Other highlights (33)
“The developments at Bear Stearns certainly seem to be positive and as a result we will, of course, intensify our surveillance of all positions and expenses. You know how I feel about the dangers of overconfidence.”
“I would also like to add that the last three weeks have been a thing of beauty. Every department is really boiling and some of the new people that we have taken on are starting to make real contributions.”
“You should also be hearing shortly from Marvin Davidson about our ballooning departmental expenses. It is up to all of us to fight our unrelenting enemies—complacency, overconfidence and conceit.”
“The year was over last Friday and it was a good one, but last year is gone. The score right now is nothing to nothing. Nobody cares (especially our competition) what we did last year.”
“Observing these figures makes me more determined than ever to follow the simple rules laid down by the Dean of Business Philosophers, Haimchinkel Malintz Anaynikal: 1- Stick to thine own business. 2- Watch thy shop. 3- Limit thy losses. 4- Watch thy expenses like a hawk. 5- Stay humble, humble, humble. 6- When dealing with a new account, know thy customer and know thy customer’s money is up. At the partners meeting two weeks ago, it was pointed out to me by Haimchinkel Malintz Anaynikal that the hors d’oeuvres had been upgraded considerably from peanuts. You will be happy to know that we are now back to peanuts. This may seem like a small saving, but it’s the thought that counts.”
“He pointed out to me that the tendency is to cut expenses when things are tough and how stupid that line of reasoning is. When things are good, you should be even more careful of expenses because it is ridiculous to leave anything on the table when you hold a royal flush. We must continue to be alert, aggressive and never complacent. And last, but maybe most important, the partners of this firm must continue to work together and learn to overlook petty differences. We are all expendable and I hope that your Executive Committee does not have to prove that to any of us.”
“When mortals go through a prosperous period, it seems to be human nature for expenses to balloon. We are going to be the exception. I have just informed the purchasing department that they should no longer purchase paper clips.”
“Bear Stearns is probably going to sell stock to the public, and there is one guarantee that I would like to give the potential buyers of our stock—they are going to get the fairest shake from us that management can give any public shareholder. This place is going to be run tight, and the reasons are not all altruistic. We are not going public for the perks. We are going public for a number of reasons, and one is that we want the stock to appreciate.”
“When you are a private enterprise, savings on expenses go to the bottom line. When you are owned by the public, savings still go to the bottom line, but they are in turn magnified by the multiple the stock carries.”
“Now that you are all believers, I would like to see some real effort and results in the expense-cutting area. The rest of our industry cuts expenses when business is bad. We try to cut expenses all the time, but particularly when business is great. Would we have thought of this brilliant”
“2. We must continue to be alert for scams and con artists. We must watch for unusual behavior by the people we work with. What is unusual behavior? Something subtle like somebody who drives a Rolls-Royce on a salary that can barely support roller skates.”
“Remember what Haimchinkel Malintz Anaynikal said—“The time to stop stupidity and be tough on costs is when times are good. Any schlemiel* and most schlimazels* try to cut costs when times are bad.””
“Our pretax margins were 26.6% for the first 9 months of this year and are the highest in the industry. I am sorry to report that for the same period our return on equity was 25% and ranks only 2nd in the industry. This ranking of our R.O.E. is disappointing to me and particularly to Haimchinkel Malintz Anaynikal. We are obviously doing something wrong. Let us all set about correcting it. The only statistic I care about is return on equity. After many sessions with some of our business school graduates (yes, we do have some), I think they have helped me understand the secret to improving our R.O.E. It seems that if we increase revenues and cut expenses, return on equity goes up and that is what makes me happy. Please make me happy! I can be very unpleasant when I’m not.”
“Then there are Friedman’s “five forbidden phrases.” • “I don’t know.” It should be replaced with “Let me check and find out.” • “We can’t do that.” Instead, tell callers what can be done. • “You’ll have to . . .” The caller doesn’t have to do much of anything, certainly not sit on hold. Instead, the employee should say, “You’ll need to . . .” • “Hang on a second, I’ll be right back.” It’s a lie and should be replaced with “I’ll need to put you on hold for a few moments, if you are able to hold.” • “No.” It should no longer appear at the beginning of a sentence. That makes people think about what they’re saying before they start talking.”
