With all the stipulation over the Banking Industry, many people are not sure how to play the industry. Some consider Banks to be bullish now that both Citi (C) and JPMorgan (JPM) announced that they have made a profit in the starting months of 2009. Others think that their is still far too many toxic assets on the banks books to make them a strong buy for another year or two. My belief is that if you want to invest within the industry then you need to go for the best of breed companies. In the Financial world, that only brings up one name Goldman Sachs (GS). Currently I am a big fan of Goldman Sachs as they have been able to avoid the large amounts of debt and toxic assets that the majority of other banks currently have. The company took on very little government borrowed money in fact they stated that they did not even need the injection of capital yet supposedly the Government force fed it to them. Anyways, the company plans to have it paid off by mid 2009 to allow the extravagant executive bonuses to continue. Goldman's books look marvelous in current times and when you mirror them to other banks. I see a large room in growth for Goldman's revenue when you factor in the long term the equity markets will rise profiting Goldman's Proprietary Trading market which brings in the majority of the companies profits. Another are for growth I see is among M&A, Merger and Acquisitions. In current economic times with the credit crisis looming, there is a large group of companies who will have to make the decision to merge or be bought versus going bankrupt. Goldman is the gold standard when it comes to running M&A's so expect them to get the majority of the jobs. The company is known for their culture of success and I can see that coming to life.
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