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Book Summary

This is my book summary of Memos from the Chairman by Former Chairman of Bear Stearns, Alan C. Greenberg. My notes are informal and often contain quotes from the book as well as my own thoughts. This summary also includes key lessons and important passages from the book.

• The Book in Three Sentences
• Overview
• Highlight & Takeaways
• My Favorite Memos from Alan C. Greenberg
• Scanned Memos from Alan C. Greenberg
• More Books Like This
• Buy the Book
  

The Book in Three Sentences

“Ace Greenberg did almost everything better than I do—bridge, magic tricks, dog training, and arbitrage—all the important things in life.” —WARREN BUFFETT | Alan C. Greenberg, the former chairman of Bear, Stearns, and a celebrated philanthropist, was known throughout the financial world for his biting, quirky but invaluable and wise memos. His memos are famous for praising frugality, common sense, and a focus on winning, no matter what happens next.

Overview

A short preface greets you as you leaf open this book that says:

These memos were written between 1978 and 1995. While circumstances changed for Bear Stearns, the principles expressed here remain true.

Which is quick followed by this wonderful forward from Warren Buffett:

Ace Greenberg does almost everything better than I do—bridge, magic tricks, dog training, arbitrage—all the important things in life. He so excels at these that you might think it would give deep inferiority complexes to his colleagues. But if you think that, you don't know much about his colleagues.

In this book we finally learn where all this wit and wisdom—and there's plenty of both—come from: Haimchinkel Malintz Anaynikal. (I used to have trouble pronouncing his last name until I learned that the trick is to rhyme it with Ahaynikal.) Haimchinkel sees all, knows all, and tells all—but only through Ace, his Designated Oracle here on earth.

Haimchinkel is my kind of guy—cheap, smart, opinionated. I just wish I'd met him earlier in life, when, in the foolishness of youth, I used to discard paper clips. But it's never too late, and I now slavishly follow and preach his principles.

Many years ago, Where Are the Customers' Yachts?, through a humorous look at Wall Street, dispensed some of the best investment advice ever written. In this book, Ace has applied the same treatment to managerial advice with equal success.

WARREN BUFFET

This book is so unique that I've never come across another like it. It's a compilation of all of the Memos, a sort of push notification of the day, he sent while working as CEO and Chairman of Bear Sterns — many decades before its collapse in 2009. Reading these make it clear that Bear Sterns would have survived the crisis if it were still led by Alan C Greenberg.

Alan Greenberg's "Memos from the Chairman" are a goldmine of timeless advice around frugality, going against the grain, listening to common sense, and so much more. They're also hilarious, witty, and so much fun to read.

The back cover of the book reads:

‍“Ace Greenberg did almost everything better than I do—bridge, magic tricks, dog training, and arbitrage—all the important things in life.” —WARREN BUFFETT

‍Alan C. Greenberg, the former chairman of Bear, Stearns, and a celebrated philanthropist, was known throughout the financial world for his biting, quirky but invaluable and wise memos. Read by everyone from Warren Buffett to Jeff Bezos to Tom Peters (“I love this book,” the coauthor of In Search of Excellence said).

Greenberg’s MEMOS FROM THE CHAIRMAN comprise a unique—and uniquely simple—management philosophy. Make decisions based on common sense. Avoid the herd mentality. Control expenses with unrelenting vigil. Run your business at the highest level of morality. Free your motivated, intelligent people from the chain of command. Always return phone calls promptly and courteously. Never believe your own body odor is perfume. And stay humble, humble, humble

