Goldman Sachs (GS)

Tied to the market. Big capital markets bank that benefits when there's M&A and lots of trading. Yield is ~2.5%, growing at about 20% a year. Returning capital to shareholders. Benefits if we're headed into another economic cycle. Relatively low payout ratio of about 25% of earnings. Really attractive.

Is a top asset manager and investment bank. Will benefit as more IPOs happen. Same with M&As as interest rates tick down. Given these, GS is in the sweet spot. Great managers.

The bank stress test won't impact this either way. GS is in good shape and won't effect their plan to do share buybacks or pay dividends. It's still his favourite bank stock.

Business continues to grown (revenues + earnings). The dominate investment banking & trading business in the world. Also adding "asset management" to product line. Good for long term investors. 

He just bought more. GS are the best in breed, across all bank categories.

Shares are rising this morning after reporting a solid beat. He never felt like this stock went away or slumped. He always believed in it and its CEO. They identified their mistakes and corrected them. Are best in breed.

Reported a good quarter this morning, so he bought more shares. GS is back, doing what they do best which is investment banking and the capital markets. They were paring back businesses last year and were less successfully. ROE is double in 2024 over last to 14.7%. They beat fixed-income revenues and equity trading revenue. They hit it out of the park. Is the top U.S. bank.

Sell a quarter because he's more worried about a market pullback than a GS pullback. Their next quarter will be great.

Loves it. Are starting to see the IPO market open up, as well as the private market, which are high-margin businesses.

It's a microcosm of corporate America: you fall down but what matters is how to rise up. The CEO has confronted his mistakes and divorced unprofitable businesses. When rates decline later this year, capital markets and M&A deals will open up and GS will benefit; they are well-positioned.

With its strong retail franchise with the brokerage business, plus very large asset management, MS has done a way better job than GS.

Yesterday, they reported a strong EOS beat, up 65% YOY, and new revenues up 7% YOY. Global markets, including investment banking, was lacklustre. Their real driver of growth was asset and wealth management which saw 23% new revenues growth. Meanwhile, it reduced staff to manage costs, but return on equity disappointed. Bottom line: after things settle, more upside lies ahead.

Underwriting is bottoming. You can position here for 2024.

He regrets selling positions in MS and BAC and wants to get back in. He does want to sell some of his JPM. Wants to return to MS and GS, because he thinks their stock-trading revenue can excel. As for Citi, their revenues are way down, so he'll pass.

As rates decline, banks will benefit, but he likes GS for its exposure to capital markets.