Generating Investment Ideas...

Ideas? Websites? Where do you guys get your info from to generate investment ideas? Not just for ideas, but I daily check dealbook, wsj, abnormal returns. honestly I need help and when hedge fund interviews start i want to be able to have 2-3 stock pitches at anytime. im mostly interested in distressed/event driven hairy shit that is complicated, so any help in that part would be great.

thanks in advance.

 
Best Response

Value Investors Club is great... if you can get admission. Most of the guys on there are actually running money and know their stuff. You can request guest access which has a 45 day delay, still a good resource. In the same vein SumZero is good, but probably not as good/selective as the VIC.

http://www.sumzero.com/

Newsletters are key. The two main ones I read are Value Investors' Insight and Graham and Doddsville. Both have excellent, in depth interviews with very good managers. They typically talk about their top positions, logic behind them, and general lessons they have learned over time. Graham and Doddsville is free but VII is $350 a year.

http://www.grahamanddoddsville.net/

Gurufocus is pretty good too.

http://www.gurufocus.com/

I would be careful about Seeking Alpha. Sometimes there are pretty bright people that post on there, sometimes there are guys that think Cramer and Lenny Dykstra are investing greats.

Large institutional managers (100M+) with outside investors have to file 13-F's. Go sec.gov and look up the holdings for the top funds (Baupost, Greenlight, Third Point, Glenview, etc). Most of these mangers write quarterly letters you can get your hands on through dealbreaker, check those out.

http://www.valueinvestorinsight.com/

If you have CapIQ or Bloomberg you can run in depth screens, but that requires access and a good idea on what you want to search for.

If you know what type of funds you will be interviewing for people could probably provide more directed advice. Do you have any interviews lined up yet?

Best of Luck

 

Look up some presentations that big name investors do to get a feel for how to think through things. Here is one from Einhorn.

http://www.marketfolly.com/2011/10/david-einhorn-short-green-mountain.h…

Obviously its way more than you need but looking at stuff like that will get you in the right frame of mind. Though, I agree, having some awesome sound effects to punctuate your main points will differentiate you from the crowd.... Haha.

 

Find a company you like and back it up with industry economics, find a competitive advantage (back it up with financials), and do some sort of earnings projection as well as an assessment of what management has been doing with earnings. If you can't find a company you like then the job is no good for you. That means you don't actually care about the market.

Pick out a few pieces of financial data from the statements or MD&A and speak to how they will be helpful to the company in the coming years. Possibly could follow up with a bit of technical analysis if you want to say the company is at a solid entry point to go long or short or whatever it is you want to do.

Know key industry metrics and how they drive revenue. If you're pitching Mosaic make sure you know prices per tonne and the general trend of where that's been and where it's headed... shit like that. Also some macro knowledge about the company and industry's direction or what your opinion is on it.

Not too difficult really.

I hate victims who respect their executioners
 

Hostile takeover of RIM. Shed the entire line of phones and go with a single device like Apple does. Incorporate a more user friendly OS and keep the physical keyboard. Cut the price of the phone in half, then develop the services side of the business. Maybe partner with a CRM software company (ie Salesforce) to develop a built-in mobile app to attract small business employees. Then come up with an ad campaign that convinces people that BB's are for work, and iPhones are for play.

 

I agree about Seeking Alpha. There are some very good ideas and very smart people that participate in discussions there. There are also quite a few morons. It's up to you to decide who's worth listening to.

 

i hear you about the disparity of users...

Starting on November 1st I'll be aking a big push to get more finance professionals of all kinds on the site (especially HFs, traders, consultants, PE, etc.)

Until then, it would be great if you could help me recruit more traders by Inviting your Trader Friends to the forum through the invite block on the left.

...and you'll even get 10 bananas for inviting them! (I know, try to contain yourself).

in all seriousness, the site still has a bunch of ways it is going to improve. I want everyone to know I am extremely dedicated to making this the best finance community online and I have reinvested almost every penny I have made so far on ads over the past 1.5yrs into my web developer and making this upgrade happen. there are still a bunch of new features and issues that need to be addressed, but my web developer is only one guy so please be patient.

Thank you for your support. Oh yeah, Jimbo is one of the most frequent users on here and he is a very knowledgeable trader as far as I can tell.

 

well, i am generally happy to help, but you have to find a fairly rare thing....people with experience who want to help others, without wanting anything in return really (money or knowledge)

 

What did the silly wannabe trader say to Jimbo?

Wannabe: Man, did you see the spread on the Qs? It was tighter than my little sister. Jimbo: Not after I got done with her. Wannabe: ... aww man, that's nasty.

true story.

