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Goldman Sachs (GS) is the premier investment bank in the world and arguably the greatest of all time. However – after an analysis of its 4Q22 earnings – I believe it is a bull market stock and should be sold.

What do I mean by “bull market stock”? I mean that GS’s business is levered to rising asset prices. GS’s business has two main divisions: Global Banking and Markets and Asset and Wealth Management. My argument is that too much of GS’s business involves leveraging its own balance sheet in financial markets and too little in investment banking and wealth management services in which they get paid fees by clients.

The latter made up only 39% of GS’s 4Q22 revenue. Too much of the business is in Fixed Income, Currencies, and Commodities – a notorious black box – and equity and debt investments where they are using their own capital. My argument – then – is that given the structure of GS’s business, they are highly levered to asset prices. Because I’m significantly more bearish than the consensus on asset prices, I believe GS is now a sell.

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