Goldman Sachs

Dear Mr. Berko: What do you think of Goldman Sachs as a good growth stock? I'd like to own 50 shares and would appreciate your thoughts as a long-term (five years) investment. Also, I'm looking at the commercial real estate REITs. Do you think the commercial market has recovered? If so, can you recommend three or four issues? I'm really anxious to get into this market and I would invest about $2,500 in each stock. E.R., Joliet, Ill. Dear E.R.: Certainly, one of the best growth stocks to own might be Goldman Sachs (GS-$166.27), providing the company does not take itself private. Goldman is the most powerful investment bank in the world and nothing seems beyond its endless reach. Journalist Matt Taibbi describes GS as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." Goldman's success is a result of its highly connected alumni who left GS to take over Citigroup, the New York Stock Exchange, Wachovia, the Department of the Treasury, the New York Fed, the National Economic Council, the Commodity Futures Trading Commission, the Foreign Intelligence Advisory Board, the U.S. Embassy in Germany, the Bank of Canada, the Troubled Asset Relief Program, Allstate, the Italian Central Bank, the World Bank, ad nauseam. The list is formidable. Goldman is the eminence grises and these alumni influence the uppermost echelons of governments and corporations all over the globe. This invisible hand of intelligence provides GS with unequaled reach and manipulative power to influence the price of commodities (especially oil), the availability of credit, the direction of the Dow Jones, mortgage liquidity and mortgage rates, the price of gold, the cost of fuel, our economy, Congress and the president's advisers. Goldman's controlling grip on the financial infrastructure of our economy gives CEO Lloyd Blankfein emperor status. And some Goldmanites will tell you that the Goldman motto is: "We few are born booted, spurred and ready to ride while the many are born saddled, bridled and ready to be ridden." And certainly, past successes validate Warren Buffett's decision to become a large shareholder ($5 billion) in Goldman Sachs. So if Goldman Sachs is good enough for the legendary Buffett, it should be good enough for you. Goldman is ruthless (morality seldom plays in the quest for profits); its people are brilliant; it has access to information that makes the CIA and the FBI function like Cub Scouts while some folks believe that GS should be allowed to print its own currency. And certainly, Goldman can do a much better job of running our government than Congress. I may not like the company or many of its people, but I admit to a profound admiration for its business model. Morningstar thinks GS can be a $275 stock in the next few years, and other advisory services believe that Morningstar may be much too conservative. I don't know if the commercial real estate market has bottomed (only Goldman knows) and none of us will know until after it has done so. Most readers recognize I'm not wishy-washy in my opinions; however, the commercial market has many pros biting their nails. There are excellent properties for sale at valuations many believed were attractive 10 years ago. However, the consensus suggests that this market should bottom out by early summer, and I agree. But if you insist on taking a position now, then you could consider the following issues: SIMON PROPERTY GROUP (SGP-$71.42) should improve earnings about 8 percent to $5.47 a share this year, and the $2.40 dividend yields 3.3 percent. VERNADO REALITY (VNO-$63.93) expects to improve earnings from $4.34 to $4.84, and the $2.60 dividend yields 4.0 percent. BOSTON PROPERTY (BXP-$62.10), yielding 3.25 percent; MACERICH (MAC-$30.60), yielding 8.0 percent; and BROOKFIELD PROPERTIES (BPO-$12.27), yielding 4.4 percent, are each expecting to report lower 2010 earnings this year but may have some upside potential. Good luck on these. —————————— Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at mjberko@yahoo.com. Visit Creators Syndicate Web site at www.creators.com. © 2010 Creators Syndicate Inc. Published: Wed, Feb 24, 2010

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