Stockpickr: Trade Like Goldman Sachs

Let's face it: Goldman Sachs(GS Quote) is the best bank out there. It sees all the deal flow, and both major political parties are full of former Goldman executives.

Goldman has consistently generated great profits from its proprietary trading and investing. If I could be a fly on the wall, I would be one at Goldman, the center of the trading universe. Of course I can't be a fly on the wall, but Stockpickr provides three Goldman Sachs portfolios that you can emulate:

• Goldman Sachs Large Cap Value Fund;
• Abby Joseph Cohen, chief investment strategist at Goldman; and
• Goldman Sachs Picks & Pans, the firm's favorite and least favorite tech stocks
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The Goldman Sachs Large Cap Value Fund was up 18.4% in 2006; up 14.6% on average over the past three years; and up 11.7% over the past five years, handily beating the S&P 500 in each of those periods. It's among the funds with the longest streaks beating the S&P 500, having done so since 1999.

It has stayed focused on owning large-cap value plays. For instance, it owns Exxon Mobil(XOM Quote). True, it's going to be hard for Exxon, with a $423 billion market cap, to double in size anytime soon. But it's hard to find a safer bet. Exxon trades at just five times cash flows, has more than $20 billion net cash in the bank and, if any of the peak oil theorists such as T. Boone Pickens are right about the price of oil, it will continue to have steady profits.

Exxon can easily hit $90 to $100 during the next price surge in oil. The stock is a holding of many hedge funds, including Renaissance Technologies and Citadel Investments.

The Goldman Large Cap Value Fund also owns Waste Management Industries(WMI Quote). Beyond being a solid demographic play (I know I create more trash every year; at the very least, there's more trash on the floor of my office right now than there was a year ago), Waste Management trades at just seven times cash flows, making it a possible takeover target.

Additionally, analysts expect the company to earn $2.17 a share in 2008, up from $1.98 in 2007 and $1.81 in 2006 -- solid double-digit growth each year. Bruce Kovner, one of the "Market Wizards" featured in Jack Schwager's book of that name, also owns Waste Management through his Caxton Associates.