Streetwise — Chapter 7: Breaking Through

1. 1. The author proposed a low-risk S&P 500 futures arbitrage for Saudi clients, earning a 17% annualized yield with 5% tracking risk.
2. 2. Mark Winkelman transformed J. Aron from a risk-free arbitrage business into a risk-taking principal trading operation.
3. 3. Goldman hired Fischer Black, co-developer of the Black-Scholes model, who provocatively asked gold miners why they didn't leave gold in the ground.
4. 4. Armen Avanessians, hired from Bell Labs, built the Armenator and later the Securities Database (SecDB), which became Goldman's risk-analytics backbone.
5. 5. The author was tasked with creating a new forex sales force for clients despite knowing nothing about the foreign exchange business.
6. 6. The author learned about Islamic financing through a contact at Al Rajhi Bank, where charging interest was prohibited but investment income was allowed.
7. 7. Goldman's culture allowed the author, a junior J. Aron employee, to execute a major S&P arbitrage with support from senior Goldman partners.
8. 8. Mark Winkelman hired technologists and 'strats' like physicists and engineers to embed on trading floors, driving innovation through analytics.