Wait On GS

Goldman (GS - commentary - Cramer's Take)? Tempting, but still not yet. Last week I wrote that as long as there are estimates that still must come down, there will be no end to the bloodletting at Goldman, even if it is going to earn $18 and sell at 8 times earnings, which has been its multiple. Right now the Street is at $19 for 2008, but there are a couple of people around $18 and until we see everyone below it, we won't get a bottom.

I know it seems counterintuitive to believe you can lose money on Goldman down $5, because somehow people think it has a "premium" in the way it is selling now --and the premium is book only, not multiple -- it somehow deserves to trade no better than the rest of its industry.

Perhaps you think that there shouldn't be any Blankfein premium, any institutional premium and that the book of business that Goldman has is in secular decline. I find that hard to believe. I think it is in cyclical trouble, but not nearly as bad as the analysts think. It is inconceivable to me that Goldman should trade as badly as the others given that it has excess capital to buy stock back -- it doesn't need capital as so many of them do -- and has marked down a lot of bad stuff to where it is.

Perhaps people think that Goldman needs to trade at 6 times earnings and 1.5 times book like some of the others, even though Goldman's book is clean. That gives you about a $135 target. That's the only place I would buy it at if the estimates have to come down, and they still do.

Think about it: big bear Opco is at $19.60 for 2008. You mean to tell me that couldn't be slashed by $1.50 tomorrow? And do you believe the stock won't go down on it?

Right now, Goldman -- as good as it is -- is a falling knife.

Wait.

Wait. Wait.

At the time of publication, Cramer was long Goldman Sachs.

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