Speaker 1: Goldman Sachs is drenched in years of history as being a major bank in the United States, founded in New York by German Marcus Goldman. Goldman Sachs is a multinational finance company, so they participate in a range of things, including investment management, investment banking and securities. Investment management is basically a professional asset management. Investment banking includes IPOs, mergers and acquisitions, and securities is buying and selling financial assets.
Now, I know this sounds pretty damn confusing to a lot of people, but when we buy a business, we must understand how it operates, how does it generate income? How are we going to get a return on investment? And to do so, we need to understand the basic functions of what the business is about. One of our Buffett’s elements of risk is not having the knowledge and understanding of your investments. So when investing, I try to eliminate the risk. I’m not going to bore you with the ins and outs of Goldman Sachs cooperations, but I will give you some basic insights into how I am analyzing this business. Let’s bring up the graph.
As you can say, this business is by no means small. With a market cap of ninety two point seven seven billion. The size in itself helps eliminate risk looking at the price that is two hundred forty six dollars for a share of this company. And based on the past earnings, this will give you a return of nineteen point twenty four dollars. This obviously gives us the PE of nineteen point seven right now. To be honest, when I see a PE below 15 in this market, I’m always going to be drawn towards that shit as an establishment bank that is bringing through some solid returns. So I’m pretty happy with that. Never going to complain with a decent return on my business. For me, I like this business looking at its figures, it’s bringing in good returns and it’s got a high book value compared to its price. It’s a huge business, not the most exciting of businesses around. It’s no SpaceX looking to fly to Mars, but it is stable and profitable. But owning this business comes with its risks and these risks are by no means menial. I mean, just typing Goldman Sachs on YouTube and seeing the results that pop up Goldman Sachs power and peer of Goldman Sachs leaked behind and for profits this Goldman Sachs evil. I mean, when you get to a business that size, it’s always going to have a couple of questionable parts to it integrity wise. So think about that. If you do decide to invest in this business, the other major risk, possibly the biggest risk of owning the share is that Goldman Sachs has a high debt to equity ratio of three point one to for every dollar and equity that it has, its debt is triple that. This is something all investors should be concerned about they would supply this year. This is a high risk, especially if the market were to collapse. Highly leveraged businesses will be the ones that will be the most risk. Just look at the major banks in our last depression. Only when the tide goes out do you discover who’s been swimming naked. That’s how Warren Buffet puts it at Goldman Sachs. I mean, I get oh, I’ll leave that to you to decide. But there’s always that possibility that that sneaky tie does decide to come out. You know, it might be found up. By the way, that’s a metaphor for a market crash or depression for those who don’t get a fair conclusion. I do like the numbers in this business and a lot of the underlying numbers of banks in the United States today. However, the stock has high debt and a dodgy history, which makes me quite apprehensive to invest. If you are going to invest in the share, do some in-depth research on those risks and make sure you are happy to carry those risks. What your investment?
Well, that was my analysis on Goldman Sachs stock for twenty eighteen.