Help a Newbie
I just finished my freshmen year at college, and currently doing a summer internship at a small consulting firm. My goal is to get myself into a hedge fund, however as I scam throughout forums there is terminology unknown to me. Where do I get modeling training, and other technical knowledge asked at interviews? Which are the top hedge-fund firms I should consider for internships? Any books recommended? There are different hedge fund strategies, which of those relates the most to finance?
No hedge strategy relates to finance I think. My uncle recommended me this book when I first started though, really helpful: http://www.amazon.co.uk/Hedge-Britannia-Curious-History-Obsession/dp/14…
More money than Gods is a good book as well. Gives a good history of hedge funds. Take a look at the resources on some of the top ranked posts and you can get modeling help through Wall Street Prep, BIWS and such
Well fuck me, I just awarded you a silver banana for a book about Hedges
Hahahahahaha made me laugh this morning.
Anyway, you can learn basic modelling online with prep packages such as the ones suggested above by another poster. Besides this the most standard place would be a bank/fund. As for the internships, depends what strategies interest you most... Bridgewater Associates, Citadel, AQR, Viking, Eton Park, Tudor, DE Shaw and Winton are just but a few of the largest funds accepting summer interns.
I believe having a sound understanding of fundamental investing is very important before getting into markets so books such as The Intelligent Investor to start off should be fine, then the Market Wizards series, etc. That is of course if you're into equities, there's many other great books/papers to read if you're into other asset classes.
reading helps a lot - maintained a spreadsheet to track my reading and i recall reading 76 books my freshman year alone. that was a bit extreme but id say spend the next few months reading about various strategies and try and pick 1-2 related ones that you like. then dedicate the next few years learning as much as possible about those strats.
Where do I get modeling training, and other technical knowledge asked at interviews? -Read "Valuation" by McKinsey & Associates. For every one of my investment ideas, I've referenced that book in some way shape or form.
Which are the top hedge-fund firms I should consider for internships? -Depends. Do you like qualitative or quantitative analysis, or do you just want to intern at any hedge fund for the sake of interning at a hedge fund? If the latter is the case then usually HUGE quant funds offer summer internships
Any books recommended? -Valuation by McKinsey & Associates, The Intelligent Investor by Graham, Common Stocks and Uncommon Profits by Fisher, You Can Be A Stock Market Genius by Greenblatt, Manual of Ideas by some guy with a long European last name, Art Of Value Investing by Tilson, Quality of Earnings are a few of my favorites.
There are different hedge fund strategies, which of those relates the most to finance? -Finance encompasses a broad spectrum of topics...so unless your strategy is betting on sports teams, which I'm pretty sure some hedge funds do as their strategy, then all hedge fund strategies relate to finance in some way shape or form
is 'art of value investing' actually good? i've never read it but the fact that tilson wrote it makes me want to steer way away from it...
Don't mean to intrude on this thread, but I thought it was easy to read and most importantly hit on many of the major points. @kidflash, I would definitely read it. I want to thank @SonnyZH, I found the book you mentioned in my local library and loved it.
Haha completely understandable. The Art of Value Investing is actually a compilation of notable quotes from the Value Investor Insight. Einhorn, Cooperman, Bares are just a few notable names quoted in the book. Tilson literally doesn't contribute any insight.
My advice;
1) Aim to understand the industry first (Alpha vs Beta shops - Fast vs Slow money etc - there are some journal artcles on this which break it down well). This will give you a basic context for the different strategies used. 2) Credit Suisse has a good article on different hedge fund strategies and return profiles, basically you can split it up into non-directional (arguable though, since you're taking a direction on gamma, liquidity etc) and directional (stock pickers, event driven stuff). 3) Figure out what asset you want to work with, and what your skills are. Broad categories to look into are; Equities (obviously), Credit, Rates, volatility, hybrids (converts etc), commodities. 4) Learn the requisite techniques to understand modelling (i.e. you need to have AT LEAST a fundamental grasp of statistics and calculus, if not greater) 5) Follow the markets you're interested in (difficulty depending upon what asset you favour) 6) Get a thesis -> model it -> size and implement it in a real/fake portolio and track performance.
What sort of modeling are you doing where you need to know calculus?
"fundamental grasp" of calculus is at least necessary to understand regression analysis (i.e. gradients and functions, ala CAPM and other pricing models), and would require more indepth understanding for more complex modelling involving stochastic processes, which IS relevant if you are interested in derivatives.
Thanks a lot guys I appreciate the help. Wish I had more credits.
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