Being Black at Goldman Sachs...David Solomon Interviews Best Buy CEO...Investing in a Post-COVID Environment

[Goldman Sachs]( [BRIEFINGS] June 9, 2020 "To Everyone Who’s Asked, ‘How’s It Going?’" “To everyone who's asked me some variant of ‘how's it going?’ over the past month, I've probably lied. Or lacked the words to articulate it fully, but I’m giving it a shot.” This was the opener of an email Fred Baba, a managing director in Goldman Sachs’ Global Markets Division, sent to colleagues last week. The letter was shared around the firm, and Baba joined Jake Siewert on the Exchanges at Goldman Sachs podcast to talk about why he decided to share his story. “I felt that someone needed to say something in a way that would speak to…the Black experience of people here at Goldman Sachs, and I also needed to figure out how to articulate this hole I had been feeling inside of me for the past several days.” Reflecting on the pain that the last few weeks have revealed, Baba emphasized the importance of a collective commitment to fighting racism. “I think until people are having these genuine relationships and until people are feeling that this is a fight that belongs to them as well, I think it’s going to be very difficult for us to see change,” Baba said. “But I am very positive, based on what I’ve seen and based on the responses I’ve gotten from the firm and the hundreds of e-mails and messages and notes and encouragement, and people saying that they are having these conversations on their teams. I am cautiously optimistic about this moment in time, both within the firm and also within the United States, but we’re all going to have to keep doing it.” Listen to the podcast on [Apple Podcasts]( [YouTube]( or read the [OpEd](. [Listen to podcast]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=podcast&body=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DA-Hyq50ncyw) Talks at GS With Best Buy CEO Corie Barry Above (L to R): David Solomon of Goldman Sachs and Corie Barry of Best Buy As the pandemic upended the world of retail, Best Buy CEO Corie Barry pivoted quickly, shifting all of the company’s stores to curb-side pickup within 48 hours. “The idea of moving faster as an organization than we ever thought possible is actually a really positive side benefit of what's been a really horrible health and financial crisis,” Barry told Goldman Sachs CEO David Solomon in a recent episode of Talks at GS. As a brick-and-mortar retailer, the idea of moving quickly—without “perfection around process”—wasn’t built into Best Buy’s DNA, Barry said, but she is eager to push ahead. “It won't be perfect…We'll listen to our field partners, we'll iterate on solutions from there and we'll get to a better answer, but we can do it much faster than we ever thought.” As the economy reopens, safety will be an essential element of Best Buy’s brand. “For the first time in my life we are seeing safety as a key element of brand love, the feeling of safety,“ Barry said. “We believe that creating the safe experience will actually bode well for us over time, both for employees who are more loyal but also frankly for customers who give you a lot of credit right now for having a safe experience.” [Watch video]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=best%20buy&body=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DsXTtvKv_J7w) PODCAST: Investing in a Post-COVID-19 Environment “Some events, like oil shocks, have clear and well-defined implications. Other events change the rules and force a rethink of everything. COVID-19 is a rule changing event,” writes Steve Strongin, senior advisor for Goldman Sachs, in a new report, [The Great Reset: A Framework for Investing After COVID-19](. As Strongin explains in a recent episode of Exchanges at Goldman Sachs, he separates the post-COVID-19 investing environment into three phases—preservation, consolidation and innovation—that capture the structural dynamics of the competitive environment, and four key themes—resiliency, sticky learning, risk-based market segmentation, and regulatory resets—that are driving changes across those phases. “Resilience will probably be the thing that most changes the economy but may be the least apparent to the average consumer,” Strongin says. “A lot of things failed in the last three months. Supply chains failed. Computer systems failed. The ability of businesses to adjust and work-from-home systems failed. Everyone is going to learn from their successes and failures. And the core of that is going to be looking at systems and valuing systems that operate well under stress, versus maybe saving a penny or a dime but allowing your supply lines to be stretched and fragile. So a lot of changes we’ll see will have to do with making sure the system can take a hit and keep operating.” Listen to the podcast on [Apple Podcasts]( or [YouTube](. [Listen to podcast]( [Read report]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=podcast&body=https%3A%2F%2Fwww.goldmansachs.com%2Finsights%2Fpodcasts%2Fepisodes%2F06-09-2020-steve-strongin.html) June QuickPoll: Market Sentiment Normalizes Amid Skepticism Over Rally After record levels of bearishness, sentiment has normalized as investors turned more bullish, with a relatively balanced bull-to-bear ratio in the latest Marquee QuickPoll survey of Goldman Sachs clients. Here are highlights from the monthly poll: “Too good to be true.” Despite a more balanced market sentiment, there