10/22/15

Mod Note (Andy): #TBT Throwback Thursday - this was originally posted on 3/24/13.

So I've seen a few posts lately asking about mutual funds, Asset Management gigs, and alternatives to the sell-side out of college, and hopefully my experience taking the asset management route to hedge fund rather than banking can help people get a better idea of what the expectations will be like.

I'll be clear early on though, I worked at the type of asset management firm that's tough to classify. I like to consider this class of AM firm as a "top asset manager" or a "boutique asset management firm" or something along those lines. In a thread about Third Avenue (one such asset manager), West Coast Rainmaker does an excellent job breaking down these types of firms and the major ones in one of his comments. Link to that is right here: //www.wallstreetoasis.com/forums/third-avenue-manage...

These funds tend to go unnoticed/unappreciated/unrecognized by the majority of WSO (and the majority of the younger crowd on Wall Street in general), and are markedly different from the likes of the traditional asset managers such as Fidelity, T. Rowe, Capital Group, Wellington, BlackRock, etc. that I sometimes lump into the "too big to succeed" category. Not that they aren't amazing firms (I'd happily have worked at most of them... not BlackRock though) but they, as West Coast Analyst phrased it, don't provide truly differentiated products in most circumstances. I'll try my best to identify the differences between these and top asset managers that I know of as I go along.

My background as it relates to AM, briefly: I spent 2006-2008 working for a top asset manager in an investment analyst role working strictly with concentrated long-term equity investments. I got this job through On Campus Recruiting, fortunately enough, and think the reason I was able to get their attention was that I had been investing for a very long time and managing money for friends and family for a while, mostly in the same style as they did. Despite their notoriety in the investment community I had no clue who they were when I interviewed there, and for some reason I also think that helped during the interview process.

Anyway, let's begin.

Recruiting

Right off the bat, the biggest drawback/advantage to working at a boutique AM firm is that research teams tend to be very small, tight-knit in terms of philosophy, and turnover is extremely low. The advantages to this are pretty clear: the culture does not quickly change and the groups are very friendly/ extremely willing to develop talent from within. That makes them very ideal places to start out. The drawback is also obvious then, as it's very difficult to get your foot in the door and actually find an opportunity to interview since most places are not frequently open to hiring.

Some top AMs will hire through OCR and other direct-from-undergrad means, but most have ad-hoc recruiting practices that make it hard for someone coming right out of school to get an easy opportunity at a job. Sending out your resume can sometimes be all it takes if you catch them at a lucky time when they're open to hiring, but often they are only looking at certain target schools for their hiring when they need it, or will take experienced hires from elsewhere. The key trait these firms look for is a previous appetite for investing (particularly in whatever their style may be) and a virtual certainty that investing is what you plan on making your long-term career.

Interview processes for these firms are generally casual and very investment-oriented. The behavior questions I remember getting were pretty standard, but a lot of it was geared towards getting a feel for your personality as it relates to being a deep thinker and an investor. One of the biggest differences I noticed between the recruiting processes of the top AMs and the traditional AMs was that the people at top AMs seem to be MUCH more like genuine intellectuals and learners than people at a place like Fidelity where there might be more of an established process and way of thinking that keeps everyone pretty much doing the same thing. I had situations during my interviews where the PM interviewing me would literally pull out a pad of paper and start taking notes based on something he didn't know that I did about a company he wasn't familiar with or something. They genuinely want to know everything, and it's all very intellectual. Technicals aren't really a big deal per se, but having a pitch and being able to explain your thought process when evaluating a business is extremely important. Most top AMs are long-term investors, so knowing how to look at a business through that lens is a big deal, much more so than being able to predict a 3 month catalyst that will get you 10%. They don't want 10% once, they want 20% annually for 40 years.

Culture

I think I've covered a decent amount of the culture within my recruiting rant - my apologies - but I'll quickly stress the things that I noticed compared to my experience at hedge funds or with people at traditional AMs. There's the intellectual component, then there's the stress on talent development (biggest plus to working at one of these places), and the last part that I haven't mentioned yet is another big one... most analysts at these types of funds aren't a very social bunch.

Autonomy is a huge part of the job, as the smaller the research team the more responsibility each analyst has to take on (and the less people to micromanage you). I can say that even two weeks into the job out of college I was meeting with clients who had separately managed accounts with us, grilling top sell-side analysts, and meeting CEOs for lunches. These guys really gave me no time to grow up and put me right in the fire from day one. While I love this, some people might not be able to handle it but most of the time their recruiting practices select people who can. The downside to this level of responsibility/autonomy is that people aren't really spending any time during the day just chatting or being social. Now, we spent a lot of time talking with one another about businesses and what we were working on, but we didn't spend much time hanging out outside of work (some of us did, but really not nearly as frequently as I do with my coworkers now) and there's not much room for personal life conversation either. Outside of the social aspect, it also sucks that you can start working on an idea and run with it for 3-4 weeks without a single person walking into your office to tell you it's a good or bad idea. Then all the sudden your PM might suggest moving on to another project and you've wasted a month on a single idea. So if you're not proactive in checking out your progress, you can potentially get fucked.

