“Awesome stories”
- Executive Director, Goldman Sachs
Hello everyone.
Summer is over.
My family and I managed to get away to Cornwall - the most southerly county in England, with the best beaches and sunniest (relatively…) weather. I overheard a lot of American’s in St Mawes this year. And a decent chunk of French in Rock.
I have it on good authority from folk in NYC and London that Patagonia vests are out this autumn. And basically any other vest is in. Impossible. Believe it when I see it.
This week’s newsletter: Druckenmiller embraces AI slop, Texas is coming for your top analysts, I used to make breakfast porridge for MD’s at PIMCO, Brian Moynihan is smarter than you and Steve Schwarzman was a bad-a*s in the army.
How To Ignore Seniority
Stephen Schwarzman disobeyed direct orders - but uncovered a criminal cover-up in the U.S Army, and the Colonel fired every officer in his unit…
In 1969, the U.S was deep into the Vietnam War.
Long before Blackstone, a 22-year old Steve Schwarzman was called up to join the Army Reserve for basic training.
However, there was a problem...
Very quickly after joining, it became obvious that Steve’s unit never had enough food. Some mornings, there was no breakfast at all.
After 5am runs in full combat gear and long days of weapons training, recruits were exhausted, demoralized - and starving.
Steve remembered something the Colonel had said during the welcome speech:
“If you see something wrong, come and tell me.”
So he did.
Steve made his way into the officers’ quarters and told the clerk he wanted to meet with Colonel. The clerk looked up at the new recruit and responded:
“Get the f*** out of here!”
Steve refused to move.
So, the clerk called a Lieutenant.
A Lieutenant stormed in and yelled at Steve: “Who the f** do you think you are?”
A Captain arrived. Then a Major.
Each tried to intimidate Steve.
Each failed.
Before long, Steve’s silent protest meant he was sitting across the desk from a grey-haired Colonel. He calmly explained the food shortages, and how morale was collapsing.
“He was stunned”, Steve recalled.
The Colonel said nothing and sent him back to his unit.
Two days later, every officer in the company was dismissed. An investigation revealed officers had been stealing food from the soldiers and selling it for personal profit.
Steve was called back in to the Colonel - this time, not to be punished, but thanked.
No trainee had ever spoken up before.
Years later, Steve reflected on that time:
“Courage isn’t always about being loud. It’s about refusing to back down when you know something is wrong.”
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Finance Culture
Finance legend Stan Druckenmiller wrote an Op-Ed for the WSJ. Nothing out of the ordinary there. However, after reading it for 2 minutes it’s glaringly obvious the entire thing has been penned by AI. Like, the absolute, most basic level possible of AI. The kind you see on Facebook posts. Stan confirmed: “of course I used AI...I'm not embarrassed by it...I write everything using AI now for the same reason I use a calculator when I do math problems.” OK, so a very interesting question here…does it matter if one of the most respected investors in the world uses AI for writing. Is the message more important than the way it's communicated? As an aside, no-one ended up talking about the content of his piece, which was fantastic.
People joke about “Y’all Street”, but the meme of huge finance firms choosing Texas as their next destination outside of NYC is growing by the week. Over the summer, Goldman and Apollo announced Lone Star state expansions. The latest domino to fall is Morgan Stanley. CEO Ted Pick and his executive team have earmarked Dallas for 4,000 new jobs and a massive $1.2 Billion new MS skyscraper.
Bank of America CEO Brian Moynihan has a wider vocabulary than you, and he can prove it. The rugby fanatic has been playing a vocabulary game where he deliberately slips in obscure, old fashioned words on quarterly earnings calls with wall street analysts. Like "gainsay", "concomitant" and "fantods". I guess it’s a cool game to play, as long as the stock price is trending the right way.
You may not know that I started my career in finance as an executive assistant at PIMCO. I created a short video about what it was like. The new insta page just hit 1,000 followers and has 170,000 views.
All replies to this newsletter are confidential, let me know what you think.
Recommendations
Steve gave a fantastic Q&A to new Blackstone analysts, watch it in full here.
A very rare recording of Steve answering questions at a Harvard Kennedy School student roundtable from 2008. Of it’s time, but some evergreen comments around leadership and business in general. Watch it here.
Forward this email to one person you know in finance who might get it.
Joseph Cass