Stock pitch - Experienced analyst
How detailed would you think an investment case for cold outreach to L/S HFs should be?
I have 5 YOE and trying to move shop, from a small single manager to potentially a larger one. I am preparing an investment case to send out, but undecided whether sending just a one-pager or emailing something more detailed would be best.
On the one side, I'd be straight to the point and if I get the attention of the reader I can discuss/share more in a potential interview; doing so runs the risk of not showing how deep I might have gone in the analysis.
On the other side, sending a more detailed case (5-10 pages) would show that I am serious and give the reader the chance to delve deeper if he/she intends to do so; negative of that is he/she might take the investment idea, use it or not, but not even bothering with replying back. All the necessary info would be there so no need to spend time unless they really want to hire someone.
Go with the 5-10 pager. If they're receptive, they'll reply.
Disagree. Sending a 5-10 pager right from the start might be overwhelming and they won't just read it. I think sending a one pager to start, then sending a 5-10 pager for those who are interested is the better move.
Keep it short and sweet. Every decent analyst should have a list of 5-10 top Long short ideas. I’d go with a small paragraph, company x: short - debt roll up, management have a history of fraud, over earning, consensus way off, catalyst within the next 12 months.
My personal view though, I would never give an idea for free and I certainly wouldn’t give anyone my best idea for an interview
If you are actively reaching out, and therefore need to make the reader the most interested in your profile you can, why wouldn't you give your best idea?
Obviously it depends on your current personal trading compliance rules, but where I currently sit, my best ideas are all in my personal portfolio because I think they are good ideas. If a large manager with a lot of capital just happens to like the idea and start a position, hey, I'm not complaining. Always happy to have buyers/sellers on board my ideas.
CIO / PM type ppl have seen most investment cases and categorise them in to buckets, e.g. 'revision-to-mean trade', 'unappreciated growth with near-term catalysts', 'overhang removal from X proof point'.
I love it when there's a crisp PM summary with the key swing factors for the bet, and I can choose to double-click on whatever I feel is incremental to my existing knowledge base. Bottom line the thesis for your audience (almost like a clickbait). Outline key bets. Not just the delta to the street, but in a crisp concise manner outline WHY there's a difference in commercial assumptions and HOW the gap will narrow through catalysts / thesis crystalisation.
The shorter and more crisp the thesis, the more it's going to be read by people you send it to.
Confidence in only outlining what matters shows true understanding of a business. Many analysts write up stuff that doesn't even move the stock. If it doesn't move the stock then it doesn't matter to my PNL and thus, I wouldn't care...
I'd recommend a one pager. Half a page of description of your thesis (bottom lining it) + half a page of thesis-supporting outputs.
It's easy to spot which outputs have analytical depth and work and which are just high level / easy to replicate with no real source of differentiated research.
Footnote that further analyses and thesis deep dive available upon request to drive your engagement.
Can't the under-appreciated growth with near terms catalyst cause a reversion to the mean? What's the difference as you've laid them out separately?
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