Why I Left Goldman Sachs: A Wall Street Story (13 page)

Ricci called us all into a room, the entire Equity Derivatives Sales force, and said, “I know a lot of you are upset. If you want to know who you should be upset at, it’s me. I’m the one who made the decision.” And he looked everyone in the eye. It was a strange moment, but I was impressed with his lack of bullshit. Yet it was also a sad moment—it’s very rare to have a boss you like as much as everyone liked Daffey.

In June, the Derivatives group (both sales and trading) threw him a farewell party, at the Soho House in the Meatpacking District. In a strange turn of events, the room we were in, called The Library, had a huge stereo system but no music to be played. I was the only one there who had my iPod, so I stepped into the breach as amateur DJ for the night. I took song requests from some of the partners, but mostly I played the music I liked. Nelly’s “Ride Wit’ Me,” Jay-Z and Linkin Park’s “Numb/Encore,” and U2’s “Beautiful Day” were some of the tunes people enjoyed that night.

There were a lot of senior people there, and everyone, including me, drank a lot. A few words about drugs, smoking, and drinking at Goldman Sachs may be in order here. In my whole career, I never once saw a colleague take any kind of illegal drug at work or at a social event. Drugs were severely frowned upon at Goldman, even regarded with a certain horror. To indulge in them would have been looked upon as severely reckless—and reckless people didn’t survive very long at Goldman Sachs. Disciplined people survived. Being caught using would have been grounds for immediate dismissal.

Smoking: in the New York office, there was a smoking crew who would take cigarette breaks outside the building every two or three hours. Usually the group consisted of either European expats or quants, or a combination of the two. The smoking crew in the London office consisted of: The Entire London Office.

Alcohol was a big part of the culture at the firm, as it is on Wall Street in general. Getting smashed with your clients was a regular occurrence. The key was knowing how far to go. At Daffey’s party, one associate got very drunk and kept telling everyone how hot he found the new female analyst, who was standing a few feet away. Even though I was also pretty hammered at the time, I remember thinking,
Holy crap! This guy is embarrassing himself, perhaps irreparably
.

Drinking with colleagues was tricky, but there seemed to be a completely different standard for senior people when it came to alcohol. If you were a junior person, you didn’t want to be perceived as a stick in the mud; you needed to show people you could hold your own. At the same time, it was important to strike a balance. Senior people simply had more license. I’ve seen some very senior people get ridiculously drunk, slur their speech, and then pretend the next day that nothing happened. They kind of get away with it—they’re the bosses, after all.

Daffey was one of those Aussies for whom alcohol only heightened his natural exuberance and seemed to make him more charismatic. At his farewell party, he was calling people over one by one and giving us each a minute to say goodbye. When it was my turn, he made the usual crack about South African rugby, then turned serious. “Dude, keep at it,” he said. “You’re the kind of guy who I think could do any job at Goldman Sachs—I would put you in any seat, trading or sales.” He then lost his train of thought and moved on to the next person. The next morning he called me and thanked me for being DJ.

Then he left for London.

After Connors made it through his rough early days at the firm, it was clear that he had some significant skills. He was about as good as anyone at getting to know clients, showing dedication to them, understanding their problems, and helping them work toward solutions. Clients loved him. Sometimes the solutions he found were very profitable for the firm, but Connors would have to work hard and long to get these trades to the tape. They were not quick wins. Hedge funds may be able to trade “on the wire” (immediately) in response to an idea you give them, but as a general rule, institutions such as pension plans (both corporate and state), sovereign wealth funds (governments such as Abu Dhabi, China, Hong Kong, Norway, Qatar, Saudi Arabia, and Singapore), insurance companies, and mutual funds (e.g., Fidelity, Wellington, T. Rowe, Vanguard) take much longer to work toward executing on a solution or investment idea. Sometimes this is because they are being thoughtful and have a long-run horizon. Other times their slowness could be a result of bureaucracy and the size of their organization; at worst, it could be because of lack of sophistication.

Connors had great success servicing clients that many people within the firm had thought were dead ends: particularly sleepy state pension plans all over the country, which no one ever thought could do any business with Wall Street. The managers of these funds really appreciated his patience and focus on them.

