Great story. Can you share a list of books/articles that you found useful when learning investing by yourself?
CFACandidateLevel1:
Great story. Can you share a list of books/articles that you found useful when learning investing by yourself?
Thanks for the comment. My favorite books in no particular order:
The Intelligent InvestorCommon Stocks and Uncommon ProfitsThe Art of Value InvestingYou Can Be A Stock Market GeniusDhandi InvestorOne Up On Wall StreetThe Manual of IdeasValuationThe Education of a Value InvestorThe Quality of EarningsFooling Some of the People, All of the TimeThe Essays of Warren BuffettHedge Fund Market Wizard
Value investor working in the hedge fund industry.Portfolio Manager, Analyst at a $380+ million Texas-based value investing HF.Former Research Consultant, Analyst at a NYC-Based deep value and special situations HF.
Thank you so much. Another compelling story of hard work paying off. Good luck with your work.
Have a banana for being awesome, sir!
Also, inspiring story right there.
This is some solid stuff.
Lots of HFs are willing to talk to you if you are young, hungry and cheap (ie. free/nearly free). Some guys love the mentorship thing and/or the fact that you might be a free/cheap option, in exchange you work hard and learn a lot. In some ways it can be easier to get into than in a bank since you aren't always competing with resume drops at colleges. Lots of funds are thinly staffed/small. The key is to get a meeting (emails and phone calls "asking for 5 minutes of their time")...
I used to do Asia-Pacific PE (kind of like FoF). Now I do something else but happy to try and answer questions on that stuff.
What resources did you use to learn investing , economic and finance fundamentals?
In the future , do you think that eventually more hedge funds will gain more willingness to hire undergrads on a FT basis ?
Any advice for a college student looking for HF internships?
Congrats,Keep Grinding !
Shambles:
What resources did you use to learn investing , economic and finance fundamentals?
In the future , do you think that eventually more hedge funds will gain more willingness to hire undergrads on a FT basis ?
Any advice for a college student looking for HF internships?
Congrats,
Keep Grinding !
As far as resources for learning the fundamentals go, for me personally, first and foremost are books. Read and reread. For some of the best books I own, I've read them at least 5 or 6 times and still learn something new each time. I also learned a lot from old presentations given at the Value Investing Congress. They may be outdated, but can help you a great deal in your education process as you can pick the brains of the greatest. Lastly, the insights found from Top Ideas on Seeking Alpha and Manual of Ideas. Many of which are written by PMs. Manual of Ideas also has a brilliant youtube page.
On the topic of hedge funds willing to hire undergrads on a FT basis, maybe. Again, hedge funds don't typically hire undergrads due to a perceived lack of experience and HFs themselves not having the resources to train. But, this depends on the HF. In my first interview with the fund who I work for, I asked whether or not my status as an undergraduate will hurt me. His response was music to my ears, something along the lines of: "It won't hurt you, it won't help you. In the end, we care about what you can do." In other words, if an undergrad can demonstrate the ability to generate profitable ideas, I don't believe anything else will be an issue.
My advice for college students looking for an internship, dedicate the majority of your time on writing TWO compelling investment ideas, one on the long side and one on the short side. This is the easiest and best way to differentiate yourself from others.
Value investor working in the hedge fund industry.Portfolio Manager, Analyst at a $380+ million Texas-based value investing HF.Former Research Consultant, Analyst at a NYC-Based deep value and special situations HF.
Very solid, thanks for sharing.
Great story. Way to apply yourself and go for what you want.
As someone with several years of experience in the industry, I would suggest you start evaluating the firm you are currently with - in my best guess, less than 10% of funds actually consistently deliver performance, net of fees, that exceeds a passive index fund. They run on marketing fumes and literally destroy value for clients (that instead goes in the managers' pockets). Unless you don't care about whether or not you / your firm add value, I suggest you start figuring out which bucket your firm falls in. The longer you stay, the more likely you will be trapped in mediocrity.
username777:
Great story. Way to apply yourself and go for what you want.
As someone with several years of experience in the industry, I would suggest you start evaluating the firm you are currently with - in my best guess, less than 10% of funds actually consistently deliver performance, net of fees, that exceeds a passive index fund. They run on marketing fumes and literally destroy value for clients (that instead goes in the managers' pockets). Unless you don't care about whether or not you / your firm add value, I suggest you start figuring out which bucket your firm falls in. The longer you stay, the more likely you will be trapped in mediocrity.
Thanks for the advice. My boss's fund has been in operations since 2002 I believe and has a long-term track record of 15+% annualized.
