Why I Left Goldman Sachs: A Wall Street Story (3 page)

Along with the other interns who had arrived a week late, I was brought to a room for an introductory session by Human Resources. I remember walking in and seeing some of the other Stanford people I knew. There was real electricity in the room—this was everyone’s first experience on Wall Street, and we were all talking excitedly and milling around. HR gave us a pile of forms to fill out, along with our Goldman Sachs e-mail addresses and our intern ID name tags. The name tags, laminated cards with a bright orange border, worn on a bright orange lanyard, showed our names and universities in big black letters. We were told in no uncertain terms that we were to wear the name tags around our necks every moment we were on the premises; failure to do so would lead to big trouble. The firm wanted there to be no doubt on the trading floor as to who the interns were.

Goldman ran a summer intern program in each of its divisions: one in Equities; one in Fixed Income, Currency and Commodities (FICC); one in Investment Management; one in Research, and so on. Back when I’d passed the interview process, I’d been offered two internships: one in Equities, in New York; and one in Investment Management, in Chicago. I had learned something about private wealth management the previous summer, at Paine Webber: it’s a slower business, a smaller environment. You’re dealing with individuals. For me, the exciting thing about Wall Street was the big fish, the institutions. So I signed up for Equities. I wanted the real trading floor experience: standing up in a frenetic environment, shouting across the floor. In time, I would get my wish.

Walking onto that floor, for an intern, is thrilling and intimidating and bewildering all at once. The trading floor is not an environment for everybody, but I liked it immediately. Looking around, I found I loved the energy. I loved the chaos, the yelling, the tension. I loved the fact that it all added up to billions of dollars changing hands among the biggest and smartest investors in the world. I desperately wanted to understand it and be part of it. I wasn’t intimidated by it. Maybe I should have been. Instead, I felt at home.

The day after the first Open Meeting, the speed dating began. There were some thirty groups, or “desks,” on the trading floor, each one comprising about fifteen people: a partner, two or three managing directors, a half-dozen vice presidents, three associates, and three analysts. The seventy-five interns were grouped into pods of four or five people, and over the course of the summer, our little pods would rotate around to as many desks as possible, each of us carrying his or her little black folding stool. This was called shadowing. We’d spend two or three days shadowing each desk, trying to learn what its business was all about, trying to help out, trying to do more than just not get in the way.

The stool. Practically speaking, you carried it with you at all times because there were no extra chairs at the trading desks. But the folding stool, along with your big orange ID badge on its bright orange lanyard, was also a status marker: it showed that you were a plebe, a newbie, a punk kid. It was innately demeaning. When unfolded, the stool was all of eighteen inches high—so there you’d sit, next to and slightly beneath the exalted salesperson or trader or sales trader, looking like no more than a shoeshine boy while he or she performed some grand and mysterious task.

To spice up the situation, there was a perpetual shortage of stools. Whether this was purposeful on the part of management, a Darwinian musical chairs designed to separate the weak from the strong, it is impossible to know. But at the beginning of the day, the interns would grab for all the available folding stools, and invariably a few interns would get caught short. This could prove embarrassing, especially if, when you were stool-less, some trader said the magic words “Come sit with me.” You’d excuse yourself and run madly to beg, borrow, or steal a stool. (There were a few hiding places around the floor, notably one storage closet, where a spare or two could sometimes be found.)

The internship was extremely demanding. You came to work at 5:45 or 6:00 or 6:30 in the morning, whenever your desk wanted you in. During the day, you’d do your best to be useful. How you spent your time—and whether you were actually of any use—depended on how inventive you were. Because we hadn’t yet passed our Series 7 exam (the regulatory test required for everyone who works on Wall Street), we were not allowed to trade. We couldn’t talk to clients. We couldn’t answer the phones. And yet there we were, in a trading business, among extremely busy people in the middle of this giant trading floor. For a summer intern, there is a very fine line between being dead weight—just hanging around and annoying people—and trying to prove you can add some kind of value.

