Good Learning Resources for Early HF Analysts
Hi all,
I'm currently a first year analyst doing L/S & distressed/special sits at a larger NY credit shop. I've really enjoyed my first year on the job and would like to continue building on my technical analysis and cross-industry/asset knowledge outside of work. Generally, I enjoy reading research published by other funds (don't know that many yet but especially enjoy the ones from Alta Fox, Elliott, and Muddy Waters).
As someone that doesn't necessarily come from a traditional finance background and who wants to continue to branch out and broaden my understanding of financial markets/investing frameworks, are there any good resources/pitches you guys have read throughout the years that you think would be helpful for a younger analyst to understand? I've read through the majority of my firm's memos/theses and am just looking for more inspiration.
I especially like memos that try to dice up the valuation question and creatively analyze it from multiple perspectives in a pseudo-academic way and also maybe explain where the deltas in valuation b/w each methodology are coming from (i.e. "If you believe X KPI inflects to Y in NTM, then the equity accretion must be at least Z, else mgmt. would just buy back debt at H" or "Even in a downside case where X happens, mgmt. must logically hedge with Y action which has range of outcomes Z* that are all better than status quo of H* which implies markets' pricing of ~equal volatility to the upside/downside from current price E screens cheap")! Lastly, L/S trade idea pitches are also very welcome (i.e. "Based on current operating fundamentals and trading prices, we prove why being long the converts & short the equity presents meaningful arbitrage opportunity.")
Again, I am still very early in my career and don't know a lot so anything you guys have found helpful or inspiring is probably great! Thanks in advance!
Based on the most helpful WSO content, here are some valuable resources and pitches that can help you as an early HF analyst:
Recommended Resources:
Yen Liow Talks on YouTube:
Columbia Business School Stock Pitch Competition:
Pabrai’s Writings:
Big Famous Bets:
Zoltan Pozsar's "How the Financial System Works: A Map of Money Flows in the Global Financial Ecosystem":
Books:
Example Pitches:
Einhorn’s Pitch on GMCR:
Ackman’s Pitch on GGP:
Additional Tips:
Read Research from Other Funds:
Focus on Undercovered Companies:
Understand the Thought Process of Good Investors:
These resources and examples should provide a solid foundation for building your technical analysis and cross-industry/asset knowledge. Happy learning!
Sources: Q&A: HF Analyst @ $5bn+ Fund - Breaking In and Transition to Risk-Taking Role, 1st Year Macro HF Analyst: My Macro Framework, 1st Year Macro HF Analyst: My Macro Framework, Q&A: HF Analyst, Finishing 1st Year as HF Analyst - Ask Anything
Bump
How’d you land at your fund without a finance background?
My fund has a summer analyst program and we do not overly screen out candidates based on background. Since we really never hire laterally and just develop internally via the summer program, thought process is we can just train them up from scratch if needed (thus we looks for more of the soft qualities like passion, culture, integrity, etc.)
Hey this is unrelated but I'm wondering if you're currently hiring for full time? I interned at BCG but didn't receive a return. Thanks!
Any examples of the memos you like, aside from fund letters?
Alta Fox has quality research publications and so did Wolfe before they took it down. I found Muddy Water's short report on Sunrun to also be insightful but more from a learning perspective on accounting tricks.
Thanks for sharing - at a similar-ish fund, and nothing to help per se, but found DD&SS on Substack pretty good
Can you share links to the materials you've reviewed?
Muddy Waters short report on AMT (https://muddywatersresearch.com/wp-content/uploads/2013/07/MW_AMT_FULL_…)
The report is fairly long ~100 pages, but very well thought out and researched. MW was ultimately completely off (for the most part) on the towers space broadly but the report itself and the evaluation framework was solid in my opinion. I only wish there was a larger discussion on valuation sensitivities to rates as I imagine a large portion of those long the equity are making rates bets too.
Hope this helps!
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