 

I bought some Visa shares yesterday at 59-a-piece. I have also been an investor in MA since they went public. I think both companies are poised for good long-term growth. And the fact that they are not exposed to credit risk makes them even more attractive given the current market scenario.

 

Good call on the MA, you must have made a grip of cash. However I'm not sure if the fundamentals support 60 a share for V - I think they have a huge amount of future litigation liability, which was part of the reason they chose to go public. Anyone else want to chime in on this?

 

Agreed - there is a lot of untapped knowledge on this board on this topic (and I don't mean of the insider nature).

- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
 
WallStreetOasis.com:
So a new forum that just deals with Investing? Don't you guys think this could fall under the Traiders Train Forum? or would it be a Site Specific category (not industry)?

Thanks for the suggestion. Any thoughts on the name and tag line?

Thanks, Patrick

WSO, I think the traders train would deal more with people who are or want to become traders that have questions about how to perform their jobs, or to share tips and tricks about the sales & trading industry.

I see the new Investor's forum being used for company analysis, thoughts on how Fed actions will affect the market, etc.

- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
 

It could be under industry specific or related topics, I think either would work great.

For the title - how about Investors Intuition?

As always, thank you Patrick for your dedication to the site.

EDIT - realized that intuition was not spelled correctly.

 

Ok, I changed the "News - Read All About it!" Forum to "Investment Inn"

A few reasons I did this

  1. The news forum rarely gets used
  2. We already have a separate Newswire section in the navigation bar
  3. Drupal was not letting me create a new Forums so this was the easiest way to get it up now
  4. If there is a worthy piece of news, it should fall under any of the Industry Specific forums anyways

...so I hope you don't mind the Investment Inn taking over the News Forum. I figure the activity in this forum could be pretty good since trading strategies and discussions on exotic derivatives can be interesting.

 
oR3DL1N3o:
get that technical bullshit out of here and do some real value analysis you fucking noobs.
Stop making yourself look like a dumbass
If I had asked people what they wanted, they would have said faster horses - Henry Ford
 
oR3DL1N3o:
get that technical bullshit out of here and do some real value analysis you fucking noobs.

I'm gonna have to agree. Technical analysis is bullshit for the most part. Sometimes it can help support actual valuation reports, not the other way around.

Not a bad way to start for freshmen.

 
IBDaspirations:
Thanks for all the positive comments guys!

To those people who said that technical analysis is largely bullshit, what form of analysis would you recommend for day-trading currencies?

Macro movements. Monitoring soverieng CDS spreads. Interest rate movements obviously. Form an opinion on any of these.

 

Basing your strategy off of technical analysis provides you absolutely no edge whatsoever. There is no way you can consistently have any true alpha or consistent profits, especially after fees. Some technical indicator based strategies very very roughly emulate cointegration based pairs strategies or some momentum strategies that could be used during regime shifting and high vol / low liquidity situations, but the methods are too crude to consistently make any money over the long haul without eventually going into ruin.

The best way to make money daytrading currencies as a college student is to not do it. That's probably the best answer you can get.

 

Just so you know, MMs own the FX world and any attempts at decent TA there get you completely runover. Read up on the market maker shift (and timezones, going from asia->london->new york) and that's where your most profitable FX trades and ideas should come from. Otherwise, its all stop hunts and noise to get the retail trader's money.

 
IBDaspirations:
I'm just curious, why is it that the retail trader generally doesn't do well as opposed to wealthy investors and big institutions/hedge funds? Is it because of algorithmic trading?
All about bankroll, skill, and knowledge of the system.

Two poker players sitting at a table. Player A has $500, Player B has $2. Assuming the same skill level, who wins?

Same scenario as above, except now assume that Player A gets some of the rake back from the house and has been playing cards his entire life. Player B is scared of losing his milk money.

The cards don't have to be stacked for the game to be lopsided.

 

Leverage, margin, other tricks used by the big boys to steal your lunch.

HFT is a non-existent problem for the retail crowd, unless youre really pissed about not getting filled cause of that bid which was .001 higher than yours. Media likes to discuss algo trading cause its the 'next hot thing' to discuss at the water cooler, but in reality its only an issue for people making markets or institutional players which, apparently in the olden days, dealt with people executing large block orders as opposed to machines.

Anyway, keyword is generally. Retail generally doesn't do well. At least, certainly not in a day trading environment where running stops to the high/low, gaming S/R levels, creating fake rumors, and option pinning on OpEx (how convenient there's weekly options now..) are the name of the game.

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