You happen to be attending an interview with Goldman Sachs. As a good and diligent candidate, you will know the importance of asking some questions of your own at the end of the interview process. How else can you demonstrate your enthusiasm for the firm and interest in the role?
However, before you step into a Goldman interview equipped with questions about how the bank plans to tackle the seemingly secular decline in fixed income revenues, be warned: when you interview at Goldman Sachs you are advised not to ask questions that could put your interviewer on the defensive. This is at the suggestion of Goldman Sachs itself. Specifically, the bank says candidates should, ‘Avoid over-elaborate, administrative questions which may put the interview on the defensive.’
To this end, you should probably not conclude your Goldman Sachs interview with inquiries of the following nature:
1. Gary Cohn said in June that Goldman’s fixed income business is suffering as a result of low volatility and steady rates. By all accounts, fixed income revenues across the market took a turn for the worse in July. How does Goldman plan to deal with that?
2. Bernstein Research analyst Brad Hintz has argued that compared to its peers, Goldman is far too exposed to volatile sales and trading revenues. Banks like Morgan Stanley have successfully diversified into wealth management. Do you feel that Goldman’s top-level strategy is appropriate to the new landscape?
3. Lloyd Blankfein’s bonus is partially contingent upon the firm achieving a return on equity of 12%. How likely do you think this is in 2014? Is compensation across the firm linked to this target? Hintz estimates that the return on equity in Goldman’s trading business is only 7% – is that accurate?
4. In the past few years Goldman executives have continuously reiterated their intention of shifting business to, ‘high value locations’ like Mumbai and Salt Lake City, where costs are lower. Is this shift likely to affect the job that I’m going for? Separately, do you feel that the migration to high value locations is sufficient to mitigate rising costs due to regulation?
5. Bloomberg reported recently that Goldman structurers have designed a new generation of structured investments that, ‘bundle debt into top-rated securities.’ This sounds a little like collateralized debt obligations. How do the new securities differ from those structured in the years preceding 2008? Is there reputational risk involved in the creation of these products? Is that an issue?