"It clicked right off the bat"
Has Sandy Weill torn up his own rulebook and forgotten the lessons of the past? The Travelers Group chairman, who last month announced a $9 billion merger between his firm's giant US brokerage arm Smith Barney and Salomon Brothers, certainly surprised those who knew him in previous incarnations at Shearson and American Express.
Hardwick Simmons, formerly at Shearson, now chief executive of Prudential Securities, says the deal "violates two great rules Sandy taught us: 'Always buy when nobody else wants to, and never put your earnings in the hands of a trader'." Weill shied away from taking trading risks "because events out of your control can determine your destiny," says Simmons. "He got very nervous when we had significant capital positions."
Weill chuckles, hearing his past comments come back to haunt him. "My views have changed because the world is changing and one has to change with it," he says, citing the fall of communism and the rise of privatization. "We've grown up."
Smith Barney chief executive James Dimon, co-chief executive of the future Salomon Smith Barney, insists that a new era is dawning: "We have accepted this kind of risk," he says, elaborating on the concept of risk and return.