Advice for a new portfolio management analyst

Cantab's picture
Rank: Chimp | banana points 12

Hi guys, I recently started at a BB Hedge Fund and I would like to ask for advices from those who work in the portfolio management industry.

A little background, I used to work in ER at a BB for 2 years, and recently changed to HF. However, the HF I am in holds a huge amount of stocks (greater than 1000). I am having difficulty to learn about most of them (I previously cover only 3 stocks)...

My portfolio manager claims that I dont have to worry about learning about them in detail because since we are so diversified so our holding percentage in any one particular stock is rather limited.... this goes against what I have learned previously in ER in which I make phone calls, interviews, company site visits to companies to learn about them in DETAIL....

I am sure there are portfolio managers on this board that have experienced this learning curve, if any advice or tips could be given for me it is very much appreciated!!

THanks a lot WSO!

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Comments (5)

Jul 23, 2011

You worked at a BB bank for 2 years and only covered 3 stocks? Did they fire you for gross incompetence?

And what learning curve? At 1,000 stocks, the fund has completely eliminated all idiosyncratic risk (which happens around 30 stocks) and it is acting more like an index than a mutual fund. Clearly the stocks aren't in the portfolio for fundamental reasons, so why are you worrying about having to cover them on a fundamental basis?

Jul 23, 2011

Yeah, HF doesn't sound like it's looking for intrinsic value or anything. I think you should focus on becoming a pro at the different industry groups and watching macro trends to to make assumptions on said groups. It would probably help you limit the companies you should pay closer attention to.

Does a Portfolio Management Analyst even cover stocks? Is this something you should even be worried about? What re you going to specifically be doing?

Jul 23, 2011

@NorthEastIdiot: WIth the stock coverage, thats just the way things worked at my old firm... I wouldnt consider myself imcompetent compared to my colleagues... I worry to cover them on a fundamental basis because mainly thats the way I was trained to value companies previously, I guess it just has something to do with how the culture of my HF does not allign with my value investing belief...

@Something Creative: I think you got a good point in focusing at different industry groups and watching macro trends. I dont cover stocks, at least not so much as a reseach analyst, I usually carry out screenings and then use preset models by the fund to quickly derive a so called intrinsic value for various stocks.

London BB ER 2nd year Research Associate

Jul 25, 2011

what's a BB HF?

i'm assuming your new fund is long-short with a quant bias. hopefully you can program. :)

Jul 25, 2011