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Goldman Sachs : The Culture of Success
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47 of 49 people found the following review helpful
Format: Hardcover
I spent 30 years at Goldman Sachs as a senior risk arbitrage trader in the equities division. I retired in 1995. The information contained in the volume has been carefully and thoughtfully researched and the result is a wonderful historical analysis of Goldman Sachs. The book is eminantly readable and easily understandable, even for those uninitiated in the banking business. My only negative criticism refers to the excessive space given to the recent history of the firm. There was a clear change in the firms' culture after the greedy portion of the 1980's. The author is right on the mark when she tells how important the people (not only the partners) were to the creation of the special atmosphere that pervaded the firm and how very special it was to be a part of it. Although profitability was always a clear motive, it surely was not the sole purpose for which the firm existed. To profile a few bond traders and enumerate their spectacular successes (and failures) in the 1990s clearly indicates how things have changed from previous decades. I worked with Gus Levy for 10 years and Bob Rubin for 20 years and from a trader's point of view these were the spectacular people at least in the Equities Division. I doubt that the client interest is foremost in the culture of Goldman Sachs today as it was for the first 125 years. Although the importance of the client remains high today, it is profitability and risk taking that are the motivating forces.
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60 of 68 people found the following review helpful
on December 18, 2000
Format: HardcoverVerified Purchase
This book does a good job of telling the overall theme of GS, partnership and emphasis on long-term relationships are good things. The history of the firm is all laid out in front of you, recounting the significant changes in the firm over the years and how it has emerged as the preeminent investment bank. Ms. Jardine tells the story as it leads up to Goldman's IPO.
However, I do believe that there are some significant things missing. While the grander history is present (GS is good), the details and annecdotes that would provide that backup are missing (I know it is good, explain to me why). Figures are often quoted without relative measures (revenue in certain areas was X in 1960, and then Y in 1994), which is somewhat worthless if they aren't compared as %'s of the Company's revenue, or some kind of relative measure. Otherwise, this is all apples to oranges, it doesn't make sense. Ms. Jardine doesn't hesitate to make very definitive statements, such as "Goldman only recruits the best." However, she rarely, if ever backs up such statements in any way shape or form. I don't doubt GS recruits the best, but back it up! While her book does cover a lot of ground, other authors have managed to cover greater periods of history and still maintain a hint of interesting story-telling, such as "The Great Game : The Emergence of Wall Street As a World Power, 1653-2000" by Gordon.
All in all, I feel that the book is little more than glorified recruiting material. In a world full of solid financial writing, there are better books to spend your time reading.
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28 of 34 people found the following review helpful
on March 12, 2003
Format: Paperback
If you are expecting a balanced book about Goldman Sachs, don't buy it. However, it is the only book available on GS -- undoubtedly because the author had the prior consent of employees who knew it would be written favorably. GS is showered with so many complements and few criticisms, that this books should be passed out to employees as a morale booster or to pump up new recruits! Three other specific points:
1) Ms. Endlich was a FX trader for GS in the early 1990's... which becomes painfully obvious. Her bravado and excitement about high profile trades and big traders are elevated to romantic proportions. She entirely lacks any perspective on corporate strategy. Her financial accounting skills are woefully weak; for example, the high "profit" of GS is used in its venacular to cover everything such as a rumored trading profit (pre-expenses) to pre-tax ROE of Limited Partnership compared to after-tax profit of corporations. Finally, her disdain towards the "conservative" banking side of GS leads to superficial views of the whole business. This ain't no Jack Welch book by an author with true business knowledge.
2) I am no English language teacher, but shame on the editor(s) of this book!! Her English is horrific and a disgrace to the publisher. For instance, "him and John" should be "John and he"; when someone is speaking usually one uses quotations (pg208); run-on sentences are usually solved by periods; and, the endless use of commas don't replace unclear expressions. Incredible it was published, eh? Henry James would be impressed.
3) She misses one big point... "The Culture of Success" of any firm is relative. Although this book is not about the industry, her unbalanced description of GS's strong inward culture is reinforced by her clear bias towards internal benchmarks of what makes success. Looking in the mirror every morning and calling oneself pretty doesn't make a good book. Ultimately, she never addresses the bureaucracy of a large partnership (exemplified by large law firms today), why other firms innovated more products, what departed/booted partners feel, or what do customers really think about GS's famed "client focus".
In sum, if you just want to read some propoganda yatta yatta, go ahead and buy it... but then again, there always is reality. I don't work in banking or for any competitor of GS, but I am sure that they may have even a stronger opinion against this book.
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13 of 15 people found the following review helpful
on September 4, 1999
Format: HardcoverVerified Purchase
This was evidently the most popular summer book both at Goldman Sachs and at Morgan Stanley. I know I bought it the first day it was out at Borders, and I recommended it to colleagues immediately. Although this book does provide a glimpse into the secret world of one of the top investment banking limited partnerships, it is difficult to evaluate objectively since Ms. Endlich was a former foreign currency trader at Goldman. Nevertheless, the book is well written with what appears to be daylight clarity. The history of the development and evolution of Goldman Sachs is fascinating, and I was particularly interested in the story of how Goldman took over the commodity trading company J. Aron in 1981 and the subsequent inpact that had on Goldman's profitability. Ms. Endlich does have a clear advantage with her access to some of the principals who are still alive, and that may be her chief contribution. Ms. Endlich also deals with several of the near collapses of Goldman Sachs including the failure of Goldman Sachs Trading Corp. in 1929, which took several decades to recover from, and the Penn Central commercial paper scandal of 1969 & 70. There have been other rumored large losses from proprietary trading at Goldman Sachs over the years. Goldman Sachs like Morgan Stanley had a genteel client list and both became top investment banks. Ms. Endlich, however, portrays Goldman as the inventor of the raid-defense in a series of hostile takeovers. It is not clear just how accurate this favorable portrayal of Goldman in the M&A business is. Goldman recently went public with a well publicized IPO. The firm will now be subject to much more stringent public disclosure, and they have already indicated that they will curtail their aggressive proprietary trading. All in all, a well written informative book.
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16 of 19 people found the following review helpful
Format: Paperback
I read this book right before joining Goldman Sachs and was tremendously excited about it. I joined in 1999, right after the IPO (yes, I missed out). Despite the apparent glorification of the company, I did feel like its culture of teamwork and "long term greed" was present in everything my teams did, which the book does a good job of portraying.
It is clear the author appreciates the company very much and that this is a somewhat endorsed biography of the firm, yet I enjoyed reading it nonetheless. It is refreshing to see a former employee write a positive book after so many recent cases of employees leaving only to criticize their former employers.
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5 of 5 people found the following review helpful
on July 31, 2007
Format: Paperback
This is the firm that learns. From its origins as a two person broker of IOUs in 1862 to its position today as the world's dominant player in trading, risk management and arbitrage, Goldman Sachs has managed the unthinkable in the world of finance: attaining mind-bending levels of profit growth over a century and a half while maintaining a mythical mystique based on a corporate culture of integrity, intelligence, and humility. It's an improbable feat at best. But after all probability is Goldman's business--measuring it, defying it, and reading into it things that others can't.