Connors was primarily a big-picture guy: his working habits when it came down to the nitty-gritty were idiosyncratic. He had a reputation for disappearing from the desk at odd hours. It was my job, as his backup, to cover for him—to help out whoever was looking for him so it wouldn’t be a big deal that he wasn’t there. I never asked where he’d been. The etiquette at Goldman was that you didn’t inquire why someone more senior than you wasn’t on the desk. If internal people or clients asked, I would just say, “Connors is off the desk. Can I help?”—even if it was 4:30
P.M.
on a Friday and he had clearly left for the weekend.

I don’t know for sure, but I think Connors liked to sleep in a little bit at times; maybe sometimes he liked to squeeze in a morning workout. He would come in late, but to be fair, he would often stay much later than everyone else—occasionally until 11:00
P.M.
—working on projects for clients. He moved slowly, but always seemed to get where he needed to go eventually. This type of elongated day was acceptable when the revenues were coming in. A lot of things were acceptable while the tide was rising.

And it was rising fast: the first quarter of 2006 was the best quarter ever for our pod in Equity Derivatives Sales. We had brought in millions of dollars in revenues, almost doubling the previous year’s total.

It was at this loaded moment that Tim Connors invited me to his bachelor party in Las Vegas.

It was nice of him to ask me. In effect, it was kind of a reward for all my hard work—plus, maybe a tacit acknowledgment that I’d done more than my fair share of the heavy lifting. Still, the invitation gave me pause. For one thing, a big weekend in Vegas was the kind of fun I wasn’t sure I could afford, because when Goldman heavy hitters go to Vegas, the price point is very different from going with your college buddies.

Between airfare, hotel, gambling, and incidentals, I estimated that this bachelor bash could wind up setting me back two or three thousand bucks. That may have been a drop in the bucket for a VP or managing director, but for me it was real money. Was it worth it?

I was still an associate at this point, albeit a senior one, and though my total 2005 compensation (including bonus) had come to more than $200,000, after paying taxes, sending money to my family in South Africa, shelling out the $2,500-per-month rent on my 650-square-foot Upper West Side apartment—I’d moved from 41 River Terrace to my own place in 2004—and spending considerably on taxis and New York City restaurants, I just didn’t feel that it would be responsible to blow three grand on a weekend.

I was also concerned about the experience itself. I knew at the outset that I would be the most junior person there. Did I really want to watch my boss and other higher-ups misbehaving in Vegas? Scenes from Daffey’s farewell party kept replaying in my head. I already knew there was a double standard between management and underlings when it came to drinking and other pursuits. Did I want to have to rein myself in while trying to keep up? It is one thing to go one Cuervo over the line with your buddies; it is another to throw up on your boss’s John Lobbs.

Also, I may have been overthinking it, but I wanted my work to speak for itself in the success that accrued to me. Cringe if you like, but I didn’t want to have to impress the boss by showing him how many shots of tequila I could drink. I generally didn’t socialize every weekend with my colleagues; I didn’t try to ingratiate myself with senior people so I could go out with them on weekends. I didn’t like to mix my private life and my work life, and this party threatened to do just that. At the same time, I liked Connors, and wanted to be there to celebrate with him. And if I could just lighten up a bit, this could be fun.

I consulted Phil. Phil, who is two years older than me, the son of a Mayflower WASP father and a Chilean mother, was (and continues to be) an important mentor of mine. We met on the first day I joined the firm and quickly became close friends; he’d worked in the Latin American pod of Emerging Markets Sales before Goldman made a decision to start pulling out of the Emerging Markets in 2003. (He became a successful wealth manager at a white shoe private partnership, handling ultra-high-net-worth Latin American clients: a perfect job for him.)

