Just how low a multiple do top investments deserve? Mr. Market has accorded them low multiples mainly because it is inherently difficult to predict their earnings. In recent years, this difficulty was magnified as more banks, led by Goldman Sachs, began to deploy their balance sheets in more aggressive ways. The recent turmoil has made clear that perhaps these stocks deserve an even lower multiple. The New York Times notes that a reasonable view early on would have been that Merrill Lynch and Citigroup, with their diversified revenue streams, would be buffered against huge losses. Wrong. One might also have expected Goldman and Lehman to take some huge lumps. Wrong again. They've fared relatively well.  

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