“I have just informed the purchasing department that they should no longer purchase paper clips. All of us receive documents every day with paper clips on them. If we save these paper clips, not only will we have enough for our own use, but we will also, in a short time, be awash in the little critters.“ – Alan “Ace” Greenberg

Why would the Chairman of a top Wall Street bank care about paper clips? Because it sends a message: be frugal.

Ace Greenberg rose from a lowly clerk to Chairman and CEO of Bear Stearns, one of the top firms on the Street. During his time at the helm, he regularly wrote short letters to his staff, goading them toward success.

These entertaining letters form the book Memos from the Chairman. When I heard Warren Buffett recommend it recently, I had to pick up a copy.

Frugality? On Wall Street?

“At last weeks partners meeting. Haimchinkel pointed out to me that the hors d’oeuvres had been upgraded considerably from peanuts. You will be happy to know that we are now back to peanuts.”

Greenberg cut expenses relentlessly. Snacks, envelopes, stamps — everything. His partner in this crusade was Haimchinkel Malintz Anaynikal, a charming invented character always advising sobriety and common sense.

Wall Street is more known for steak dinners and limos than frugality. Maybe that’s why Greenberg never stopped pushing his staff to cut costs.

Little expenses add up, and every expense comes straight out of your bottom line. If Greenberg let the firm become undisciplined in how it used paper clips and envelopes, soon employees would be wasting much larger sums.

Pick Up the Phone!

“…the harder you work, the luckier you get.“

Wall Street banks deal in some exotic stuff: derivatives, mortgage backed securities, you name it. But no matter how complex the business got, Greenberg always emphasized the basics.

Answer the phone. Return calls promptly. Show up to meetings on time.

These are basic things. But too often, we forget these basics, especially if we start to think we’re important.

In the end, any business is about serving the customer. That starts with being responsive and punctual.

So many of us in venture capital have long since forgotten these basic rules. A recent founder meeting I had is a case in point:

“Thank you so much for being on time!” the founder began. Later in the meeting, he thanked me again for showing up at the time we agreed.

Shouldn’t that be a bare minimum that any founder expects? You’d think. But evidently a lot of VC’s aren’t getting it right.

I may not be the biggest investor. I may not be the smartest.

But darn it, I can show up on time.

How Bear Lost Its Way

Today in 2025, Bear Stearns is known as a cautionary tale, if it’s known at all.
The company collapsed during the financial crisis in 2008. JPMorgan wound up swallowing Bear for a pittance.

If Bear had continued to follow the wise counsel of Ace Greenberg and Haimchinkel Malintz Anaynikal, this never would’ve happened.

Greenberg ordered his staff to be in the office during business hours, no exceptions. But when Jimmy Cayne ousted Greenberg from the CEO role, those standards began to slip.

Cayne often left on Thursday afternoons to play golf or bridge. Predictably, other executives followed his lead.

No one at the top seemed to realize how bad the firm’s finances were getting during this time. No wonder — they barely worked!

Bear’s collapse shows how the tone at a company is set from the top. Without strong leadership, a great company can cease to exist in just a few short years.

Wrap-Up

Greenberg practiced hard work, client service and frugality. If Bear had kept to those lessons, it might still be among America’s great banks.

But it didn’t. And now it’s gone.

It’s not complicated to put Greenberg’s lessons into practice. It’s all about doing basic things: returning messages, showing up on time, and watching expenses.

Anyone can do these things. But most people don’t.

That’s a great opportunity for the rest of us. It gives us a chance to stand out!

I learned a lot from Memos from the Chairman and had quite a few good laughs too. Pick up a copy!

More on books:

Street Fighters: The Last 72 Hours of Bear Stearns, the Toughest Firm on Wall Street

Hetty Green: The Witch of Wall Street

Gambling Man: Masayoshi Son (Part Two) 

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