Value investor working in the hedge fund industry.Portfolio Manager, Analyst at a $380+ million Texas-based value investing HF.Former Research Consultant, Analyst at a NYC-Based deep value and special situations HF.
not to throw shade your way but something seems fishy. If the fund has been throwing up 15%+ annualized returns for 12 years I'd expect they would be able to raise a good amount of money. At least enough to bring you on as an analyst full-time if that was their intention. In my experience hiring someone isn't about the money in the budget as much as the time/burden it takes to manage them. If they're going to commit to a relationship I don't see why they wouldn't do it all the way. I'd expect long-term, even if you do end up full-time with them, the economics of your compensation will never give you a fair shake.
DaveMCR:
username777:
Great story. Way to apply yourself and go for what you want.
As someone with several years of experience in the industry, I would suggest you start evaluating the firm you are currently with - in my best guess, less than 10% of funds actually consistently deliver performance, net of fees, that exceeds a passive index fund. They run on marketing fumes and literally destroy value for clients (that instead goes in the managers' pockets). Unless you don't care about whether or not you / your firm add value, I suggest you start figuring out which bucket your firm falls in. The longer you stay, the more likely you will be trapped in mediocrity.
Thanks for the advice. My boss's fund has been in operations since 2002 I believe and has a long-term track record of 15+% annualized.
What is the Sharpe ratio? $64K question. (Actually add several zeroes to that)
2: What marketing?
> 3: Reserved largely for billionaire geeks.
I think a $75mm fund with 15% returns is a good start, but if you're posting solid returns that hold up during tough periods for the market, I feel like the fund should be bigger after 13 years. It's possible you may not have gotten the whole story if all three numbers ($75mm, 13 years, and 15%) are correct. And while you've landed a dream job for a lot of folks (I would have killed to land at a hedge fund out of undergrad), it's important to keep your eyes open for opportunities at firms that are generating more compelling returns. (Remember to look at the Sharpe ratio, volatility, and drawdowns in addition to the total return figure. Sometimes AUM and the flow of funds can tell the story at the larger shops)
In any case congrats and best of luck to you and your firm.
Yeah. I don't want to take away from OP's excellent post or his accomplishment in breaking in out of undergrad, but $75M may be a little smaller than mid sized. It is a perfectly fine place to start though.
From a guy with a little more gray hair, I would add three questions that you want to try and answer before taking a job offer at a fund, especially if you have multiple offers:
-What is your AUM?-What is your Sharpe?-What does the flow of funds look like?
For a quant fund, I would also try and figure out:
-How much data do we really have to work with?-How is the trade execution? Tech infrastructure?-What is the culture like?
My guess is a lot of funds are like this one.
Borderline family office maybe some friends and family. I think it’s possible someone can put up those returns and just be a poor marketer or not a salesman or just likes not having the stress of managing an organization.
Those might actually be the best performing funds though volatile could be a bit crazier.
Great entry and congratulations @op
For students or others who are contemplating in getting into high finance you have to realize that it takes drive and dedication. Ask yourself, what are you willing to do to get the job or to show that you are motivated in doing such jobs and not simply by saying I am interested. Action means a lot than words.
While I am a CFA charterholder, I have not actually done anything close to what the op has done. Yes, I am interested in value investing and I strongly believe that it will deliver consistent results over the long term, but when it comes down to sitting down and actually conducting a thorough analysis, I am simply not motivated. There are competing priorities and right now, stock analysis is not high on the list.
So I think it's also helpful to ask yourself, what are your priorities? How are these going to help you get what you want?
Related Topic
Breaking into the Industry (Originally Posted: 07/28/2009)
What is the best way for a college graduate to work at a hedge fund? The problem is that there are no hedge funds that recruit at my school. However, I have a large list of hedge funds (of all sizes) and I plan on cold calling and asking about FT positions. I'll be targeting the smaller funds first. What do you guys recommend?
Are you interested in quant or fundamentals or technicals-based investing?
Do you have some non hedge fund work experience to draw upon? asset management is a tough first job to get for just about anyone. One idea would be to find a sector of the real economy you're interested in and maybe get two or three years of experience working in that industry. During that time, supplement your work experience with the CFA program or night classes in programming.
Another idea if you have an accounting background would be to target an entry-level position on the business side of a fund and then make the switch as an internal candidate when they are looking for someone for the investment team.
