How to succeed at hf?

Joining a sm hf in about a month (out of undergrad, one internship in banking and one at a different hf). Any advice on how to generate good ideas and do well?

Comments (5)

  • Intern in PE - LBOs
Sep 26, 2022 - 5:51pm

Hey, congrats on the offer!

I'm a 3rd year in undergrad wondering what your journey was like. How did you know that SM HF was the right seat for you, and how did you go about getting the job?

Sep 26, 2022 - 7:14pm
MMPM, what's your opinion? Comment below:

Be humble, ask questions, seek mentors. Find someone you admire at your new shop (that hopefully likes you back) and stick close to them.

Also- no one expects you to source ideas right out of undergrad. Focus on learning discrete tasks, and try to make your boss' life easier by performing those tasks for him. The ability to source ideas will be slowly developed later on.

Sep 26, 2022 - 7:33pm
dickthesellsider, what's your opinion? Comment below:

What MMPM said. 

I add:

  • Always think about how your task fits into a goal: "What is this analysis supposed to tell us?"
  • Learn to present information that is easy to read and is as final of a format as they are looking, so there is less back-and-forth
  • Take good notes: we always overestimate how much we can remember without writing things down
  • You don't have idea gen responsibility yet, but doesn't preclude you from journaling what happens to the situations you have worked. Document big moves on the stocks you have worked on, what drove them, did they impact intrinsic value of the business or were they irrational buying or selling? Over time, you develop pattern recognition. 

That's all for me for now. 

Most Helpful
Sep 27, 2022 - 6:56am
herzyherzy, what's your opinion? Comment below:

No one is expecting you to generate ideas from the get-go, so place more of your focus on 1) accuracy/attention to details in modeling, 2) improving velocity over time, and 3) understanding/deep-diving into the names you're given. You have an eerily similar background to my own, if I had to go back and do it all over again I wish I spent an extra 30 minutes per model per company just reviewing everything to making sure I had adjusted for non-GAAP correctly and to make sure my numbers all tied. 5 years later it's obviously more fluid for me but I think when you start out, the quickest way you can build credibility with your PM & team is just by doing the base level tasks correctly.

Generating good ideas comes with time and reps, (RE: velocity). You need to 1) immerse yourself in knowing the companies you begin to cover and understanding the businesses as best you can, and then stay as close as you can as your coverage lists grows; while 2) starting to understand or notice over time what drives them. Some of the first companies I covered 5+ years ago are now names I can trade pretty fluidly as I stayed close to the story, updated every quarter, and now I have a pretty good understanding of what matters to those businesses. It takes time but starting from day 1 and slowing working your way deeper on names & sectors will give you the leg up you're looking for in terms of idea generation in ~12 months+. 

Don't rush idea generation, some of the best ideas are ones where you aren't even looking for it and it hits you. This comes with all the above... immersing yourself in reading filings/transcripts, getting up to speed on sector knowledge, ultimately building out a robust investor network and chatting with other analysts. You start to not only connect the dots better over time but you "see the field" more clearly and this really only comes with time and shots on net. Now if you think you have a great idea and sharing is encouraged then by all means go for it, but just ensure you cover all your bases when going through that pitch. Know exactly what the risks are and why the trade wouldn't work. The best ideas and the best analysts that find them tend to know exactly why a trade WILL lose them money.

Sep 27, 2022 - 8:32am
buyandsold, what's your opinion? Comment below:

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