Goldman Sachs

One Question for Jim Cramer by Anne Kreamer

Jim Cramer is host of CNBC's "Mad Money," featuring lively guest interviews, viewer calls and, most importantly, the unmatched, fiery opinions of Cramer himself. He serves as the viewer's personal guide through the confusing jungle of Wall Street investing, navigating through both opportunities and pitfalls with one goal in mind — to help them make money. He's also co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street" (M-F: 9 a.m.-12 p.m. ET). Cramer is the founder of TheStreet, a multimedia provider of financial commentary.

He graduated from Harvard College where he was President and Editor-in-Chief of the prestigious daily, The Harvard Crimson. After graduation he became a reporter for the Tallahassee Democrat and later for the Los Angeles Herald Examiner where he covered stories ranging from homicides to sporting events.

Cramer is a former hedge fund manager and founder/owner and Senior Partner of Cramer Berkowitz. His compounded rate of return was 24 percent after all fees for 15 years at Cramer Berkowitz. He retired from his hedge fund in 2001, where he finished with one of the best records in the business, including having a plus 36 percent year in 2000.

Jim Cramer of Mad Money
Jim Cramer of Mad Money

Q: What’s the most significant risk you’ve taken professionally?


You want risk? Walk away from a job that you worked years to get, walk away from a job that paid you more your first month than you had made your whole life. Walk away from Goldman Sachs.

Yet, that’s what I did in February of 1987 because I always wanted

to work for myself and even though I loved the place, I knew that if I didn’t make a move I might never do so.

I first tried to get a job at Goldman in 1981, the year I enrolled in Harvard Law School. I loved the stock market and while I wanted to be a prosecutor, I knew that the summer between your first and your second year at law school tended not to impact where you ultimately worked.

I figured if you want to go to work in stocks, you might as well go for Goldman Sachs, the best there was and the best there still is.

There was a huge problem, though. They didn’t want law school kids. They wanted business school students. So began what amounted to a two year odyssey to prove that I deserved a slot, one of the coveted 25 or so positions that they granted to those who graduated business school every year.

In the next two years I interviewed with Goldman Sachs ten times, got turned down three times and simply didn’t take no for an answer.

And when I got hired for Securities Sales, advising high net worth individuals and smaller institutions on what to do with their money, I couldn’t believe my good fortune.

The payoff was immediate; the commissions bountiful, the people terrific, the excitement non-stop.

Yet, somehow, it wasn’t enough. Somehow I wanted to work for myself. So I made the most stupid and the most brilliant move of my life, I quit. Four years into it I walked away to start my own hedge fund.

Stupid? Yes, because two months after I started I was already down ten percent for the year. I had lost almost everything I had made in the time I worked at Goldman. Then, after clawing back to plus 3%, I ran smack into the 1987 crash. Fortunately, I had been able to cash out ahead of it, one of those moves that in hindsight looks like genius but at the time was just total self-preservation because the market before the crash had been horrendous.

And that’s where the brilliant came in. Because I had cashed out ahead of the crash, I managed to have a positive return, something that almost no hedge fund manager was able to claim.

In fact, almost everyone else I knew who struck out on his own to run a hedge fund during that period ended up blown to bits.

That meant tens of millions of dollars came my way to manage. Fortunately, I got back in close to the bottom, and the rest was pretty much history as I managed to rack up a return of 24% after all fees over a 14 year period and then retired to move on to full time writing and television.

When I look back at what I did, I still can’t believe that I took that risk. I would have been happy if I stayed at Goldman Sachs, I know that for certain. By my goal had always been to work for myself and when I had enough capital to make a go for it, I jumped at the chance. Even as it was catastrophic at first, I would do it over again in a heartbeat.

But, and this is the big but, I was single at the time, I had no kids, I wasn’t fearful. I didn’t have responsibilities beyond my own rental apartment and share in a place in the Hamptons. So while it was the riskiest move I ever made in my professional life, I knew I did have the rest of life to make it back if I failed.

Looking back 25 years later, that’s certainly not the case anymore.

Why You Really Shouldn't Curse at Work (Much) by Anne Kreamer

The media brouhaha over Carol Bartz's coarse language in the wake of her firing was telling. Rather than responsibly assessing her merits as the chief executive of Yahoo!, the conversation instantly devolved into what kind of woman swears on the job. That, to me, is so twentieth century. When we've reached a point in our anything-goes culture that the anchors of the most important newscasts (Jon Stewart and Stephen Colbert) curse nightly, and public figures like prime-time teenage role model Lea Michele, the actress who plays a goody-goody(ish) character on Glee, talks (as we used to say) like a stevedore in interviews, it strikes me that managers and executives need to seriously rethink the words they choose to communicate displeasure.