“Consequently, we want all Managing Directors to begin critically examining their areas. Here is a list of some of the things you should be reviewing: A. Your work force 1. Who is not sufficiently productive? 2. Who should be replaced? 3. Who should be eliminated and need not be replaced? 4. Before hiring anyone new, ask whether your existing staff can be assigned additional responsibilities. 5. Do you have employees performing functions that are duplicating those performed in other departments, such as Accounting or Data Processing? B. Other items to watch and do that will keep us neat & clean. 1. Are you paying for unused or uneconomic news or quotation services? 2. Are you paying outside vendors for services or material that are not really needed, or duplicate what is already available in-house? 3. Do you have too many telephones and underutilized fixed wires? 4. Are you controlling such things as Federal Express, messenger services, and personal long-distance calls? 5. Do you & your associates reread daily my major memos on rubber bands, paper clips and envelope recycling (I feel that adhering to those memos was the main reason last year was a success).”
“Over the years Haimchinkel Malintz Anaynikal has stressed: 1. Hire PSD’s.* 2. Make decisions based on common sense and avoid the herd mentality. 3. Control expenses with unrelenting vigil, because if you turn your back for a second they will grow like weeds. 4. Help all departments to grow, because this year’s starlet can be next year’s dog. 5. Beware of catchy phrases—such as “Merchant Banking.” Haimchinkel Malintz Anaynikal knew I was not clear on what Merchant Banking is, so he defined it for me. “Merchant Banking is buying stock in a company whose shares are not publicly traded and the company should be in a business very different from what you are familiar with.” Imagine, all this time I thought Merchant Banking was some esoteric, complicated British secret.”
““The amount of dissension rises geometrically with the more issues you have to philosophize over.””
““The business you are in is just plain difficult at this time. When you entered the industry, you were warned that it was cyclical but bull markets tend to cloud realism. You are now in a period that separates the men from the boys. Mrs. Haimchinkel Malintz Anaynikal suggests that when the going gets tough—go shopping! A certain officer of Bear Stearns suggests that when the going gets tough—start selling positions! My suggestion is that when the going gets tough—the tough get going! You have no option but to follow my suggestion. If you do, you will prosper beyond your wildest dreams when the market turns— and it will. Your advisor, junior grade Itzhak Nanook Pumpernickanaylian””
“Some time ago we informed the people at Bear Stearns that no legal business, printing business, plumbing business or anything else that Bear Stearns pays for can be assigned without the approval of David Glaser (x3763) or Richard De Rose (x3767). I made a terrible mistake. I did not remind you of this every three months as I should have; so I am reminding you now. If you bite a dog and need a lawyer, you can hire one without our permission. If you expect Bear Stearns to pay a legal bill, you had better get the permission of one of these men I mentioned or you will end up paying the bill yourself.”
“We have a Purchasing Department, delighted to deliver FAX paper to you for $7.35 per roll. Why not call them? We are offering an incentive to induce you to use Purchasing. In the future, accounts payable will not pay any invoice (over $200) for equipment or supplies without Purchasing Department’s approval. If Purchasing finds it could have obtained the item at a lower price, the Senior Managing Director or other executive who authorized the purchase will be charged personally for the difference.”
“Being consistent may be dull, but it leads to a pleasant environment and to happy campers.”
“Please note that I do not agree with all of their suggestions: 1. Sickness No EXCUSE . . . We will no longer accept your doctor’s statement or note as proof. It is clear that if you are well enough to get to the doctor’s office, you are well enough to come to work. 2. Leave of Absence (For an operation) We are no longer allowing this practice. We wish to discourage our associates from exposing any part of their body to a knife. Knives cut and cuts cause blood and that’s bad. We hired you as you are and to have anything removed would clearly make you less than we bargained for. Therefore, anyone having an operation risks termination. 3. Death (Your own) This will continue to be a valid excuse, but we will now require a two-week notice since we will have to replace you. MEMO FROM THE DESK OF ALAN C.”