Unfortunately for this year's college grads, both sell side and buy side opportunities are quite limited. HF AUM have fallen quite dramatically and there was overcapacity of people to begin with- the industry is probably going to be half of its 2007 size going forward.
MichaelHutchens:
Unfortunately for this year's college grads, both sell side and buy side opportunities are quite limited. HF AUM have fallen quite dramatically and there was overcapacity of people to begin with- the industry is probably going to be half of its 2007 size going forward.
Not to mention the boatloads of people with significant experience who are competing for the same jobs. All else equal, why hire a kid with no experience when there are hundreds of more qualified people who have been recently laid off?
MichaelHutchens:
Are you interested in quant or fundamentals or technicals-based investing?Do you have some non hedge fund work experience to draw upon? asset management is a tough first job to get for just about anyone. One idea would be to find a sector of the real economy you're interested in and maybe get two or three years of experience working in that industry. During that time, supplement your work experience with the CFA program or night classes in programming.
Another idea if you have an accounting background would be to target an entry-level position on the business side of a fund and then make the switch as an internal candidate when they are looking for someone for the investment team.
Unfortunately for this year's college grads, both sell side and buy side opportunities are quite limited. HF AUM have fallen quite dramatically and there was overcapacity of people to begin with- the industry is probably going to be half of its 2007 size going forward.
I'm more interested in fundamentals (long/short) funds. I have some finance work experience.
When you say to get work experience in a specific sector, what do you mean? research analyst?
As far as the CFA, I plan on taking it as soon as I graduate. Thanks for the help.
As an intern in a FoF and meeting with many hedge fund investor relations/managers, I have not seen any fund that has an employee out of college. Hedge funds have very lean teams, and every person in the firm is selected carefully. Especially now when there are dozens of experienced people trying to get jobs, I would say the chances of joining a hedge fund out of college are virtually zero - unless you are an all-star math/econ genius and you get very lucky.
banker88 why do you have the need to mention you work in a FoF in every thread.
You are not going to get a job right now even if you cold called a million funds. I suggest you go find my post on starting to trade and go through all the steps over a couple of months. If you do them all you will know something about the business and you should have a firm grasp on at least one market. Then pick up your list of hedge fund contacts and cold-call everyone but instead of asking them for some charity, pitch them your favorite trade idea. Be like a boiler-room stock broker trying to sell that idea except instead of getting them to buy something you just want them to look at your resume. If a 22 year old cold-called me and said, "hi i'm so and so, I just graduated college, I follow XYZ market very closely, and I want to tell you about a trade idea i have..." I would at least be amused enough to listen for 4 minutes provided something else isnt going on. If the idea was good i would at least let them send me there resume and it would be a story i would tell other also..
this way you at least have a chance and if you fail at least you learned something about the business you want to get in to...
Bondarb:
You are not going to get a job right now even if you cold called a million funds. I suggest you go find my post on starting to trade and go through all the steps over a couple of months. If you do them all you will know something about the business and you should have a firm grasp on at least one market. Then pick up your list of hedge fund contacts and cold-call everyone but instead of asking them for some charity, pitch them your favorite trade idea. Be like a boiler-room stock broker trying to sell that idea except instead of getting them to buy something you just want them to look at your resume. If a 22 year old cold-called me and said, "hi i'm so and so, I just graduated college, I follow XYZ market very closely, and I want to tell you about a trade idea i have..." I would at least be amused enough to listen for 4 minutes provided something else isnt going on. If the idea was good i would at least let them send me there resume and it would be a story i would tell other also..this way you at least have a chance and if you fail at least you learned something about the business you want to get in to...
Thats a really good way to stand out from the rest of the crowd, especially with so many applicants. What thread are you referring to?
Hedge Funds that hire kids out of Undergrad are D.E. Shaw, Citadel, Bridgewater, etc. Thus, you basically have to have the HYP pedigree to even be considered. Those HF's are large enough to train and work with inexperienced kids (meaning no real prior trading experience). In your case, the best avenue to break into a HF would probably be to get on with a S&T or Prop role and network into a HF. You can also go the quant way and get an MFE or something along those lines. My 2 cents.
lots of networking. most hedge funds don't "recruit" out of school anyway. i don't think you'll have any luck with cold calling unless you try Bondarb's method. it's probably easier to see what kind of network connections you have and ask to talk to them about what they do, the industry, advice, how you can get into the biz, etc rather than straight up asking for a job.
I would also point out that this is not an easy industry to work in.
