Credit approach to equity investing offer upside?
I know there is a different approach to investing when you compare L/S equity funds to credit funds, but I was wondering, would it be useful to bring a credit first approach when investing in equities? Would this be more beneficial than just doing your 3 statement model and qualitative analysis compared to peers like a regular pitch?
From what I have heard, on the equities side, you're investing based on assets of the company, TAM, margins, growth rates of future FCFF etc. In credit, you're investing based on the liabilities of a company and their likelihood of the company paying its debt and not so much its growth potential plus you're always focused on maximizing your downside protection.
The skill sets required for fixed income vs equities are pretty different, but if someone were to use both skill sets in being able to analyze the company lets say the capital structure, debt covenants etc for the credit side, and then go into the weeds on the asset side of the company, would that sort of make a "complete analyst"?
I am in the camp that thinks this is possible, but the pace of the market just won't let you. Would this mean that knowing the names and doing the work on a name beforehand is one of the most important things as an analyst?
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