The Actual Work

The autonomy, like most else involving top asset managers, was good and bad. Now depending on who you are, the way it affects your actual daily work will vary. Right from the start (and even as an intern) we were all given the same job title as Analysts, and had more or less the same general responsibilities. With such a small team and an enormous amount of ground to cover in the equity space, analysts are expected to source their own ideas and to do it well. From day one you come up with your own ideas, do your own research, and figure it all out on your own. If you don't know how, tough shit, you're probably gonna get fired then. Asking for help isn't looked down upon, but it certainly will slow down your process and make you look a lot less desirable than someone who can put out solid research on a potentially-attractive business. We had an analyst start pitching a gaming company and I don't think anyone took him seriously for at least 3 months after that.

The talent at the level of most of the top AMs, particularly the PMs, is truly tops on Wall Street in a lot of areas. Being surrounded by the kinds of investors who run these funds can be a huge bonus to your career in terms of developing into a smarter investor and piecing together the investment processes of multiple successful managers to form your own unique philosophy is worth working for them for free, honestly. I never really though of my work as "actual work" because of how enjoyable it was working with these type of people, so it's hard to dive into specifics.

I could obviously write about all the stuff I did and it would take 90 pages, but that would be a waste... so I'll save questions for the comments and try to answer them as best I can if anyone has any.

Lifestyle

This is the one area that I think really separates top AMs from their peers. Just about everyone in the firm, including the PMs, is in between 8:30 and 9:00am, and out around 5:00pm... with 6:00pm considered "staying late" and 7:00pm being an all-nighter. I never worked a weekend my entire time at the firm, and analysts routinely shot 4:00pm emails to the research team to let them know they'd be working from home the next day. As long as you get your shit done and you get it done well, nobody really cares where you do it, honestly. I've heard this sentiment echoed at other top AMs, but never at traditional asset managers. Another big difference is that the top AMs (probably just a function of smaller analyst headcount) usually have very flat structures where everyone is pretty much on the same level except the PMs, though even they tend to prefer their analyst duties to their PM duties.

So hours are great, you're typically treated very well by your coworkers, face time is nonexistent, and the only real way that I've ever seen analysts come in feeling like they hate their job or their coworkers is when there wasn't a cultural fit in the first place and someone fucked up in the hiring process. It's really a hard gig not to like, hence the super low turnover.

Compensation

My personal experience with compensation was that my firm actually paid a bit above what my investment banking buddies at top shops were getting all-in, but other data points and experience has me putting the typically compensation numbers at or very slightly above street level. Salaries tend to be higher than banking, but like most AM firms the bonuses are significantly lower. At the end of the day, you're working basically a 9 to 5, so the slightly lower comp isn't gonna kill you and the exit opportunities are the same or better than banking if your ultimate goal is moving to a hedge fund or other asset manager that matches the investing style of your AM firm. In this environment, I would expect something like 80-90k base salary and a bonus in the 20-30% range for top AM firms, though it could be slightly lower if things have changed significantly. My salary was higher than that and my bonus was slightly above the 30% mark my first year, but that was 2006. After a few years those numbers go up pretty significantly, and I know for fact our highest-paid non-PM analyst (though he handled some separately managed accounts like most senior analysts) was getting all-in comp north of $3.5M, which you can't really complain about.

Summary

All in all, top AMs are an amazing place to start an investing career. An intellectual culture that wants their young talent to develop and succeed, an attractive compensation structure, very easy hours, and great excellent opportunities all make them highly desirable but extremely difficult to get hired.

I'll try my best to answer anything I didn't cover in the comments.

Comments (184)

3/24/13

Hearing about jobs like this keeps me going; it sounds too good to be true. I'm still kicking myself for not even applying for an internship at a Ruane, Cuniff & Goldfarb-spinoff. I actually bought into the "markets are perfectly efficient" line in academia for years.

How did your fund view diversification? I have a ton of respect for guys like Berkowitz who commit to their best ideas. But (a) that doesn't leave much for a junior hire to do, and (b) a lot of retail investors fear that kind of volatility.

I would guess running a diversified (75+ position) fund lets makes it easier to ignore short term volatility. Especially if you are investing in traditional "value" stocks, you are probably buying into some pretty troubled companies that may fall further before correcting.

Financial Modeling
3/24/13

West Coast rainmaker:
Hearing about jobs like this keeps me going; it sounds too good to be true. I'm still kicking myself for not even applying for an internship at a Ruane, Cuniff & Goldfarb-spinoff. I actually bought into the "markets are perfectly efficient" line in academia for years.

How did your fund view diversification? I have a ton of respect for guys like Berkowitz who commit to their best ideas. But (a) that doesn't leave much for a junior hire to do, and (b) a lot of retail investors fear that kind of volatility.

I would guess running a diversified (75+ position) fund lets makes it easier to ignore short term volatility. Especially if you are investing in traditional "value" stocks, you are probably buying into some pretty troubled companies that may fall further before correcting.

