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The Goldman Sachs Group (GS), is a global investment banking and securities firm that provides a wide range of financial services to corporations, financial institutions, governments and rich individuals. The Goldman Sachs Group, Inc. reported net revenues of $39.16 billion and net earnings of $8.35 billion for the year ended December 31, 2010. John Griffin’s Blue Ridge Capital, Bill Miller’s Legg Mason Capital Management and Bruce Berkowitz’s Fairholme are among the hedge funds which have invested in Goldman Sachs shares. Bruce Berkowitz says that he would buy more GS shares if he was allowed to do so.

Goldman Sachs reported $226 Billion total assets in its last 13F filing. Some of the largest positions of Goldman Sachs are SPDR S&P 500 ETF (SPY) with $9.2 Billion invested, Apple Inc. (AAPL) with $3.4 billion invested, Microsoft Corporation (MSFT) with $2.8 Billion invested, SPDR Gold Trust GS (GLD) with $2 Billion invested, Pepsico Inc. (PEP) with $1.7 Billion invested and Google Inc. (GOOG) with $1.6 billion invested. In addition, put options on SPDR S&P 500 ETF , iShares Trust Russell 2000 Index Fund (IWM), Apple Inc. and Powershares QQQ Trust (QQQ) are some of the other biggest positions of Goldman Sachs. Other than these, here are the largest new positions in Goldman Sachs Group’s portfolio at the end of December (Our list is not including bonds and put options):

Largest New Holdings

Stock

Value in Millions [USD]
As of Dec 31,2010

Return
Since Dec 31,2010

GENERAL MTRS CO (GM)

301.0

-14.6%

LYONDELLBASELL (LYB)

226.4

17.3%

AEROFLEX HLDG CORP (ARX)

210.0

12.0%

BARRICK GOLD CORP (ABX)

198.3

-2.9%

SMURFIT-STONE CONTAINER (SSCC)

105.7

50.0%

FIRST REP BK SAN FRAN (FRC)

84.4

3.3%

FLEETCOR TECHNOLOGIES (FLT)

65.5

7.0%

IPATH S&P 500 VIX ETN (VXX)

55.4

-19.3%

SPDR SERIES TRUST (Call) (KBE)

55.1

-0.6%

UNITED CONTL HLDGS INC (UAL)

52.1

-1.3%

VALEANT PHARMACEUTICALS (VRX)

50.9

58.8%

GENERAL MTRS CO (Call) (GM)

42.7

-14.6%

LPL INVT HLDGS INC (LPLA)

37.9

-1.1%

NICOR INC (Call) (GAS)

31.8

6.6%

IPATH S&P 500 VIX ETN (Call) (VXX)

30.3

-19.3%

UNITED CONTL (Call) (UAL)

30.3

-1.3%

SEMGROUP CORP (SEMG)

29.4

23.4%

GENERAL GROWTH PPTYS (GGP)

27.2

-2.2%

BOOZ ALLEN HAMILTON (BAH)

19.4

-5.9%

SPDR SERIES TRUST (TFI)

17.8

2.6%

ISHARES MSCI SWEDEN IDX (EWD)

17.3

2.3%

ALLIED WRLD ASSUR COM (AWH)

14.1

3.8%

COCA COLA ENTERPRISES (CCE)

13.7

6.3%

ISOFTSTONE HLDGS LTD (ISS)

13.3

7.5%

NORDION INC (NDZ)

12.5

0.8%

SNYDERS-LANCE INC (LNCE)

12.2

-14.4%

GRANITE CONSTRUCTION (Call) (GVA)

11.4

5.4%

ETFS PRECIOUS METALS BASKET (GLTR)

10.1

7.5%

ANHEUSER BUSCH INBEV (Call) (BUD)

10.1

0.7%

PROMOTORA DE INFORMACIONES S (PRIS)

10.0

44.0%

EXAMWORKS GROUP INC (EXAM)

9.4

22.8%

REPSOL YPF SP ADR (Call) (OTCQX:REPYY)

9.2

25.8%

COCA COLA ENTERPRISES (Call) (CCE)

8.3

6.3%

SCHWAB STRATEGIC TR (SCHR)

8.0

0.0%

VERA BRADLEY INC (VRA)

7.7

22.3%

WISDOMTREE TRUST (DTN)

7.5

4.0%

CLEAN HARBORS INC (Call) (CLH)

7.4

19.4%

ISHARES MSCI GERMANY IDX FD (EWG)

6.9

5.8%

SHAMIR OPTICAL INDUSTRY LTD (SHMR)

6.4

0.8%

CORESITE RLTY CORP (COR)

6.2

15.2%

MARKET VECTORS RARE EARTH ETF (RSX)

6.0

3.4%

ETFS WHITE METALS BASKET TR (WITE)

6.0

10.3%

LYONDELLBASELL (Call) (LYB)

5.8

17.3%

HUDBAY MINERALS INC (HBM.TO)

5.1

-11.3%

CELANESE CORP SR A (Call) (CE)

5.0

4.8%

VALEANT PHARMACEUTICALS (Call) (VRX)

4.9

58.8%

PIMCO ETF TR (TUZ)

4.6

-0.3%

ISTAR FNCL INC (Call Option) (SFI)

4.5

15.1%

Value Weighted Return of Largest New Holdings

1,915.4

5.7%

SPY

N/A

4.9%

Goldman Sachs’ largest new stock picks have gained 5.7% since the end of 2010, vs. 4.9% gain for the SPY. GM was Goldman Sachs’ biggest new investment at the end of December 2010. GM has lost 14.6% since then, underperforming the SPY’s 4.9% return. GM is one of the five stocks where at least two insiders made recent purchases. Goldman Sachs has $301million invested in GM. Hedge funds snatched 6% of GM’s outstanding shares and amassed a $3.4 Billion position. There were 112 hedge funds with GM positions at the end of December. John Griffin’s Blue Rigde, William Ackman’s Pershing Square, George Soros, David Tepper’s Appaloosa, Roberto Mignone’s Bridger Management, Richard Perry’s Perry Capital, and Leon Cooperman’s Omega Advisors are among the several high profile hedge funds with GM positions.

VRX has had one of the best performances in its portfolio since the end of December. Goldman Sachs had $50.9 million in VRX shares at the end of December. VRX has gained 58.8% in the last three months, beating the SPY by a large margin. John Griffin is also holding VRX shares in his portfolio. HealthCor’s Joseph Healey was expecting Valeant to double in the following 12 to 18 months. Two of the new stocks in GS’ portfolio are also in Dan Loeb’s portfolio: LYB and SSCC. LYB returned 17.3% and SSCC gained 47% since the end of 2010 (check out Dan Loeb’s other brilliant stock picks) The worst performing stock among the new purchases of Goldman Sachs was VXX, losing 19.3% since the end of December.

Goldman Sachs is one of the most well connected firms on Wall Street. It also follows hedge funds closely, taking advantage of their informational superiority. We believe investors could beat the market slightly by imitating Goldman Sachs’ new stock picks. It managed to beat the SPY by 0.8 percentage points over the first three months of 2011.



Disclosure: I am long SPY, MSFT.

Additional disclosure: I am short VXX and long physical gold.

Source: Beat the Market With Goldman Sachs' Bullish New Stock Picks