Having been at a Hedge Fund for 3 months, I'm still a generalist, learning the ropes, and mostly enjoying going a mile wide and an inch deep into many different industries for now.
By observing the analysts around me, I have recognized that, in general, there are two distinct stages to research:
Stage 1: The point at which you must decide whether the company requires more work. Is it a "Yes" or a "No", for proceeding with going deep? This stage should be quick and to the point. Not investing in deep research yet, but knowing just enough with a reasonable level of conviction to know whether it deserves more time. Stage 2: Going deep.
I have recognized that Stage 2 isn't such a problem for me. I imagine most of the folks that will read this post are in this line of work precisely because if given unlimited resources (time and a BB terminal) they can spend a month knowing everything about the name. But I'd like to adress Stage 1.
Does anybody struggle with Stage 1? How do you get to know whether a company is worth deeper research in a matter of, let's say, 2-3 hours?
Does anybody have a framework that they like to follow in order to succeed at the efficiency/quality tradeoff required at Stage 1?
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