We were in the "diversification is for idiots" square, and as my boss used to always say, your best 6 ideas will be better than your next 100. We tended to invest less in the cigarette-butt value stocks and more in the high quality businesses at fair prices kind of value stocks that you could hold for 20 years and just know this is an excellent business that will keep compounding its earnings growth and give us a return for a long, long time. As for limiting what a junior guy can do, I don't think it necessarily does that. While we only held like 15 positions, every analyst is still looking at 1-3 ideas that aren't actually positions, and we research those extremely heavily before they get put into the fund, and the real reason why analysts stay busy is simply that the more excellent businesses you can identify, the better. If an analyst spends 2 months figuring out that XYZ Corp is an excellent business worth owning, but the stock doesn't get cheap for another 7 months and you end up buying it, that guy's 2 months were actually extremely productive. The more knowledge the better was always our motto.

I hate victims who respect their executioners

3/25/13

BlackHat:
West Coast rainmaker:
Hearing about jobs like this keeps me going; it sounds too good to be true. I'm still kicking myself for not even applying for an internship at a Ruane, Cuniff & Goldfarb-spinoff. I actually bought into the "markets are perfectly efficient" line in academia for years.

How did your fund view diversification? I have a ton of respect for guys like Berkowitz who commit to their best ideas. But (a) that doesn't leave much for a junior hire to do, and (b) a lot of retail investors fear that kind of volatility.

I would guess running a diversified (75+ position) fund lets makes it easier to ignore short term volatility. Especially if you are investing in traditional "value" stocks, you are probably buying into some pretty troubled companies that may fall further before correcting.

We were in the "diversification is for idiots" square, and as my boss used to always say, your best 6 ideas will be better than your next 100. We tended to invest less in the cigarette-butt value stocks and more in the high quality businesses at fair prices kind of value stocks that you could hold for 20 years and just know this is an excellent business that will keep compounding its earnings growth and give us a return for a long, long time. As for limiting what a junior guy can do, I don't think it necessarily does that. While we only held like 15 positions, every analyst is still looking at 1-3 ideas that aren't actually positions, and we research those extremely heavily before they get put into the fund, and the real reason why analysts stay busy is simply that the more excellent businesses you can identify, the better. If an analyst spends 2 months figuring out that XYZ Corp is an excellent business worth owning, but the stock doesn't get cheap for another 7 months and you end up buying it, that guy's 2 months were actually extremely productive. The more knowledge the better was always our motto.

What is the performance of your fund? Like, after fees, relative to the market, how are you guys doing? Am asking because I just read the hedge fund mirage and generally think that investment managers don't add value.

3/25/13

STIBOR:

What is the performance of your fund? Like, after fees, relative to the market, how are you guys doing? Am asking because I just read the hedge fund mirage and generally think that investment managers don't add value.

At the risk of giving away where I worked, our annualized return to date over multiple decades of life was in the high teens. The firm I work at now is much newer, but in aggregate, also high teens for a little over a decade. I always subscribe to the theory that the right kinds of managers do add value, however on average the whole may not.

I hate victims who respect their executioners

3/25/13

Had you stayed in your old firm, we probably would have met in 2010 when we were doing a NDR.

Impressive pedigree..you Wharton kids get everything handed on a silver platter :P

Follow me on Twitter: https://twitter.com/KarateBoy

Best Response
3/25/13

KarateBoy:
Impressive pedigree..you Wharton kids get everything handed on a silver platter :P

Honestly after seeing the amount or grind and hustle that kids on this site have explained having to go through to get internships and full time opportunities, I almost resent my alma mater for how badly the ease of access to top jobs was taken for granted by a lot of students. I like to think I worked pretty hard and had a genuine interest in the jobs I was able to get as a result of going to a top school but a lot of my peers really didn't. So many intelligent kids went there because they knew they were smart and could go anywhere they wanted, and decided they might want to go into business because it pays really well, so they decide on Wharton because it's thought to be the best for business at the undergrad level. Then two years into their college educations they realize they never wanted it to begin with and either disappear into something retarded or end up swallowing their happiness and just plodding along into banking, taking the spots from much hungrier kids who actually wanted it 100x more. It's almost ridiculous, and I seriously admire a lot of the kids on here who will read the stuff I write and come back with some really great questions and seem to aspire to have the same opportunities that I had, which I totally took for granted. It really is amazing and I think we're going to see a shift at some point where the backgrounds of Wall Street are going to look a lot more diverse than they historically have. And I'd welcome that.