Jim Simons, head of Renaissance Technology, is a paranoid nutjob when it comes to competition. He's arguably one of the smartest and perhaps hardest working people in this industry (certainly smarter than me), and even he can't sleep very well at night.
I don't want to scare people away, and there's money for everyone, but your competition is a paranoid, hardworking insomniac billionaire supergenius with an IQ ~180 and a collection of servers and data that is O(NSA+CIA). Hedge funds are a place for people with a lot of ambition, but you have to temper that ambition with an even bigger dose of humility and moderate expectations.
While that's true, at the less senior levels, the pressures are very different. Besides, for most of the serious people who self select for this kind of industry (not me), I think that they'd be up and stressed no matter what. Some people are just stressed out by nature - if they aren't at the top, they're stressing about how to get there or why they're not there and if they're at the top, they're stressing about how to stay there.
Life's is a tale told by an idiot, full of sound and fury, signifying nothing.
IlliniProgrammer:
I would also point out that this is not an easy industry to work in.
Jim Simons, head of Renaissance Technology, is a paranoid nutjob when it comes to competition. He's arguably one of the smartest and perhaps hardest working people in this industry (certainly smarter than me), and even he can't sleep very well at night.
I don't want to scare people away, and there's money for everyone, but your competition is a paranoid, hardworking insomniac billionaire supergenius with an IQ ~180 and a collection of servers and data that is O(NSA+CIA). Hedge funds are a place for people with a lot of ambition, but you have to temper that ambition with an even bigger dose of humility and moderate expectations.
Agreed that it's competitive, but have you ever considered that not every hedge fund is a macro or quant fund? Many long/short funds are beating Rentech's returns and don't have a single person with over 130 IQ.
SanityCheck:
Agreed that it's competitive, but have you ever considered that not every hedge fund is a macro or quant fund? Many long/short funds are beating Rentech's returns and don't have a single person with over 130 IQ.
Sure. There are a lot of traditional funds out there. But I think that there's a lot of stuff that used to be an art- managing risk, finding cheap securities, that has become more of a science over the past 20 years. The days of scanning through ValueLine reports looking for stocks with low P/Es ought to be over.
BTW we beat Rentech's returns too, but I think it's more luck than skill. If you look at 20 year returns, they get tougher to consistently beat on Sharpe by just about anyone.
In any case, every hedge fund can benefit greatly from a risk model and from portfolio optimization. If you're not managing your risk with a factor model (or perhaps something more advanced) and either running it through an optimizer or at least trying to optimize by hand to reduce risk while preserving your edge, you're taking risk you don't need to take and leaving Sharpe on the table. And in order to do this stuff well, you really want a guy with a strong math background. Maybe you can pull it off without a graduate degree or even a STEM major but you need someone with some background in linear algebra and convex optimization (or at least calculus and stats if you're optimizing by hand)
So in some sense every fund- even the traditional ones- can really benefit from having a quant to help manage the portfolio. Or at the very least if you have the budget for 20 employees, and your fund has more than a dozen or so stocks in its portfolio, one of your employees should know how to invert a matrix, know what cVar means, and should have some input on how the portfolio is allocated or hedged.
username777:
reverse engineering $75M current AUM compounding at 15% p.a. for 13 years....
$75M / [(1 + 15%)^13] = estimated $12.2M starting AUM, assuming zero flows into the product. certainly seems strange.
The way fund flows work in reality is that investors tend to buy high and sell low- much to the chagrin of fund managers. If you pull half your money out at the bottom and add it back at the top, where top is 2x bottom, you have 37.5% less money than you'd have if you just left it in.
So in an information equilibrium, fund flows tend to reduce AUM growth. (Investors pull out at the wrong time)
Debating the size/performance history of the fund detracts from the OP's point, which is the process he used to break into a HF out of undergrad. The fund's prestige almost doesn't matter at this point. Just be happy for him that he doesn't have to spend the next couple of years working as a monkey cranking out spreadsheets for clients who don't care.
Congrats, and good hustle.
7xEBITDA:
Debating the size/performance history of the fund detracts from the OP's point, which is the process he used to break into a HF out of undergrad. The fund's prestige almost doesn't matter at this point. Just be happy for him that he doesn't have to spend the next couple of years working as a monkey cranking out spreadsheets for clients who don't care.
Congrats, and good hustle.
Yes. Actually OP is the kind of person who has a good personality for this industry. Lots of hustle and modest expectations.
OP did not need to work at a DE Shaw or SAC to be happy.
OP is perfectly happy just to jam a few toes in the door.
