Ignore the Joke of Goldman's Estimates

If you are an analyst covering Goldman Sachs (GS - commentary - Cramer's Take), and if you like Goldman Sachs, here's something I don't understand: Why don't you just cut your estimates to some level that can be beaten? Why not cut them to a loss for the quarter?

Just pick a number -- say, "I think Goldman will lose $1.48 a share." Or if you are afraid of that, how about a range: "Goldman should lose between $1 and $2 a share?" Instead, we get this ridiculous one-upmanship where one guy cuts to $3 and then another guy cuts to $2 and now $1.50.

Right here, right now -- as someone who likes Goldman Sachs -- I am coming out with an estimate of a loss of $2.49 a share, and I am cutting my $19 number next year to $15.48 for 2009. There, now I feel that I am the low man. I change the whole range for the estimates, and even if they report a small loss, I will drive the stock up.

This estimate game is a total joke when it comes to the financials. I want to tell the biggest joke: "Cramer Sees Huge Loss for the Quarter." Then the stock goes to $140, and when it reports, it goes to $180.

That's what I would do if I were an analyst who liked the stock. If I didn't, I would raise my estimate to $4 to cause a big disappointment. That's the way the game is played, and I want in!

Random musings: By the way, Merrill (MER - commentary - Cramer's Take) holds in really well, doesn't it? It is still way above its offering price, which is a very solid sign for the financials. ... Look out short-sellers, I am seeing the beginnings of some serious markups!!

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

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