So what is the secret? How is it that one firm can attract the most brilliant minds in finance, force them into a quasi-military commitment of time and mental energy, and organize that brainpower into a unified profit machine? Many have conjectured, more have envied, but noone on the outside can provide any more than idle opinion.

Luckily for the readers of "Goldman Sachs: A Culture of Excellence", they have in author Lisa Endlich a docent of matchless qualifications. A former VP in foreign exchange at the firm, she provides an insider's view that's not a tell all. She's writes well, in a style that honors the Goldman ethos--thorough, absorbing, and critical in the academic sense. While examining the birth and development of each of Goldman's divisions starting with commercial paper, she offers up a rich education in the operations of i-banking and trading for anyone inclined to read in detail.

And for the rest of us, there's still plenty. Endlich starts from the premise that Goldman Sachs is all about its people, and she stays consistent throughout. From its inception as a family firm run by Marcus Goldman and his son-in-law Sam Sachs, through its early years as banker to the robber barons, the long reign of the Weinberg family, its reinvention as a trading power and the tenure of master trader Gus Levy and Uber banker John Whitehead, and on into the nineties and the ascendancy of Rubin, Friedman, Paulson, Corzine, and Blankfein, Endlich provides nuanced and sympathetic portraits of brilliant, complex men whose leadership skills are surpassed only by an ability to place personal ego second to the needs of the team.

And that, Endlich suggests, is the big secret. That's what makes Goldman so exclusive. The firm absorbs those with superior intelligence who subsume personal need to propel the greater glory of the collective. It's a major irony in one of the prime movers of capitalistic society, but its borne out empirically by the story Endlich tells.

Throughout its history Goldman has demonstrated time and again an insatiable institutional desire to win, and to accomplish that by embracing change. Goldman created the commercial paper market, and went on to become a pioneer in investment banking, risk arbitrage, and trading. All along Goldman, the whole organism, developed an intuitive feel for risk and a collaborative approach to deal making that helped it emerge on top time and again. And since its decision to go public, the action that Endlich builds her book around, its business model has only refined and improved.

