Sachs of Solid Goldman

OK, normally when a company goes into the "record earnings" nonsense, I just roll my eyes and chalk it up as part of the normal corporate earnings crapola-fest. But when you're a company with Goldman Sachs' (NYSE:GS) past, the concept of best-ever quarterly earnings seems a bit more impressive.

And results for this investment bank were certainly impressive. Wait a minute. Why do we still call these "investment banks" when trading is often more than 50% of the business? I guess old habits die hard.

Anyway, net revenue climbed 61% in the quarter as all three major operating units posted double-digit topline growth. Investment banking revenue improved by 14%, largely on the back of a better debt underwriting market. Revenue from trading and principal investments rose 88% on strength in debt, currency, and equity trading, as well as gains recognized from investments like convertible preferred stock in Sumitomo Mitsui Financial Group. Last, but not least, asset management and services chipped in 28% revenue growth.

Given the increase in revenue, expenses were fairly under control. Compensation expenses increased 61% (when I-banks do better, they pay better). Non-comp expenses, though, require a bit of explanation. As reported, they increased 28%, but that includes expenses related to investment entities. If you strip those out and just look at the expenses incurred by the bank, non-comp expenses were up a reasonable 18%.

There is plenty of competition in the world of trading, investment banking, and asset management, and the likes of Merrill Lynch (NYSE:MER), Morgan Stanley (NYSE:MWD), and Bear Stearns (NYSE:BSC) are not pushovers. It's also true that even the best banks are going to have the occasional "bad hair quarter" and are sensitive to the health of the global economy and securities markets.

I also have to confess that, by and large, the idea of investing in an investment bank provokes in me a reaction not unlike that of Malcolm McDowell's character, the little Droogie Alex, toward Beethoven's Ninth in the second half of A Clockwork Orange. But I'm a sucker for good businesses trading at good prices, and I think Goldman is a great business trading at an OK-to-pretty-good price.

For more Takes you can take to the bank, click here:

• Not Bearish on Bear Stearns
• How Companies Go Public
• Goldman Takes on a Little Tarnish
• Citigroup Still in Flux

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).