The curious case of Goldman Sachs...

As you all know by now, I have been short GS for a while, and am up quite a bit on that short obviously since its sitting right over 52 week lows. While the other brokers continue to get hammered, GS has held up remarkably well. It's been my experience over the years that often the best shorts in a bear market are the last stocks you would expect to fall. While they may hold up stronger for a while, when they roll over, they roll over in a BIG BIG way, and you have the added edge of a more dramatic down move. On this blog I've called and been right about a number of these stocks; POT, FSLR, LEH, FNM, FRE, GS, GOOG, etc.etc.etc. There are a few stocks here that still have a lot of downside left to them. Friday I called puts on TM. I got an email from a subscriber who asked why I would want to short TM, that if GM goes under (govt won't let it, wrongly) TM would pick up their market share. First off, that's not necessarily correct, and secondly, TM just announced sickly horrendous #s. The only way you can own TM here is if you think that they have made a Faustian deal with the devil! The stock is a $68.50 stock in the auto industry! Sales are cracked and will get worse more than likely. This is the type of swing short I'm looking for now, stuff that makes sense but the market hasn't caught up with it YET. I have a few on my radar that I'm giving to clients, but some of them I've mentioned before and continue to pound the table on them, like TM and GOOG and GS. GS is an enigma. They are in no man's land, and the only reason I hear for owning it is that they are "smart guys" and that they will figure it out. Really? Then why are they in this mess to begin with, if they are so smart and so good about figuring things out! With MS, MER, BSC, LEH, LM all slamming lower, GS should be $20s in a couple/three months. I see no compelling reason for us to rally here, other than some wishful thinkers. The financial sector looks ready to move down harder and lower, potentially this week. Several banks I LOVE LOVE LOVE short, some not so much. It's a good group to couple up if you have a sense as far as who will weather it out easier. This coming week I have to lean lower, but not heavy. At least not initially. Too many guesses and not enough clarity. Do we go back and retest recent lows, or do we bounce first? That's the ultimate question, and one we'll see soon enough on! I'm flying to Germany for a conference in a few days so may not be available here til I get back. Remember to rule! Waxie