I hate victims who respect their executioners

3/25/13

BlackHat:
KarateBoy:
Impressive pedigree..you Wharton kids get everything handed on a silver platter :P

Honestly after seeing the amount or grind and hustle that kids on this site have explained having to go through to get internships and full time opportunities, I almost resent my alma mater for how badly the ease of access to top jobs was taken for granted by a lot of students. I like to think I worked pretty hard and had a genuine interest in the jobs I was able to get as a result of going to a top school but a lot of my peers really didn't. So many intelligent kids went there because they knew they were smart and could go anywhere they wanted, and decided they might want to go into business because it pays really well, so they decide on Wharton because it's thought to be the best for business at the undergrad level. Then two years into their college educations they realize they never wanted it to begin with and either disappear into something retarded or end up swallowing their happiness and just plodding along into banking, taking the spots from much hungrier kids who actually wanted it 100x more. It's almost ridiculous, and I seriously admire a lot of the kids on here who will read the stuff I write and come back with some really great questions and seem to aspire to have the same opportunities that I had, which I totally took for granted. It really is amazing and I think we're going to see a shift at some point where the backgrounds of Wall Street are going to look a lot more diverse than they historically have. And I'd welcome that.

That's largely why I'm on here: to learn and give back.

I'm not going to go through my background again, but suffice it to say that I fall into the hungry camp versus the target-school camp.

The preferential treatment some backgrounds gets - while understandable from an employer perspective - is frustrating to most of us on the outside. I've had to fight tooth and nail for my seat at the table. Now that I've broken in, I make it a priority to give back to my school by advising upcoming juniors and seniors.

The answer to most of the questions above regarding employment is networking.

EDIT 1: http://www.gabelli.com/corporate/phd.html
EDIT 2: I'm also on here for the lols.

Follow me on Twitter: https://twitter.com/KarateBoy

3/26/13

KarateBoy:
BlackHat:
KarateBoy:
Impressive pedigree..you Wharton kids get everything handed on a silver platter :P

Honestly after seeing the amount or grind and hustle that kids on this site have explained having to go through to get internships and full time opportunities, I almost resent my alma mater for how badly the ease of access to top jobs was taken for granted by a lot of students. I like to think I worked pretty hard and had a genuine interest in the jobs I was able to get as a result of going to a top school but a lot of my peers really didn't. So many intelligent kids went there because they knew they were smart and could go anywhere they wanted, and decided they might want to go into business because it pays really well, so they decide on Wharton because it's thought to be the best for business at the undergrad level. Then two years into their college educations they realize they never wanted it to begin with and either disappear into something retarded or end up swallowing their happiness and just plodding along into banking, taking the spots from much hungrier kids who actually wanted it 100x more. It's almost ridiculous, and I seriously admire a lot of the kids on here who will read the stuff I write and come back with some really great questions and seem to aspire to have the same opportunities that I had, which I totally took for granted. It really is amazing and I think we're going to see a shift at some point where the backgrounds of Wall Street are going to look a lot more diverse than they historically have. And I'd welcome that.

That's largely why I'm on here: to learn and give back.

I'm not going to go through my background again, but suffice it to say that I fall into the hungry camp versus the target-school camp.

The preferential treatment some backgrounds gets - while understandable from an employer perspective - is frustrating to most of us on the outside. I've had to fight tooth and nail for my seat at the table. Now that I've broken in, I make it a priority to give back to my school by advising upcoming juniors and seniors.

The answer to most of the questions above regarding employment is networking.

EDIT 1: http://www.gabelli.com/corporate/phd.html
EDIT 2: I'm also on here for the lols.

I have heard some horror stories about working for Gabelli...

...but I would probably still do it in a heartbeat.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."

11/16/16

You guys help me so much, I want to thank all of you.

But, let's suppose that a foreigner wants to get at Wharthon. To get an MBA, to change careers coming from Engineering, having built his own companies from the ground and made it to the U.S. with some money at his pocket... How could I get there? Supposing that I may have enough to donate, and to pay easily for the course and everything else?

Do I need to know the right persons? Because, Wharton doesn't look too much of an open institution for outsiders. And, most of guys I know only have degrees in education, which I consider useless and they may be really unable to help me.

What you guys would say about me and my situation?
Thanks in advace!

11/14/16

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3/24/13

A friend of mine from school is thinking of applying to b school. He works in research at a top asset management firm. Based solely on his work experience and the brand name of his company, what would be his chances at h/s/w?

3/24/13

Could you name some firms that you would consider top AM? I am having trouble distinguishing them from your big AM like Fidelity and Wellington

10/23/15

Guggenhiem...

Greed is Good!

3/24/13

From West Coast Rainmaker's post in the thread "Third Avenue Management"

Wellington: Boston based, awesome culture, awesome products. I'd kill to work here. Mostly does subadvisory work e.g. Hartford Life outsources the management of some of their mutual funds to Wellington. Lots going on: they have quant, L/S, industry specific, etc. teams internally.

Dodge & Cox: Low turnover (both in portfolios and personnel) and a little slower paced. They focus on large cap equities; also started international and FI funds. Their funds are all multi-manager; every investment is extensively mulled discussed by the team. They started a research associate program a few years ago due to the expanding scope of the firm. The associates stay around for 3-4 years, then generally move to a MBA program (like most AM firms, great placement).

Capital Group: Old firm with a great track record. Good culture, good comp. Very understated - they do not advertise their funds. They also use a multi-manager model, but PMs are each given a slice of a fund to allocate to their best ideas. In my opinion, one of the best AM firms to work for. No real way in out of undergrad; they only have a back office rotational.

