Goldman Sachs (GS)

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

She owned this for a long time, just sold it. What catalyst is there to drive this higher? She sees headwinds instead. She doesn't like the financials, late cycle. IPOs won't be meaningful to their earnings.

Has reduced his position. Not the time to buy any banks. He's hanging on. Nothing is going right with it, though, and it could decline further it bottoms. Keep an eye on interest rates, which could stay high for longer. .

He sold it when Instacard started to falter; that trade was over. He decreased his position and is no longer a core position.

It remains too dependent on proprietary trading and investment banking.

He added to it a few weeks ago. Their well-positioned to benefit from the capital cycle returning (more IPOs). They have a deep bench.

Capital market activity may return next year (IPOs) to benefit GS. Last quarter, their revenues have been down 8%. He prefers Morgan Stanley for being a pure play, even though financials are not a great place being late-cycle.

Very low price to tangible book, and a really cheap 10x earnings. Stumbled in the consumer area, cleaning that up. Tremendous free cashflow, buying back shares, dividend increases will be ongoing. 

He added more shares. It's cheap here. The CEO is performing well, and he expects capital markets to come back. If markets continue to improve, the IPO market will return, which will benefit GS, likely in late 2024. $320 seems to be the bottom, a place to add. The negative press is behind them.

Trading at cheapest level since financial crisis (1x book value).
Consumer finance business weighing down company (expects problem to pass).
Ongoing dividend increases. 
Best in class investment bank.
Current share price presenting excellent buying opportunity.

They report next week. Are concerns over how the CEO is running the company. Their retail business was clearly a failure and they want to exit this business. JPM reported solid numbers today. Some of the bad news is behind GS, so there is some upside ahead.

It reported yesterday. The street misinterpreted that report and shares sank in pre-market trading--business dropped 17% YOY, but that number was compared to the single-greatest quarter that that division had ever had. Later, the stock erased those heavy losses.

Trading at 1x book. Pays over 3% dividend.

The consumer segment has been a mess, but there's upside in asset management that they stressed on investor day. Down only 6.5% which is a win.

He used to work here 40 years ago. The bank has totally changed. GS is embracing everyday consumer banking; it paid $2.23 billion for Green Sky (which specializes in consumer loan originations) at the top of the fintech craze. He doesn't like this shift.; in his days he was pushed to bring in super-rich clients. Instead, GS should sell its consumer division entirely.