Anecdotal Stories of How HF People Love Investing More Than Avg. Wall Street Employee?
Anecdotal Stories of How HF People Love Investing More Than Avg. Wall Street Employee?
Heard this is true. Heard stories that alot of people at SM's spend free-time reading investing novels, and think about the markets constantly. I feel that I am really interested in this stuff, but curious to what extent these kinds of rumors are true. To see how large the discrepancy is versus the average WS employee
What investing novels are there?
I don't think it's a rumor. People in general that are at the top of their respective fields ( A SM being top percent in the financial field ) definitely spends a good amount of their time reading,listening /learning new things. Provides them with a different perspective that they can implement into their respective lives/careers. When you have a high passion for something there will always be a drive to learn more.
To provide you with an example. Warren buffet spends 80% of his day reading. That I believe gives you the anecdotal response you're looking for. Howard marks another legend has a reading recommendation list you can find if you google.
You're telling me he reads for 19 hours a day, and manages to fit everything else including sleep into 5 hours? And he's made it to 90?
Investing is definitely cool. I really love the idea generation/ " digging" through companies as the legend Paul Enright likes to call It . You should check his invest like the best episode on how he does his DD and what he looks for, exciting stuff ! Also talks about emerging markets , biotech, consumer tech and his FB play.
My favorite two high schoolers
And yeah Invest like the Best is a great podcast
its overblown
for most people its just a job, like any other job
Probably the reason "most" people in this or any other business aren't hugely succesful or are stuck in their careers. If it's just a job to you and you are competing against people that live and breathe it, no wonder you're not breaking through.
It's not overblown, it's totally real. In my case, it kicked in when I was promoted to PM. As an analyst, I did enjoy most of the job, but the level of engagement and motivation skyrocketed after I really owned my P&L.
You don't break into a tiger cub or $10Bn AUM SM by thinking "it's just a job."
whatever you say IB - analyst 1
I think it sounds cool until you actually have to do it as a real job and you’re actually faced with real ramifications if your ideas don’t work out. That said - am pretty sure many decent HF professionals enjoy discussing ideas and reading about companies of interest whenever they want without it feeling like work. The so called entrepreneurial nature of the job is good and bad.
The first statement already drives it home. Investing is a profession where you can be passionate about but still suck at.
It's always easy when a great investor talks about an investment idea and they articulated it concisely and they made a lot of money out of it, so IT SOUNDS COOL (and financially rewarding). It's also easy to say "I will buy more" when the name you pitched into the portfolio is down 50% unrealized, without assessing whether the business value is permanently impaired or it's more a short-term issue (the latter warrants buying more, the former warrants selling the position ASAP).
What ppl don't see is the amount of reading and talking to ppl (customers, supplier, employees, etc.) within the value chain to come to a second-level view on a situation. The work-life balance is also deceptive because many pros in this business put in 100 hour weeks but don't call it work.
Some of the best trades are just seat-of-your-pants stuff where you have the balls to buy something after a massive sell off. Back in March 2020 when covid hit you had airlines (Ryanair/Easyjet) and cruise liners (Carnival/Royal Caribbean) in EUR credit land priced for bankruptcy. A quick analysis of liquidity and collateral, and faith in the FED/ECB coming to the rescue, resulted in some substantial money being made last year. It's not always the quirky academic type reading 100 books a month who is making the great returns.
Yes, some people made huge money last year on their PA doing things like this (even mid 8 figures). The media was saying nobody will ever fly on airlines again, which was clearly nonsense. Sometimes the best investments are very simple ideas that are executed carefully and correctly, and sized up enough.
Often times the "best ideas" are strokes of luck that make the "investor" believe he is a genius when in fact it was just luck.
The world came up with a vaccine 10 months after the virus outbreak. What were the chances of that? And would we all be so cocky about things if the vax trials had come out unsuccessful? Even Buffett puked out of his multi-$bn position in airlines, but apparently everyone on WSO and twitter is a genius that knew better.
A little modesty never hurts, friends.
Air travel picked up well before the vaccines were widespread, and it would have returned eventually in any case. Buffett made a poor decision that was contrary to his own investment philosophy.
I'm not sure there is a clear difference between genius and luck, or if it even matters. The people who started big HFs back in the day and made the most money were not necessarily the smartest ones, but the ones who saw opportunity in a growing industry early on.
It’s not as simple as people were going to fly again so airline stocks will recover at some point. Everyone knew that. The hard question was how long would airline stocks bleed before it bounced? That in itself was a covid trade and as luck had it - the successful vaccine trials helped put a floor to these names late last year. I don’t buy the argument that airline bookings were already starting to recover and that helped time the trade. It was obviously the vaccine headlines and I doubt an industrials analyst knew anything about whether it was going to be 50% or 95% effective.
100% agree. Again, in retrospect, everything is obvious.
Hopefully prior poster can flag next time he sees a "no brainer" so we can all get rich with him. And let Buffett know too!
We did internal surveys of regular cruise goers and found that over 80% of people who regularly go on cruises (I have never been on one) couldn't wait to get back on their next Carnival Cruise and stuff themselves at the buffet and drink themselves to death. So we knew that the demand was there, the issue was the CDC and the unknown as to how long it would take to restart. From there you had to do 2 things: (i) estimate the monthly cash burn, and (ii) look at how much collateral (ships) could be used to raise secured debt (applying a major haircut to those ship values). At that point you could say "Carnival can probably survive a 2 year shut down and beyond that we're fcuked." Then it was just a view of "will the general populace tolerate lockdowns beyond 2 years." A lot of luck for sure, can't deny that, but fortune favors the brave!
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