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Goldman still puzzles


Matthew GoldsteinInvesting in Goldman Sachs still requires a leap of faith in the investment firm’s ability to out-trade, out-wit and out-muscle everyone else on Wall Street.

Sure, the bulls will say that with fewer competitors and with the Federal Reserve keeping bank borrowing costs near zero, Goldman’s traders should be able to print money. But here’s the thing: The post-federal bailout version of Goldman is as much of an investing riddle as the pre-crisis Goldman that many critics called a giant hedge fund or an inscrutable black box.

Even after becoming a bank holding company last fall, Goldman still doesn’t make it easy for investors to get their arms around all the firm’s many moving pieces. Trying to get a clear picture of how Goldman makes all that money and where the risks to its profitability may be lurking is like embarking on a treasure hunt with a ripped map.

Here’s an example. Go to the section of Goldman’s most recent 10-K where there is a list of the firm’s “significant subsidiaries.” There you’ll find the names of some 115 companies and where each was incorporated.