Love it or hate it, there's no denying Goldman is a force to be reckoned with. When these guys predicted that oil would surge to $100 and beyond back in '06, many Fools laughed. The laughing stopped when oil proceeded to do just that. And when Goldman followed up its $100 prediction with a call for $200 oil just two years later, not only did no one laugh -- investors actually bid up oil futures, helping Goldman to fulfill its own prophecy. (Almost.)
For good reasons or ill, this banker's opinions remove markets – so even if you don't agree with Goldman, it's worth keeping an eye on what it's up to.
Bullish on Baidu
Goldman's highest-profile move this week has to be its contrarian argument in favor of Google
Such a move promises obvious benefits to arch-Chinese-rival Baidu
Insulin, boo! High-fructose corn syrup, yeah!
A logical prediction, you say? Clear and well-researched to the point of being boring? Well never fear, Fool. Goldman hasn't lost its capacity to entertain, either. Case in point: The other major switcheroo in its rating today comes straight outta The Twilight Zone. Tweaking the contents of its famed "conviction buy list," Goldman cited the quick bounce off November lows at CVS Caremark
Who would have thunk it? Goldman Sachs is a "truck guy"
Speaking of which, the really big story this week is the one that -- on the surface at least -- appears the least groundbreaking of all.
Revisiting its "conviction buy" rating on Cummins
Says the analyst: "China truck demand is accelerating, CMI is bullish on the outlook for emerging market power gen demand," and most importantly: "U.S. pickup truck demand is accelerating, Favorable material costs."
America loves trucks
Why is this significant? Not because of the incremental increase in target price at Cummins, but because of how the Cummins comments relate to other comments Goldman made last week. On Jan. 29, you see, Goldman broke away from the pack of its Wall Street peers, and slapped a $15 sticker price on Ford
Now I'm sure the recall debacle at Toyota Motor
That's right: Ford.
Put Toyota's troubles to one side for a moment. Focus for now just on the series of prognostications Goldman has published over the last few weeks:
- First, we saw Goldman endorse manufacturers of cardboard shipping containers, along with a certain A-list retailer who ships 'em.
- Then, Goldman put its stamp of approval on America's steelmakers.
- And now, we see Goldman making the further prediction that trucks are coming back, and that the maker of the best-selling F150 in particular deserves a target price at the high end of Wall Street expectations.
What's it all add up to? Well, viewed individually, these upgrades may not add up to much, but when you line 'em all up side-by-side, the picture is clear: Goldman Sachs believes the Recession is over ...
And it's time to go stock shopping again.
Fool contributor Rich Smith does not own shares of any company named above, but Baidu and Google are Motley Fool Rule Breakers picks, while Ford Motor is a Stock Advisor recommendation. The Fool has a disclosure policy.
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