To what extent should I indicate my interest in a particular employer in an application?

Career counselors say that one should tailor one’s cover letter to show interest in an employer you want to work for.

I agree with this in part. Of course, if a company, say Microsoft, is looking for someone with programming skills, it would probably help to mention somewhere in your cover letter or your resume that you have prior experience with programming.

However, some of my friends have taken this one step further and actually mention specific projects that they would like to work on. For instance, let’s say one of them apply for a job with Goldman Sachs. The local Goldman Sachs office is recruiting for a financial analyst, but gives little details as to what the analyst would be doing. My friend writes in his cover letter that he would like to join Goldman Sachs because he wants to be involved with deals like the merger between XYZ and ABC company last year. Or something like that.

To what extent would being so specific help one’s chances of getting a job? I feel that while it is good to show knowledge of a company’s operations, there might be other issues, such as:

1. What if the local branch of Goldman Sachs is shifting its focus away from mergers and more into personal investments for rich individuals? Then, the statement about wanting to work in mergers becomes irrelevant.

2. My friend could be pigeonholed (maybe that’s what he wants, but I don’t think so based on what he told me. He seems to be unsure of what area finance he wants to go into). That is, if you mention that you really want to do mergers, then the company might think twice before hiring if the financial analyst position they are hiring for does no work related to mergers but instead helps high net-worth individuals invest.

3. My friend risks getting the facts wrong. For example, maybe it was not the local branch, but rather the New York branch, of Goldman Sachs that actually made the deal.

So, my question is: How specific should one be when “tailoring” one’s cover letter for a position with a particular employer?