How To Drop Names

I realize that not every visitor to this blog comes here for entertainment. Yes, bashing investors, colleagues and rivals is fun, but I like to think that this blog serves a serious purpose as well. Many of my most devoted readers are, in fact, young hedge fund types who aspire to my current lofty heights.

For these readers, and as a public service, I have decided to introduce a new feature: an occasional “how-to” column. This column will reveal everything you need to know about slithering up the greasy pole that is the financial industry.

Today’s topic: how to drop names.

(What, you thought I was going to teach you some actual finance? Ha ha, don’t make me laugh. Knowledge of actual finance is highly overrated in this game. Don’t waste your time and mine trying to learn what a bond is; it’s just not worth it.)

The ability to drop names strategically is a key element of Wall Street success. A good name-dropper will be perceived as a person of prestige and influence; and from perception to reality is but a short step. But as with all other skills, it needs to be practiced and perfected. Dropping names badly can often be worse than not dropping them at all.

There are various techniques that one can use to drop names; here is a brief taxonomy:

1. The Pathetic. I once had lunch with a banker who tried to convince me that Sopwith should open a prime brokerage account with his (second-tier) firm. He went out of his way to mention that he had once worked with Jon Corzine: “Yes, Jon and I traded the bond basis back in the 80s”. My unspoken reaction? “Dude, that’s pathetic. By your own admission you and Corzine were in the exact same position 30 years ago. And now look at you! He became head of Goldman Sachs and then governor of New Jersey. You on the other hand are trying to sell a second-rate product to a third-rate firm, for peanuts in commissions. You should be ashamed of yourself.”

Needless to say, I do not recommend the Pathetic name-drop technique.

2. The Aggressive. Some second-raters recognize, dimly, that comparing themselves to shining stars is not the smartest strategy. So they leaven their comparison with well-chosen barbs aimed at these shining stars. For example: “John Paulson? Yeah, I worked with John for a few years. I always thought he was more lucky than smart.”

This strategy can be effective if the listener shares the name-dropper’s inferiority complex or otherwise has a chip on his shoulder. There are lots of Wall Street types who have precisely this mentality: wannabe players who love nothing more than to see celebrity figures being brought down to earth. So the odds of success are high. But the Aggressive name-drop technique can backfire spectacularly, especially if the shining star being dissed is self-evidently not a chump (e.g. John Paulson). For this reason I do not recommend this technique either.

3. The Mutually Respectful. More effective than fawning over a superstar (a la the Pathetic) or badmouthing him (a la the Aggressive), is simply treating him as an equal – and implying that he treats you as an equal. This has to be done subtly for maximum effect: “Have you read Bill Gross’s latest column? He thinks stocks are going up. It’s funny, I’ve always liked Bill, but his trading advice has never worked for me. I guess my advice has never worked for him either. Oh well, to each his own.” Notice how by disagreeing with Bill Gross you convince the listener that you are not fawning over him, when in fact that’s precisely what you’re doing. I like this technique but you must be careful not to overuse it.

4. The Implicit. Now we get into the higher echelons of name-dropping technique. The implicit name-drop occurs when you do not actually drop a name; instead, you refer obliquely to a personage and leave it to the listener to fill in the blanks. For example, “I’m sorry I’m late; I had to make a quick visit to Omaha for an investor meeting and my return flight was delayed”. Hopefully your interlocutor will guess which particular Omaha investor you’re talking about.

In addition to prominent Nebraskans, you can refer to Hungarian émigrés, Alabama farmboys and former squash champions. Depending on how chummy you are with the listener, you can even make wiggly quote marks in the air when referring to all these characters; the possibilities are endless. This is an excellent technique; its only drawback is that it depends, at least partly, on the eagerness of the listener to believe what he wants to believe. Fortunately this is not a huge drawback, given the nature of the average Wall Street listener.

5. The Reverse. The most subtle and sophisticated name-dropping technique. In the reverse name-drop, you get someone else to drop your name. Or rather, you imply to your listener that someone else drops your name with regularity. For instance, when meeting an investor for the first time: “Was it Jim who suggested Sopwith to you? It’s okay, you don’t have to tell me; I know he doesn’t like publicity. Must be the ex-academic in him.” Or if you’re late for a meeting, “Sorry to keep you waiting; I had to take a phone call from this investor, as a special favor to Stan. A complete waste of time, of course; I wish Stan had better judgment sometimes.”

This article was going to be a lot longer, but I have to run, I have Ben on the line wanting to talk about interest rates.