Phil not only knew which forks to use; he knew a lot about a lot of things. Because of his mother, he spoke fluent Spanish. He’d grown up on Park Avenue and spent summers at his parents’ house in Southampton, where his doubles partner had been George Soros—Phil called him “Big George”—and his family belonged to Shinnecock Hills, a golf club so exclusive that Goldman partners such as Daffey and Ricci practically salivated at the sound of its name. (One time, I played Shinnecock when the whole Derivatives team was in the Hamptons for a team-building clambake, a real bull market event, and all the partners’ jaws dropped when I mentioned this.) While Phil was at Goldman Sachs, all kinds of senior people used to cozy up to him despite his junior status, perhaps hoping for an invitation to Shinnecock, or maybe so that some of his style would rub off on them.

With a background like his, Phil could easily have been a lightweight. Instead, he was motivated—serious without taking himself too seriously; thoughtful, humorous, and focused. He seemed to understand the world for what it was, neither overestimating the big things nor underestimating the little things. So he became my go-to guy for counsel on matters large and small, both professional and personal: which Goldman MDs to invite to the rooftop bashes my roommates and I used to throw on the forty-third floor of 41 River Terrace; what to wear to a formal engagement party in Central Park; when Turnbull & Asser was holding a sale, and which sales guy to ask for.

On one of our first days at Goldman, Phil pulled me and a couple of other junior analysts aside and gave us some advice that I’ve never forgotten. “Everyone here is a salesman,” he said. “It doesn’t matter if they’re a trader, if they’re a quant, if they’re a salesperson. Everyone is selling something.” His point was: never assume that people are not trying to advance their own agendas. He opened my mind to being a little bit skeptical (as opposed to being cynical), to giving a hard (but not necessarily harsh) look at what might be behind requests and compliments. He advised me to be alert to people, even people senior to me, trying to win my favor. You can never be sure where people are coming from, Phil said.

When I asked Phil if I ought to accept Connors’s invitation, I watched with fascination as his tactical computer processed advanced algorithms. It didn’t take long. “I think you should go,” he told me.

“You do?”

He nodded. “You need to show these guys that you can have fun, that you’re part of the gang,” he said. “That even though you’re a young guy, you’re not too nervous to go hang out with them.”

So I went to Vegas.

Unlike Connors and the other, more senior people—he had invited fifteen guys in all, including nine from Goldman—I didn’t take any time off. I was too junior to do so. (Connors left after work on Wednesday and didn’t return till the following Tuesday.) I flew out on a Friday evening, landed in Las Vegas close to midnight, dropped my bags off in my room at the (newly opened) Wynn Hotel, and, as instructed, proceeded to the Lure Ultra-Lounge on the outskirts of the main casino floor to meet Connors and crew, who’d been in town for two full days drinking steadily.

The light was purple; the music was pounding. To Connors’s credit, despite the fact that he was swaying in his seat, the first question he asked me—he had to yell to be heard—was about a big total return swap derivatives trade we had done earlier in the day with a large pension plan. It had gone just fine, I told him. He smiled woozily.

Nine or ten of us, a half-dozen Goldman guys—including Bobby Schwartz, aka the Jewish John Kennedy—plus a few of Connors’s old pals from college, business school, and elsewhere, were sitting around a table laughing loudly enough to compete with the music. People were slapping the bridegroom-to-be on the shoulder: he was the cool guy, the magnetic guy, the reason everyone was there. The waitress was a knockout, a ten; the drinks kept coming. A managing director from a regional office—everyone called him Bill-Jo; he was, by far, the senior Goldman guy at the table—was buying: vodka soda was the drink of the night. I had two, and felt a nice buzz. Then I had a third. Then I had a fourth. By the time we all left the lounge, around 2:00
A.M.
, I was walking carefully, as if I were on the wet deck of a sailboat on the high seas. I slapped Bill-Jo on the back (a familiar gesture I wouldn’t have tried without the vodka in me) and thanked him for buying me all those drinks.

“Let me tell you something,” he said rather seriously, though he had had a number of drinks himself. “I never let anyone more junior than me pay for anything when they’re with me. It’s a policy I was once taught and have always followed.” I’ve remembered this ever since.

We were all walking out of the Ultra-Lounge, past the blackjack tables, where the action was hot and loud. I watched with awe as a high roller in a bolo tie put down a pile of $500 chips on a single hand.

“I wonder what it’d be like to bet that kind of money on one hand,” I said casually.