Told You So
To the CIO of a SM fund:
Told you so. You rejected me, saying that it would be a bad fit because my judgment was questionable from the case study. I gave a short recommendation and you were building a position long. Since then, the stock is down 30% and S&P500 is up 10%.
Maybe I was lucky this time, sure, and you may be terrific investor, but you jumped to a conclusion on me and you ended up being terribly wrong. You would never have an open mind to reach back out to reconsider, either.
I wish I could send you this email.
That's the thing I love about this business. The market always has the final say. Yea it sucks that was the feedback you got after an interview, but the only validation you need is the stock being down. Obviously don't send an email like that, because I bet he remembers anyway (who wouldn't remember someone making a case against one of their longs). Just keep your head up and get them next time.
Most investors win only 60% of the time.
This is bullshit. By definition investors are right on average 50% of the time. If you’re really really good you might be able to do 55
Same. Your performance is not a qualitative concept evaluated abstractly. What were your returns? You can get as creative as you want in explaining the why of performance but its directly observable in the market; are you a winner or a loser? It’s the p and l that decides not some asshole senior but still junior employee with his own agenda and lack of interest in yours, whatever it is
Send the email! Don’t be a pussy - stand in business
Well, I love this, but did the stock tank due to your thesis being correct? Have to be intellectually honest there. Good job, anyway, send that email!
Good question. Thesis was correct. This wasn’t some random thing.
I find this weird in the HF space, if you take a position or view that is opposite of the fund or interviewer, there's a higher chance you'll get dinged or the person won't like it. But aren't HFs always talking about being intellectually honest and understanding different views on a company? If you look at it you don't really know if someone is right or wrong during the interview since your thesis is about the future. Also, wouldn't that lead to groupthink by just hiring people that agree or think only like you do. I get it a candidate might not move forward because their research wasn't good or they were looking at the wrong points, but having an opposing opinion shouldn't be grounds to get dinged. Its actually a red flag IMO if an investor can't listen to opposing views. Plus investing is as much art as is science, and in science people can look at the same data and still come up with different theories and conclusion.
Same reason why all companies talk as if they're saving the world when they're just an accounting firm or some dumb shit lol. At the end of the day, we're all human and we don't like people, especially juniors, who constantly disagree with us. I wish companies acknowledge their very human biases instead of pretending that they're beyond that lol
Overconfidence bias is absolutely rampant in the HF industry. I mean, who wouldn't be confident in themselves when they went to a good school, got a top job in finance, and balled out enough in that job that they're running their own fund? The more successful a fund is, the worse this gets. Like imagine being Tiger Global and everything you touch turns to gold... why not raise a massive VC fund? You are among the best investors in the world after all.
Staying intellectually humble is really hard. The Romans had a saying "ne supra crepidam sutor iudicaret" (Let the cobbler not judge beyond the shoe). I think you can generate real alpha if you just inject that shit into your veins.
Tiger VC fund was an absolute mega mind cash grab tho
I think its hard to stay humble when everyone around in the same firm is overconfident in their abilities, you end up thinking that you are definitely correct in your actions.
this is an interesting point, namely how can you keep the identity of your fund based on investment strategy when a free for all environment is the ideal HF model for promoting intellectuallity. Why would those people even be interested to work for the same fund if their ideas are totally different?
I think “free for all” is a very different concept than the intellectual honesty and humility points posted by those two above. One is culture/managing people and one is investment philosophy
Thing is you could have the same strategy but still end up with different ideas. You make a good point of hiring people who are more attuned to the strategy you practice, for example its not best to work at a fund focused on quarterly earnings if you believe in holding for 2-3 years. But even if you follow the same investment strategy, the ideas will and should be different because we all think differently based on our experiences and observations.
Thinking differently or having different views shouldn't be punished. I've seen this happen when a fund gave my friend 3-4 companies to look at, and he came up with his own opinion which lead him to pitch a company as a short but the fund didn't like because they were long on it and they decided to not move further. Many funds do not have the humility to listen to a dissenting opinion, which leads to group think no matter how smart you are. And I've heard numerous similar stories on getting rejected for pitching an opposite bet.
A lot of SPMs should be purely objective and welcome diversity in thought and view but just as we see with everything else there’s a big confirmation bias and a desire to promote people who agree with you hence creating an echo chamber
Yeah the book on Bridgwater mentions about this where the firm is basically a cult following for Dalio nerds, can't really see much independent thinking going on over there.
First, nice call.
I'm sure you feel vindicated, but this is a humbling business. Better to be graceful, than otherwise. Single data point is not really relevant at all, unless you can point to a track record of "wins" you got nothing man.
That guy will look at your email and be assured that he made the right decision. Nobody wants to work with the guy who takes victory laps on their wins.
I agree, that’s why I said I wish I could send this. Instead I am posting to an anonymous forum.
