Credit - Pod Shop/MM vs. Distressed/Special Sits HF
What's your view on industry and career outlook for all the credit folks out there?
Have never worked at a pod shop before, but my current firm does a decent amount of active trading as well as long-horizon distressed. As a younger analyst, I tended to think that deep value, concentrated distressed is where it's at. The work seemed more interesting, more involvement in headline grabbing situations, and legendary stories from the likes of Elliott.
But increasingly as I think about what kind of portfolio I'd like to run 5-10 years from now and refined my decision making processes to become more probabilistic, it seems like most distressed managers are running black box books and are long on hubris and short on risk appreciation. Hence the scarcity of "consistent" players with many former "rockstars" sinking on one too many bad trades (BlueMountain, Solus, Perry, Paulson, etc). It feels like a more diversified approach to portfolio risk is the better way to actually be a professional investor. It's like being a professional poker player - you don't go in and bet all your chips on a hand with no respect for uncertainty and luck in any individual play, but you rather seek to play hundreds of hands and over time seek to tilt the table in your favor by being the superior and probabilistically aware player. In other words, being a "grinder", although many of the best poker players are known to take some ballsy bets on consequential hands.
Any experienced folks out there who have thought about this? Do you think this is mostly a matter of personality fit/interest or is there a superior approach to investing in public credit?