Goldman, Facebook, and the Opportunity You're Overlooking

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) might be interested in acquiring Twitter before it hits the public market.

It'd probably be best to stay away from those companies as they IPO.

Here are the three lessons I see:

1. Goldman is a questionable company. Be careful when their heavy involvement in a stock has conflicting interests with yours, since there’s a good chance they know exactly how they’re going to make money off of you.
2. Always be on guard against ideas that seem too good to be true, because they often are, and it's usually the individual investor who gets burned.
3. You're much better off investing in companies that don't make headlines, fly under analysts' radar, and are overlooked by institutional investors.

That last point is critical. And, as I promised earlier, I want to share with you an idea that fits this mold.

The company is EnergySolutions (NYSE: ES). You've probably never heard of it. That's my point. It's a $600 million company, which has only been public for a few years, that processes, cleans up, and disposes of nuclear waste. When was the last time you heard anyone say, "Wow, what a great industry!" My point exactly. But somebody has to deal with it, and this company is great at what they do.

Better yet -- its stock has been hammered. It recently went through major management changes, carries a hefty debt load, and almost blew its debt covenants a few months ago. It has a P&L (profit and loss statement) that's not too strong on the P side.

But again, that's my point. All of this combined has brought this stock to ridiculously cheap levels -- with the appearance of being risky -- when it could be worth more than double what it currently trades for. It's no wonder activist hedge fund ValueAct owns a large position in the company. It's the sort of unhyped stock that's so unlike the latest hot IPO from Wall Street.

This stock idea is one of a handful that my friend Motley Fool Special Ops advisor Tom Jacobs recently shared with me. It's the kind of stock he specializes in for his portfolio service looking for deep value, contrarian, or special situation investments.

Right now, we're about to let investors into this high-demand service. We expect the available positions to fill up very quickly, but if you're interested, I invite you to enter your email address in the box below. When you do, I guarantee you'll be among the first to hear from us when we open this service later this week.