Highlights & Takeaways

• It is up to all of us to fight our unrelenting enemies—complacency, overconfidence and conceit.
• 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.
• I have been around long enough to know that the shoe usually falls on your head when you least expect it.
• 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.
• 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.\
• When mortals go through a prosperous period, it seems to be human nature for expenses to balloon. We are going to be the exception.
• 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.
• 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.
• “A man will do well in commerce as long as he does not believe that his own body odor is perfume.”
• Remember that the Green Bay Packers won because they executed the fundamentals better than their competition. Trick plays make headlines, but winners execute the basics.
• Watch expenses—like a hawk. Now is the time to cut out fat! The rest of the world cuts expenses when business turns sour. With your help, we will be different, smarter and richer.
• 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."
• If you think back, you will discover that our best moves were made against the thinking of the masses.‍
• On July 1, our New Year starts. The score is zero to zero. I would love to see us scorch the front nine. Historically the first six months of our fiscal year are difficult. Let us make this year different. I am an old man and I do not like pressure.
• One of Nookie's main tenets is that "fish stink from the head." If the management gives the appearance of being alert and suspicious, the people under you will act accordingly; so our task is simple. Be smart, act smart, be alert, be suspicious, and on guard! The only thing that can stop us from getting richer is stupidity.
• 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.
• Remember, winning poker players squeeze every nickel out of good hands, and they do not tip cocktail waitresses $100—fools do!
• Remember the simple axioms that have helped us in good times and bad:
  If we control expenses.
  If we diligently evaluate risks.
  If we hire carefully.
  If we run our business according to the highest level of morality.
  If we treat our associates the way we would like to be treated.
  If we return all telephone calls quickly and see that the people around us treat the clients with care.
  If we just use good common sense we can turn a great year into a fabulous one.
• It is true we paid our dues by surviving and even prospering during some tough years for Wall Street, but do not confuse luck with brains. We must, as a firm and I hope individually, make the most of this euphoric period but give very little back when the curtain falls. I can promise you one thing—this picnic will not last.
• BE CAREFUL, BE SMART, BE A SURVIVOR!
• Our goal still remains—a high return on equity with integrity.

My Favorite Memos from Alan C. Greenberg

Memo: From the Desk of Alan C. Greenberg
Date: October 5, 1978
To: All General & Limited Partners

Bear Stearns is moving forward at an accelerated rate and everybody is contributing. It is absolutely essential for us to be able to talk to our partners at all times. All of us are entitled to eat lunch, play golf and go on vacation. But, you must leave word with your secretary or associates where you can be reached at all times. Decisions have to be made and your input can be important!

I conducted a study of the 200 firms that have disappeared from Wall Street over the last few years, and I discovered that 62.349% went out of business because the important people did not leave word where they went when they left their desk if even for 10 minutes.

That idiocy will not occur here.

Memo: From the Desk of Alan C. Greenberg
Date: May 28, 1980
To: All General & Limited Partners

The month of May was the first month of our new fiscal year and for bookkeeping purposes it ended on May 22nd. Preliminary indications are that it appears to be the best month in the history of Bear Stearns.

Before we get carried away, there is one thing that I do want to emphasize. We are working with more capital than ever before, so if every month is not a record-breaker, we are probably getting lazy. We have plenty of room for improvement and there are still a number of leaks in the dike. In fact, the only area that I think is running at 100% efficiency is the error account.

I implore our partners who supervise salesmen to increase their surveillance of all personnel. I want all partners in the trading area to pay particular attention that our positions do not increase dramatically in size and that we continue to assiduously follow the rules of Haimchinkel Malintz Anaynikal in the area of loss-taking, freshness of positions and body perfume.*

I have, of course, asked Carl Holstrom to once again tighten all surveillance of expense accounts for partners and our associates. 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.

* For those of you who might have forgotten Haimchinkel Malintz Anaynikal’s comments on this subject, ask Peggy Moynihan for my memo dated 3/13/79.

‍

‍Memo: From the Desk of Alan C. Greenberg
Date: May 5, 1981
To: All General & Limited Partners

There has been a lot of publicity lately about firms hiring students with MBA degrees. I think it is important that we continue a policy that has helped us prosper while growing from 700 people eight years ago to over 2,600 today.

Our first desire is to promote from within. If somebody with an MBA degree applies for a job, we will certainly not hold it against them, but we are really looking for people with PSD* degrees. They built this firm and there are plenty around because our competition seems to be restricting themselves to MBA’s.

If we are smart, we will end up with the future Cy Lewises, Gus Levys and Bunny Laskers. These men made their mark with a high school degree and a PSD.

* PSD stands for poor, smart and a deep desire to become rich.
‍

Memo: From the Desk of Alan C. Greenberg
Date: October 5, 1982
To: All General & Limited Partners

September looks like it was the best month in the history of Bear Stearns. The past four weeks appear to be particularly gratifying because I think every area contributed and it demonstrated what so many of us have been saying about our potential if conditions changed for the better.

After a month like the one we just experienced, I think we should be on our guard against the negatives that go along with great success. I am speaking of complacency, sloppiness, relaxing on expenses, cockiness, and just getting careless in general.

This is the time to be on our guard. If the market does go our way, I want to make every dollar and leave nothing on the table. The market may turn sour again, so do not forget for a moment what the great coach Haimchinkel Malintz Anaynikal said many years ago, “when the going gets tough, the tough start selling.”