IBD people gunning for a very large fund also need to know that they're on a bit of a different path than OP and that both paths are perfectly valid. We have to respect OP's choices and advice but we also can't invalidate the decision that other people have made to pursue two years in IBD. I would argue that experience gives their careers a little more stability.
Finally the last point is that while prestige and size are poor measures to make decisions on, not all hedge funds offer the same opportunities for career growth and becoming a better investor/researcher/risk manager/quant. It's important to understand how to generate returns in order to grow your career. Not all X% returns are created equal; not all Y Sharpes with X% returns are created equal. And there is an enormous amount to learn about risk management, investing, managing people and investors, and the like. In general there is probably more to learn on the pure investment side at the funds that post "better" returns (keeping in mind that there are lots of ways to measure that) and attract lots of capital.
So that's why while OP is off to a good start, some of us are just chiming in that there is a lot of room to also grow and learn in this business, and that OP just needs to keep his eyes open.
Hey guys, to clear some things up, the fund managed $400M million at its peak, but capital was returned to investors during the recession. As far as I'm concerned, the fund's AUM consists exclusively of the PMs own capital so I think he's content with where he is now. He's a fairly well known guy in the value investing world.
Value investor working in the hedge fund industry.Portfolio Manager, Analyst at a $380+ million Texas-based value investing HF.Former Research Consultant, Analyst at a NYC-Based deep value and special situations HF.
I definitely enjoyed the write up and Illini's comments.
I don't know if it's only me but I always liked the quant approach or Soros like trading instead of talking with CEO's and Buffet like investing, it just so boring, investing should be dynamical and competitive. Quant trading makes you develop a broad universe of skills and it's exciting to create a strategy, backtest it, optimize it, throw it in the market and watch it battle to the death with other algos, screening through 10k-s and forecasting the next quarter GDP output is no fun. IMHO
You killed the Greece spread goes up, spread goes down, from Wall Street they all play like a freak, Goldman Sachs 'o beat.
In the HF side myself and agree more with IP. Sanity Check may have higher annualized returns but what is the vol associated with that number? Given what I know about my counterpart group at IP's fund and their rigorous process for managing exposures I think they are better protected against large drawdowns than say a Pershing. Granted, they do very different things, but IP is saying look at the Sharpe.
Now it's possible Sanity Check's PM does have a high Sharpe to go with those impressive return numbers, but how does one know that he isn't just one of those lucky coin flippers who hasn't blown up yet? If you had to bet on an ex ante PROCESS instead of an ex post track record, I would put my money with a fund like IP's.
This has been a very difficult past five years for hedge funds to be fair. The S&P 500 has floated up at a very fast pace and a lot of stuff that used to work hasn't done as well.
When the SPY starts going sideways again, SanityCheck's fund will start to shine.
Let's not be too hard on folks here. We work in a tough business. Everyone wants to do stuff a bit differently.
My only point is that smart investors appreciate a good risk model. And PMs who believe in their source of alpha will want to hedge away their risk- or at least know what risks they're taking. There's also stuff that's commercially available and pretty easy to set up.
Wait a second, I visited this post and you took a polite, but massive dump all over the OP. I point out how well my Vanguard fund has done and I'm the jerk? I don't know if the 17% return was market neutral or levered 3 to 1. If you're paying 2 and 20, I don't want to hear about a tough environment. Performance in the context of the risk taken to get that performance is all that matters.
From Non-Target to BB CEO: My StoryGo f*ck yourself.
I didn't say that about you (actually I added your name because I was referring to a Lehman risk product but figured that would be best discussed offline). I just think the world is a nicer place when people are nice to each other. As you are well aware we work in a brutal industry and there is no need for us to make it more brutal than it has to be.
To respond to your point, what you want is an uncorrelated return that is well behaved. If you have that, you get a better performing portfolio overall than the S&P 500. If you add two uncorrelated returns that are positive, you get a better Sharpe than either return on it's own**. (Making certain assumptions about kurtosis and skewness)
It should be orthogonal to the S&P 500. It should not go down when the S&P 500 goes down.
Quant funds try to be orthogonal to the S&P 500. And actually if you look at quant fund returns, my understanding is that we killed it in September and October 08, and lost our shirts during the rally in March and April 09.
So if the S&P 500 is giving you 17% and we're giving you 15%, that's still fine. We're still doing our jobs and have a place in your portfolio. Depending on our variance you may even want to lever up on us to make that 15% return 20%. Now, if our returns have massive covariance with the S&P while charging 2+ 20 and returning less, that's when it's time to dump us.
