We are buying 82 shares of Goldman Sachs at roughly $579.19. In addition, we are exiting our position in Morgan Stanley , selling 375 shares at roughly $127.24. Following the trades, Jim Cramer’s Charitable Trust will own 205 shares of Goldman Sachs, increasing its weighting to about 3.26% from about 2%. The trust will no longer hold a position in Morgan Stanley. We’re completing our switch in investment banking stocks, a move we signaled was on the horizon last month . We’ll realize a gain of 58% on our Morgan Stanley shares. We made the change because we want more exposure to capital markets and investment banking, an industry that should thrive under the incoming Trump administration’s deregulatory stance. The events over the past 24 hours support our thesis. On Monday, the Federal Reserve’s top financial regulator, Michael Barr, said he will step down from his role next month. A more industry-friendly official is expected to take his place. Analysts at Keefe Bruyette, a boutique Wall Street research firm specializing in financials, called this announcement a “strong catalyst” for banks. The analysts think it’s likely that the proposed capital requirements in a new banking regulation known as Basel III Endgame could be reduced. In addition, there’s been a flurry of deals announced this week, an early sign that we are about to see a wave of mergers-and-acquisitions activity. Whether its Paychex buying rival Paycor , Stryker acquiring Inari Medical , Getty Images merging with Shutterstock , or Cintas making an offer to buy UniFirst , we could argue that all these deals rely on a lighter strict regulatory environment to go through. Compared with Morgan Stanley, Goldman Sachs will be the bigger beneficiary of more dealmaking because it is the leading M & A advisor in the world. Looking back to the third quarter of 2024, Morgan Stanley’s institutional securities business — comprised of investment banking, equity, and fixed-income revenue — represents about 44% of total sales. Goldman’s global banking and markets segment, by comparison, represented about 67% of total revenue. (Jim Cramer’s Charitable Trust is long GS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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