Educational Resources to be a great hedge fund analyst?
Coming from a tech background, there are tons of online resources that teach you how to code in Python, learn databases, and do things like web/mobile development.
What are some resources that teach the skills relevant to being an excellent hedge fund analyst? I am aware that WSO (and other groups) offer financial modeling courses and CFA prep...are those all you need?
Another way to phrase this question is: of the best performers you've met in your hedge fund career, how did they teach themselves (and with what) to get to their skill level?
It's really simple:
read a lot
look at a lot of stocks
How did you form your set of criteria for a stock/asset to the point where you'd make a recommendation? Was it taught to you by university curriculum or did you learn on the job from someone more senior?
80% experience. University isn’t going to teach you to become a good investor, nothing will, you just need to go out and generate ideas. To do this you need to be “taught” fundamental finance ideas and accounting -> you do this through the IB process most of the time. Investing related skills are picked up on the job when you’re in a role.
Other 20% is intuition, can’t be taught/how you’re wired
also there is no one size fits all criteria. These situations are fluid, a short can turn into a long in a few weeks or over a quarter…the faster you get out of the “learn a process and apply it rigidly” mindset the better
facts
value investors absolutely seething at this comment
Last part is very SIGNFICANT. Wish I'd read this when I was coming outta school...you have to understand in real life situations can change quickly and no reward for being emotionally attached to a position. Look at any of the veteran PMs who are still in the business, you'll quickly see they don't follow one rigid process and make bank. They understand when things change, they have to change too.
Really solid advice
This whole anti-academic podbrain mentality is weird to me. There is a TON of actionable investment tools that can be gathered from books. Not the classic investing/business books, I agree those are mostly garbage. But there's a lot to be learned from books that are infrequently read by market participants.
Some of my favorites:
Fooled by Randomness (intuition for skew/kurtosis)
Industrial Organization (Shy)
7 Powers (read as application of Shy)
Superforecasting
Structure of Scientific Revolutions
The Visual Display of Quantitative Information
Technological Revolutions and Financial Capital (probably wrong but helped me understand the Wall St -> Main St feedback loop)
what do you think perez gets wrong?
Read. Read. Read. Get a subscription to the FT. Make a book list. You can't just wake up and follow some plan and become the next hedge fund phenom. You have to learn economics, economic history, how the credit market works, etc.
Pick a sector you like or have some edge in. If you're a chemical engineer, study chemicals companies etc.
Read a 10K everyday. Read earning calls for your sector. Try to understand the whole sector on one particular index first and then diversify. Every sector has specific metrics and KPIs they care about. For SaaS its stuff like TCV, Billings, Avg. Contract Duration, etc. For O&G it's totally different. Do not try to become a master of all companies.
On the SEC website, use the interactive data tab to make sure you see the accounting notes. Honestly learning how to plug an income statement and a balance sheet into a cash flow statement should take an afternoon. Learning US GAAP classifications and definitions could take a week. But that's literally just accounting.
Not OP but thanks for this.
Of course. The best investors are really just obsessively curious. Committed to learning and the truth above all else.
People get caught up in what they think they should know, but honestly it's better to hire people who already have areas of deep fascination and align them towards investment outcomes. You can't really teach curiosity.
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