Read an Excerpt
From Chapter 11
The result of Goldman's methods was more than just winning the leverage war. By virtue of its approach, the firm didn't suffer the baggage of the period such as junk-bond portfolios and unpaid bridge loans. Goldman was able to achieve enormous profitability and grow its capital. The firm maintained its client base and position of trust. Thus as the leverage era ended, Goldman was poised to continue its leadership in M&A advice and to capitalize on new underwriting and trading opportunities.
This sounds simple. Yet what is astonishing is the extent to which the lure of leveraged-deal fees of the 1980s appeared to cause many other financial firms to neglect the concepts that had made them successful. An analysis of Goldman reveals how the firm stood out in using learned methods and consistent approaches. (It also shows how Goldman's divergences--such as the bridge loan to Southland Corporation--provided rebukes that prompted the firm to return to proven methods.) Thus an important benefit of the analysis is how it relates to the challenges facing Goldman Sachs and financial industries today.