Welcome to Edition #70 of Did You Know? (DYK), the weekly newsletter by Gorick Ng, Harvard career adviser and Wall Street Journal Bestselling Author of The Unspoken Rules, where we deconstruct the untold story of how someone (or something) became successful—and what you can do to follow in their footsteps.
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Did You Know? Be contrarian + be correct
Your story this week
Did you know? Sallie Krawcheck became the CEO of 4 different Wall Street businesses within 10 years.
It’s 2002. Who’s the “most powerful woman on Wall Street?”
Her name is Sallie Krawcheck. In 1995, Krawcheck joined Sanford C. Bernstein as an equity research analyst, a job that involves analyzing companies and publishing reports predicting their stock price.
But quickly, Krawcheck realized that people don’t read equity research for fun—they read it for a perspective. In other words, she couldn’t just be great at financial modeling and writing; she had to be great at having a point of view (remember our story on Trader Joe’s?). In her own words, “You can’t be successful as a research analyst if you don’t speak up.”
Within a year, Krawcheck was recognized for her work as “the top-rated analyst” by Institutional Investor magazine. Within four years, she was promoted to Senior Research Analyst, then Director of Research.
Then, Krawcheck noticed something: more and more analysts were “being lured away by the big firms.” The result? Bernstein was “losing basically everywhere.”
Krawcheck immediately approached executives at her company. Believing that her company’s challenges were short-term and that “thorough, objective research” would become a hit again, Krawcheck suggested that her company “triple the size of the research staff.”
The “bet of [her] career” paid off. The “pendulum swung back”, Bernstein stabilized, and, two years later, Krawcheck was named CEO of the entire firm in 2001.
Another year later, Fortune magazine put Krawcheck on its cover and crowned her as “The Last Honest Analyst.”
Suddenly, other companies started paying attention.
That same year, in 2002, Citigroup came calling and hired Krawcheck as CEO of Smith Barney, its research arm. 3 years later, in 2005, Krawcheck became Chief Financial Officer (CFO) of Citigroup.
2 years later, in 2007, Krawcheck became CEO of Citi Wealth Management.
2 years later, in 2009, Krawcheck became CEO of Bank of America’s Merrill Lynch Wealth Management and US Trust.
Called “one of the most powerful women on Wall Street”, Krawcheck is still a CEO today in 2024. But this time, Krawcheck leads her own financial company, Ellevest, which has raised $2 billion in investments and serves over 100,000 clients.
What does this mean for you? The next time you see everyone else flocking in a certain direction (as Krawcheck saw in her colleagues fleeing equity research), remember Krawcheck—who became a contrarian, got it right, and saw a big bump in her career.
Your strategy this week
Did you know? Be a contrarian!
What Krawcheck did was take a contrarian perspective—a fancy way of saying “to go against the majority.” But being a contrarian is a high-risk, high-reward move.
In the case of Krawcheck, if she were wrong, she would have stayed in a dying industry—and seen her career opportunities dry up.
If she were right, however, then she’d be one of the few remaining people in a growing profession—and, as people flocked back into equity research, she’d suddenly also find herself being early (which not only makes her valuable, as we saw from my essay on the sports analytics industry, but also allows her to start her “Ten Year Clock” sooner than anyone else, as we saw from my essay on MrBeast and Joe Biden).
In short, sometimes career success = be contrarian + be right.
This isn’t my framework, though—it’s the framework that underlies the entire world of investing!
Imagine you’re an investor, whether you’re in venture capital (investing in startups), private equity (investing in larger privately held companies), or hedge funds (investing in publicly held companies).
You only make a lot of money by being contrarian—by investing in opportunities that most people don’t see. Why? Because if everyone’s investing in the same thing you’re investing in, then the best you can be is average.
But it’s not good enough to simply be contrarian. You also need to be right. If you’re contrarian and wrong, then you’d lose money and look reckless. If you’re non-contrarian and wrong, then you’d lose money but look like everybody else.
If your head is spinning from all of the finance jargon, here’s another example: Imagine you’re driving on the highway and want to beat traffic. If you’re contrarian, then you might take some random side streets. If you’re non-contrarian, then you’d stay on the highway like everyone else.
If you do end up beating traffic, then you’d look brilliant! If you don’t, however, and end up at a dead end, then you’d look foolish for ever trying to veer off the tried and tested highway.
In the case of Krawcheck, it’s hard to imagine how she could have gotten promoted so quickly had she not been a contrarian. After all, there are thousands of equity research analysts out there on the “highway” of finance—and few of them can become CEO.
Here's one way to practice being contrarian in your day-to-day life:
(1) See the highway by filling in these blanks: “Many people around me believe that _______ will _______.”
- E.g., “Many people around me believe that radiology as a medical specialty will become obsolete as AI takes over.”
(2) Make a decision by filling in these blanks: “I agree that _______ because _______, but I disagree that _______ because _______. Therefore, I believe _______.”
- E.g., “I agree that AI can automate image analysis of simple medical cases, but I disagree that radiology will become obsolete because someone needs to be accountable. Therefore, I believe that radiologists will not just continue to exist, but will become even more interesting of a profession for a tech geek like me because radiologists will be at the cutting edge of AI.”
You won't always be right, but, the more you try driving on some “side streets”, the stronger your intuition will be—and the more skill you’ll have at spotting the right opportunities.
Just remember: The bigger the bet, the higher the stakes—and possibly, like Krawcheck found, the greater success you'll find in your career.
I know it because I’ve experienced it: When I was an MBA student at Harvard Business School, the default option was to go into finance, consulting, or tech. I decided to be contrarian and write a book. This path isn’t for everyone, but, at least for me, I haven’t regretted the decision yet!
Practice being a contrarian!
Gorick
Sources:
- https://www.linkedin.com/in/salliekrawcheck/details/experience/
- https://mdash.mmlafleur.com/sallie-krawcheck-the-most-courageous-woman-in-the-world/
- https://money.cnn.com/magazines/fortune/fortune_archive/2002/06/10/324538/index.htm
- https://www.investopedia.com/terms/u/underwriting.asp
- https://images.forbes.com/lists/2005/11/DFBE.html
- https://www.ellevest.com/magazine/news/2-billion-milestone
- https://greenmoney.com/forbes-sallie-krawcheck-leads-ellevest-to-1-billion-aum/
