Goldman was the trade of the year

Most of us were hunkered down during those bleak summer days. The days when the TSX dropped 500 points one day before lunch.

You might not have noticed that Goldman Sachs (GS:NYSE) fell from US$210 to about US$160 at that time. As a new shareholder with a cost base of US$222 or so, I certainly did. With it touching US$248 this afternoon, you would be hard pressed to find another big cap that is up more than 50% during the past few weeks. Even the unstoppable RIM has taken most of the year to see gains of that nature. The sudden drop in Goldman’s trading price had the appearance of a firm with major liquidity problems, but of course that just wasn’t the case.

And while Goldman has rallied, Fortress (FIG:NYSE) and Blackstone (BX:NYSE) are still below their IPO prices. Curious.

The GS moves are another reminder that the market might be efficient over the long term, but it certainly isn’t efficient on a quarterly basis. With another month to go before the MTIP and LTIP calculations are likely locked in – GS fiscal year ends Nov. 30th – the teams in NYC and Toronto will feel good about where things are headed in that department.

MRM
(disclosure – I own GS)