“Your executive committee is going to spend a lot of the new year stressing fundamentals. I do not think our success has been due to luck (although all of us welcome and appreciate good luck). Football teams that are in great condition and can block and tackle, win. We are going to win because we constantly keep in mind certain axioms such as: 1). It is our job to inspire receptionists and secretaries to smile and sparkle when”
“I can guarantee very little about the future, but there is one thing you can bet on. Your executive committee is going to spend a lot of the new year stressing fundamentals. I do not think our success has been due to luck (although all of us welcome and appreciate good luck). Football teams that are in great condition and can block and tackle, win. We are going to win because we constantly keep in mind certain axioms such as: 1). It is our job to inspire receptionists and secretaries to smile and sparkle when speaking to or seeing clients. The top people at Bear Stearns set an example by returning all calls promptly. 2). Avoid the herd mentality. 3). Control expenses—even more so in good times. 4). Every department should be staffed with the best and the brightest because I cannot tell you which area of our business will be “hot” six months from now. 5). Reduce expenses. 6). We are going to stick to the things we think we know something about. I am too old to start selling cars, costume jewelry or life insurance. 7). Conceit and complacency are dangerous, particularly in our line of work. If I ever feel that the people at Bear Stearns start thinking their body odor is perfume and I cannot convince them otherwise—I will sell my stock. 8). I like people who conduct their business “neat and clean.” If you do not understand that, call me. 9). Cut expenses. 10). We must always be on guard in dealing with new relationships, and our associates must always be aware that we are watching the shop and them at all times. The best protection against in-house fraud is for management to have a great rapport with associates big and small. They will see aberrational behavior in a co-worker four years before internal audit spots the deception.”
“1. The bear market will end and it can end quickly. 2. A bell will not ring to prepare you for the good times. Remember how great the world looked three months ago? The market can reverse its present course just as dramatically. 3. This market gives all of us a chance to demonstrate what we are made of. Some people go all through life and never get a chance to demonstrate their ability to lead. You are fortunate! You can help the people you work with to get through this by being a leader. Now is the time for real leaders to step up. 4. If you are going to stand tall, keep a few things in perspective. This is nothing next to Auschwitz, Buchenwald or Vietnam. 5. You are working for probably the most liquid firm in Wall Street and our firm, on a relative basis, looks stronger every day and we will keep it that way. 6. Haimchinkel Malintz Anaynikal pointed out that some people for ethnic reasons may get through this period easier than others. For example, I have never felt better or slept sounder, but I do have an advantage over some of my peers at other firms—I am the beneficiary of 5,000 years of persecution. This market will not get me down. It is just a minor challenge.”
“LODGING All employees are encouraged to stay with relatives or friends while on company business. If weather permits, public areas such as parks and parking lots should be used for temporary lodging sites.”
“We should have anticipated this culture shock because when a person joins us from a firm that has been losing billions, they should feel that we do things a little differently than the pack; but we do not want them to get the bends.”
“Please do not think for a minute that this represents a change in our basic philosophy. In fact, since business is booming we will once again emphasize cost control. Remember that great poker players leave nothing on the table when they hold good hands.”
“We like things that work—THEY WORK.”
“7,000 years ago the Egyptians were building pyramids and their women were riding in chariots, and getting manicures and pedicures (we know that from the paintings in the tombs). At that same time, the rest of the world was living in caves and chasing their next meal. The Egyptian civilization continued to advance for 5,000 years and then they started getting careless with expenses. Their overhead got out of control and that was that. They have been trying to recover for 2,000 years.”
“We can all be proud, but we must not become complacent. We must not count on luck.”
“When we cut expenses we have a direct, equal and positive impact on our bottom line. If we forget this fact we will be a member of the “Losers Club” and stupid. That is one club that we are not joining.”
“All of us receive various printouts and other printed matter every day from Bear Stearns. If you do not need the information or if the information should not be for you, call Pat Ripley 212-272-3271. Pat will then do two things. She will stop the useless flow and also target you for a reward. If you do not cut off information you should not be exposed to, you will be fined. Read this memo carefully, and be sure the people you work with understand our policy.”