Our firm has dynamic money-making potential and will continue to grow and prosper beyond our wildest dreams if we devote all of our working hours to Bear, Stearns & Co. This has led the Executive Committee to decide that no General Partners or General Partners’ spouses can make any outside investments (other than publicly traded stocks and bonds or a residence) without the approval of the Executive Committee. The Executive Committee does not want our partners worrying or thinking about any business other than Bear Stearns. Owning an equity interest in our firm is the best investment any of us will ever see; so let us give B.S. 100% of our effort.
‍

Memo: From the Desk of Alan C. Greenberg
Date: May 2, 1983
To: All General & Limited Partners

Haimchinkel Malintz Anaynikal just called and reminded me of something that I should have thought of without any help.‍

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.‍

Let us go to the whip and make the month of May an indication of what we are going to do for the coming twelve months.

‍

Memo: From the Desk of Alan C. Greenberg
‍Date: September 9, 1983
To: All General & Limited Partners

Haimchinkel Malintz Anaynikal just called and told me he was very impressed with the results for the month of August. I have not seen them yet, but if they are as good as Haimchinkel Malintz Anaynikal thinks they are, then August was probably the best month we have ever had in relative terms.

The bond market and the stock market did nothing, but the Bear Stearns machine did its thing. His call, however, reminded me of the warning he gave us some years ago, “thou will do well in commerce as long as thou does not believe thine own odor is perfume.” I assured him that despite our success, we are still trying to be as careful and as punctilious as always.

DO NOT MAKE A LIAR OUT OF ME.
‍

Memo: From the Desk of Alan C. Greenberg
‍Date: January 25, 1984
To: All General & Limited Partners

You have probably seen the published results of our competitors for the past three months. You are also probably up to date on how we have done for the past three months and the first eight months of this fiscal 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.
‍

Memo: From the Desk of Alan C. Greenberg
‍Date: July 25, 1984
To: All General & Limited Partners

The newspapers are full of the quarterly financial results of the publicly owned investment banking firms. For the three months ended June 30th, Bear, Stearns & Co. had a loss of $3,473,000, after interest on partners’ capital.

That figure will not help you buy much from Tiffany, but it does mean that we are keeping things under reasonable control. Keep in mind that the figures of our corporate competitors are usually after tax credits. For example, the loss of $33 million by Merrill, Lynch, reported this morning, was really $90 million before tax credits.‍

We are not panicking; we are not laying off people, but we are making a real effort to cut expenses. The other side of the coin is we have hired a large number of number one draft picks in the last few months. This is the time to hire good people. We have followed this policy in the past, and I am convinced that we will be proven correct once again.‍

I did not want to write this memo, but Haimchinkel Malintz Anaynikal insisted that I communicate with the troops, even when the news is less than perfect. Haimchinkel Malintz Anaynikal also mentioned that now is the time not to hide from clients. It takes real courage to make calls when you know the reception might be hostile. But there are times when we must face the music. It will pay off when the market turns, and I promise you the market will turn. I hope sooner rather than later.

‍

Memo: From the Desk of Alan C. Greenberg
‍Date: June 19, 1985
To: All General & Limited Partners

The month of May is history, but it looks like we did get ten runs in the first inning. I frankly cannot remember any time in the past where we ever broke even in the month of May, much less made money.

Haimchinkel Malintz dropped down, saw the figures and made some suggestions. We should not lose sight of fundamentals, such as cutting expenses and being ever alert to the fact that if we are not careful, there are some people who would like to steal the whole place out from under us.

‍

Memo: From the Desk of Alan C. Greenberg
‍Date: August 9, 1985
To: All General & Limited Partners
Subject: EXPENSES

I was just shown the results for our first quarter. They were excellent. 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. All of us receive documents every day with paper clips on them. If we save these paper clips, not only will we have enough for our own use, but we will also, in a short time, be awash in the little critters. Periodically, we will collect excess paper clips and sell them (since the cost to us is zero, the Arbitrage Department tells me the return on capital will be above average). This action may seem a little petty, but anything we can do to make our people conscious of expenses is worthwhile.

In addition to the paper clip caper, we also are going to cut down on ordering the blue envelopes used for interoffice mail. These envelopes can be used over and over again. All of us are going to help our bottom line grow.

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.

You have probably guessed by now that these thoughts are not original. They came from one of Haimchinkel Malintz Anaynikal’s earlier works. His thoughts have not exactly steered us wrong so far. Let’s stick with his theories till he lets us down.