is continued skepticism over the recent rally. “Whether in our survey or in our client conversations, we continue to hear a lot of disbelief,” said Oscar Ostlund, who oversees the QuickPoll and is head of New York Market Strats in the Securities Division. “Investors continue to dislike this rally.” More than 40% of surveyed institutional investors, for example, said they expected the S&P 500 to sell-off in June. Rotating to Europe. The search for value has spurred a broad rotation into cheaper assets, as investors moved from growth and defensive sectors, into cyclical and value stocks. For the first time since early 2018, surveyed investors said they expected European stocks to be the best performing major equity market in June. “The EU's proposed recovery fund is a game changer,” Ostlund said. “Combined with strong risk asset performance, this is a perfect cocktail for investors to rush back into European assets.” Pro-Cyclical Monetary Policy. Outside of the survey results, Ostlund added that one of the “side effects” of central banks holding interest rates near zero is the pro-cyclical nature of central bank actions. In normal times, central banks can cut rates or ease conditions when the economy slows, and raise rates or tighten conditions when economies heat up. But that relationship has reversed in the current crisis. If say, oil prices move higher and the economic outlook improves, financial conditions are automatically easing, providing more accommodation to the economy and support for risk on assets. That “powerful accelerant,” according to Ostlund, is likely to provide more fuel for the rally For more information about QuickPoll and Marquee, [reach out to the team](mailto:gs-marquee-sales@ny.email.gs.com?subject=Briefings%20Follow-Up%3A%20Interested%20in%20Learning%20More%20About%20Marquee&body=Briefings%20follow-up%3A%20I%20am%20interested%20in%20learning%20more%20about%20Marquee.). SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=QuickPoll&body=) Briefly...A Virtual Townhall With the Goldman Sachs Firmwide Black Network Above: Members of Goldman Sachs’ Firmwide Black Network on a virtual townhall Goldman Sachs’ Firmwide Black Network recently hosted a virtual townhall to share experiences with racial discrimination in the US and around the world. Lisa Opoku, global chief operating officer for the firm’s Engineering Division, moderated a discussion with Margaret Anadu, head of Goldman Sachs’ Urban Investment Group, Leke Osinubi, chief risk officer for the Core Engineering business unit, Kene Ejikeme, head of Multi Asset Platform Sales in EMEA, and Sean Legister, a vice president in Multi Asset Sales in New York, on how to bring the Black community—and its allies—together. Lisa Opoku: For many of us, there’s something special about this moment in time. I think as Black people—in general—we haven’t been entirely honest and open about our lives. Although we’re constantly confronted with racism and discrimination, it’s something we’ve learned to power through and, in fact, go to great lengths to conceal. What’s happened in the last few weeks is a turning point that has forced us to be more honest about the pain we’re feeling. For me, I took Ahmaud Arbery’s murder hard—not only because he looked like a grown-up version of my son—but also because it took two months before anyone was arrested. Then, in the same week, we had the Amy Cooper situation in New York and George Floyd’s murder—it was just the tipping point. For the Black community—with our history and all that we go through every day on a micro level—we finally got to a place where we couldn’t take it anymore. Leke Osinubi: In many ways, what we’ve observed with George Floyd’s murder isn’t new; it’s just that we’ve only now had more opportunities to capture it. For me, his murder was the apex of all the frustration and exhaustion I’ve felt. The length of time—8 minutes—that the officer’s knee was on his neck was representative of the knee that’s been on the necks of Black men and women throughout history, and represents the system that continues to work against progress. It’s the constant reminder of our social position. The officer standing by silently was representative of others’ complicity in that murder and in the systemic oppression of Black people. My story is the same as their stories; we aren’t any different. As Black men we’re taught to be strong and not to cry because one day we’re going to have to serve as images of strength for our families, but in essence we can’t even protect ourselves. The irony that George Floyd died with someone kneeling on his neck, when African Americans have been kneeling in peaceful protest for the last four years, is telling of my existence—and that’s when I said enough was enough. Sean Legister: For me, the Amy Cooper situation in Central Park was more terrifying. Because while George Floyd’s murder wasn’t expected, it also wasn’t surprising. But the moment I step outside of the offices of Goldman Sachs, I’m just another Black man in America. And in most situations, if I were in a situation where it would be my word against the “Amy Cooper’s” of the world, I think I’d lose that battle every time. The subtle racism also comes across when people say that they don’t see you as Black—that they don’t, in fact, see color. But if you don’t see color, then you’re not seeing a huge part of who I am. Or they may have a different perception of what it means to