How to punish analysts?
Hey -
If you have an analyst that is wrong >50%+ of the time (stocks arent working, missing blowups on shorts, saying something is overvalued then it goes up 30% on a print) what is the best way to punish them?
Makes me so f** mad when I tell them to look at something, they pass and then it’s up on earnings or down. I can pay them less at year end but I feel like there are ways to punish them more (or make their lives hell because they are losing $ for me)
Take each one as a learning opportunity and be constructive with what they miss. They will be immensely loyal for guiding them through it. Then coach for the desired behavior (e.g., if you pass on what I told you to do, you will be fired). So you teach them their process learnings but set expectations that current behavior is unacceptable.
Lower the capital at risk / AUM sleeve you give to them. Everything else is a variant (they work harder for less capital, therefore less gains, less bonus, etc.)
Arguably, you should be punished for continuing to listen to them. And so you lose $.
Take some responsibility for your PnL.
Just inverse everything he says and you’re golden
The ol’ Costanza method
Sort of agree with a point above end of the day you make decisions and falls on you. You should punish yourself for listening to weak analysts to begin. Also what you mean pay them less? This analyst deserves more than 0 still?
As someone else said the most petty thing a PM can do is basically do the opposite of their analyst then tell everyone moron didn't think it was important. But its a lot easier on your stress levels to just ignore them and hope they quit.
Fire him/her/them ?
I always thought that in the HF industry one would get fired immediately ?
Does the analyst recognize they are making these mistakes or missing opportunities? Every trade or pass opens a chance to post-mortem decisions...do you go through this exercise? Are they making the same mistakes or is each novel? When your analysts suggests passing on a trade that then goes up +30%, is this because the Company performed opposite of their analysis or is the move due to an idiosyncratic factor not caught or considered in the analysis?
Blame whoever taught them in their first few weeks on the job
You sound like a fucking moron (and clearly you are losing a lot of money, so you probably are)
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