DoubleLine: I basically worship Jeffrey Gundlach, so I was excited to see them open an equities fund. No idea how you'd get hired there though.

First Pacific Advisors: Great performance. Robert Rodriguez's firm; he occasionally does interviews. I don't know much more about them.

Harris Associates: Chicago based, Bill Nygren's firm, manages the Oakmark fund. Has a thriving separately managed accounts business. I think comp is slightly below street, but I could be wrong.

Neuberger Berman: NYC based. Interesting structure: they split people up into teams by PM. So you would have the [PM's name] team managing one pool of money. Not terribly familiar with them.

Ruane, Cunniff, & Goldfarb: Manages the Sequoia fund. Classic Value investing.

Royce: Great name in small caps, if that's your thing.

Third Avenue: Previously discussed.

There are some other great managers (Yacktman, Fairholme, Himalaya, etc) but I haven't looked into them mainly because they don't really hire anyone.

I hate victims who respect their executioners

3/24/13

BlackHat:
From West Coast Rainmaker's post in the thread "Third Avenue Management"

Wellington: Boston based, awesome culture, awesome products. I'd kill to work here. Mostly does subadvisory work e.g. Hartford Life outsources the management of some of their mutual funds to Wellington. Lots going on: they have quant, L/S, industry specific, etc. teams internally.

Dodge & Cox: Low turnover (both in portfolios and personnel) and a little slower paced. They focus on large cap equities; also started international and FI funds. Their funds are all multi-manager; every investment is extensively mulled discussed by the team. They started a research associate program a few years ago due to the expanding scope of the firm. The associates stay around for 3-4 years, then generally move to a MBA program (like most AM firms, great placement).

Capital Group: Old firm with a great track record. Good culture, good comp. Very understated - they do not advertise their funds. They also use a multi-manager model, but PMs are each given a slice of a fund to allocate to their best ideas. In my opinion, one of the best AM firms to work for. No real way in out of undergrad; they only have a back office rotational.

DoubleLine: I basically worship Jeffrey Gundlach, so I was excited to see them open an equities fund. No idea how you'd get hired there though.

First Pacific Advisors: Great performance. Robert Rodriguez's firm; he occasionally does interviews. I don't know much more about them.

Harris Associates: Chicago based, Bill Nygren's firm, manages the Oakmark fund. Has a thriving separately managed accounts business. I think comp is slightly below street, but I could be wrong.

Neuberger Berman: NYC based. Interesting structure: they split people up into teams by PM. So you would have the [PM's name] team managing one pool of money. Not terribly familiar with them.

Ruane, Cunniff, & Goldfarb: Manages the Sequoia fund. Classic Value investing.

Royce: Great name in small caps, if that's your thing.

Third Avenue: Previously discussed.

There are some other great managers (Yacktman, Fairholme, Himalaya, etc) but I haven't looked into them mainly because they don't really hire anyone.


Ahh, thank you. pardon my lack of attention to detail
3/24/13

BlackHat:
I could obviously write about all the stuff I did and it would take 90 pages, but that would be a waste...

No, man, it wouldn't. It would be fucking gold.

3/24/13

Febreeze:
BlackHat:
I could obviously write about all the stuff I did and it would take 90 pages, but that would be a waste...

No, man, it wouldn't. It would be fucking gold.

Straight from my head!

3/24/13

What's the average age that most analysts in the AM world get their CFA - How quickly does that rocket you to a PM gig? Are internship positions at AM/IM firms usually equity research roles? Do you have a specific view on Equity vs FI oriented firms?

Sorry for the barrage of questions. I interned at a boutique IM firm over my past Freshman Winter/Spring break, though 80% of what I did was data entry, they did toss me into the mix in multiple client meetings (with BB names) because the PM I worked for wanted a college students view on Apple vs Samsung when discussing AAPL holdings.

Really loved it there, currently looking for other options for the summer since they can't keep me.

3/24/13

StryfeDSP:
What's the average age that most analysts in the AM world get their CFA - How quickly does that rocket you to a PM gig? Are internship positions at AM/IM firms usually equity research roles? Do you have a specific view on Equity vs FI oriented firms?

Sorry for the barrage of questions. I interned at a boutique IM firm over my past Freshman Winter/Spring break, though 80% of what I did was data entry, they did toss me into the mix in multiple client meetings (with BB names) because the PM I worked for wanted a college students view on Apple vs Samsung when discussing AAPL holdings.

Really loved it there, currently looking for other options for the summer since they can't keep me.

Average age... maybe 23-24? Most places will either not give a shit whether or not you get your CFA, or they will really encourage it (e.g. T Rowe) and get you on track to get it right when you start working, so if you entered out of undergrad they'd probably help you to have it within 2-3 years. I don't know how much that helps you get to a PM role and I think your individual performance is obviously the bigger part of it. I'd say 8-10 years might be the average to get into an actual position where you're managing capital. Could be much earlier, could be much later depending on firm. I'm always biased towards equities because it's all I know and have ever done, but I'm sure fixed income can be great if that's your thing, and PIMCO is beastly obviously so they must be doing something right in the FI space.