be Black and perhaps I don’t fit that stereotype. Kene Ejikeme: In London, the UK and parts of EMEA, the Black experience is more of a summation of micro-aggressions. Do you want to get shot and killed, or die by a thousand cuts? For me, the Amy Cooper incident was the one that hit me personally the hardest and made me reflect about what that means for my place in society. On a day-to-day basis, there are so many little things that are happening in real time that are just too many to address. Whether I’m trying—without success—to hail a taxi or getting on the tube and seeing mothers pull their children or daughters away from me. By the time I’ve gotten to the office I’ve already sustained multiple “cuts.” With everything happening in the world, I’m just reliving those moments all over again. The problems in the UK are just as ugly, pernicious and debilitating as they are in the US—they just take a different form. Margaret Anadu: During my analyst days at the firm, a colleague yelled at me while I was getting my breakfast—likely assuming I worked in the cafeteria because I’m Black. When I got back to my desk, visibly upset, my manager at the time asked what was wrong and when I told her, without missing a beat, she immediately wanted to find the woman and address the situation. Today, a lot of people are asking: “What can I do and what do I say?” The answer is to just be with us. The ability to confront these racial issues and create allies depends on building relationships with people long before a crisis. My manager and I had a relationship that was real and genuine before the incident. It’s a lot easier to talk about something that’s difficult when you’ve spent real time talking about things that aren’t difficult. Lisa Opoku: Can you talk about your experiences in terms of how you’re dealing with parenting in these times, or conversations that your parents may have had to help you understand racial inequality? Leke Osinubi: For my daughter, we’ve had some extremely tough conversations where I want her to fully embrace who she is. I try to empower her to understand her own internal strength, but at the same time, realize that she’s not going to be living in a fairy tale. There was a point in time when I was trying to protect and shield her from racism, but realized that was a disservice. Sean Legister: For me, my mom is my everything. She’s a single mom from Jamaica who raised me to work hard, but not be too loud so I can fit in. When I went away to Amherst College, I told my mom I wanted to major in Black Studies. Her response was that if I wanted to learn about Black people I should go to the library and read a book. She had wanted to see me major in math or economics. But a couple of months later when Barack Obama won the presidency, she called me crying and told me I should major in Black Studies and chase my dream. Within the firm, we’re trying to use our voices to educate others and work to bring about more changes. We can do better. I’m hopeful that since I can bring my authentic self to work that will open the door for others. Lisa Opoku: Margaret, what are you hearing in your conversations with the analysts and associates across the firm at this time? Margaret Anadu: It’s a mix of experiences. Many feel optimistic about the future, while others are anxious and deeply distressed. You’re not only dealing with the actual reality of what’s going on outside your doors and feeling alone and exposed, but for some this is exacerbated by the silence they feel from others. We’ve all heard that to be silent is to be complicit. So even an awkwardly worded email or note to someone who is in pain is better than nothing. We’re certainly having more conversations so that’s real progress. But we have to continue to be honest and vulnerable. Lisa Opoku: Kene, you’ve been a leader in the Black community in London for a long time. What kinds of changes do you think need to happen to effect real change? Kene Ejikeme: I would encourage the conversation to pivot from, “Don’t discriminate because it’s not a good thing to do and you’re a good person,” to a conversation that having a more diverse firm contributes to the bottom line and enables us to drive a better return for our shareholders. I would like to see greater transparency around that and include more people in those conversations. We’re an analytical, data-driven firm and when we put numerical targets on things we magically seem to hit them. We also need to create a web of accountability where managers who do a good job managing diverse teams get paid more and are promoted. [Read more Brieflys]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Briefly...on%20Bringing%20the%20Black%20Community%20-%20and%20Its%20Allies%20-%20Together&body=https%3A%2F%2Fwww.goldmansachs.com%2Finsights%2Fpages%2Ffrom_briefings_09-june-2020.html) Goldman Sachs Media Highlights CNBC - June 8 [Goldman Sachs' Steve Strongin on investing as businesses reopen from Covid-19 lockdowns]( (4:15) Bloomberg - June 4 [Goldman’s Patel Says Keep an ‘Eye With Caution’ on These Markets]( (5:21) Bloomberg - June 2 [Market Rally Driven by a Narrow Group of Stocks, Says Kostin]( (8:30) [Subscribe]( [Unsubscribe]( The data provided in this newsletter is for information purposes only and should not be construed as investment or tax advice nor as a recommendation to buy, sell, or hold any particular security. 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