There may be those in the know who believe that the ascendancy of hedge funds and the powerful private equity barons has rendered Goldman's model obsolete. There are others who take issue with aspects of the firm's trading philosophy. Only time will tell whether the naysayers views on the subject have merit. But Goldman has left armies of detractors in the dust for decades now. Bet against it at your own peril.
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13 of 16 people found the following review helpful
on December 25, 2002
Format: Hardcover
As one of the most successful Wall Street titans, Goldman Sachs has a history of empowering very smart and dedicated people. This is that story. It addresses the personalities and culture that drives Goldman to success. For anyone interested in the financial markets, it is a joy to read. Some things I did not know:
1) GS focuses on the client and maintains a long-term focus. Long-term greed.
2) During the 1980's, GS set itself apart from its competitors when they refused to represent any company that was the aggressor in a hostile takeover. As such, they billed enormous business as a "defense" investment bank. (pg 19)
3) "You cannot just be an employee. The firm demands that you be a contributor." (pg 21)
4) There is a culture of understatement. "A mild shabbiness seems to be almost a status symbol." (pg 25) The main office does not say Goldman Sachs on the front. It just reads the first two numbers of the address: 85.
5) GS started out as a family firm specializing in commercial paper. By the 1960's, it was handling 50% of the country's commercial paper. (pg 34)
6) GS was almost ruined when it was involved in the speculating leading up to the crash of 1929. The investors lost 92% of their investment in the infamous GSTC investment trust.
7) Sidney Weinberg is considered the father of modern Goldman Sachs. (pg 49) He worked at Goldman for more than 50 years and started out as a helper to the porter: cleaning shoes, and brushing hats.
8) Gus Levy became the next senior partner in 1969. Levy was from trading, not banking, and would "prepare the company for the trading-oriented work of the 1980's." (pg 63)
9) The next leadership was in teams: John Weinberg & John Whitehead, then Steve Friedman & Robert Rubin, then Hank Paulson & John Corzine.
10) In the 1980's, the profit centers were M&A and arbitrage.
11) Historically, GS was known for its excellent people, but not its innovation. One JP Morgan banker said that GS bankers were incredibly good, but predictable.
12) Partners were making incredible money in the 1990's, but naturally the competition was fierce: 4000 Vice presidents competing for 32 partner seats. (pg 135)
13) Numerous stories of GS's great traders (Becerra, O'Brien etc...) and how they would make $80 million in trading profits one month, then lose $100 million just one month later. At times, the speculation would get out of hand. One person commented that GS's London trading desk was "testosterone alley." (pg 192)
14) In early 1994, the firm was in a crisis. Its top management had stepped down and the company was losing $200 million a month due to heavy trading losses and a bear market. (pg 202)
15) GS invented, and still dominates, the block trading market. Great story: Kuwaiti Investment Office (KIO) gives three investment banks one hour to price $2 billion of British Petroleum (BP) stock. GS wins the bids, transacts the stock smoothly and gains a reputation as the firm able to handle block trades. (pg 248)
16) Paulson said, "Good firms worry about competition, great companies worry about clients" (pg 250)
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4 of 4 people found the following review helpful
Format: PaperbackVerified Purchase
An unauthorized (?) history of the venerable investment bank Goldman Sachs & Co. From its founding by a Jewish peddler to a global financial powerhouse, Goldman Sachs has seen lots of ups and downs which are documented by this book. Written by a former Goldman vice president, the book has more praises for the firm than criticism. All too often it sounds not critical enough of the firm's mistakes. If you come here for insight on how Goldman became successful as a business, you'll be disappointed.
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4 of 4 people found the following review helpful
on July 5, 1999
Format: Hardcover
Its an ok book...starts off quite well, but gets kind of boring after the first half..i expected it to be something like micheal lewis's Liar's Poker...but this book is far from it...but it gives an insiders view of goldman...i recommend it to those really interested in the firm.
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6 of 7 people found the following review helpful
on April 25, 2003
Format: Paperback
Although it is clear from Ms. Endlich's tone that she nearly workships everything about Goldman Sachs, this is a well researched and competently written book. It covers in detail the history of the bank, paints portraits of some of the key players in some detail and presents a compelling overall picture of the bank's history.
Where the book falls short is in its financial and overall business details (compare to "The House of Rothschild" by Niall Ferguson). Overall, and interesting and insightful read.
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