The Goldman Sachs Group is a global investment banking and securities firm providing a range of services on a worldwide basis, including investment banking, trading and principal investments, and asset management and securities services. For the FY ended 11/00, revenues rose 31% to $33B. Net income rose 13% to $3.07B. Results reflect growth in investment banking and asset management activitiespartially offset by the absence of a $716M tax benefit.

January 24, 2000

The AMEX Securities Broker/Dealer Index (XBD.X) is up over 32% since the end of November and Goldman Sachs has certainly been along for the ride. This move in the brokerage stocks makes sense since the Fed appears likely to slash rates yet another half point, creating a much more stable operating climate. Goldman Sachs makes most of its money from managed accounts. Management fee income grows when the underlying assets grow. For the year 2000, assets under management grew to $294 billion, up 14% from 1999. Goldman Sachs is also a major player in the IPO markets and if the stock market continues to stabilize, we could see a resurgence in this business. Earnings from the major broker/dealers have been strong, highlighted by Merrill Lynch's (NYSE:MER) stellar results announced earlier this week. Goldman Sachs will report their earnings on March 20th. The current trend line creates good support at $111.75. Major overhead resistance is likely to be found at $128.00, which gives us plenty of room to make a nice profit. The MACD offered a brief scare last week, but it appears to have resumed its upward course. OBV is very strong and is currently higher than when the stock was last making new price highs in September. Goldman Sachs is also a viable split candidate due to its lofty stock price. The company does not have any split history.

Picked on January 24th @ $117.88
Change since picked +0.00
Stop Loss @ $111.00

February 1, 2001

This global provider of investment banking and securities services should start to make a move following the FOMC's decision to slash interest rates another half point. The struggling stock market saw many IPOs being shelved at the end of the year, and IPOs are big business for Goldman Sachs. Now that the Fed is getting very serious about reversing the downward economic trend, fears that we are headed for a recession are abating. The result is a more stable investing climate and this could lead to more confidence in the IPO market. The share price of GS has climbed back into the middle of its six-month range. The stock is starting to exhibit signs that it needs to consolidate the 50% retracement of the end of the year decline. Unfortunately, the MACD turned negative today. We do not anticipate any major declines but some sideways action is certainly possible. A split announcement could get the stock back into its uptrend. Although Goldman Sachs has never announced a split in its brief public trading history, we think a split announcement is entirely possible due to the current share price and the split patterns of some of their colleagues such as Merrill Lynch (NYSE:MER). Support in the trading range is at $113.00 and resistance will likely be found at $120.00.

Picked on January 24th @ $117.88
Change since picked +0.32
Stop Loss @ $111.00

January 30, 2001

GOldman Sachs survived the test of its trendline support at $111.50 and is begining to run higher in anticipation of tomorrow's expected rate cut. GS is a major investment institution that should benefit greatly from a rate cut. A stabilized and growing economy would help the stock market and since Goldman Sachs derives a lot of its income from fees generated from assets under management, it stands to make more money as these assets grow. GS announced a strategic investment yesterday that was mostly cheered by investors. Goldman Sachs will acquire Benjamin Jacobson & Sons LLC, which is a leading specialist firm that operates on the floor of NYSE, for $250 million in stock and cash. As for trading GS, a move above today's high of $118.59 should result in a test of resistance at $120.00, which was last week's high. The MACD is still going sideways with only a mild positive bias. On the plus side, On Balance Volume is very strong, indicating that there is a positive cash flow into the company’s shares. A split may be pending with the stock trading comfortably in triple digits. GS will not be reporting its earnings until March 20th. Our stop loss remains at $111.00.

Picked on January 24th @ $117.88
Change since picked +0.74
Stop Loss @ $111.00

January 28, 2001

Brokerage stocks have been one of the best performing stocks this year. The AMEX Securities Broker/Dealer Index (XBD.X) is up over 11% since the start of January. One of the biggest reasons for this rally is the improving interest rate climate. Goldman Sachs is one the largest investment banks and a more stable stock market could lead to a resurgence of IPO's from which it generates astronomical fees. At the end of last year Goldman Sachs had $294 billion in assets under management. Goldman’s fee income grows every day that the stock market rallies. GS has only been a publicly traded company for about 1 1/2 years so there have not been any splits as of yet. However, the share price is certainly trading at levels that warrant a split announcement. GS has been in a solid up trend since its low of $77.00 during the past two months. The well- defined trend line was successfully tested on Friday. $111.50 will be the important initial support on Monday. The rally will likely renew in earnest if the stock can climb above $120.00. Despite the weakness at the end of last week, the MACD remains positive. OBV and Money Flow are also still positive. This tells us that the pullback could be just the natural ebb and flow of a solid stair step pattern higher.

Picked on January 24th @ $117.88
Change since picked -3.19
Stop Loss @ $111.00