My point is that from a portfolio allocation perspective return doesn't matter because you can achieve any return with the right leverage. To make portfolio allocation decisions you need to look at Sharpe, market covariance, and the heavy tail analysis of returns. The risk that you want to allocate to our strategy determines your return.
In reality returns aren't quite as well behaved as a normal distribution, so the average return does matter. If you're putting up 100% in potential risk, you don't want a 3% return. But if returns are reasonably high and well behaved, it's better to think in terms of Sharpe and covariance.
IlliniProgrammer:
I didn't say that about you (actually I added your name because I was referring to a Lehman risk product but figured that would be best discussed offline). I just think the world is a nicer place when people are nice to each other. As you are well aware we work in a brutal industry and there is no need for us to make it more brutal than it has to be.
To respond to your point, what you want is an uncorrelated return that is well behaved. If you have that, you get a better performing portfolio overall than the S&P 500. If you add two uncorrelated returns that are positive, you get a better Sharpe than either return on it's own**. (Making certain assumptions about kurtosis and skewness)
It should be orthogonal to the S&P 500. It should not go down when the S&P 500 goes down.
Quant funds try to be orthogonal to the S&P 500. And actually if you look at quant fund returns, my understanding is that we killed it in September and October 08, and lost our shirts during the *rally* in March and April 09.
So if the S&P 500 is giving you 17% and we're giving you 15%, that's still fine. We're still doing our jobs and have a place in your portfolio. Depending on our variance you may even want to lever up on us to make that 15% return 20%. Now, if our returns have massive covariance with the S&P while charging 2+ 20 and returning less, that's when it's time to dump us.
My point is that from a portfolio allocation perspective return doesn't matter because you can achieve any return with the right leverage. To make portfolio allocation decisions you need to look at Sharpe, market covariance, and the heavy tail analysis of returns. The risk that you want to allocate to our strategy determines your return.
In reality returns aren't quite as well behaved as a normal distribution, so the average return does matter. If you're putting up $100K in potential risk, you don't want a 3% return.
I know that, but here are the problems:
No risk management is clearly a bad thing, but 100% faith in quant models is probably just as bad and potentially disastrous (see LTCM, where the smartest guys in the room forgot about basics of trading....the sharks circle when there's blood in the water)
Nobody here isn't being nice. Saying that the other guy's fund will do well when markets go sideways is not nice, it's just phony. You don't know how ithat fund will perform, you don't even know what fund he's referring to. I've stated some facts and inferred a few things, nobody is calling one another names.
In the marketplace of ideas, some are good and some are bad. Calling out bad ideas is not equivalent to being mean. We're not 4 year olds here (well, maybe a couple are close).
From Non-Target to BB CEO: My StoryGo f*ck yourself.
Dickfuld, I thought you were in the industry? Or are you fixed income only?
Your questions / comments are a bit surprising to me since the model is well known even among junior analysts.
Single PM, 0 leverage, 55-70% net long, and none are market neutral. And you want to compare this vs. your vanguard over a bull cycle? Hmm.....
Your comments pertain more to a SPO partners which is concentrated long-only. Oh and they (SPO) did beat your vanguard returns by quite a large margin over these past few bull market years.
I'd venture most Tiger cubs would too if they were long-only.
Macro funds are great. So are concentrated long/shorts. There are plenty of models that work for different investors. The point of posting is to provide unbiased information to the silent majority of browsers of WSO who try to get authentic information. Not satisfy your ego on which "strategy" is better.
I believe Illinois' views are entirely correct for his experiences, but my original point is just that a quant has no real value in a Tiger cub model.
Hope that helps.
70% net long is exactly what I would have expected. But, maybe I'm the only one who thinks that beating the S&P by a 1.5% in a fund that is not daily liquid is not that is worship worthy.
So, what was the vol of your fund over this time period? Once again, 70% net long still doesn't necessarily tell you how much risk you're taking when we don't know the composition of your portfolio. Not that I really care, but you were the one bragging about fantastic returns with (relatively) low IQ PMs.
From Non-Target to BB CEO: My StoryGo f*ck yourself.
Dickfuld, I thought you were in the industry? Or are you fixed income only?
Your questions / comments are a bit surprising to me since the model is well known even among junior analysts.
Single PM, 0 leverage, 55-70% net long, and none are market neutral. And you want to compare this vs. your vanguard over a bull cycle? Hmm.....
Your comments pertain more to a SPO partners which is concentrated long-only. Oh and they (SPO) did beat your vanguard returns by quite a large margin over these past few bull market years.
