35 Years - from February 13, 1990 to February 13, 2025

35 Years – from February 13, 1990 to February 13, 2025

On a Tuesday before Valentine’s Day 35 years ago today, Drexel Burnham Lambert filed for bankruptcy. I was 28 years old, fresh out of Stanford Business School, newly married and months away from beginning a family. I worked incredibly hard to earn the honor of working for Drexel in Beverly Hills where the famous X-shaped trading desk with Michael Milken occupying the center, literally marked the very center of the global financial universe.

I have experienced a lot throughout my career, but the lessons and experience I received at Drexel have had an incredibly positive impact on my life. I will be forever grateful to Michael Milken who in addition to changing the world for the better in so many ways, remains an important part of my life to this day. I am beyond appreciative for the many remarkable people I met through Drexel, many of whom today are invaluable clients, trusted business partners at Jefferies, and lifelong friends.

In honor of this 35-year anniversary, I have created a list of the 35 most important lessons I have taken away from this incredibly formative experience from my junior days in finance. Some of these were obvious at the time and some took time to fully understand and appreciate. I share these with all who care with the hope that some will find a lesson or two that might make their journey a little more thoughtful, productive and fun.

There is no such thing as a “slight” liquidity crisis. Protect your creditors/debtors at all costs if you want to bring sustainable long-term value to your shareholders.
Arrogance destroys. It is hardest to remember this during bull periods. Surround yourself with people who tell you when you are wrong, or it will be too late by the time you find out.
Financial institutions depend entirely on trust and confidence. Today’s world is even faster than way back then. Your funding (or lack thereof) may only be a click away. And never depend upon unsecured funding because it is only there when you do not need it.
You cannot fight the US Government. At least you cannot if you are a financial institution. And even in the off chance that you win, you lose. Stay out of trouble.
Informed independent thought is better than following the crowd. Most people told me going to Drexel when I did would be the worst thing I could do for my career. I did my own independent work and decided for myself and in hindsight, it was one of the best career choices I ever made. But do your work, because sometimes the crowd is right.
Everything in life is fragile. Health, reputation, relationships, careers and even companies. Never forget this and take each for granted at your own peril.
Everyone is your best friend when you are on top of the world, but you can only tell who is truly with you when you find yourself in the gutter. And never forget, everyone winds up in the gutter periodically.
True character is only defined when the world is upside down. Relationships and heroes are made when someone helps defend, protect, stabilize, comfort or simply stand side-by-side with someone good while they are going through a challenging period. Shame on those who try to elevate themselves by spreading false narratives or trying to unfairly take advantage of other’s pain. They are the lowest of the lows and usually they have never accomplished anything important themselves. This is one of the worst ways jealousy manifests itself.
Sometimes the thing that is the worst thing you can imagine happening to you, winds up being the best thing that can happen to you. It will require a level head, and it often takes a fair amount of time to realize it.
Always do your best to put yourself in a position to learn from the absolute smartest people you can find. They might not always be the easiest people to deal with, but the education is invaluable. Unless of course, they are so impossible that it detracts from your mental or physical health. No education is worth that.
Sometimes the people you most respect at the time wind up not being the most important in your life and the ones you do not think much of wind up being the major influences for everything you accomplish. Be nice to everyone and treat all with respect. There is always something valuable to learn from everyone you meet.
The juniors who do your heavy lifting may turn out to be your biggest clients, business partners or lifelong friends. If you are fixated on title or status and only look upward, that insecurity may haunt you for your entire career. And just because you may have been overlooked or bullied as a junior, it doesn’t mean that you are entitled to your turn with the paddle. Break the cycle, for your and everyone’s benefit.
Most people who act like they have all the answers do not. Listen and learn but do your own work. IQ points generally do not accrue to the person with the loudest or most authoritative tone.
If you ever have the chance to be around that one individual that is truly capable of changing the world, do your best to never let go. These people are incredibly rare, so you better be able to recognize one when you see them. And just because they are so unique, it does not mean that they have no flaws or issues. Even world-changing people are human.
Building and maintaining trusting relationships is vastly more important than any other business skill you may acquire. You need to be extremely competent to keep the relationships, but competence without trust, yields nothing.
