Hi Guys,
Those of you who work at HFs , how many stocks do you cover ? I mean how many stocks do you actively maintain models on, follow during earnings etc and know the story pretty well ? I am looking to make a switch from the sell-side to a HF, and I want to understand how the workload changes in terms of scope and depth.
Thx.
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Anyone please ?
I followed 10-15 on the sell side. Now I follow 15-20 at a HF but actually with a greater amount of detail. Some of the guys that I work with follow only around 5 companies but obviously those companies are very well modeled by them. I think workload on the buy side is more driven by the strategy/culture rather than the number of names followed.
OP you probability should rephrase and specify L/S Equity funds, there's like ~four or ~five HF strategies and like half don't even look at stocks.
Sorry, I meant Long/Short Equity.
I work for a long-only manager. Our portfolios have ~50 stocks.
I feel responsible for the entire universe (large cap US). We try not to make sector bets so the focus jumps from sector to sector.
Some sectors are easy/boring. Telecom/REITs/Utilities just look for quality and/or neutralize your benchmark. That still leaves ~45 names to find.
We rarely meet with management and models are neither comprehensive nor meticulously updated. We want an understanding of where the forward quarter/year numbers will be. Never DCFs. We strive for a sell-side like knowledge of the fundamentals driving the stock while avoiding the tedium of actually maintaining the models.
For almost all companies, we are far from product/service experts but we like to think that we are "experts" at understanding the nuances of the key financial metrics. If we can accomplish the latter then we feel like we have an advantage over 90% of the market. The 10% with the true expertise will beat us but we can still make a lot of money beating the other 90%.
How many stocks does a PM in a long/short fund know well ? I have heard that long/short book could easily have about 70 - 80 stocks. How well does the PM know those names ? Or does he know a subset and depend on the Analysts for the rest ?
Anyone ? For those of you have made the transition from an Analyst to a PM or seen somebody make that transition, did you have to really know a universe of close to ~100 stocks ?
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