Market Overview

Goldman Sachs vs. Morgan Stanley - Which Bank Looks Good For 2014?

Goldman Sachs vs. Morgan Stanley - Which Bank Looks Good For 2014?

The big investment banks have taken a huge hit in the court of public opinion in recent years. Since the 2008 financial meltdown, to be called a “big banker” has been almost as bad as being called a used car salesman. But in the world of investing, the name of the game is making an honest profit, which generally figures above all other considerations.

So, what we are concerned with is how the big investment banks fare against one another, and against the broader market averages. Here we will take a look at two of the biggest investment banks in the world, Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS).

Goldman Sachs is a mega investment bank with a market cap of over $80 billion. It began 2013 with a per share price of $131.00. Overall, the company seemed to ride the tide of the rising markets, though the ride was anything but smooth.

It seemed like Goldman Sachs' stock could never really get going in 2013, seeing many peaks and valleys during the year. The stock did finish the year on a high note, closing out at $177.00 for a 35 percent return. That return did beat the S&P and Dow gains for the year, but not in spectacular fashion.

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Morgan Stanley began 2013 trading at just $20.00. The stock struggled to gain upward momentum throughout the year, but overall saw more ups than downs. However, Morgan Stanley investors were doubtlessly disheartened by an early spring pull-back, which erased a 25 percent gain that the stock had earned in the beginning of the year.

By the end of the year, however, Morgan Stanley stock was soaring high. With a per share price of $31.36 at the end of 2013, investors who held the stock from beginning to end saw a 55 percent return.

The three-year chart for Morgan Stanley looks strikingly similar to that of Goldman Sachs. But the companies displayed vastly different per share appreciation in 2013.

While Goldman Sachs beat the market averages, Morgan Stanley blew them away. News organizations are already beginning to sing Morgan Stanley’s praises, but it may be too soon. Going into 2014, the factors that will play the largest roles in these companies’ fates include how “tapering” affects the U.S. economy, the number and size of high profile IPOs, and the political situation in the United States.


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