Memo: From the Desk of Alan C. Greenberg
‍Date: September 10, 1985
To: All General & Limited Partners
Subject: MEMO PADS

We have been supplying everyone with memo pads. These pads have, at the top, our logo and also a person’s name and telephone number. This is conceptually wrong. We are in a person-to-person business. It would be much warmer if the sender of a note signed it with his name and telephone number along with some sweet words, such as “I love you” or “I need more business to feed my family.”

Therefore, continuing our goal of trying to increase the income of our associates, pads from now on will only have Bear, Stearns & Co. printed across the top.

It is amazing how one good idea sometimes produces unforeseen benefits. Haimchinkel Malintz Anaynikal just informed me that this superior way of communicating will save us $45,000 a year. What a pleasant surprise!!

‍
Memo: From the Desk of Alan C. Greenberg
‍Date: April 18, 1986
To: All Managing Directors
Subject: HOW TO GET RICHER

It is amazing how easy it is to save substantial money when you really put your mind to it. I was dreaming of Haimchinkel Malintz Anaynikal the other night and the following idea came to me.

All of us use blue envelopes for sending written material around the office. Our team has done a great job of saving these envelopes and reusing them, but our scotch tape expense has gone up. From this day on, instruct your secretary to lick only the left side of the flap when sending the envelope. The reason for this will amaze you, and make you wonder why you did not think of this yourself.

If the envelope is gently opened by the recipient, it can be used again and sealed, without using scotch tape, by your secretary licking the right side of the flap and then sealing it.

After all of us have become accustomed to accurate and precise licking, a further extension of this will be to lick only the left third, and then the middle for the next trip, and the right side for the penultimate voyage. If one has a small tongue and good coordination, an envelope could be opened and resealed ten times.

The beauty of this thought is that not only is it practical, but it is 100% sanitary. Our bottom line will continue to grow if all of us can come up with brilliancies similar to this.

Memo: From the Desk of Alan C. Greenberg
‍Date: July 13, 1987
To: All Managing Directors
Subject: COST CONTROL AND OVERALL EFFICIENCY

Bear Stearns has recently announced a record year—a period during which some of the majors in our industry had problems in certain areas that affected adversely their P&L. We may be entitled to some degree of pride in our performance, but certainly not smug self-satisfaction.

While our cost/revenue ratios appear to be reasonably satisfactory, now is the time to pause and remind ourselves that:

1. We have expanded rapidly, adding 800 employees during FY 1987 alone;
2. The move to 245 Park Avenue will increase significantly our fixed expenses;
3. Our industry is cyclical, and we are in the midst of the longest bull market in history;
4. A sharp downturn could be painful if we are not lean and mean;
5. Many of us get paid primarily out of bonus pool profits; and,
6. Inevitably fat creeps in with expansion and prosperity.
   

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).
   

Bear Stearns has grown and prospered because capable, aggressive, money-motivated people worked hard, were given substantial responsibility, and watched their businesses and each other. The biggest challenge is yet to come—start getting ready NOW.

If you don’t do it—we will have to do it for you and that will be less pleasant and less efficient. This place is not going to smell like a bureaucracy—bureaucracies don’t set records. We own 60% of this place—let’s keep it sound and make it grow. Our compensation is based on the firm’s profitability. In addition, I am newly married, and I am in no mood to take a pay cut. Regardless of what your experience has been, I am finding that two cannot live as cheaply as one.

Memo: From the Desk of Alan C. Greenberg
‍Date: August 21, 1987
To: All Managing & Associate Directors

Bear Stearns is not having a hiring freeze.

Our experience has been that the best time to hire productive people is when conditions are difficult. Some areas of Wall Street are having problems and that means opportunity is once again knocking at our door. Let us all be alert and continue to build!

I would like to announce at this time a freeze on expenses and carelessness. We probably throw away millions every year with stupidities and slop. In fact, I have seen more slop in the last three weeks than in the previous six months. Stop it now. No business is strong enough to withstand constant stupidity.

Haimchinkel Malintz Anaynikal is really something. Just take a look at my June 13, 1987 memo and see once again how right he was. He hates slop, even more than I do. In fact, he pointed out to me where our stock could be if we ran a neat, tight shop. I am tired of cleaning up poo-poos. The next associate of mine that does something "un-neat" is going to have a little meeting with me and I will not be the usual charming, sweet, understanding, pleasant, entertaining, affable yokel from Oklahoma.

