Do You Think Goldman Forgot How to Make Money?

Why do people presume that investment banking will never come back? Why do they presume that there will never be more use for a place like Goldman Sachs (GS - commentary - Cramer's Take)? Why do people openly question that they can ever make a profit again or that their book value is a total lie? Do people think there is a secular decline in all financing, and that we are done forever raising money? Do people think we are done merging? Do they think we are done issuing municipals? Do people think we are done with trading corporate debt? Do people think we are done with lending money against stock? That's it?

I think Goldman's going to be like GE (GE - commentary - Cramer's Take), where we say, "OK, that's a big surprise because it is no surprise," and the stock goes up. I think that there's a real chance here to buy Goldman at the nadir of business and a totally fear-driven discount to book.

I know the model has to change, blah, blah, blah. But so has the competition -- like none other than Morgan Stanley (MS - commentary - Cramer's Take). Can Goldman buy some banking deposits? Harder than a couple of months ago, but it can get it done. The most important thing that Goldman has going for it, though, is that it can create product. It always has. It knows how to make financial product and sell it.

I think that no matter how bad the quarter, this one is GE II.

I own it for Action Alerts PLUS.

I believe the downside here is far outweighed by the upside.

At the time of publication, Cramer was long Goldman Sachs, Morgan Stanley and GE.

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.