While it is fantastic to work on the largest and most complex situations in the financial world, successfully accomplishing something much smaller but entirely dependent upon you (and a few partners), can be much more rewarding. I was a cog in the giant wheel doing the 1988 $25 Billion LBO of RJR Nabisco at Drexel but got more personal satisfaction personally spearheading the 1990 $184 Million LBO of Buttrey’s Supermarket at Jefferies. Nothing beats being an entrepreneur and when you start on your own, you usually have to start small.
Better yet, working with your partners to build a company over decades that can eventually do the largest and most complex transactions in the financial world creates a feeling of pride that is impossible to fully express.
There is good and bad to learn from every work experience. Sometimes learning from the bad to avoid it in the future is even more valuable than being exposed to all the good.
Many people want you to fail and will spend their time badmouthing you or spreading false narratives to make them feel better about themselves. The more of these people you have out there, the better you are doing. Sometimes you get to tell some of them “no thank you” when they eventually ask you for a job.
Brands are hugely valuable. Building a good one takes forever and losing a good one takes a day.
It may be easier and feel more secure operating in an opaque environment devoid of transparency. While that world might feel more amenable to profitability and sustainable as a business model, this could not be further from the truth. If you can build something that truly adds value in an open and completely transparent manner, it turns out that “moat” is more valuable and if you can sustain it via honesty and integrity, long-term value creation will be achieved.
Capital structure always matters. Ignore it at your own peril. Duration is everything and if you do not know what I am talking about, ask someone who does.
It is one thing to model a theoretical stress test, but all the analysis in the world won’t mean anything until you live through a real crisis. I don’t wish them on anyone, but the truth is that surviving them is the most invaluable experience you can ever have. This is the point of maximum learning, and I am talking mostly about what you learn about yourself. I do not know anyone who is truly successful in business that has not been through at least one (usually many) of these.
Smart people attract other smart people. Insecure people attract marginal people who will tell them how great they are. If you find yourself the smartest person in the room, find another room.
It is literally amazing what you can accomplish with even just a handful or two of the best and smartest partners. It is impossible to do anything important on your own, and even if you partially succeed, it isn’t a lot of fun and won’t last long anyway.
Many people think that if you use your sharp elbows to “protect your turf” by keeping your best clients isolated from the rest of the firm, you will be able to secure and control the relationship for your best long-term interest. It turns out if you selflessly deliver your entire organization to maximize the best interest of the client, your relationship and degree of trust becomes exponentially stronger and more secure. It can become so strong that even if your firm disappears and you have to start from scratch, the client comes with you and becomes the foundation for your next opportunity.
Never ask a client or co-worker to do something that is in the ~~best~~ short-term interest of the firm, but not in the long-term ~~best~~ interest of the co-worker of client. It is a very long race and the right “client-first” mentality will determine your level of success.
You cannot build a great firm by making enemies of every competitor. There is fair and justified competition and there is underhanded behavior. Everyone should know the difference.
Sometimes what people believe at the time is a blemish on your record turns out to be a badge of honor.
Regulators and rating agencies are not the enemy. They may not always be right, but their opinion always matters. Ignore them at your own peril. And if you find yourself saying “they are idiots who do not understand,” you are the idiot.
It is critical to have a Board that is independent, smart, informed and empowered. It might be more fun in the short-term to surround yourself otherwise, but the party will probably not last long.
Ownership, alignment and transparency at the top of an organization is one of the highest predictors that long-term success will follow.
Humility is the best protection to properly understand and accept the inevitable moments of disaster that afflict every career and company in the financial services industry. Probably in every industry.
Nothing beats a true sense of urgency, especially in times of duress.
Leverage on the way up, leverage on the way down.

And a special bonus lesson for those who are still reading this:

Perception becomes reality. If everyone thinks something, even if it is completely wrong, somehow this can often become the new reality. This must always be corrected, but the timing and manner is not always straightforward. The natural impulse can often be to just blurt out the truth and attack with the facts as hard as the other side is spewing lies. The reality is that the other side is often unencumbered by the need to abide by rules, consideration of others, or the facts. The rumormongers are driven solely by self-serving agenda. I have learned in my 35 years since Drexel that when the truth eventually comes out in the right manner, the naysayers with agenda wilt and fade back into the darkness.

RICH HANDLER
CEO, Jefferies Financial Group
1.212.284.2555
[email protected]
@handlerrich X | Instagram
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