The art of asking questions in Finance
From the Bible: "Ask and you shall receive" - Matthew 7:7-8
Today I'd like to get the perspective of seasoned hedge funds professionals on how juniors and specifically interns should ask questions when they first join a hedge fund.
I am asking this because, being in my last year of a MSc (Europe), I am set to begin an internship as a Quant Researcher at a tier 1 multi-strategies HF. I want to make the most out of the experience and help my desk. I was told by a HR that successful interns were the ones asking "smart questions" and doing so on a regular basis.
Now it would be amazing if there is any senior in the hf industry (pms, analysts...) among you who would like share which key points I should focus on to get the most out of this. What do you I need to look for as soon as I get in there?
What I am asking for is broad and I do get it, but if anyone can participate and bring something to this trade, please do so.
Thanks a lot.
To excel as an intern at a hedge fund, asking the right questions is crucial. Based on the most helpful WSO content, here are some key strategies and insights:
Be Thoughtful and Prepared:
Show Intellectual Curiosity:
Ask Smart, Relevant Questions:
Timing and Context Matter:
Engage with Everyone:
Focus on Continuous Improvement:
Examples of Smart Questions:
Body Language and Attitude:
Remember, the goal is to show you're a fast learner, passionate about investing, and capable of thinking critically. Hedge funds want interns who can eventually add value, so focus on demonstrating your potential through thoughtful engagement and a proactive attitude.
Sources: Q&A - research analyst at credit hedge fund, Q&A: 3rd Year Hedge Fund Analyst, Q&A - research analyst at credit hedge fund, How to Thrive on Your Research Internship, Do's and Dont's as a Trading Intern
I'm going to use your post as a teaching moment.
You asked: "What do you I need to look for as soon as I get in there?"
This is a great example of a low quality question since it lacks specificity, has too much preamble, and doesn't establish a clear outcome you'd like to get to.
Whenever you ask a question the first step is to understand your audience. Are they the right person to ask this question to? What's their frame of reference? What context are they missing? If you're asking a HF analyst they're likely crammed for time, juggling multiple time sensitive tasks, and have a high cost to context switch depending on the tasks they're trying to get done that day. If it's a PM, each of these items are dialed up and they're optimizing for ROI on their time since it's the scarce resource.
The second step is to define the outcome you're looking for. In this case, you want to be able to ask smart questions relating to work as a quantitative researcher with the goal of demonstrating your curiosity in a constructive way.
The third step is to be specific and ask for an example or something tangible where the core concept you're looking for was applied. You get more information out of it since it's not a useless hypothetical one but rather one founded in reality. Framing it this way gives this person the ability to leverage their experience and share an actionable insight that is easily digestible for you. This is especially important at this stage since you have minimal frame of reference based on your lack of experience.
Finally, tie those two pieces together so you're setting them up with context and a clear ask that gets your information quickly while allowing them to relate to you more closely by sharing their experience.
So putting this all together, this is what I would ask this audience.
I want to learn as much as possible at my new internship, but am cognizant that there are actually "stupid questions" in any field so I want to avoid them. For those of you that have worked with interns, what was an example of a "smart question" that they asked you and what was impressive about it?
Finally, to answer my own rephrasing of your question:
I had an intern at a shop that I worked that wasn't doing great, but he asked me a very smart question that was clear, direct, and easy for me to answer while giving him a lot of information in very few words.
He asked: "I really want to establish a career in this industry. Do you think I'll get a return offer at the end of the internship?".
I responded: "No."
Smartest question he asked all summer.
Maybe this helps, maybe it doesn’t.
Questions should be confirmatory in nature, should be relevant, and reflect about 2-3 orders of thinking before asked, such that the final conclusion requires nuance that could only be gleaned from years of experience, and that it’s clear as an intern you “could” have gotten there theoretically but needed a real life confirmation.
An example of this could be - why does this security act out of sink with xyz theory if fundamentally it should be like this (I have done the work to show it should be here, have double checked for errors and still can’t explain) - I have considered xyz reason, but what typically tends to be your experience with this in this specific subsector - is it the holders of the security, does it get priced in a different, non obvious way etc?
That is a fair enough question in my opinion, you provide context or phrase it in a way to show you genuinely did the work, made no mistakes in the easier method and think there’s a genuine non obvious market dynamic that they’d be aware of given their experience.
A bad question is lazy, or reflects carelessness on your part.
The best and smartest questions start with "help me understand..." or "how should I think about..." - real mark of a hedge fund legend. Stay frosty
Try to find an appropriate moment
Don't ask something you can find in Google after a 10' search
Don't ask questions out of laziness: have your own analysis and give it a proper crack first
Formulate them coherently and succinctly. Provide needed background, but do not over extend
Try to make them to the point, not too open.
Listen attently and tray to follow the thought process
As mentioned above, try to ask questions to help your thought process than a mere fact: don't give me the fish, teach me how to fish
Be thoughtful with the answer (also reply, if unclear or not in agreement) and thankful
Try not to ask again the same question: show that you digested the info. If needed again, perhaps rephrase or contextualise the question
All this, of course, you are asking the right person. Of not, ask the person to point you in the right direction/right person
This assumes you are asking someone who is interested in helping you out. Beware the many assholes, know-it-alls, narcissists and jesters (hoping to seed weed in your brain).
Most common pitfall of juniors asking questions is making it extremely convoluted in order to sound smart. CEO/CFOs are often left wondering whether there is a question at all and what it is.
Economize words, and state the question clearly.
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