There were a couple discussions on the forum about the quality expected in a pitch when interviewing for a top notch fund, almost regardless of asset class (but within corporates). One particular comment jumped at me in that it referenced the amount of diligence (reference calls, proprietary research, cold calling, etc.) that can go into a pitch, even if just for an interview and having 1 week at your disposal. On that note, I'd like to source some of the best pitches you have ever seen (whether from Columbia's Value Investing newsletter, VIC, personal experience) to get a better grasp of what, practically, top-top pitches look like. I think I got a decent idea but been wrong before.
Thanks!
I've seem some crazy pitches during my career. We interviewed a guy who previously worked at BlackRock Fundamental Equities and he had one of the best pitches I've seen to date.
In 2011, he pitched Netflix (this was way before Netflix was on everyone's radar.) It was pretty comprehensive. He addressed the common questions:
- What's their TAM?
- If they penetration their TAM by X amount per year, what will their valuation look like?
- Why were they so successful?
- How will competitors respond?
- Why are their competitors ill-positioned to compete? Quantify it
- What will their unit economics look like at scale?
- How do you know management is good?
- How do we know that this isn't a FAD?
- Potential merger arbitrage opportunity?
- etc. etc.
He did very well addressing these questions. He then proceeded to address the future of streaming.
- He then presented his own market research basically explaining why he thinks streaming is the future.
- He then presented his own market research that showed that traditional movie theaters are declining and the vast majority of people prefer to watch movies/ content at home.
- He conducted his own research that showed that the onset of 'Smart TVs' will lead to Netflix's penetration to increase.
- He even pontificated that Netflix will be able to create their own content at scale.
- etc. etc.
What's really impressive is that this was all in 2011! Nobody was really paying attention to streaming back then.
Needless to say, he hit the nail on the head. Netflix is up 16x since then (35x at peak).
He worked with us for a couple years and then left to work at Renaissance. Definitely one of the best analysts we had.
RenTech hires fundamental equities guys?
This sounds pretty remarkable. What do you mean when saying “did his own research”?
I’m asking since for you guys interviewing him, it must have come as a bit of a surprise having such a bullish look on Netflix at the time. Either way, appreciate the comment, thanks!
I second this question, I'm curious to know too. Also, I'm curious if this was a pitch he had all along (maybe from his job) or did he create it from scratch for the interview. If the latter, that's a fuck ton of work for an interview
Couldnt that be considered a slippery slope arguement?
Interested in this topic as well. It's worth pointing out that a good pitch for an interview does not necessarily equate to the best pitch that an analyst would make to a PM, and a well-articulated pitch does not necessarily equate to a good stock pick. While not exactly "pitches", I think activist presentations are some of the best resources for learning what to look for.
Besides that, here are two entries from VIC that were incredibly prescient:
Applied Optoelectronics Inc (AAOI): Value Investors Club / APPLIED OPTOELECTRONICS INC (AAOI)
I'm not familiar with the name outside of this writeup, but this was posted quite literally at the stock's peak about a week before it crashed.
Celsius Holdings (CELH): Value Investors Club / CELSIUS HOLDINGS INC (CELH)
Another great writeup, but the author happened to exit right before the stock really took off.
Interested in seeing any amazing pitches for bonds since they are a bit harder to find than equities
Check out the distressed debt investing blog, very dated pitches since they were from GFC but very interesting stuff there.
Probably not exactly what the post is asking for, but when my fund interviews we usually give a case study for something that is already in the book. The last person we hired was from sell side last year. His project was to work up one my of current shorts and he did a way more thorough job analyzing this company’s major near term catalyst than even I had done (which was a sufficient amount of work to have a high conviction view). Very easy decision to hire him and he ended up crushing it this year.
It’s exactly what I had in mind. Would you expand a bit on “thorough”?
This is the scenario I hope to place myself in so keen to understand how this person managed to surprise you who were already knowledgeable on the stock
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