Distressed Debt the most right-tail outcome?
I'm a student at Wharton, and I'm trying to optimize for the most hardo outcome that exists outside of quantitative finance. To me, it seems that that is long-short. However, some are saying that could be distressed debt or private credit, and I'm confused. Or maybe even activist investing, and I'm confused about all of those and how they play out immediately out of college. Should I be optimizing for credit or equity-type stock pitches or projects? The problem is, a lot of people say, "Oh, you have time. You can just figure it out, do an internship, explore." But frankly, there are no definite outcomes, and I think the best exploration is the community here on Wall Street Oasis. Given the forced choice of picking one thing, what is the most extreme finance role you can break into out of undergrad, excluding quantitative finance?
Genuinely curious - what's the argument for PC here?
There is none. Do not go to PC thinking you are getting a right tail…the asset class doesn’t even have right tails.
Wdym
Lmao please expand
bump
Look into gold prospecting.
you're already a step ahead of your peers just by simply admitting "i'm confused"
I’m dying what freshman is this. The most hardo seats are the ones that don’t give returns but hint hint wink wink do. Optimize for it by pitching a ton both credit and equities
lmao this def TL or sumshit
Distressed debt does not have a tail outcome. The space has changed.
I disagree. It has left tail outcomes
Forget that, just go ahead and launch your own hedge fund right now
The only thing you should be optimizing for is where you think you'll learn the most / be most exposed to growth. You can craft a right tail outcome in any seat in finance if you're successful enough – PE, PC, distressed debt, quant, etc. Optimizing for the "most hardo outcome" is simply backwards + if it's hard for you then you're probably not performing at the right tail of the distribution anyway. I'd rather be the top guy in vanilla LMM direct lending than the 50th percentile distressed debt investor (and losing money).
To riff on this - try listening to podcast interviews of different types of fund managers (there are also a number of books out there which are effectively just chapter-long summaries of the background and performance of different investors), and read news, with the question/lens of "does anything about this resonate with / make sense to me?" And then follow what you're interested in / aligns with how you think / what you want to pursue. Not saying this means you'll be able to immediately do what you want to, but it helps you craft ideas about how to go about chasing your goals.
Outside of quant, distressed is the most “hardo” but what does it get you? Chris Hohn has had a way better time holding 7 stocks.
Distressed isn't great right now. Even the smart guys sometimes make a mistake (would cite Diameter on First Brands) and there's been some high profile losses based on being on the wrong side of a coin flip (see Arini on Aston Martin.) Documentation is very poor these days and no one wants to hand over the keys unless recoveries are shot, so the loan to own strategies 20-30 years ago aren't working.
Commodity futures trading or anything with a real assets/infra play
yes join Arini. heard they are minting $$ this year!
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