In fact, we're now so inured to vulgarity that it takes something really over-the-top — say, the baby doll being sold this holiday season that apparently curses — to make us stop and take notice. Taboo words, with a couple of true taboo exceptions, have always been used sparingly to communicate powerful emotions, but when swearing becomes simply reflexive and ubiquitous — as it is today — those words cease to have much power or meaning. And when crude words do shock, the language deflects our focus from the serious issues at hand.

Take, for instance, the internal Goldman Sachs e-mail that Senator Carl Levin read aloud last year during a Congressional hearing: "Boy, that Timberwolf was one shitty deal.'" Hard to tell without more context whether the guy who wrote that e-mail (now a Bank of America division president) was proud of the group for pulling the wool over the public's eyes, or just candidly stating the facts. But one thing became clear pretty quickly — to the American public, the language made what looked like double-dealing cynicism more memorably rotten. And the immediate consequence? Rather than suggest to their employees that they not sell bad deals to their clients, Goldman Sachs chose to focus on the language and its potential for embarrassment, instructing their employees to stop using profanity in e-mails. The emotionally laden words that communicate our more powerful feelings are particularly slippery at work, where we spend the majority of our waking hours and where our livelihoods hang in the balance.

How we choose to interpret hyper-charged no-longer-taboo words changes from moment to moment and office to hallway, according to permutations of status, gender, ethnicity, education, age and the particular setting — one person's obscenity is another's spicy punctuation. "In-house" language is often at odds with public norms. I was talking with a female partner in a New York corporate communications company that advises companies on critical communications challenges. "I think of swearing," she told me, "the way I think of Yiddish. It's very expressive." But she also asked to be quoted anonymously, perhaps anxious that her cheerful acceptance of workplace swearing might be seen as an endorsement — and might offend clients, current or prospective. And yet many of the people I spoke with about this subject, men as well as women, suggested that swearing was a strategic part of the lexicon they developed to be taken seriously as potential alphas of their organizations. I can relate. My first jobs were in banking and then media sales — businesses at the time completely dominated by men and fueled by a backslapping, crude-joke-telling camaraderie. Swearing definitely helped me come across as one of the guys, and thereby granted me access to the kind of casual gossiping and information-trading upon which deals are sometimes built. "Swearing," as one senior female attorney told me, "gives others, men and women, reciprocal permission to let their hair down and feel comfortable sharing revelations." This approach — swearing as an effective social tool that can enhance work relationships and allow women in particular to present an equal-to-men or even crypto-masculine identity — has been documented by psychology and linguistics researchers.

But not all swearing is equal. Take swearing in anger. Swearing is positively correlated with extraversion and Type A hostility and many scholarly studies (Jennifer Coates, 1993, Vivian de Klerk, 1991, 1997) identify swearing as intrinsically aggressive. Take Dick Cheney's unapologetic snarling at Senator Patrick Leahy on the Senate floor, or Serena Williams's outburst to a ref about a foot-fault call. Their curses were meant to take charge, to intimidate. And swearing men and swearing women are perceived differently. De Klerk discovered that women risk being viewed more negatively than men when using obscenities. Elizabeth Gordon, who studies speech and gender stereotypes at the University of Canterbury in New Zealand, has found in her research that women who were "non-standard" speakers — that is, foul-mouthed — were judged to be of lower social and moral strata. We've seen this play out in public. Cheney refused to apologize for his f-bomb and reported that he felt "better" after his exchange with Senator Leahy, whereas at Serena Williams's next press conference, she was subdued and entirely contrite. These days, it's practically meaningless and way too easy to say something "sucks," or (much) worse. And the rough waters in which we all now work makes it increasingly important to be clear and precise about what is going on emotionally inside and around us — not to be milquetoasty, but to be calibrated. As a person who allowed (and, I confess, still occasionally allows) herself to resort to default swearing, it seems to me that in this laissez faire age, and as we start a new year with new intentions, that it's a good idea — indeed, a damn fine notion — for business leaders to get more truly creative about their language and use the various linguistic bombs only sparingly.