How much more smarter/driven than average do you need to be to make it in L/S fundamental equity?
I'm a recent grad doing SS ER and I'm thinking of breaking into L/S fundamental equity investing. However, I'm considered about the headwinds to the industry, namely the growing AUM of passive funds, quant strategies, and generally more efficient markets from better information sources and training, etc. Jack Bogle predicted that the markets in his time could still be efficient with only 10% of trading volume being under active management. How much more smarter and harder working would someone breaking into the L/S fundamental equity industry need to be than the average analyst in order have a successful, long term, career.
About 20
Don't need to be smarter, but do need to work harder.
What is the denominator about which you’re asking? All humans? Associates in equity research? Other HF analysts? As the group narrows, the relative answer lessens some but the absolute answer doesn’t change
On intelligence there's a threshold you probably need to have with diminishing returns past that on strictly IQ. Sometimes very smart investors get way too academic and end up hurting themselves. Need a strong work ethic for sure, the right attitude regarding risk, and the ability to think creatively as well in my opinion.
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