Cooler heads prevail. A lot of us can relate. Just keep chugging, try to be right more than wrong and be humble. Hubris ends careers
Should use the case study if you interview for another firm.
It would be an example of you providing ideas but not being listened to + what you could have done to convince the PM.
If I could guess the stock you are talking about, I would say SNAP.
Nice call, it's great to see your thesis play out and be vindicated. But keep in mind this doesn't mean anything statistically. If you are right 51% of the time, you have an edge, and if you are right 49% of the time, you are a bad investor, but the difference between the two cases is extremely hard to see, only a long track record will show the diff.
Not even just that simple too. Would have to take into account the magnitude of wins vs losses. Nicholas Nasim Taleb was wrong most of the time but his wins were just so big it more than made up for it.
Is the stock down for the reasons you explained to the PM?
Yes sir
I would send that email but not in this tone. First, do the exercise all over again and see if 30% down made sense, is it a long/short/hold from here. Then identify how your thesis has translated to today. Then summarize it, prepare. At that point send the email and see if the CIO agrees/disagrees now.
How do you word it so that it's not coming off as "f u I was right"?
Will always come off as “f u I was right”. But not a matter of right/wrong is matter of doing the exercise and creating a view from todays price. Once that is complete one will know how to word their view going forward. Major chance the CIO ignores this all together. But if CIO wanted to hire someone today, they are not hiring them for the last 30% down. Also imagine CIO came back and says yah we still holding X, but we see a similar thesis on other names, which at that point maybe an opening to hear their view.
Same with another firm, they want your thesis today not just 30% down move.
I think this would be great in the multimanager PM setting, but might backfire for SM.
I think he has a different decision tree, which is whether to double down (thesis intact, sell-off overdone) or cut the position (no longer fits investment philosophy, broken thesis). He isn’t realistically going to flip short or hold. Furthermore, he can avoid the subsector for years and focus on other areas that worked for him. He doesn’t have to maintain views nor keep coverage.
He’ll want a re-underwriting. I’d have to say either your thesis is broken (which will come across as a victory lap) or your thesis is ok (which is inconsistent with my work) or this is a reset and good entry point (which makes me look more like a trader than researcher in the SM setting). If I had trust built with him, maybe that third option would be palatable.
The hiring process in public equities is an absolute shitshow/farce. You're better off not being different throughout the interview process because at the end of the day, the industry likes groupthink.
At least you got the feedback. I got ghosted after flying out, dining, pitching, and being right
That sucks to hear, sorry
Oh he knows he's wrong and you're right. Tbh I wouldn't do the email thing, but I will always 'haha' any of his Linkedin posts from now on.
If you think that CEO is a clown, then act accordingly, laugh at him.
The endless laughing will irk him for sure, and he will know why.
Been there too, pitched a short during the case in my last process and the PM said it’s the only short he got out of all applicants in the process and that he too was long. Nailed the year end price target with the stock declining ~20% due to the main driver in my thesis. Always wanted to send an email and re-attach my detailed case.
Did you stay in contact?
I know the feeling. I was dinged on an interview 5-6 year ago for saying I would never touch Chinese markets due to political and financial unreliability. Look at the Chinese market now.
I heard they are still interviewing new people for the role, months later.
Insufferable. I can’t imagine why you didn’t get hired. Blud doesn’t know the difference between outcome and decision.
OP, here's a way to subtly send them the message you want them to hear. I'd imagine you sent your case presentation to them via email. Reply back to them and ask them for a phone call to catch up, as you feel like you could use some "career advice" and you feel like they might have some words that might help. They're obviously going to see the email chain where you sent in a short, biting themselves.
Never confuse the outcome with the process.
The process was broken. They liked the work I did, just not the recommendation. They said the bear case wouldn’t play out, and, if did, it was already in the price.
It did play out and it wasn’t already priced (by -40% relative performance!)
I think this guy is talking about confusing stock outcome with good investment process, not the interview process
I actually had a situation where I didn't get an offer because I disagreed with the PM then after I was right he gave me an offer. This is an edge case though. It won't affect the outcome, but why not send a more polite version of the email?
Nice! Did the PM reach back out to you, or did you follow-up after?
pm laughed me out of the interview and told me i was incompetent then i ended up calling a big event and he gave me an offer right after. his head of research had a big position with the opposite view so i guess maybe to save face they just shat on me the whole time. i ended up saying no because he was a huge asshole. but yes he reached out to me and gave me an offer right after. i think honestly this is an edge case. i think generally with case studies you want to pander to what people already believe and saying i told you so usually won't work. but if you already heard a no, i also don't think that it hurts to try.
Had the same thing happen today with VKTX. I feel your pain man…
Kinda want to circle back to people and say “how about VKTX”
Even a broken clock is right twice a day.
words I live by
Why are you certain that the trade is over? And the thesis for the either the long/short has fully played out? Trades go south for a little bit but thesis' remain intact.