‍

Memo: From the Desk of Alan C. Greenberg
‍Date: October 16, 1987
To: All Managing & Associate Directors

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.

Haimchinkel Malintz Anaynikal's guides may seem simplistic, but why don't we give them a try?

* For those of you who are new to Bear Stearns, PSD stands for poor, smart and a deep desire to become rich. Please do not infer from this that Haimchinkel Malintz Anaynikal is prejudiced against people who possess other almost worthless degrees. He is not nor does he teach others to be.‍

‍

Memo: From the Desk of Alan C. Greenberg
‍Date: October 26, 1988
To: All Managing & Associate Directors

Electricity is not free! This will come as a complete surprise to 98% of the people who work at Bear Stearns. Why am I so sure?

Nookie* took a little walk around our offices one evening and found enough lights and machines on to fund Bangladesh's light bill for a year.

I have never enjoyed the smell of money burning, particularly when it is my money.

The careless wasting of electricity is burning money. (Our electrical bill is running at the rate of five million a year.)

From this day on we have two revolutionary new rules. Turn off lights when you leave a room and turn off equipment when you call it a day. With concentration, dedication and muscular coordination we can do it! Nookie* suggested we hire a therapist to help our associates handle this major job adjustment, but I think he underestimates our people. Prove me right or it is off to therapy sessions.

‍

Memo: From the Desk of Alan C. Greenberg
‍Date: November 9, 1988
To: All Managing & Associate Directors

October was an excellent month, and November is starting off great. I think my memo about turning off lights had a lot to do with the profitability of the last forty days.

Our profits would have been even higher if our people had responded with more enthusiasm to my requests about cutting down our electrical bill.

I will take part of the blame for lack of total compliance because I did not realize the complexities involved. Our staff did well in turning off switches that were on a vertical plane, but switches that were on a horizontal plane seemed to cause major problems.

Nookie* explained the reason for this to me. Although most of us are P.S.D.'s,* we still live in homes with electricity and the switches for room lights are on the walls, not the floors. Please file this fact. Our associates performed miserably in turning off the electronic machines. Can you figure out why? Nookie knew at once. Let me help you.

All the switches for these apparatuses are on a horizontal plane. Our group could not adjust! Please have seminars in your areas explaining how these switches work. Our alternative is to have the switches on all the machines changed to a vertical position.

This would cost $8,492,212.00. Your Executive Committee thinks with your help our staff can adjust.

I cannot stand to see our money being burnt.

Stop all waste!

* If you do not know who Nookie is or what a P.S.D. is, do not read any further. You will never understand the text that follows.
‍

Memo: From the Desk of Alan C. Greenberg
‍Date: June 9, 1989
To: All Managing & Associate Directors

I had a dream. The dream was that I returned to this world as a seller of fax machines and I had Bear Stearns as an account.

We are ordering fax machines around here like they are being given away—and they are not!

We had a study done of fax machines and it has been proven conclusively that the machines do not object to different people using them. This means that it is possible for people and departments to share in the use of these inanimate objects.

Before you or your associates request another machine, please explore sharing or moving a machine we already own closer to your area.

This idea is a good one and I can say that because it was not mine. It came from Nookie's wife and sister-in-law. Common sense seems to flow in the veins of that group.

‍

Memo: From the Desk of Alan C. Greenberg
‍Date: May 9, 1990
To: All Managing & Associate Directors

When summer arrives it seems that absenteeism increases. We need everyone on the job every day if we are going to keep our momentum going.

Nookie heard of my concern and he felt the matter of such importance that he consulted with his uncle, Haimchinkel Malintz Anaynikal. Their collective thoughts are listed below. 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. Greenberg
‍Date: October 17, 1990
To: All Managing & Associate Directors

You are correct. This is one tough period, and in my 41½ years in Wall Street I have seen a few. In fact, things are so bad, in almost every area, that Haimchinkel Malintz Anaynikal made an unexpected visit (he stressed that this was no reflection on the advice we have been getting from his nephew, Itzhak Nanook Pumpernickanaylian). Uncle Chinkel just felt that he might point out some factors that only experience can teach you.

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.

‍

Memo: From the Desk of Alan C. Greenberg
‍Date: August 14, 1991
To: All Managing & Associate Directors

Two important milestones were reached last week. McDonald's sold their 70th billion hamburger and Bear Stearns bought their 10,000th FAX machine.

