Why Did Peter Kraus Leave One Opportunity for Another at Goldman Sachs?

TL;DR

Peter Kraus took the Goldman Sachs opportunity because he believed he would regret passing it up and saw value in the firm’s ability to reward specialized skills. In 1985, Goldman was building a mortgage business, hired about a hundred people, and brought him in as one of its first few employees. Read on to see how his sales strengths and willingness to take risks shaped the move.

Transcript

My mother said to me something that stuck with me my entire career She said don't do something you would regret and I would regret not taking up a job. So I took the job And in 1974 Wall Street was not what it was today. It was a very different place I mean if you were talking about the bond trading business that meant actually Cutting out the coup... Read More

Key Insights

• "My mother said to me something that stuck with me my entire career She said don't do something you would regret and I would regret not taking up a job." (0:00)
• "Well, I know I'd love peat Marwick I thought accounting was great." (1:18)
• "You know you could be a really good merger guy and get paid as Well as the really good investment banking guy as well as the really good trader." (4:09)

Questions & Answers

Q: Why did Peter Kraus take the job at Goldman Sachs?

Kraus believed he would regret not accepting the opportunity. His mother advised him not to do something he would regret, and that advice stayed with him throughout his career.

Q: What opportunity brought Peter Kraus to Goldman Sachs?

Goldman Sachs had announced plans to build a mortgage business in 1985 because it was behind Credit Suisse and wanted to catch up. After becoming Kraus's first client for a new business he proposed at Peat Marwick, Goldman offered him a job in that effort.

Q: What position did Peter Kraus leave to join Goldman Sachs?

Kraus was a partner at Peat Marwick when Goldman Sachs recruited him. Goldman planned to hire him as a vice president, which concerned his wife more than it concerned him.

Q: How early did Peter Kraus join Goldman Sachs's mortgage business?

Goldman Sachs hired about a hundred people for the new mortgage business. Kraus recalls that he was employee number two or three.

Q: What made Goldman Sachs special to Peter Kraus?

Kraus valued the firm's ability to let technically strong employees, client specialists, and traders concentrate on their strongest skills. Compensation was consistent across those roles, so people did not need to become managers simply to earn more.

Q: What was Peter Kraus's core skill at Goldman Sachs?

Kraus described himself primarily as a salesman. He was good with people, willing to ask for business, and prepared to put himself out there.

Q: How did Peter Kraus's skills develop at Goldman Sachs?

Kraus began with sales and relationship-building as his core strength. Over time, he developed technical, trading, and investing skills and became more multidimensional.

Q: Why had accounting seemed like an attractive profession to Peter Kraus?

Accounting had grown dramatically in the 1960s because the SEC required public firms to have audits. Kraus also liked numbers, clients, tax, auditing, and consulting, although the business later slowed as inflation affected its cost structure.

Summary & Key Takeaways

• The speaker started their career in accounting during a period of growth in the industry due to SEC regulations.

• They transitioned to Goldman Sachs after proposing a new business idea and eventually focused on sales and building relationships.

• The speaker discusses how they witnessed the growth and innovation in the financial industry, particularly in the area of financial institutions.