Back in May 1999, Goldman Sachs went public to great fanfare after years of internal debate among its partners about the wisdom of such a step. The top brass had been utterly devoted to the idea of remaining a private partnership, but they quickly got with the program, especially after the top top partners figured they were suddenly going to be worth hundreds of millions of dollars each after the I.P.O. That point was further driven home after the first day of trading, when the Goldman stock increased by some 30 percent.
Abracadabra, Goldman Sachs was worth more than $30 billion, and was trading at nearly five times its book value. It was the most feared and revered investment bank in the world and its high multiple of book value reflected the esteem in which investors held the firm and its ability to make money hand over fist, regardless of market conditions.