However, you shouldn't be to be discredited or overlooked, as you're wrong until you make money.
Some PM's have the humility and enough wins under their belt to appreciate the competitive nature/ballsiness inherent in any comment you make that is along the lines of "I told you so..." but some, typically younger ones, will say nothing with their mouth as their expression will do enough damage and an analysts life could be hell for a while. The latter is unfortunate and similar to my situation.
I'd clearly have a view on the direction of a name following some due diligence that the PM was engaged in with me, like a mgmt meeting, conference or idea dinner. It could be well defended or just an initial take...didn't matter...if during our discussions it became clear I thought it was a long and he was uninterested or did not agree, I would forget that stock ever existed unless it went down with a thesis still intact and now a opportunity that's even more compelling. Situations like that will make your career (kidding)
.
The CIO aside, you are also being an arrogant dumbass. I mean, congrats - you got a play right. At best though, you failed to convince him. I pitched NVDA prior to triple digits in price, in a point in time that was far from the AI discussion…PM did not buy it, wasn’t convinced. I massively got it right, sure, but the only thing this event really does is question my ability to pitch. Being a salesman is a huge part of the job, if not the main one.
People can always reject your pitches, and it may not be your fault, but to not even consider this as a factor that dinged your candidacy…the CIO dodged a bullet.
Besides, what do you want? A medal? You are only as good as your last trade. And that trade gets very old, very fast.
Chin up, grind on, and keep moving
The CIO aside, you are also being an arrogant dumbass. I mean, congrats - you got a play right. At best though, you failed to convince him. I pitched NVDA prior to triple digits in price, in a point in time that was far from the AI discussion…PM did not buy it, wasn’t convinced. I massively got it right, sure, but the only thing this event really does is question my ability to pitch. Being a salesman is a huge part of the job, if not the main one.
People can always reject your pitches, and it may not be your fault, but to not even consider this as a factor that dinged your candidacy…the CIO dodged a bullet.
Besides, what do you want? A medal? You are only as good as your last trade. And that trade gets very old, very fast.
Chin up, grind on, and keep moving
The CIO aside, you are also being an arrogant dumbass. I mean, congrats - you got a play right. At best though, you failed to convince him. I pitched NVDA prior to triple digits in price, in a point in time that was far from the AI discussion…PM did not buy it, wasn’t convinced. I massively got it right, sure, but the only thing this event really does is question my ability to pitch. Being a salesman is a huge part of the job, if not the main one.
People can always reject your pitches, and it may not be your fault, but to not even consider this as a factor that dinged your candidacy…the CIO dodged a bullet. Your (possible) arrogance is a huge red flag. Not every trade you pitch will be selected. It is your job to convince the PM.
Besides, what do you want? A medal? You are only as good as your last trade. And that trade gets very old, very fast. You very much sound like any competitor that says “I would have won IF…”. At the end of the day, there is no asterisk - you either succeed or fail.
Chin up, grind on, and keep moving
The CIO aside, you are also being an arrogant dumbass. I mean, congrats - you got a play right. At best though, you failed to convince him. I pitched NVDA prior to triple digits in price, in a point in time that was far from the AI discussion…PM did not buy it, wasn’t convinced. I massively got it right, sure, but the only thing this event really does is question my ability to pitch. Being a salesman is a huge part of the job, if not the main one.
People can always reject your pitches, and it may not be your fault, but to not even consider this as a factor that dinged your candidacy…the CIO dodged a bullet.
Besides, what do you want? A medal? You are only as good as your last trade. And that trade gets very old, very fast.
Chin up, grind on, and keep moving
The CIO aside, you are also being an arrogant dumbass. I mean, congrats - you got a play right. At best though, you failed to convince him. I pitched NVDA prior to triple digits in price, in a point in time that was far from the AI discussion…PM did not buy it, wasn’t convinced. I massively got it right, sure, but the only thing this event really does is question my ability to pitch. Being a salesman is a huge part of the job, if not the main one.
People can always reject your pitches, and it may not be your fault, but to not even consider this as a factor that dinged your candidacy…the CIO dodged a bullet.
Besides, what do you want? A medal? You are only as good as your last trade. And that trade gets very old, very fast.
Chin up, grind on, and keep moving
The CIO aside, you are also being an arrogant dumbass. I mean, congrats - you got a play right. At best though, you failed to convince him. I pitched NVDA prior to triple digits in price, in a point in time that was far from the AI discussion…PM did not buy it, wasn’t convinced. I massively got it right, sure, but the only thing this event really does is question my ability to pitch. Being a salesman is a huge part of the job, if not the main one.
People can always reject your pitches, and it may not be your fault, but to not even consider this as a factor that dinged your candidacy…the CIO dodged a bullet.
Besides, what do you want? A medal? You are only as good as your last trade. And that trade gets very old, very fast.
Chin up, grind on, and keep moving
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