Even figuring out where you were supposed to go was challenging at first. The desks weren’t marked; there were no signs reading, “Emerging Markets Sales Desk” or “Latin America Sales Trading Desk” or “U.S. Equity Trading Desk.” You had to ask around to get directions; you needed to draw little maps for yourself to navigate the jungle.

You needed to be very entrepreneurial and creative. Adding value as an intern often began with getting coffee for the desk every day; frequently, interns also did breakfast and lunch runs. You would literally take a pen and pad and go around to the ten or fifteen people on the desk and take everyone’s order. It’s a strange concept, but Wall Street looks at attention to detail as an indicator of how people are going to do in their job. If a kid keeps messing up the lunch order, he’s probably going to mess up something else down the line.

I remember one managing director—a few years after I’d started working at the firm—who was very sensitive about his lunch orders. He didn’t eat onions or certain other things. One day he asked an intern for a cheddar cheese sandwich, and the kid came back with a cheddar cheese
salad
. The kid handed it to him so proudly: “Here’s your cheddar cheese salad.” I was sitting next to the MD, so I remember the incident well. He opened the container, looked at the salad, looked up at the kid, closed the container, and threw it in the trash. It was a bit harsh, but it was also a teaching moment. The managing director joked about it with the kid afterward; he didn’t make a big deal about it. The lesson was learned.

There were all kinds of little ways an intern could add value: by getting the food orders right, by making photocopies, but especially by being creative at finding actual work to do. If an intern heard a salesperson or trader say, “My client is interested in biotech stocks,” the intern, if he or she were entrepreneurially minded, could then say, “Why don’t I go do some research on biotech stocks for you. Would that help?” Some Goldman employees responded enthusiastically to this kind of initiative, which could be a great thing for the intern—he could then show what good work he was capable of. Whereas if you spent the day just schmoozing with the people on your desk, there was a very real risk of your being seen as a mere tagalong, an annoyance. Yet there were some people who were geniuses at this. Some interns, like my friend Mark Mulroney, got jobs in part because of their innate ability to win people over.

There was a reason those stools folded: You were always picking them up and heading somewhere else. You weren’t just sitting at some trader’s feet the whole day. Every day throughout the summer, there were presentations and panel discussions that all the interns were expected to attend. A speaker might come in and talk about what derivatives were; another might discuss the various roles in Equities: What was the difference between a salesperson and a sales trader? How did you become skillful at each of these roles?

The point of the talks was to educate us, but also to help us narrow down in our minds which area we wanted to work in. Not everyone was suited to be a trader. Not everyone was suited to be a salesperson. Not everyone liked bonds. Some people liked stocks more than bonds. The math geeks usually became traders or “quants” (also known as “strats,” for
strategists
). The jocks usually became aggressive traders or outgoing salespeople. The rest of us fell somewhere in between and had to decide. But everybody had to like hard work.

Invariably during the day, you’d be speed-dating on one of the desks, and one of the mandatory speaker events would come up. At this point, you’d have to get into a tricky negotiation with the managing director or VP you were sitting with. You had to say, “I’m sorry, but I have to leave for this event,” at exactly the moment when you were working on a project that that person needed quickly, such as running a spreadsheet. And yet you
had
to attend these events. Roll call was taken; your questions and answers were assessed. This was another set of rapids to navigate, and there was no set of rules for getting through, but you were always being judged.

In addition to our very full slate of daytime activity, we were frequently given huge projects to do after hours—say, a twenty-page presentation on the pros and cons of the Glass-Steagall Act. There was no time during the day to work on something like this; you couldn’t exactly sneak off for five hours and crank it out. That left the time after everyone went home—usually around 7:00
P.M.
—and the weekends. Working till midnight on a weekday was not unusual; nor was coming in to the office on a Saturday or Sunday, or both. (We worked hard that summer, but we played hard, too. In our precious leisure time, we interns explored the city, sometimes en masse, sometimes in subgroups. On weekends, many of us would go clubbing together; on the Fourth of July, a big group walked over to the East River to watch the fireworks. And romance ensued. Two couples who met in the summer program ended up marrying a few years later.)