I'd venture most Tiger cubs would too if they were long-only.
Macro funds are great. So are concentrated long/shorts. There are plenty of models that work for different investors. The point of posting is to provide unbiased information to the silent majority of browsers of WSO who try to get authentic information. Not satisfy your ego on which "strategy" is better.
I believe Illinois' views are entirely correct for his experiences, but my original point is just that a quant has no real value in a Tiger cub model.
Hope that helps.
I agree with a lot of what IP has said here content wise but the faux humility is hilarious
Also I think it makes perfect sense that a group of folks that would consider a secretary more useful than a quantitative guy would have lower IQs
Finally I'm not sure on what planet a 75 mn fund would be considered mid-sized but it's certainly not this one. Let's call a spade a spade
Going Concern:
I agree with a lot of what IP has said here content wise but the faux humility is hilarious
Also I think it makes perfect sense that a group of folks that would consider a secretary more useful than a quantitative guy would have lower IQs
Finally I'm not sure on what planet a 75 mn fund would be considered mid-sized but it's certainly not this one. Let's call a spade a spade
All three points are spot on. Faux humility is the perfect term to describe what happened.
From Non-Target to BB CEO: My StoryGo f*ck yourself.
Probably the best post i've seen on WSO to date. So relevant to my current situation honestly, haha.
Would you mind answering a question through PM?
Lion Cub, absolutely
To clear some things up, the reason why I referred to the fund as "mid-sized" is because $75M in AUM according to the SEC is considered a mid-sized advisory firm.
According to Item 2.A in Form ADV:-A large advisory firm has AUM of $100M or more-A mid-sized advisory firm has AUM of $25M or more but less than $100M
Relatively speaking, I understand $75M in AUM is not a lot. I guess I shouldn't be so technical next time.
Value investor working in the hedge fund industry.Portfolio Manager, Analyst at a $380+ million Texas-based value investing HF.Former Research Consultant, Analyst at a NYC-Based deep value and special situations HF.
It's probably because the SEC hasn't updated anything since like the 90s (bit of an exaggeration but you get the point...)... many definitions regarding what constitutes as HNW or income are hilariously outdated.
Either ways, I apologize for nitpicking on the size of the AUM. I didn't mean to detract anything from your accomplishment.
What's a Lion Cub exactly? I heard elephant cubs usually have the highest returns.
There's always a bit of arrogance to these 'I MADE IT' posts - but it's a bit funny given it's not a full-time role. Going Concern nailed this thread.
SanityCheck:
What's a Lion Cub exactly? I heard elephant cubs usually have the highest returns.
tiger cubs > lion cubs > elephant cubs
Southern Gent,
What resource would you say helped you best develop your modeling skills?-Reading and rereading the book "Valuation" by McKinsey & Company. Also, build your own model and learn through trial and error.
Do you feel you are best suited for value investing? Or did you choose it because it was easier to learn, more popular than other strategies, etc?-Yes, I believe I'm best suited for value investing because it fits my lifestyle and personality. My parents understood the value of purchasing goods at bargain prices and instilled that mentality into me.
Value investor working in the hedge fund industry.Portfolio Manager, Analyst at a $380+ million Texas-based value investing HF.Former Research Consultant, Analyst at a NYC-Based deep value and special situations HF.
- $75mm might be considered mid-sized in Ethiopia.
- Who are your firm's clients? What HF would pay for research from a 22yr old who's best credential is being a SeekingAlpha contributor? As far as I can tell, the only value of this is just so you can put "Director of Research" on the resume. You're basically a kid with an eBay store who calls himself an entrepreneur and puts "CEO and Founder" on his LinkedIn profile.
- Who is Tom Beevers and why should we care that you two are friends? Any other names you want to drop that don't matter?
Anyway, congrats or whatever.
Under my tutelage, you will grow from boys to men. From men into gladiators. And from gladiators into SWANSONS.
Flake, to address your questions/comments
1.$75mm might be considered mid-sized in Ethiopia.-Okay, good to know
Who are your firm's clients?-The HF? No idea. Above my pay grade dude. I'm just there to do research. My equity research firm? One hedge fund for whom I do research for and individual investors who pay me to teach them about value investing. I'm just a one man shop managing both the business side of running a LLC, as well as the underlying research I produce. I do have a tech intern that makes my life marginally easier tho.
