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Goldman Sachs is Incredibly Overbought

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The financials, especially GS, are in an absolutely prime shorting position right now. Gains since the election of Trump have been absolutely insane and frankly ridiculous.

Investors are all jumping on the bandwagon and falling for the

>rising interest rates are good for financials

meme, when in reality that is not true at all nowadays. If interest rates truly do kick up a notch (which I doubt), then the banks are going to be stuck with tonnes of NPLs on their balance sheet as normies realise they cannot pay back money they borrowed during the ZIRP era (which we're really still in btw).

Conversely, if interest rates do not keep getting kicked up gradually (i.e. the Fed backs down, which I think is what will happen) then the banks will underperform yet again due to lower earnings from loans.

Either way, the financials are going to get hit pretty hard over the next year - do not jump on the "long financials" bandwagon. Now is the time to start building up short positions in them.
>>
Additionally, start building up your short positions in auto sector companies and financials linked to high auto-loan exposure - I would suggest Santander but it's shares have already taken a beating over the past few years.

KMX is particularly toxic, will make a good shorting opportunity soon as the bursting of the sub-prime auto sector is revealed.
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So basically buy GS puts? Fantastic strategy
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>>1700480
>in an absolutely prime shorting position right now
Something being 'overbought' is not sufficient reason to short. The market can, and will, be irrational far longer than you can stay solvent.

>as normies realise they cannot pay back money they borrowed
at fixed rates which means they owe nothing additional because of interest rate changes.
>>
>>1700480
Most loans are fixed rates. Unless you can prove a substantial amount of them are adjustable.

You have given no evidence that GS will underperform if interest rates do not rise. Also GS is an investment bank, they're heavily involved in non loan investing.

>>1700881
Also this. If the market is so enthusiastic about GS now, there's no reason they'll stop anytime soon.
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>>1700480
The majority of their profit comes from their IBD and S&T divisions. Credit derivative exposure means they'll do just as good in 2017 if rates keep going up. If you short Goldman, you don't understand finance plain and simple.
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>>1701049
>Unless you can prove a substantial amount of them are adjustable.
Not even just that, he'd also have to prove that the borrowers in masse have grotesquely terrible DTI ratios, such that they couldn't withstand an upward adjustment.
>>
ITT: people who thought financials were a great buying opportunity in Autumn of 2007. Keep buying those financials folks, they'll never go down now!
Thread posts: 8
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