I hate victims who respect their executioners

3/25/13

BlackHat:
StryfeDSP:
What's the average age that most analysts in the AM world get their CFA - How quickly does that rocket you to a PM gig? Are internship positions at AM/IM firms usually equity research roles? Do you have a specific view on Equity vs FI oriented firms?

Sorry for the barrage of questions. I interned at a boutique IM firm over my past Freshman Winter/Spring break, though 80% of what I did was data entry, they did toss me into the mix in multiple client meetings (with BB names) because the PM I worked for wanted a college students view on Apple vs Samsung when discussing AAPL holdings.

Really loved it there, currently looking for other options for the summer since they can't keep me.

Average age... maybe 23-24? Most places will either not give a shit whether or not you get your CFA, or they will really encourage it (e.g. T Rowe) and get you on track to get it right when you start working, so if you entered out of undergrad they'd probably help you to have it within 2-3 years. I don't know how much that helps you get to a PM role and I think your individual performance is obviously the bigger part of it. I'd say 8-10 years might be the average to get into an actual position where you're managing capital. Could be much earlier, could be much later depending on firm. I'm always biased towards equities because it's all I know and have ever done, but I'm sure fixed income can be great if that's your thing, and PIMCO is beastly obviously so they must be doing something right in the FI space.


Solid advice. Your previous firms investment philosophy is pretty identical to the firm I intern at. Big thing I noticed at my firm is that since they're a small boutique (18 man) and only have 4 people on the advisory team every single person has to be as educated and up to date on research on every equity in their portfolio as the other. Reason being is that they don't think it reflects the best on them to have a client call one of their PMs wanting to know about X stock only to get the response, "Oh that's PMs stock not mine, I'll transfer you to him". I really like the approach.

What sort of material/books would you recommend reading and learning to be able to knock AM interviews out of the park (As far as technicals go)? Or is what you posted in your OP about interviews really all there is to it?

3/25/13

StryfeDSP:

What sort of material/books would you recommend reading and learning to be able to knock AM interviews out of the park (As far as technicals go)? Or is what you posted in your OP about interviews really all there is to it?

The basics, plus a few for flavor:

Intelligent Investor
Securities Analysis
Buffetology 1 and 2
The Interpretation of Financial Statements (I think also by Mary Buffett)
Financial Shenanigans
Margin of Safety
Fooling Some of the People All of the Time

And of course a few news publications daily is always important.

I hate victims who respect their executioners

3/26/13

BlackHat:
StryfeDSP:

What sort of material/books would you recommend reading and learning to be able to knock AM interviews out of the park (As far as technicals go)? Or is what you posted in your OP about interviews really all there is to it?

The basics, plus a few for flavor:

Intelligent Investor
Securities Analysis
Buffetology 1 and 2
The Interpretation of Financial Statements (I think also by Mary Buffett)
Financial Shenanigans
Margin of Safety
Fooling Some of the People All of the Time

And of course a few news publications daily is always important.

Thanks so much for taking your time to make this post. I wont be surprised if your gonna become a PM in a good 2 -3 years time.

A lot questions i may have and a bit off topic as well.

1) Can you share with us some good daily news publication sites for Students or 1st-2nd year analysts or any good sites that you feel are worth following ? Would appreciate =)

2) Are you currently pursuing the CFA? I have read through your series on working at a HF and you havent mentioned on whether your doing the CFA at all. I believe its always important to be able to make money for your PM by being able to generate good ideas rather than placing emphasis on the CFA. Would love to to hear your perspective/personal opinion on this. is it worth pursuing a professional cert something like this? From your opinion, does it boost your credibility/reputation in future when your meeting new clients in handing out namecards etc?

3) On generating new ideas, where do you usually get your ideas from? Did you subscribe to Barron's or you usually get something off newspapers/magazines/sites you follow? You have mentioned in your mini HF series that you do printout and bring home a 10-k to read at night, do you do that everyday or just over the weekends?

4) On financial modelling/valuations, on your previous posts back a month or 2 that you mentioned that you do build your own models from scratch (DCF / comparables) on a new idea, whats your main reason for this? Don't your AM or HF that you have worked from previously usually have their own templates? Is it because you do from scratch to confirm your thesis/assumptions? Also, what package would you recommend for modelling? I havent purchased any modelling package BUT is BIWS, Wall St Prep or Training The Street worth purchasing especially for someone who wants to learn modelling from scratch? Would love to hear your thoughts on this.

I also looking at training packages which could buff my Financial Statement Analysis, my accounting basics and learning to tell a story off the company's financials within a short time frame. Any courses you can suggest on this?

5) Lets say you have to interview an incoming analyst / new intern for a long/short equity hf, what do you look out for in a stock pitch? WhiteHat has actually made a good post down here (//www.wallstreetoasis.com/blog/whs-interview-stock-p...) but i'm sure you have your own checklist / something you looking out for in candidates. Care to share?

