Need Advice - LO, PMs Disregard Investment Pitch
I'm a research associate on the SS covering a highly visible sector in TMT. I'm looking to transition to the buyside preferably to LO AM. I'm getting interviews but have been ghosted and rejected the last year. I'd say I'm well versed in my sector considering my 5+ years of coverage while seeing peers with less exp (1 year) transition to the buyside.
I have the impression that buyside places an emphasis on idea generation and PnL, but theres been incidences where my idea was disregarded from the interview. In one example, I pitched a near term (short/unwind) position and all the supporting points given the downcycle. I noticed the PM chuckled, but the next week, this company pre-guided lower and reported its worst ever earnings in recent years. In another example, I pitched a separate company that had a key technology advantage in a very niche market. The PM rubbed his faced with two hands clearing his eyes as if disregarding it and just carried on. A few days later, this company issued a press release with new design wins and the stock responded with consecutive 10% gains the following two days.
I know I'm not the most charming over Zoom/Webex, but I can answer the standard interview questions. So I'm not sure why I'm not considered for later rounds. How much of an emphasis is there on fit/likeability vs. meritocracy? Is age a factor? If you were in my position, what would you do? Any advice?
Why are you pitching a short to a LO?
LOs are the most competitive jobs you will ever compete for in your life, so beware of that.
It sounds like you have content-audience fit issue: 1) Don't pitch short to a LO 2) There is no EXTRA alpha in complexity. A technologically complex name will lose a generalist PM no matter how correct your thesis is.
LO AM is the most competitive job you’ll ever compete for? Are you mental?
What other roles are more competitive in finance - PE? Those roles are a dime a dozen. VC? Everybody in the Bay Area who's in finance works at some sort of VC firm.
Thanks. The sector of TMT I cover is positive in the long term and will sustain long term growth. From the conversation, the PM agreed on the long-term points, so he asked about near-term trends. This was early/mid-'22 and given the excess in '21, and all data points indicating a downcycle in '22, I pitched a short idea. I've seen this cycle play out.
Why would you pitch a short to someone who is unable to short?
For LOs only pitch longs unless they ask for a short specifically (but always have 1 short ready to go just in case).
I would say from your post in this situation age would look to be the issue here - why hire you when they can hire a a 2nd year analyst who might not model as quickly or know as many companies as you, but critically they are cheaper and more importantly probably more malleable to the style of the fund/pm. After all after 5 years you have a lot of SS habits and your own style of investing that are hard to unlearn.
Its tough, but I would really recommend making connections with buyside through your job so next time your interviewing the PM knows your a good analyst from reading/talking with you in your current role and they like your style. Otherwise you'll probably land something just going through HHs but there will be a lot of failure.
One final thing to consider is just sticking it out in SS, make a great track record in recommendations and get hired as a senior analyst with 8/10 years of experience once you have a strong rep for your sector and good track record - and helps that TMT is a secular winner (provided your not in Telcos....).
Have you considered the MBA route and/or MM funds? Most LOs aren't the most friendly to laterals.
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