9/1/17

I've been reading through some HF interview guides and sample stock pitches, and one topic keeps popping up that I'm having some trouble with:

How do you know how the "market" is underwriting their assumptions from a valuation standpoint?

For example, the market thinks Company A's North America segment will experience 5% revenue growth over the next 2 years, then 3% thereafter, but you think the market is missing something and it will actually be 10% next year.

How on earth do you find out what the market is expecting? This seems damn near impossible unless you literally know what people are putting in their models. Especially if you are interviewing for a job since you likely don't have access to sell side research, and assuming can't call up a buddy at a mutual fund and say hey what are you projecting?

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