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Morning Coffee: Harsh advice for banking interns: you're not special, shut up. Goldman Sachs' latest AI revelations

Jason Trennert has been around on Wall Street for quite a while. His FINRA registration shows that he began his career at Morgan Stanley in 1991 and has been working for Baird research subsidiary Strategas, where he's chairman, since 2010. As such, Trennert's advice for banking interns may either be read as the musings of yesteryear, or taken as a harsh dose of reality in a world where even the notoriously brusque David Solomon has been known to admonish interns to: "Slow down and enjoy the ride."

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Firstly, and not unlike Solomon, Trennert says that if you're a banking intern, and you're not in the office all the time, you're doing it wrong. If your boss can't see you working, the assumption will be that you're not working as hard. 

Secondly, when you are in the office, "shut up." The best interns possess "situational awareness," says Trennert. They know when "thoughts should be expressed and when they should not." Tales of 2024 interns emailing everyone in the office with their opinions suggest this needs to be reinforced. 

Thirdly, and relatedly, Trennert says financial services interns need to understand that they are not special. After beating hundreds of other people to the job, they may feel this to be so. It's not. "The reality is that you’re there to do a job that helps the firm make money, pure and simple."

By virtue of this third point, Trennert says many banking interns will be surprised to find that all the talk about mentoring and senior bankers being interested in interns' careers isn't entirely true. Most senior people simply don't have much time to mentor interns, so progress requires, "ambition, self-direction, and a thick skin." 

None of this means, however, that Trennert is advising that interns submit to a full beasting or work themselves into a state of illness. When you're with a group of highly competitive, high achieving people, he says it's easy to abandon any thought of what you enjoy or what you're good at. You don't have to go down prescribed paths like banking to private equity: there are alternatives. "Why slug it out among a nest of vipers at a name-brand firm when a smaller company might offer you the chance to make a difference?"

He says the real challenge is surviving long-term with your "health and character intact." This requires a sense of humour and a sense of perspective. Perspective comes from reading. Remember that, "Your ambitions, struggles, failures, anxieties, and successes have all been repeated millions of times in the two hundred thousand years of human existence." - You might only have time for reading ancient wisdom once the internship has ended. 

Separately, having said last year that it wasn't planning to develop its own large language model (LLM), Goldman Sachs has revealed what it's doing instead. 

Goldman's chief information officer, Marco Argenti told the Wall Street Journal that Goldman has developed something inventively called "GS AI Platform." This uses multiple existing LLMS (GPT-3.5 and GPT-4 models and Gemini), but has been trained on Goldman's internal data and is restricted in the data it has access to.

Argenti says GS AI platform has already been used to create a copilot tool for investment bankers that searches public and proprietary documents to answer questions, and that the firm is in the early stages of creating an application that summarizes proprietary research to provide insights to its advisers. It's also using AI to help developers write code; their efficiency has increased 20%. 

Meanwhile...

Morgan Stanley has got a new AI powered assistant called debrief which keeps detailed logs of advisors’ meetings and automatically creates draft emails and summaries of the discussions. (CNBC)

Senior bankers in China have been asked to return previous years' pay to ensure that they earn no more than $400k. (Bloomberg) 

2024 is good but not great for M&A. “Buyer and seller valuation mismatches have narrowed but they haven’t been completely bridged, and while capital is increasingly available, it’s still very expensive.” (Bloomberg)  

Javier Oficialdegui has been named sole head of UBS’s global banking unit, while Jason Barron is now the only leader of its markets business. Their previous co-heads, George Athanasopoulos and Marco Valla, were promoted as co-heads of the entire investment bank last month. (Financial News) 

Balyasny and Schonfeld have cut porfolio managers specializing in merger arbitrage. (Bloomberg) 

Despite rallying by a third over the past year, Citi shares trade at a lowly valuation of 0.6 times book value. Wells Fargo and Bank of America trade on twice that. JPMorgan is priced at nearly 1.9 times book value. (Financial Times) 

Taproot Management, a new hedge fund backed by a former Two Sigma research MD, is hiring analysts instead of portfolio managers and paying them high-single-digit percentage cuts from the profits they generate — less than half of the typical payout to portfolio managers at larger firms. (Bloomberg)

A Goldman vice president answered a frantic call from Archegos, pleading with her to send back almost half a billion dollars that had just been mistakenly wired to the bank by one of the family office’s junior employees. The Archegos staffer was supposed to request that amount from Goldman, not send it. Goldman refuses. (Bloomberg) 

If you work at BNP Paribas, it's not acceptable to call your boss a vulgar name and compare a colleague to Pol Pot, especially if your approach is systemic. “The facade is polished, but underneath it’s dreadful." (Bloomberg) 

"The culture [at Goldman Sachs] is one where you’re meant to be authentic and real, where sexuality, as with other protected characteristics, should not define how you perform and progress in the workplace. I have only experienced genuine support and care." (Financial News) 

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AUTHORSarah Butcher Global Editor

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