I do have some sad news to report. The FAX machine salesperson who has serviced the Bear Stearns account has retired. He is burnt out—he is 33 years old. He has purchased Donald Trump's yacht, and the overworked soul just wants to cruise and take it easy for a while.

Nookie read this and thinks there is a moral hidden somewhere between the lines.

Can you find it?

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.

‍

Memo: From the Desk of Alan C. Greenberg
‍Date: April 23, 1992
To: All Managing & Associate Directors

Bear Stearns is now being billed directly for electricity. Leaving lights or machines on when not necessary is burning money.

It will probably surprise you that I think burning money is stupid, and in addition, it is a direct hit to our bottom line. Some expenses are tough to cut but saving on electricity is easy, although it does require a little muscular coordination. Some non-athletes may have trouble making contact with a light switch while walking, but it can be done by almost anyone if you concentrate.

In fact, after a little practice you will be able to throw a switch while walking fast. Make a game out of the ritual—see how many consecutive times you can flip the switch without missing.

Cutting expenses is the surest way to increase our earnings. If we all cooperate, maybe this concern for our profits will get our P/E multiple to seven.

Spread the word to the people in your area and then enforce the discipline.

Memo: From the Desk of Alan C. Greenberg
‍Date: April 12, 1993
To: All Managing & Associate Directors

Our earnings for the three months that ended March 31, 1993 were spectacular.

Fifteen years ago the Equity Capital of Bear Stearns was about 40 million (and we were rolling a big tax deferral). We earned $110,000,000.00 after taxes in the last quarter! That is amazing.

Our earning power has changed materially, but some things have not changed one bit:

1. We have no more layers of management now than we had in 1978.
2. We still realize the importance of trying to cut expenses.
3. We still realize how important it is to be on guard against conceit and arrogance.
4. We still are deeply concerned about the well-being of every person associated with Bear Stearns.
   

We have momentum and our morale has never been higher. Our future is unlimited as long as we remember where we came from and how we got this machine to its present level. Remember, Haimchinkel Malintz Anaynikal is watching. Step out of line or disregard his teachings and you will make that old man's day (and mine).
‍

Memo: From the Desk of Alan C. Greenberg
‍Date: September 24, 1993
To: All Managing & Associate Directors

During the last few months the business community has been exposed to some new management tools. They are known by the cognoscenti as Total Quality Management (TQM), Continuous Improvement (CI), Business Process Reengineering (BPR) and Other Trading and Organizational Development Initiatives (OTAODI). Your Executive Committee is always looking for ways to improve our performance, and those titles intrigued us.

We appointed a committee (C) consisting of Haimchinkel Malintz Anaynikal (HMA) and Itzhak Nanook Pumpernickanaylian (INP) to do a comprehensive study. We thought you might be interested in the results. From now on we will use the jargon of advanced management.

The "C" discovered that we have lost 90% of our competitors over the last 20 years.

Most of those managements were precocious; they were using those catchy techniques years ago.

• 35% used TQM
• 25% used CI
• 20% used BPR
• 10% used OTAODI
• The remaining 10% did not use any sophisticated management tools, they were just extra special stupid.

The "C" suggested that we stick to common sense (CS) because catchy titles will never supplant "CS." If you disagree, you are working at the wrong place.
‍

Memo: From the Desk of Alan C. Greenberg
‍Date: January 27, 1995
To: All Managing & Associate Directors

A number of sales people, in all areas, have asked us to hire a market technician. I have discovered somebody that I think will satisfy everybody including those in charge of our long-standing austerity program. This man will work literally for peanuts.

All we have to supply him with is paper and pencil and Doodles Danenberg will do his job. We will then distribute his graphs, which I promise you will be as good as any technical work done on Wall Street.

Doodles will not be housed at 245 Park Avenue, but will be available for personal consultation if you wish. His residence is a few blocks away. He is a chimpanzee residing at the Central Park Zoo.

I am sure all of you wish Doodles the best of luck. He will report to Mark Kurland.*

* Mark mentioned to me that thus far Doodles has been less demanding than any addition he has made in the last five years. There is a moral here. All of us should think of broadening our new-hire horizon.

Scanned Memos from Alan C. Greenberg

It feels wrong to not include a few examples of what these memos looked and felt like in real life. So I had to include a few scanned versions. Which more than anything, makes me wish memos were still sent and distributed in companies and teams today.

For more, I highly encourage you to order Memos from the Chairman and read the entire book yourself.

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