What to do with your Goldman Stock? Buy More

Looking back at all the people who have been paraded in front of congress, from baseball players to bankers.  If you are good, they want to know why.   


At least one person thinks that the recent dip in Goldman Sachs stock is a buy signal.  John Dorfman writes via Bloomberg that the recent decision of the SEC to investigate the Abacus deal packaged and marketed by Goldman is a huge plus.  Not because it is good to be investigated by the SEC, but typically the company at worst gets little more than a fine.  Rarely does it affect the companies long term prospects.  The hit that the companies take for getting marched in front of the Fed's is quite large.
 
If I looked at the long term effects of the Goldman parody, I would probably agree with them. They are a great investment marketing company with not very revealing research.

This logic is understandable if you are looking solely at the actions of the SEC and not the broader picture of Dodd's Dud of a bill.  I would be a bit more sceptical because the long term effects of Dodd's Dud will clearly make the future prospects less certain. 
 
Via Bloomberg:   
A guilty verdict might nick Goldman’s reputation. But the firm could withstand the hit, I believe. When the Exxon Valdez had a colossal oil spill in 1989, it harmed the reputation of Exxon (now Exxon Mobil Corp.) That didn’t stop Exxon shares from posting a total return of about 1,000 percent in the 21 years following the accident.

If it loses, Goldman might have to pay a substantial fine. But many firms, from Microsoft Corp. to the big tobacco companies, have taken legal blows and come back to perform well. 

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