Why is Goldman Sach (GS) traded at such a low price?

it has very small exposure to subprime mess, it's earning growth is 30% and right now it's traded at only p/e 7.7 when other investment banks are traded at p/e 15-18, and it's current PEG is only 0.6

isn't this stock extremely cheap right now? how come it's still going lower? anyone know the reason behind this that's not known publicly

they did!?

Considering the state of the financial sector, GS isn't really doing that bad. Compare them to the other big names on a percentage basis. GS is about 25% off it's 52 week high. MER, MS, BSC, C are all over 50% off their 52 week highs.

Also, like any financial there is still doubt about the quality of their holdings. I'm not convinced that any of them have told the full truth yet. There have been other companies that presumably had low exposure. But then kept increasing their writedowns. The exposure was higher than first admitted.

As to their growth rate, the anticipation for next quarters earnings is 30% less than last quarter. For FY08 the predictions I have seen are for 10-12%.

It all adds up to fear. Any financial is risky (in my opinon) until the dust settles and we see some quarterly reports with gains and not writedowns. Trying to find the "good" one in the bunch is dangerous. If you are right you can make good money. If wrong, it could be very costly and take several years to recover.

Because they invested millions in junk mortgage derivatives and that money is gone forever.

Goldman does have sub prime exposure, but the big reason for the drop is the sector its in. Financials are not the place to be right now. It may be a good long term investment though.

I think your analysis is good but there are a couple of headline factors that come in play. 1st they are down like any other financials and those will be out of favor in 2008 (maybe 2009) regardless of their subprime exposure. 2nd GS does not have a strong retail banking or retail brokerage to sustain a down turn. 3rd the economy is moving into a recession which means less M&A and investment banking activities. 4th Merrill Lynch might start stealing GS executives and employees. I think there are just too much head winds against them and any financial. Nobody trust financials anymore (i.e. what else are they hiding, how about Asset Back securities exposure, and so on). If you think long you could go for GS.
Good Luck

Because many shareholders are not happy with GS's decision to cover those common and very expensive sex changes obviously!

I know a respected analyst who suspects that most of these investment banks are worthless right now due to massive problems related to subprime mortgages and derivatives.