Goldman Sachs partner sent memo to bank's junior staff which everyone with an interest in the state of the financial markets should read

UK Business Insider (Julia La Roche and Matt Turner) reported on 2 March that "Early this morning, London-based Goldman Sachs partner Joseph Mauro, head of fixed income, currencies, and commodities European hedge fund sales and cohead of European macro rates sales, sent a memo to associates at the firm addressing some of these concerns." [NB: I respect the copyright of UK Business Insider, La Roche and Turner]

The memo followed job cuts at the fixed-income business at Goldman Sachs and November's statement by its CFO Harvey Schwartz which confirmed what many of us in London had already suspected: that the bank had quietly been making cuts to the division, laying off more than 10% of staff since 2013.

For an industry where morale is low, and where junior bankers and traders who have just started in finance continue to question their faith in the industry's long-term prospects vis-a-vis 'fintech', 'disruptive innovation' and 'the internet of things', you might have expected Mr Mauro's email would have tried to address his junior colleagues' concerns.  Instead he sent the memo to offer advice based on past experience and to deal with management of the many requests he was receiving for meetings from staff.  Snapshot of the opening from the memo:

I have no personal view on the approach of Mr Mauro nor the way he dealt with the matter.  Rather my interest lays in the memo itself and the insights it provides about the state of the stockmarket and the lure of leaving banking to go into start-ups right now.

The memo addresses some of the recent departures from Goldman Sachs, and looks to put some of the industry's current travails in perspective.  Mauro, who started at Goldman Sachs in 1998 and rejoined the bank after cofounding a broadband internet company shares his advice and his current thoughts about the state of the markets, which are most interesting.

In February 2009 when the CCMP Index was just under 4,700 Mr Mauro says he left Goldman Sachs to join an internet start-up LineUp.com.  Those with long memories know what happened next. One slide, and one line from Mr Mauro's memo, sums it up:

I never thought my poor timing could be eclipsed ... until now... 

Taking a leaf from my Marou's email, I thought I would take another look at the FTSE 100 after reading in The Telegraph that it has broken a record that had stood for more than 15 years and hit a new all-time high.  According to The Telegraph's Ben Martin, the FTSE 100 has again exploded, boosted by investor optimism about Greece and reassurance from the US Federal Reserve on interest rate rises.

Here is the graph I pulled:

Mr Marou's memo ends with these final words of advice to his junior colleagues:

"Put your head down ... which I completely ignored...  And keep running ... which I still heed" 

If you read through the entire article on Business Insider, you'll notice that Mr Marou's included a shot of the cover of the book Liar's Poker.  Taking another leaf from Mr Marou's book, I will conclude this post with a shot from the cover of this book.

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[Postscript - thanks to Joseph Mauro for contacting me after the publication of the above via LinkedIN. I appreciated hearing from Mr Mauro that he was seeking to help those colleagues sitting on the fence (staying or jumping ship) based on his personal experiences. Mr Mauro's communication come across as very pleasant and straight-forward.  It's worth a read of all the comments on the FT website. It was really good to receive contact from the person at the centre of the article.  I think I have a better understanding of his intents. I don't have difficulty in accepting that he was trying to share his experience as best he could to his colleagues within the limitations of modern day workforce. I personally give him a lot of credit for his engagement.   I hear the arguments of one commentator [@neo2012 on the FT site] that 'email to a large group than to actually take the time to cultivate that talent' is not good.  But I can level that same comment at myself and my superiors when I was working at a large public institution. If anything, the article has made me reflect a bit more on the optimal approach for engagements. Oh and to remember that whatever you send in an email needs to be the type of thing you can stand over if it was made public.]