What HF would pay for research from a 22yr old who's best credential is being a SeekingAlpha contributor? As far as I can tell, the only value of this is just so you can put "Director of Research" on the resume. You're basically a kid with an eBay store who calls himself an entrepreneur and puts "CEO and Founder" on his LinkedIn profile.-A kid that can demonstrate the ability to add value through his research. I guarantee you no HF would have responded to just my resume and cover letter alone. The two investment ideas I submitted were the primary drivers of the responses I received. Also, at the HF I work at, to gauge my ability, the PMs assigned me a research report to do and I only got the job after impressing them with it. As far as me being a kid with an eBay store who calls himself an entrepreneur goes... hahaha, can't argue with that, but employers sure love entrepreneurial spirit!
Who is Tom Beevers and why should we care that you two are friends? Any other names you want to drop that don't matter?-Tom is a former portfolio manager at Newton Investment Management, one of the largest asset managers in England. I mention Tom because he is my mentor and I owe him a lot of credit for the success I've had. The purpose of mentioning my relationship with Tom is merely to highlight the importance and value of finding a professional mentor willing to provide useful assistance and advice. As long as that individual can be a great mentor as Tom has for me, who cares about who he is?... some other names I want to drop that don't matter... I just wanna thank god...
Overall, I understand your criticism and that's the beauty of it. Yes, what HF would pay for research from a 22 year old who only posts ideas on Seeking Alpha? Virtually none, but through persistence and a good mentor, I was able to find one. The purpose of my post is to help inspire kids in the same position I was in. I understand an internship experience at an IB outweighs putting "Director of Research" on my resume and employers know that as well. But, I still put it on my resume to get them to ask about it so I can respond with answer that illustrates my passion for research, investing, as well as my entrepreneurial spirit.
Value investor working in the hedge fund industry.Portfolio Manager, Analyst at a $380+ million Texas-based value investing HF.Former Research Consultant, Analyst at a NYC-Based deep value and special situations HF.
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anonguytoibd:
This thread is informative and the guy is only trying to help out. I don't get the hate.
It looks a lot like an advertisem*nt for his website/firm
Thanks for your. Can you share a list of forums/blog as seeking alpha that you found useful when learning investing by yourself?
Great post. Thank you for all the helpful information. Going to get grinding.
You're a gutsy kid and I love your positive attitude. I wish I had even half your hustle & savvy when I was your age. All the best in the future, and please don't get jaded over time. The HF industry has some of the most egotistical little pricks on the planet and being around them will sap your spirit...
A sentence of advice: Keep your expenses low, save like a muthafr, and hang out your own shingle before you hit 30.
Thanks for sharing your story.
As I was/am in a similar situation as you, I have a few questions:
- Did you ever invest your own money? If so, did you ever reference your track-record/return performance?
- If not, how did you come about in order to gain credibility on your investment ideas?
- Lastly, what is your GPA and was this ever a concern/topic in your interviews?
HvaCapMar:
Thanks for sharing your story.
As I was/am in a similar situation as you, I have a few questions:
- Did you ever invest your own money? If so, did you ever reference your track-record/return performance?
- If not, how did you come about in order to gain credibility on your investment ideas?
- Lastly, what is your GPA and was this ever a concern/topic in your interviews?
Also Pm'd, but for everyone else-
Did I ever invest my own money - Yes, I currently invest 75% of my income into equities. During college, I made my mom open a $3,000 brokerage account for me to buy stocks with. Did I ever reference my track record - Yes/no, I made a detailed excel on the stocks I recommended on Seeking Alpha. I didn't reference my specific account given the fact that a few of my positions didn't really have a thesis (BRK-B for example, I just like Buffett)
GPA- Bad for hedge fund standards. Did it come up in an interview...no, not once and in total I did about 12-13 interviews. The subject of the interviews were mostly about my investment ideas.
Value investor working in the hedge fund industry.Portfolio Manager, Analyst at a $380+ million Texas-based value investing HF.Former Research Consultant, Analyst at a NYC-Based deep value and special situations HF.
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It's been a while since anyone posted in this thread but here goes. The link to your long/short research ideas is not working. Can you please repost?
I think I have Dave's short thesis on one of my hard-drives, but I don't have his long thesis. I don't think he's as active as he was before since he got his analyst position. I can took a look if he doesn't respond.
That's really amazing and I'm glad everything is working out. I think I'm more impressed that you wrote an entire investing thesis after having just read Intelligent Investor and got it pubed on SA. In any case, living the dream my man, keep it up.
Hoping for hedge life.
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"When you stop striving for perfection, you might as well be dead."
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