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Alpha Stage
Modesty and Wealth
November 15, 2006







Yesterday’s New York Times Business Section tells the story of Ranaan A. Agus, the manager of one
of Goldman Sachs’ largest internal hedge funds. Last year he made between $10 and $20 million as
his compensation for successfully placing Goldman’s assets into risky investments.

The article is impressed with the fact that Agus makes so much money, yet drives a Honda. It further
states, "At Goldman, top executives are not allowed to become famous, until they become famous.
Rising stars like Mr. Agus are cultivated and nurtured under a thick cloak of anonymity until their
money-making talents flower so that they seek their public fortune elsewhere or they rise up into the
ranks of senior management."

Read the Article!!


Discussion-Starters:

  • Ask your child(ren) what the following words mean: "compensation," "executive," and "Wall
    Street." You might also want to discuss the meaning of “hedge fund,” with older child(ren). A
    Wikipedia article on hedge funds can be found here: http://en.wikipedia.org/wiki/Hedge_Fund

  • "Many people judge others by the kind of car they drive or the type of house that they live in."
    Ask your child(ren) if they think that this sentence is true. Why would people judge others in
    this way? Is it appropriate to judge others in this way? Why/why not? Ask your child(ren) if
    they think it’s appropriate to judge other people, in general. Encourage them to support their
    opinions. If it is appropriate to judge other people, on what should they be judged? Share your
    own thoughts with your child(ren).

  • The article states, "At Goldman, top executives are not allowed to become famous, until they
    become famous." Ask your child(ren) what this sentence means. Do they think that this is a
    good rule for a company to have? Do your child(ren) think that Goldman makes more money
    or has a more pleasant work atmosphere because of this policy? Why/why not? What do you
    think?

  • Mr. Agus’s fund makes bets on whether or not companies are going to merge with one another
    and how the merger will effect the value of the company. When Agus and his staff bet right,
    they have the ability to make a lot of money. Tell your child(ren) to imagine that Mr. Agus has
    come to them for advice. He wants to know how to best determine when companies are going
    to merge, or form one united company, and how the merger will effect the value of the
    companies that joined together. What advice would your child(ren) offer. Encourage them to
    explain why this advice might work. What advice might you offer?
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