HomeNewsEquity Valuation / Financial EngineeringGoldman Sachs Valuation Masterclass: Applying Dr. Glen Brown’s Nine-Laws Framework

Goldman Sachs Valuation Masterclass: Applying Dr. Glen Brown’s Nine-Laws Framework

Goldman Sachs Valuation Masterclass: Applying Dr. Glen Brown’s Nine-Laws Framework

  • August 5, 2025
  • Posted by: Drglenbrown1
  • Category: Equity Valuation / Financial Engineering
No Comments
Goldman Sachs Valuation Masterclass: Applying Dr. Glen Brown’s Nine-Laws Framework

Abstract:
We perform a full, one-year valuation of Goldman Sachs (GS) using Dr. Glen Brown’s Enhanced Equity Valuation Model, anchored in his Nine-Laws Framework. Steps include smoothing fundamentals, calibrating valuation discount/growth factors to today’s price, defining Fibonacci-split scenarios, probability weighting, and applying a margin-of-safety. The result: a transparent, risk-adjusted 1-year target.

1. Core Fundamental Value (FV₀)

Smooth earnings and multiples over three fiscal years:

  • Average Diluted EPS (2022–2024): (30.06 + 22.87 + 40.54) ÷ 3 = $31.161
  • Average Trailing P/E (2022–2024):
    • 2022: 321.75 ÷ 30.06 = 10.71×2
    • 2023: 372.93 ÷ 22.87 = 16.31×3
    • 2024: 566.97 ÷ 40.54 = 13.99×4
    3-year average = (10.71 + 16.31 + 13.99) ÷ 3 = 13.67×5

Fundamental Value per Share (FV₀):
FV₀ = 31.16 × 13.67 = $425.92

2. Current Price vs. Fundamentals

  • Today’s Price (Aug 5 2025): $719.246
  • Premium to FV₀: 719.24 ÷ 425.92 ≈ 1.689× (≈ +68.9 %)

3. Calibrating EVDF ↔ EVGF

Over tₒ𝒷ₛ=7 months, solve:

EVGF₁yr = (P₀ / FV₀)^(12 / 7) = (719.24 / 425.92)^(12/7) ≈ 2.45
EVDF₁yr = 1 / EVGF₁yr = 0.408

Narrative (Law 9): Continuous rebirth—each “measurement” of price triggers recalibration of valuation decay/growth.

4. Market-Regime Scenarios (38.2 % Fibonacci Split)

r = 0.382
EVDF_Bull = 0.408 × (1 – 0.382) = 0.252
EVDF_Base = 0.408
EVDF_Bear = 0.408 × (1 + 0.382) = 0.564
EVGF_s = 1 / EVDF_s
RegimeEVDFEVGF1-Year Forecast
(P₀ × EVGF)
Bull0.2523.97719.24 × 3.97 ≈ $2 857
Base0.4082.45719.24 × 2.45 ≈ $1 765
Bear0.5641.77719.24 × 1.77 ≈ $1 276

Narrative (Law 2): Fibonacci splits mirror DAATS memory-decay weighting in volatility regimes.

5. Probability Weighting & Margin-of-Safety

  1. Assign Odds (Law 1): pBull=30 %, pBase=50 %, pBear=20 %
  2. Compute Expected Value:
    E[FV₁] = 0.30 × 2 857 + 0.50 × 1 765 + 0.20 × 1 276 ≈ $1 995
  3. Apply MOS (Law 6 & 9):
    15 % discount ⇒ 1 995 × 0.85 ≈ $1 696

Final 1-Year Target for GS: $1 696

6. Conclusion & Interpretation

Goldman Sachs trades at a ~69 % premium to its smoothed fundamentals. Yet, under a regime-based, probabilistic, and safety-adjusted framework, the model implies ~136 % upside to $1 696 over one year—highlighting both the market’s bullish stance and the disciplined guardrails of Dr. Glen Brown’s approach.

About the Author

Dr. Glen Brown is President & CEO of Global Accountancy Institute, Inc. and Global Financial Engineering, Inc. With over 25 years in proprietary trading and financial engineering, he pioneered the Global Algorithmic Trading Software (GATS) and the Nine-Laws Framework for Adaptive Volatility & Risk Management.

Business Model Clarification

Global Accountancy Institute, Inc. and Global Financial Engineering, Inc. operate a closed, proprietary trading model; all research and models are for internal use only.

Risk Disclaimer

All content is educational. Trading and investing carry substantial risks; past performance does not guarantee future results. Readers should conduct their own due diligence and consult professional advisors before making any investment decisions.

References

  1. Goldman Sachs Annual Reports 2022–2024: diluted EPS values.
  2. 2022 year-end price and EPS calculation.
  3. 2023 year-end price and EPS calculation.
  4. 2024 year-end price and EPS calculation.
  5. Calculation of the 3-year average Trailing P/E.
  6. Current price for GS as of August 5 2025 from Yahoo Finance.



Leave a Reply