In the past year, shares of Goldman Sachs (NYSE:GS) are up 53% -- that's more than double the 22% that the S&P has put up. In the past three months alone, since the dip it took in March, the stock is up a smokin' 21%. It doesn't seem to be taking a breather yet, as it's currently trading at around its 52-week high.

And I'm here to say that it could go further.

Ride the bull
I'll start by saying that if you are overly bearish on the global economy -- I mean "my portfolio is largely in cash and I bought some extra bottled water" bearish -- you probably shouldn't bother reading the rest of my argument for Goldman. As I've noted in the past, Goldman, through its various business segments, is a play that is leveraged to the performance and sentiment of the global economy.

Though the economy, particularly in the U.S., may not be quite as robust as it was a couple years ago, continued strength in other parts of the world should bode well for Goldman. It won't last forever, but I think Goldman will continue to benefit over the next couple of years.

Market conditions aside, Goldman is made up of three top-notch business segments that make a solid company and a great long-term prospect.

Investment banking
Goldman's actual investment-banking arm, which was at one point the core of the firm, contributes a far smaller percentage to its results than it once did. That doesn't mean that the group has any less prestige on The Street, though -- anyone with a big-time stock offering or M&A deal is still more likely than not going to knock on Goldman's door for help underwriting the offering or advising on the deal.

That's not meant to be a knock on Goldman's bulge-bracket competitors, such as Lehman Brothers (NYSE:LEH) or Morgan Stanley (NYSE:MS), or even the boutique competitors such as Cowen (NASDAQ:COWN) or Thomas Weisel (NASDAQ:TWPG) -- it's just that the Goldman stamp on a deal still carries a heck of a lot of weight.

Economic conditions in general should continue to be to the benefit of Goldman's investment-banking arm, but the merger and buyout deals that have been flooding the market recently may provide some extra juice for the group.

Asset management
Goldman sure hasn't missed the boat in this hot area. It now offers its institutional and high-net-worth clients the opportunity to invest in Goldman-brand hedge funds and private-equity funds. The firm recently raised an absolutely massive $20 billion private-equity fund and has been taking part in a number of the recent major buyouts, including the $28 billion deal to take Alltel (NYSE:AT) private. Though many of our readers seem to be bearish on the private-equity dealmaking, I think that this area should be pretty lucrative for Goldman.

Though there has been some negative publicity about the underperformance at Goldman's core hedge fund, Global Alpha, I'm not going to be so quick to write it off. Historically, the fund has done very well, and I think that any investors scared away by the recent underperformance will be quickly replaced (and then some) when the fund gets back to its outperforming ways. As in competing hedge funds like Fortress (NYSE:FIG), these vehicles offer a source of some very hefty fees for the firm.

Ahh, and now we come to the leviathan that scares the pants out of Goldman bears and many of the bulls alike. Goldman's trading and principal investments segment has been extraordinarily successful over the past few years, making it a very significant contributor to Goldman's overall success. Since 2002, revenue from this segment has more than tripled, and at the end of 2006, it accounted for 64% of Goldman's overall revenue.

While this has been great for the firm, it has also made a lot of investors skittish about what happens when conditions on the equity or credit markets change.

The bottom line
As I argued back in mid-April, when you break up Goldman's respective parts, you don't need to assign a huge value to the trading department to get an attractive-looking valuation for the overall firm. If you value Goldman's investment-banking arm at a similar level to its competitors and its asset-management arm around where its comparables trade, you end up only having to value the trading segment somewhere in the range of three times 2006 pre-tax income to get to Goldman's market cap today.

As I said above, if you see a big-time bear market ahead, you may guffaw at the idea of picking up shares of Goldman Sachs at this point. However, if you continue to be bullish on the global economy, I think it'd be very foolish to bet against the top dog on Wall Street.

Fool on:

Wait! You're not done. Go back and read the rest of the arguments. Then, vote for the winner.

Fool contributor Matt Koppenheffer thinks it's only a matter of time before we get a Goldman alumnus for president. Matt does not own shares of any of the companies mentioned. The Fool's disclosure policy worked for Goldman for a brief stint in the mid 1980s but got tired of the stodgy dress code.