Every week, you had to list five people you had speed-dated with; those people would then review your performance. These weekly reviews were collected and catalogued, and at the halfway mark in the summer, you would sit down with the person running the intern program for a performance assessment. (In the summer of 2006, when I ran the program, I became that person.) The intern manager would say, “These are the things people think you’re doing well; this is what you need to do better; this is how you need to change your attitude; these are your weaknesses.” My midsummer critique was very generic. (I later learned that’s exactly what you want.) I was told something along the lines of “You’re very smart, but you’ve got to be more aggressive in getting the job”—meaning, I needed to be more forceful, needed to go up to people and introduce myself, shadow more traders and salespeople.

An opposite comment might be directed at an intern who was too aggressive and who alienated all the people on a desk, making them say, “Who does this guy think he is?” There’s a famous story about a Harvard Business School summer associate who went up to a partner, the head of Government Bond Trading at the time—a small Chinese American woman who was renowned as the most vicious trader on the floor—and said, “Would you mind if I shadowed you?” The intern must not have known about the partner’s reputation—you wouldn’t have known it to look at her, but everyone was scared of her. What he certainly didn’t know was that the moment he had chosen to make his request, 8:30
A.M.
, on a specific Friday in July, was the exact moment when the nonfarm payrolls number (economic data) was coming out, which was effectively the biggest day of the month for this trader. She absolutely flipped out on him. “Who the fuck do you think you are? Don’t you know that the economic data are coming out? Get away from me!” The guy eventually got reprimanded. The way they do the math on Wall Street is to think,
Well, this guy has bad judgment. He should’ve known about the market data.
On the other hand, maybe he learned a lesson, and maybe his judgment was just fine. In any case, he didn’t receive a full-time job at Goldman Sachs.

What I learned was that success at Goldman, in the internship program and afterward, depended much more on judgment than on knowledge. You’d see the smartest kids in the world—they might have gotten a 1600 on the SAT, they might have graduated number one at Harvard—go to Goldman Sachs and be absolute disasters, get fired within the first year. It happened all the time. This was because simple matters of judgment cannot be taught.

Several people got voted off the island that summer. Five or six weeks in, one Princeton guy got dismissed for being insubordinate: muttering sarcastic comments to managers on multiple occasions. And then there was another intern—a Harvard guy who wound up becoming a professional online poker player—who showed a truly memorable lack of judgment.

It happened toward the end of the summer, at a team-building outing at Bear Mountain State Park, about fifty miles north of the city. It was a Friday in late July; everybody was in a festive mood. At the beginning of the summer, each of us had been issued a Goldman Sachs gym bag loaded with GS-branded paraphernalia: wallet, T-shirt, sunscreen, sunglasses, flip-flops. Today was the day to bring that bag along, to fly the Goldman colors.

At the outing, we were divided into a dozen groups of six people, and we had to compete against one another in all kinds of events: rowing a boat together, three-legged races, brain teasers, and so on. The final event of the day was to come up with a song—it sounds cheesy; it
was
cheesy—whose lyrics would reflect what we felt we’d learned over the summer. Anyway, Mr. Harvard somehow persuaded his group to come up with an Eminem-style rap.

Bad idea.

There were two offending passages in the song. One was about Val Carlotti, the fearsome VP who ran a number of the Open Meetings, and who effectively helped decide our destiny. The lyric went something like “Dotty, dotty, I want to shoot Val Carlotti with my shotty.” People’s mouths fell open.

Then, to put a cherry on top, the Harvard guy and his crew rapped a verse about wanting to sleep with all the chicks in HR, singling out by name the two most attractive ones.

Everyone was truly thunderstruck. Number one, why on earth would the Harvard guy do this? And number two, how had he persuaded the other people in his group to go along with it?