Free Why I Left Goldman Sachs: A Wall Street Story by Greg Smith

clients. The overriding message was “Now is the time we differentiate ourselves. This is where Goldman Sachs becomes Goldman Sachs. Let’s be ultra-attentive to our clients; let’s help them get back on their feet, even if it doesn’t benefit us immediately. Because that’s what the clients are going to remember.”
    The message was classic Goldman Sachs, and the reason it could be proclaimed so strongly is because the old guard was still there. Many of the pre-IPO partners were still in place. This was early in Hank Paulson’s tenure as sole CEO; he had recently forced out Jon Corzine. (Corzine, who had been a vocal advocate in the decision of the firm to go public, would go on to become governor of New Jersey, a U.S. senator, and then the CEO of MF Global, a futures brokerage that went bankrupt after using client funds to cover trading losses.) Paulson’s letter to shareholders in the 2001 Annual Report, released soon after 9/11, reemphasized the firm’s core values of integrity and commitment to clients. The company also established a relief fund for people and organizations affected by the attacks; Goldman employees contributed $5.5 million, which the firm matched.
    That was the macro. In the trenches, I was trying to learn my job during that crazy period. Every morning at 5:30, we first-year analysts would crowd into the copy room, our first interaction of the day, all of us competing to use the photocopying machine first because we had to make big stacks of copies to hand out to the senior people on our team by the time they arrived at 6:00. We were copying research reports on the stocks that Goldman analysts covered; we were summarizing the stories in the Wall Street Journal and on Bloomberg that would be relevant to the day’s trading. The idea behind aggregating and curating these data into summary form was to make the senior people’s jobs a bit easier, to save them from having to wade through the material themselves.
    My little claim to fame as a junior analyst sprang from an observation I’d made soon after arriving at the firm. Anytime a company reported earnings, everyone on the trading desk wanted to have the numbers at his fingertips—was this earnings figure a good number or a bad number? When I got to Goldman, I noticed that everybody was scrambling to find the research reports, to see what the numbers were. So I came up with the idea of writing a simple five-line e-mail before the earnings came out, and I sent it to all the sales traders and traders on the forty-ninth floor. It read something like “This morning, Apple is releasing its earnings. This is what we expect; this is what it did last quarter; this is how many iMacs it sold; this is how many we predict it will sell.” It was like a little cheat sheet that all the traders had in front of them ahead of time.
    This was the kind of thing a junior analyst could do before passing the Series 7. It may seem silly and small, but when people saw you doing it, they thought, This guy is resourceful. He’s trying to think of ways to help us.
    Another part of my day consisted of learning how to leave good voice mails for clients. This was my apprenticeship, the way I learned how to talk about stocks. Every day, I would practice getting the form down: the voice mail had to be no longer than ninety seconds, and it had to hit four or five key points for the day. What were the big market-moving events? What did the client need to know? What was our view? I learned by listening to a master of the art: Rudy. The reason my rabbi was called the Beast was because he could bang these calls out to more clients than anyone else, always with enthusiasm and thorough market knowledge.
    The Beast had a reason for delivering these mini-reports by voice mail instead of e-mail: he felt that the tone of his voice could convey exactly the right emphasis on any given point. Later on in my career, frankly, I started thinking voice mails were stupid. When a client