Confessions of a Wall Street Analyst by Dan Reingold Read Free Book Online Page B

who replaced Ed as telecom analyst. I really had no idea what bankers did or why they might matter. My vague notion was that bankers made the lion’s share of the dough on the Street and that their job was the most prestigious. They served as advisers to the top executives at top companies, helping them to find other companies to acquire or merge with and raising money for them. It never occurred to me that they had anything to do with analysts, or that there was any significant interaction between the two groups. In any case, if Ed was interested in being a banker, they couldn’t be all that bad.
    At the end of my second visit, Peter Dale, Morgan Stanley’s director of U.S. equity research, told me he would call me in the next few days with an offer. I still wasn’t sure if Paula would be willing to move, or of how disruptive such a move and career change might be to our family and marriage. I’d read an article in The Wall Street Journal that said top-ranked analysts were making $250,000 and up. That seriously impressed me, but of course there was no guarantee I’d ever be a top-ranked analyst. Plus 1988 had been a bad year on Wall Street. The stock market had been flat and investment banks had been in the tank. So when Peter called with my offer, I held my breath. “We’ll start you at $150,000,” he said. That meant $75,000, plus a $75,000 guaranteed bonus. My heart raced; he was doubling my salary.
    Paula and I had calculated that it would take $175,000 to replicate our D.C. lifestyle by buying a similar-sized house in a comparable school district. This magic number also meant Paula could stay home with the kids, a luxury we hadn’t had until now and one we might need given the grueling travel schedule of a Wall Street analyst. For days, Paula and I stewed overhow to handle the negotiations. Would I blow the deal by asking for another 25 grand? What if they wouldn’t give it to me? Could I still accept the job or would I have lost face? It seemed so, well, forward to ask for more. But that was the way it worked up there, wasn’t it?
    I called Peter and nervously laid out my proposition. “This is the right job for me,” I said, trying to sound cool. “But,” I said, speaking like the true quant guy I was, “it’s tough to make the numbers work.” I needed another $25,000, I croaked.
    “Okay,” Peter said, as if he’d just been asked to pass the salt. “Fine.” He didn’t have to ask anyone for permission; there was even the hint of a smile in his voice. Geez, was I clueless about the scale and scope of life on Wall Street. Apparently, $25,000 was the equivalent of a sneeze up there. “Dammit!” I said to Paula. “I didn’t ask for enough!”
    Although I was excited about the money, that wasn’t why I was uprooting my family. To some it may sound disingenuous—everything on Wall Street, I was soon to discover, was all about the money—but for me that was never truly the point. Sure Ed loved to tease me, saying, “Dan, I drive a Beemer. What do you drive?” (I drove a four-year-old Chevy Nova and Paula drove a Pontiac 6000 station wagon.)
    The money was certainly appealing. But it was more about the intellectual challenge and avoiding that malaise, that blah, that woulda-coulda-shoulda of making the safe choice. I could stay on at MCI, but my next job was probably going to be managing the accounts payable department, made up of 300 clerks. The Morgan Stanley job, by contrast, was a chance to test myself against some of the smartest people in the world. I wanted the brass ring. I wanted to become a top-ranked analyst in that poll, whatever it was called. I wanted to take the challenge and I wanted to win.
    If I needed any more assurance that I was making the right move, I got it when we had dinner with Steve and Gloria, neighbors of ours in Potomac. Steve was an economist at the Federal Home Loan Bank Board. He was smart, well connected, and, in my view, way too comfortable. Five years older