Also whats the expected level of understanding / consensus on financial accounting of a candidate interviewing for a HF/AM ?

On your HF mini series, you have stated you wanna see that your Intern is able work independently and talk to you about an idea/company over lunch. So yes i'm sure you will drill hard on your interviewee's knowledge.

6) I have been having interviews with a few funds but so far none of them asked me to walk them through current condition of equity markets / economic events yet? If lets say you were to interview me, how am i supposed to answer this question? Is it giving my opinion on current the Eurozone Debt Crisis (Cyprus), Fed Stimulus, Jobs market improvement, PMI releases and back to events six months ago (Fiscal Cliff, Elections between between Obama and Romney, Outright Monetary Transactions and Basel 3 Banking regulation?) I wouldn't how to answer such a question properly from beginning so i need a guideline on this.

Sorry to sound like a stalker on your posts but i guess WSO has a general consensus that the advice that your giving out is just way too credible.

Regards
From an aspiring future equity analyst.

3/24/13

Thanks BH!

3/24/13

Nice thread. thanks.

Most of the funds BH/westcoast mentioned sound like equity L/S focused, with the exception of dodge&cox which he mentioned has some FI.

Does anyone have the equivalent list for top boutique AM's (intellectual culture, willing to teach you how to invest, more focused on performance rather than asset-gathering, etc.) that run macro/ficc (basically non-equity) strategies?

3/24/13

I recently moved from SS ER to the BS as an analyst. I believe my new firm falls into the category of a top shop, despite our ultra-low profile. We're about $10 billion in AUM, focused on absolute return, run a pretty concentrated portfolio (typically top 1-2 shareholder in our portfolio companies), and the work is very autonomous. My experience to date is very similar to what BlackHat outlined above.

There's a lot I would like to say but I don't want to hijack the thread and I do want to go to sleep.

But, it may be helpful to some in here to realizes that lot of different funds describe themselves as value oriented investors. Usually, how a fund defines value typically falls into 1 of 3 buckets:

1) Free cash flow yield/coupon investors. This would be guys like Berkowitz.
2) Distressed value investors
3) NAV investors. This would be like Third Avenue and this is the style my new firm falls into.

BlackHat, I'm curious to know how your old firm/new firm define value? Your OP makes me wonder if you've had a pretty similar experience from the perspective of calculating NAV to quantify downside risk.

Follow me on Twitter: https://twitter.com/KarateBoy

3/24/13

KarateBoy:
BlackHat, I'm curious to know how your old firm/new firm define value? Your OP makes me wonder if you've had a pretty similar experience from the perspective of calculating NAV to quantify downside risk.

We're really in the most oldschool Buffet-esque style of value investing you could think of. We spend months researching businesses and usually aim to understand them about as well as anybody not in the C-suite, and then usually rely on Mr. Market to come to us one day with a fair or good price for the business at which point we like to pile in. I wouldn't really call it the NAV method nor would I call it the FCF method, and certainly not the distressed view either... but really a combination of them all into just being able to identify what an excellent business looks like and what a fair price to pay for it might be. We don't have target prices, we want to hold businesses forever and grow our capital alongside them, so we're definitely not saying "this business sells for X today but is worth Y. Let's wait til it's worth Y and then sell it for a profit." We would rather say "this business is so good that it will grow at X forever. We can buy it today and see a Y annual return or we could wait and if we get it at Z we can get a better return." And we of course fall into the camp that says we're owning the business not the stock, so we don't really care about the price of the shares so long as earnings or whatever major metrics we care about are growing the way we want them to.

I hate victims who respect their executioners

3/24/13

BlackHat:
KarateBoy:
BlackHat, I'm curious to know how your old firm/new firm define value? Your OP makes me wonder if you've had a pretty similar experience from the perspective of calculating NAV to quantify downside risk.

We're really in the most oldschool Buffet-esque style of value investing you could think of. We spend months researching businesses and usually aim to understand them about as well as anybody not in the C-suite, and then usually rely on Mr. Market to come to us one day with a fair or good price for the business at which point we like to pile in. I wouldn't really call it the NAV method nor would I call it the FCF method, and certainly not the distressed view either... but really a combination of them all into just being able to identify what an excellent business looks like and what a fair price to pay for it might be. We don't have target prices, we want to hold businesses forever and grow our capital alongside them, so we're definitely not saying "this business sells for X today but is worth Y. Let's wait til it's worth Y and then sell it for a profit." We would rather say "this business is so good that it will grow at X forever. We can buy it today and see a Y annual return or we could wait and if we get it at Z we can get a better return." And we of course fall into the camp that says we're owning the business not the stock, so we don't really care about the price of the shares so long as earnings or whatever major metrics we care about are growing the way we want them to.

This is good stuff. We should talk some more about this in the future.

I'm gonna go to sleep before I get carried away. I hate walking in sleepy on Monday's.

But I think that you should write a little about why you wish you had stayed longer at the AM.

