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The results show in its stock price. Morgan Stanley shares closed Thursday at $28.64, down about 37 percent since Mack took over in June 2005. Goldman shares are up about 68 percent in that same time period, closing Thursday at $174.87. Mack's return in 2005 was a redemption for him after being forced out of his prior position as president and chief operating officer in 2001. He had worked his way up the ranks at the storied investment bank since being hired as a bond salesman in 1972. After leaving, Mack took over Credit Suisse First Boston as chief executive, and was promoted the following year to CEO of Credit Suisse Group. He left that post after two years, and was serving as chairman of the hedge fund Pequot Capital when he was brought back to succeed ousted Morgan Stanley CEO Phil Purcell. At the time, Mack was seen as someone who understood Morgan Stanley's problems, and it was thought he would be able to bring the firm together better than anyone else. But praise for his leadership is not universal. "I was never a John Mack fan," said outspoken banking analyst Richard Bove of Rochdale Securities. "He didn't seem to ever have a clear strategic vision as to where he wanted to bring this company," Bove said. "As a result every time a new fad arose in the financial sector, he jumped on it." Gorman will be overseeing a very different industry from the one Mack navigated. Morgan Stanley's classification as a bank holding company means it can't use as much borrowed money as it used to, which was once an easy way to juice profits. Also some markets the company made money in, including some of the more exotic forms of mortgage-backed securities, no longer exist. One area Morgan Stanley will be looking to for growth is its retail brokerage business, which Gorman was in charge of. Morgan Stanley made a big bet on that business this spring when it combined its wealth management business with Citigroup's retail brokerage to form Morgan Stanley Smith Barney. It paid $2.7 billion to Citigroup as part of that deal. Bove said Gorman is a good choice. "He knows how to develop a long term strategy," Bove said. "I think what Morgan Stanley needed now more than anything is strategic direction."
[Associated
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