What types of opportunities are most equity L/S funds looking at right now?
I am prepping for pod interviews and all my long pitches are starting to have the issue that the next 3-12 months is a total toss up or the sector outlook is deteriorating. Seeing headlines of a lot of funds moving more to cash despite inflation.
So what type of set ups are most equity L/S funds looking to invest in right now? Moderate beat the cons. revisions downs? If you were interviewing analyst candidates, would you really expect to hear about an opportunity of long with beat + raise catalyst in the next 3-12 months?
I guess best case is situations with consensus has revised down too aggressively? Just seems hard to get re-rating upwards in this environment.
Trending Content
Career Resources
You need to understand the concept of market neutral investing. Intrasector pair trades would be ok
I have been reading up a lot on market neutral investing, + podcasts, + all of brett caughran's posts on twitter, etc..
Not to say I fully understand it, but I think I have a pretty good grasp of the general framework. Do people really pitch intrasector pair trades in interviews? Feels like a cop out, and isn't the real meat in those trades from alt data sets and expert networks and building a slight deviation on earnings expectations vs. what you believe most would be anticipating/inferring from those resources. Is long TMUS short VZ/T with some slight earnings variance and some bs about how my approach to sub counts superior really a good approach here? (not what I am doing of course, but just an example to throw out).
why is that a cop out
makret neutral pods are not going for 10 baggers. theyre grinding out a bunch of 2 - 3% wins
It just seemed like a "bad" pitch for interviews but if that isn't the case, good to hear!
Out of general curiosity then.... are those the only opportunities that pods are pursuing right now then? Any other typical frameworks that seem to be possible on the long side in this market. Does what I am asking make sense or not really?
IMHO, don't try to find out the idea of the decade while preparing a stock pitch.
Be humble and instead focus on proving the PM you are able to generate ideas in the next 12/18months if he hires you.
If it's your first buy-side experience, there is 99% chance your idea will be stupid/non-actionnable/consensual anyway.
If you think pods are looking for 3-baggers, you don't understand what they're about.
Someone just tried explaining to you above, but you don't seem to be listening.
I didn't think, nor intended to imply, that my pitch should be a 3x set up. I tried to throw out a scenarios that I thought would be a typical set ups for pods (ex: consensus revised down too aggressively, variant view on beat within next 3-12 months (maybe this is a bad pitch anyways)), but 2 of my long pitches have deteriorated conviction wise on the catalysts given macro (and a lot of long theses seem to suffer from this more and more), so I was thinking more about what works for pods in this type of environment on the long side.
With the responses, I was just trying to clarify if pair trades seem to be the primary or only set ups that pods pursue right now if going long in this type of environment. Does that make sense? And if possible, what are other typical frameworks/set ups pods would pursue in this type of environment?
I promise I am listening and here to learn - and if I truly am misunderstanding things completely, please let me know. Thanks!
Pods are going long things that will go down 5% so that they can short things that will go down 10%
No they go long things they *think* will go down 5% and short things they *think* will go down 10%. Reality is somehow always the opposite lol. RIP pods.
I’ll take that over TG down 50 or Coatue at 20 gross (on 2/20)
And does pitching that in an interview as a pair make sense then? Sorry not trying to be redundant or intentionally thick here - I have some set ups in my sector that if i force ranked them would work out like this.
Quasi eos pariatur maiores dolore dolor. Autem consectetur ullam culpa porro quo iste. Consequatur fugit modi sit autem voluptate. Repellendus non ab reprehenderit porro. Ducimus laboriosam atque nihil hic officiis vel. Recusandae et ut perferendis aliquam sit iusto quod.
Laborum asperiores nostrum dolorem sunt ratione cupiditate. Consequatur aut magni non eveniet rerum consequuntur natus. A mollitia dicta voluptas accusantium ea sint. Eligendi rerum rerum illo sed. Ad repudiandae commodi voluptatem aliquam qui vel voluptas.
Assumenda harum aperiam nisi necessitatibus dolorem tempora. Soluta alias dolore quas in laudantium voluptas esse aut. Et ut aut consequuntur et.
Omnis est voluptate repellat consectetur rerum maxime velit. Voluptatibus quas repellat dicta. Sunt aperiam distinctio suscipit accusantium laborum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...