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As an undergraduate at Hamilton College, Kennedy majored in art. "I did some awful paintings and metal sculpture," he laughs. "Even my mother saved only one of my paintings through the years - that's how bad they are." He nonetheless places a high value on the liberal arts education he received at Hamilton and now serves as chairman of its board of trustees. Kennedy says he has developed "an appreciation for a tolerable level of risk" in trying to decide which companies to underwrite at Goldman. "It's painful every time you back a loser," he notes. "You really are shooting for zero defects, but if you don't have some failures, you're probably not taking enough risk." When asked to share his proudest achievement, Kennedy looks instead to the career of his wife, Karen, who enrolled in medical school at the age of 37 and now has a pediatric practice in Manhattan. "I am very proud of what she has accomplished," he says. "After working when I was in business school and then raising the kids, she pursued a goal that most people would have thought unattainable. She loves practicing medicine." |
How would you describe the value of Internet stocks today?
Frightening. Frightening if you own them - and just as frightening if you don't. I think most people feel that it's awfully tough not to make an investment in this area. My hat's off to the Warren Buffetts of the world, who have the courage to say, "I don't buy stocks I don't understand." But I think those people also run a tremendous risk of being left behind.
Goldman has a big market share in Internet stocks, and we have tried our best to understand them, but some of this defies rational analysis! We're using valuation benchmarks that I can't imagine Jay Light even dreamed about in 1974. I just hope that things develop as well as everybody's projecting them to. Otherwise, the valuation adjustment could be quite harsh.
Is there anything that you've missed out on because of the demands of your career?
When you're fully engaged in your career, you don't have oceans of time to be involved in your community and in the organizations that are important to you. When I think about the future, though, I look to John Whitehead (MBA 11/'47) as a terrific role model. After he left Goldman Sachs, he held a senior position in the State Department, and he now serves on so many boards that he's probably as busy and involved today as he was when he ran the firm. He's made philanthropy and involvement in social enterprise a full-time job.
What was your first job?
When I was about ten, I started giving puppet shows at neighborhood birthday parties. I had a little theater and a bunch of hand puppets, and it was lucrative enough to make me feel pretty wealthy when I went to the candy store.
What is your outlook for the stock market over the next five years?
I think most of my classmates would say that what has hap-pened in the stock market in the last 25 years has far surpassed their wildest dreams. Going forward, I'm cautious but fundamentally bullish. I would be shocked if, in the next five years, we didn't have an adjustment of some significance. But I think the underlying fundamentals continue to be good, and the long-term outlook has gotten better and better. If you asked me the outlook for the next fifty years, I would say it's sensational.
How would you rate your personal computing skills?
I've kept up pretty well, by necessity. You can't get a stock quote today without being able to use a computer. Our ability to produce information for analysis has increased exponentially since we were at HBS. I marvel at how quickly things have changed. When I started in this business, if a client wanted price and volume information, someone had to literally go to the library to consult the books put out by the stock exchange, write down the information, and bring it back to the office to have it typed up. Can you even imagine that today?
Would you want your kids to do what you do?
I really consider myself to be one of the luckiest people in the world, with all the times I've won the lottery: being born in America, having parents who could afford to give me a terrific education, getting into Harvard Business School, working for a hugely successful company. If one of my kids wanted to go into this business, that would be great, but what I wish most for them is that they find something to do with their lives that will give them personal satisfaction.
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| Kevin W. Kennedy | Stephen M. Waters | James A. Stern | William J. Kneisel | Donald H. Layton |
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managing director at Goldman Sachs, where he has spent his entire career, Kevin
Kennedy has served the firm in a number of positions, including head of Corporate
Finance. He is currently cochairman of the Commitments Committee and a senior banker.