Been on these forums for a bit and I think it's clear that Goldman is by far the number one choice for the majority of people here. I know Goldman has global initiatives, does outstanding things, and has a great reputation, but so does JP Morgan or Morgan Stanley.
What is the differentiating factor that makes Goldman #1 when someone thinks of banking, and why do they think of Goldman?
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The WSO answer:
I think people get a little to caught up in the rankings. You go to a top 4 bank you are good to do anything in the industry for the rest of your career (GS, MS, JP, BAML).
The Historical answer: Goldman I think gets lumped as number one due to being a long standing firm with great history. They also had amazing timing into the market place. Back into the late 1860's the Telegraph lead to the consolidation of the financial markets across the US and the NYSE was brought into the modern world of today (one could argue). When was Goldman founded? Late 1860's. Being one of the new firms behind what was now going to be the market of choice (NYSE) in the future is huge. Additionally this innovation lead to invention and use of commercial paper by Goldman. This key fact in the market allow for GS to establish themselves early in the market place as innovators.
They also IPO'ed Sears at the time "the first major retail IPO in American financial history and represented a coming of age, financially, of the consumer sector". Inflation adjusted this IPO is a top 10 IPO of history. I would argue that this put Goldman on the map.
I would also add Citi for Europe and Evercore/PJT for the US
Those banks will help you to get the maximum optionality.
I still remember two years ago, when I was on the last round of McKinsey and asked the partner what bank would he work for (he worked at Wall Street before making a partner) and he said "I really dont care about which of the top 5 banks you join, that depends more on your alumni or culture, but making it means you have what it takes to succeed at any top firm"
It seemed quite funny at that moment, but now I understand better what he meant...
What about Credit Suisse? Does optionality get slightly limited?
This was 2 years ago, but I am sure that there is not that big difference between Citi and CS/Barc
Its kinda like Top Schools, If you are a great student and work hard then a few rankings in schools will not hinder you. No one will care beat you up if you went to NYU instead of Harvard.
Same in banking if you are a good analyst and work hard, no one will care if its at CS, Citi or GS.
@Lloyd Blankfein" any comment?
I think you are referencing a certain aura that seems to surround the firm and gives it a competitive advantage in recruiting the best talent. I feel like Mckinsey has something similar but with less "street swag" lol. I tend to feel the way you do and wonder "why on earth would I pick GS over EVR/PJT or even another great BB group with better culture." The firms long successful history should be the biggest factor but I think there are a couple recent cultural points that extend Goldmans' "Mystique" if that makes any sense. I'll try and name a few.
The IPO - The Goldman IPO is 1999 made all the partners (221) rich as fuck. The average payout was $63 million per partner and a ton of partners got 9 digit exits. The firm was one of the last remaining investment banks that had a partnership structure so nobody really knew how much they were making but this payout told every college kid interested in finance that Goldman guys were rich, big dick swinging Chads.
Political Exits - Mnuchin, Paulson, and Rubin at the Treasury and a ton of other notable guys over time. Specifically with politics everyone loves to hate rich people so these guys were no exception. Also there are Fed Exits, - William Dudley, Robert Kaplan, Stephen Friedman to name a few. I think at one point 5/12 Fed banks were headed by former Goldman executives. The average Joe probably doesn't know this but people in politics do and it adds to this aura you are referring to.
2008 - Obviously everyone hated investment bankers during this crisis but Goldman in particular stood out because they were the most famous and didn't fail, so they got more of the hate. Any documentary about the financial crisis will almost always have the scene of Lloyd testifying to congress and smugly implying Carl Levin's (Democratic senator) question was stupid (probably right lol). Also the executive compensation paid out in 2007 for most of Goldman's C-Suite was in the $70 million range, much higher than other executives at competitors.
None of this is a substitute for a long history of good performance but I think these cultural moments speak to the mystique that surrounds the firm. Also (until recently) the fact that the entire firm was rich white guys from NYC/Greenwich that went to schools like HYPSW makes it feel incredibly detached from main street.
I personally think this mystique is eroding over time. It is hard to keep that kind of advantage over competitors when they offer the same professional experience for the most part and a lot of times better pay (EBs specifically).
Also I think for 100 years the firm was very very meritocratic (or at least this is vibe I get reading books, Accidental Investment Banker, The Partnership, others). I think it is possible, and please don't let this divert the entire thread, that certain hiring initiatives (pushed politically or internally) focusing on gender, race, and even armed forces service, will over time divert the culture from its historical cutthroat meritocratic roots. Again lets not debate diversity here, I think there are good reasons for a lot of these programs but I'm just saying it MIGHT over time change the firm that had a culture created by only white hyper competitive males.
I would be curious to hear what Goldman executives think the reason is for this odd competitive advantage. Obviously on this forum if you say "because its Goldman Sachs" people will say that's a stupid reason to pick a firm and will demand you say something like "Uh... the I liked the people!" or "the group has better exits." Anyways good topic and hope to hear some other good replies from some more senior people.
I get that this is an observational piece but these sortve ideas just bother me. First, the idea that everyone at Goldman was some elite white dude from Greenwich is just absurd and a bit racist. Lloyd Blankfein is a Jewish guy who grew up in public housing, and the current CEO went to Hamilton College and started his career as an analyst at a MM that's now part of BNY Mellon. Corzine grew up on a rural farm and went to Illinois. All of these people went to public high schools. Second, the idea that "high finance" should be disconnected from Main Street is wrong and gives voice to critics of the industry. Most of what goes on in everything from IBD to S&T to the buy side has a tremendous impact on the average person. Wall Street has an extraordinary responsibility because what they do directly affects everything from mortgage rates to people's pensions. They can either have a very positive impact or negative impact, and the general public notices much more than other industries when something goes wrong because it directly affects their wallets.
I think "goldman is definitely #1" is a bit dated. The Financial Crisis was a massive tailwind for JPMorgan (which was largely insulated against the mortgage risk exposure, and had a diversified business model with various LOBs), and conversely was a massive headwind for Goldman and MS who both had decent exposure to some of the worst stuff during the crisis.
Since the crisis, IMO, it's much more of a Harvard/Princeton/Yale dynamic among the top 3, rather than a clear-cut #1 like HBS vs all other B-schools or something to that nature. Goldman still benefits from the reputation of being the old champion, but JPM's balance sheet has enabled it to close a larger volume of bigger deals in the last decade, while MS also frequently wins mandates on some of the major "sexier" household names.
I think JPM's momentum is evidenced by the obvious efforts by both GS and MS to ramp up their retail and commercial banking offerings in order to try and grow their respective balance sheets, through Goldman's Marcus brand and MS's buyout of ETrade.
Goldman still holds weight because it USED to be the clearcut number one, so there are plenty of Goldman alum and established pipelines to buyside/exit opps. Since most of this forum is obsessed with exit opps, most of this forum thinks Goldman is number 1. But from a "best in class" BANKING perspective, I would argue that JPM is the best, most stable firm.
Because Dj Sol.
Played one of his bangers and my IPod Shuffle and it caught on fire
Because most of the guys at Goldman can get girls with BIG FAKE TITTIES!!!!!!!!!!!!!!!!
How much backlash is DJ Sol getting anyway?
Is his shit music not backlash enough?
I think this video is old enough that some younger folks haven't seen it.
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