Goldman Sachs (GS)

(A Top Pick Feb 15/12. Up 13.68%.) Sold his holdings when he wanted to reduce his banking exposure. Will be predominantly more volatile than the other banks.

It’s a long term hold. At a discount to its book value. It operates like a private company with a long term in mind. They will do very well.

Thinks they are going to come out of this okay. In spite of the slap on the hand they’ve been getting, their corporate divisions are starting to kick out some profits again. There is more investment banking picking up for them.

This isn’t a money center bank. Money center banks can’t grow revenue, but Goldman is sitting there, biding their time, waiting for capital markets to build up. Boards want to spend cash but aren't. Maybe the solving of the fiscal cliff will solve that. There may be a strong M&A period at some point. He is patient enough to wait for it given this valuation.

Just reported strong numbers and increased the dividend. Feels investment banks are necessary evils. Have incredibly talented people who walk out the door with most of the profits. Very competitive business.

(A Top Pick Sept 16/11. Up 11.79%.) From a regulatory standpoint, brokers cannot take on as much risk as before. From a debt standpoint this is good. He is taking profit right now but longer-term he is still comfortable with the name