Has the pullback in financials created an opportunity?

A very hard-hit sector from this market sell-off has been the financials including Goldman Sachs (NYSE: GS), JP Morgan (NYSE: JPM), Bear Stearns (NYSE: BSC) and Bank of America (NYSE: BAC).

There are a variety of reasons for this sell-off. Some include poor hedge fund performance (Goldman and Bear), worries about unknown exposure to the derivative market, a slowdown coming in investment banking, and subprime credit exposure. While all of these concerns and worries are very legitimate, I'm starting to see very legitimate value opportunities arise in this category.

It's embarrassing to admit that I liked Goldman Sachs at more than $200 per share with the stock currently below $170 per share. But I really think that this is more a case of Mr. Market offering an opportunity rather than a sign of things to come. I believe that everything I argued in my first bullish take on Goldman is still legitimate -- a very strong 'brand,' relative undervaluation vs. peers, and so on. Unlike many of its peers, Goldman wouldn't be absolutely devastated by a significant slowdown in the investment banking business (presumably due to the end of the LBO boom) because of its abundant money management and sales and trading businesses. As a result, I think that Goldman remains a very interesting investment.