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Goldman, Facebook, and the Opportunity You're Overlooking

http://www.fool.com/investing/general/2011/02/22/goldman-facebook-and-the-opportunity-youre-overloo.aspx

Adam J. Wiederman
February 22, 2011

I’ve never been in favor of market regulation. The capitalist markets take care of themselves.

But by the time I finished reading the revealing 2009 Rolling Stone article by Matt Taibbi, “The Great American Bubble Machine,” I wondered whether some regulation -- or at least greater enforcement -- might actually be a good thing.

It’s a tale of conspiratorial suspense, but at its core, Taibbi’s article is a startling indictment of Goldman Sachs (NYSE: GS  ) .

I’d like to share the article’s premise with you, and then fill you in on a unique way to ensure you don’t get caught up in the disaster of the next Goldman catastrophe, which is being set up right now.

According to the article: Goldman was involved in building unsustainable investment trusts prior to the Great Depression, and decades later became "the IPO king of the Internet era." It played a role in inflating the housing market bubble and was the major source of the oil spike of 2008.

I believe the next bubble Goldman is looking to profit from is social-media companies and their coming IPOs. Allow me to explain, and then share with you a better stock you’re likely overlooking.

Making money from social media
Goldman Sachs' high-profile investment in Facebook gives it a leg up on the competition for a future IPO. Goldman is also frantically competing with Bank of America's (NYSE: BAC  ) Merrill Lynch and Morgan Stanley (NYSE: MS  ) in potential IPOs of other noteworthy companies like Groupon and Twitter. Especially since they, along with JPMorgan Chase (NYSE: JPM  ) , beat the others to the punch with LinkedIn's coming IPO. Of course, there's also the recent rumor that Google (Nasdaq: GOOG