Hedge Fund Breakfast– Part 1: BloombergHF
Moderator Note (Andy): SenhorFinance is a hedge fund partner based out of Brazil and has worked in basically everything: PE, IB, S&T,and hedge funds.
IB folks spend some of their evenings in business dinners/drinks, guiltlessly enjoying overpriced food and booze (and depending on local etiquette, drugs and hookers as well). Been there, done that and yeah, it’s lotsafun, because (1) it all runs on expense accounts, (2) it leaves less time for “fuck my life” ruminations and (3) it makes you feel less guilty about skipping gym the morning after.
In HFs, hours are different. For the better, of course. I go home at ~7pm but I can’t party or drink like I used to, because by 8:30am a week’s worth of work must be already done. In this series, I will share my pre-open routine: how I organize myself, what I look for in my screens to generate ideas, what I read. And I call fellow/S&T folks to join: how do you prepare for your daily random walk down Wall St.?
1. Bloomberg: A prelude
You already know that, but in case you’ve been in a coma, living on the hills or something worse (corporate development, maybe?), the Mayor’s toy is indeed the shit. I could write hours about its functionalities, about how it raised standards in financial data gathering and analysis, about how it flattened information across agents or about how harder it was to master it 10 years ago, but I leave you only 3 tips.
Tip #1: know it like you know the alphabet, better if possible. If data is garbled, weird or not comparable, learn how to fix it. if defaults don’tyour style, change them (beginner), tweak them (intermediate), override them (advanced) or re-code them (Inferno). The point here is that every capex hour invested in learning Bloomberg will pay off handsomely in monkey work shelter over the rest of your career.
Tip #2: 2 screens = minimum, 4 = standard, more = douchebagness + distraction (unless you are in algo execution flow monitoring or crazy shit like that). Lobby for 4 screens. If that doesn’t work, bribe compliance, buy the gear and slip security a $50 to smuggle the shit into the office at 3am, I don’t know, whatever it takes. Why 4? See item 2 below.
Tip #3: BBG without BBXL only works for cheap, poorly researched, mass-oriented Hollywood movies. It’s like owning a Ferrari and only being allowed to drive in a 20mph school zone in Louisville, Kentucky.
2. The art of Bloomberg-skimming
Why 4? Because there is a load of data out there, and you need to know it better and faster. Before we embark into the layout itself, remember the golden rule: never switch screens or places. You need your Pavlovian reflex system to direct your sight to the right place whenever you hear trigger phonemes such as “FOMC”, “Draghi”, “ went under”, “Xstrata earnings”, etc. I take that so seriously that I might even still have LEH Equity in my price screen.
Speaking of, screen A is my price screen. Four columns, small font, names, Daily %, MTD, YTD, period. You want to have one of those because as I mentioned in previous posts, there is no experience you can transfer across functions/employers without a decent amount of price memory. That is not the same as always having an explanation for prices or even believing them, but you need to see them all day, everyday. I can probably draw many price paths I never asked BBG to graph. And now that I am past the all-nighter stage and can afford the luxury of sleeping at night, I dream of prices and order books at least twice a week.
Screen B is for news. Typically divided in three, bottom half with top news, linked to whatever I click on in the price screen (I may want quick news about Apple, 82% Fe Iron Ore or the BoJ rate). I split the top half between events (for me, earnings calendar and the like), and economic releases.
[Note about economic releases / announcements: with, no one makes quick money out of those anymore, but you will eventually need to dodge them, so be aware of the pipeline. That usually also means knowing the consensus numbers, and, most importantly, avoiding sleeping at risk when something big is due overseas while you enjoy your daily Valium fix]
Screen C is for a deep dive into whatever it is that your book/firm/desk/fund focuses on. Equities? Have a Launchpad with financials, multiples, peers, price graph & studies, all linked to one single security field. This makes life easier when you need themargin of a less known competitor without dropping your focal task. BTMMs for money markets, YA/Indicatives/Spreads for bonds. You got it already.
Screen D is open terminal, the one you actually type shit into. Finding fields for the API? FLDS it. Monitoring option vols? OMON it. Last but not least, this is the screen where you keep your chat screen, with all those annoying brokers desperately trying to dump some fresh shit that IB originated. Or maybe some seasoned shit that they brown-fingered into their banks’ books by accident, and therefore needs to go before it freezes into custody overnight.
That should do it for now. Does this look at all like your desktop at work? More importantly, does this look like a desktop you would enjoy looking at for hours and hours in a row? If it doesn’t, no 2/20 for you