank too). Asset and wealth management was stable, up 10% from the previous quarter. Expenses were better than expected. GS benefitted from the data centre build out though M&A is slow. And yet, shares were down yesterday and today (by 1.5%). Market skeptics feel the boom time is over, though he disagrees.

They report Tuesday. The banks have been some of the worst performers lately and are priced for disappointment. There's more to GS than IPOs and M&A. There's bond issuance and trading where the high volatility helps the bank's bottom line.

The banks look great here. A higher interest rate will make the banks a little more money, not a lot. The banks are a hedge on the economy. They have enough M&A activity and IPOs, too.

He added more recently. It's down 10% in the past month. They earned $21 a share with 23.5 ROE. They raised the dividend.

After tech, the next great earnings will come from financials. Rates will moderate, spreads will continue. Broker dealers are a great business. BAC and GS are his top picks among American banks. There's a long runway for financials.

Likes for the long term. Big selloff today is hitting all financials, probably something to do with this afternoon's Fed decision. Good holding long term. Valuations are getting up there, but still making a lot of money.

Absolutely spectacular earnings. Up 7% today off its earnings report, one of the best moves we've seen this season. Major breakout, new all-time high. Attracting capital, attracting interest. Rapidly climbing within his RSI universe. Yield is 1.75%.

Different businesses. LLY is a big play in GLP-1 drugs. How will pills effect the injections business? LLY has done a good job of navigating these new pills. GS enjoys increased stock market and IPO businesses. He prefers LLY, which is tied to a secular growth trend, but GS' good times in capturing revenue in this cycle will end.

Is his largest position. GS trades in line with tech IPOs. Still likes it. Is the best-known of the U.S. financials.

They just raised their dividend from $4.50 to $5, 11% higher.

Mergers are increasing, and banks like GS makes advisory fees from them. Also, the banks have been rallying since oil slumped, and will benefit further from rising interest rates, which appears will happen later this year. Plus, hyperscalers may need to keep borrowing money to keep competing with each other.

Analysts when they made their estimates didn't count on GS winning the SpaceX and openAI IPOs.

A dividend pick. Dividend are one of the best, easiest ways to hedge against inflation. This is a dividend grower, increasing each year by nearly 22% annually over the past 5 years. The total return over 3 years is 248%.

The IPO market is about to explode, benefiting GS, which hit $1,000 a share today. Also, trading and investment banking are also doing quite well. Wealth management is a kicker. Also, the big banks continue to buy back shares.