Streetwise — Chapter 5: Gold Mettle

1. 1. J. Aron's hiring strategy was to hire many young people and quickly fire most, hoping a few would succeed.
2. 2. Goldman Sachs acquired J. Aron shortly before the author joined, but the acquisition was not widely known or immediately integrated.
3. 3. The trading floor at J. Aron was chaotic, with rotary phones, handwritten tickets, shouting, and cigarette smoke, a stark contrast to modern quiet, smoke-free trading floors.
4. 4. J. Aron's gold arbitrage strategy involved exploiting the contango or backwardation between spot and futures gold prices, effectively lending or borrowing money at favorable rates.
5. 5. J. Aron borrowed physical gold from smaller central banks like Hungary and Czechoslovakia, stored in vaults at the Bank of England or the New York Fed, to execute its arbitrage strategy.
6. 6. The author's first job at J. Aron was on the precious metals sales desk, cold-calling international clients to execute trades when news moved gold prices.
7. 7. The author's trip to South Africa exposed him to the warmth of his hosts but also to the shock of apartheid, where Blacks and whites did not interact.
8. 8. The author's trip to Moscow involved bribing a taxi driver with dollars, smuggling caviar, and observing that Soviet technology was often a facade.
9. 9. J. Aron's culture valued performance over pedigree, with many employees rising from driver or clerk roles to producers, unlike the Ivy League-dominated law firms.
10. 10. The author's decision to leave law for J. Aron was met with disbelief and tears from his fiancée and mother, who saw it as throwing away his education.