Many of the people on here know that you left b.c. its a HF and your experience wasn't that great (until you moved into your currently role). I think it would be valuable if you explained what you think you could have learned staying at the AM and maybe how your career path could have been differently.

Again, this is a great thread. I wanted to make something similar to this once I have a little bit more experience with our process. But, it's worth stressing again: shops like these are better than the VAST majority of HFs.

Follow me on Twitter: https://twitter.com/KarateBoy

3/24/13

Great post.

3/24/13

What do you think of PIMCO/where does it fall in relative to traditional asset manager vs boutqiue

3/24/13

Prangs:
What do you think of PIMCO/where does it fall in relative to traditional asset manager vs boutqiue

PIMCO is one of the largest managers in the world. They're top two, with DoubleLine, on the fixed income side. I hear that they underpay their analysts b/c the brand name is so valuable.

They've been building out an equity strategy with pretty limited success: http://www.bloomberg.com/news/2013-01-23/neel-kash...

Follow me on Twitter: https://twitter.com/KarateBoy

3/25/13

KarateBoy:
Prangs:
What do you think of PIMCO/where does it fall in relative to traditional asset manager vs boutqiue

PIMCO is one of the largest managers in the world. They're top two, with DoubleLine, on the fixed income side. I hear that they underpay their analysts b/c the brand name is so valuable.

They've been building out an equity strategy with pretty limited success: http://www.bloomberg.com/news/2013-01-23/neel-kash...

What you heard is correct, especially on an hourly basis. Recruitment policy is very stringent about hiring with flat comp (i.e. no pay bump, you're extra comp is the brand). Pay is typically 15-20% below market for similar AM positions across the board. Your minimum work day is 10 hours. Long and early hours are definitely encouraged (Gross & El-Erian boast about how little sleep they get), 4AM is early & 6AM is typical. Most people start leaving by 5:30 and its generally empty by 7PM).

3/25/13

Really useful and insightful post BlackHat, much appreciated.

May I ask why you said you wouldn't mind working for any of the traditional AM firms, but not for BlackRock?

Secondly, since you mention the teams are pretty small and tight-knit in top AM firms, would you say that if you don't get in straight from undergrad it's very hard breaking in later? Would they hire post-MBA? (I'm in London if that makes a significant difference)

I'm currently looking at taking a prop trading role, but I guess my end interests lie within Asset Management. Would you say starting off in a trading role if I wanted to break into Asset Management later is particularly bad? I realise it's probably not the most common of routes, but would you say its actually a hindrance?

3/25/13

Impossible_Living:

May I ask why you said you wouldn't mind working for any of the traditional AM firms, but not for BlackRock?

I don't want to speak for BlackHat here, but I am guessing because their culture is pretty horrible. Massive and bureaucratic, while still demanding facetime and 80+ hour weeks.

I'd personally agree with BlackHat. Would not work at BlackRock.

Have heard some negative things about Fidelity too (long hours, very competitive, somewhat political). Though I've also met people that like it there. I can't say the same about BlackRock; I have never met a happy BlackRock employee.

3/25/13

West Coast rainmaker:
I have never met a happy BlackRock employee.

Exactly. You have permission to speak for me from now on.

I hate victims who respect their executioners

5/14/17

What about the Asset Management division from banks like JPM AM?

Don't say this in a banking interview:

Which superhero would you be and why? I want to be like Robin Hood, stealing from the rich and giving to the poor - me.

3/25/13

Awesome post. I'm curious how the odds are coming into a boutique AM later in the game? Say 2-4 years out of MBA with ER exp. Also how is that type of background looked upon by the guys in AM boutiques? Thanks.

3/25/13

Calnus:
Awesome post. I'm curious how the odds are coming into a boutique AM later in the game? Say 2-4 years out of MBA with ER exp. Also how is that type of background looked upon by the guys in AM boutiques? Thanks.

This'll be addressed at everyone asking the "what are my chances if I'm ___ years out of school, post-MBA, etc." type questions.

They certainly hire people at what is considered the "junior level" (i.e. anything up to but no more than about 5 years out of school or 3 years out of MBA) but not as often since you usually have to pay those people a lot more than an entry-level kid and they can often have the same level of ability as analysts since you'll be molding them a bit into thinking the way your fund thinks anyway. The firm I worked at had hired a guy out of a credit fund who was post-MBA and he was ultimately considered a junior hire even though he was in his mid-20s I believe. So it definitely happens and it's not horribly uncommon either, and as long as whatever you're doing can line up well with the philosophy of the AM firm, you definitely have a shot.

I hate victims who respect their executioners

3/25/13

Every preftigious highschooler on the east coast is going to tell their friends this weekend they will work in AM and make $3.5M before age 30. They will then proceed to laugh at the other guys.

In all seriousness, great write up. If you have time BH, can you let us know what happens when an investment thesis tanks? Give some examples in your case, or those of other analysts.

3/25/13

karypto:
In all seriousness, great write up. If you have time BH, can you let us know what happens when an investment thesis tanks? Give some examples in your case, or those of other analysts.

This is a tough one. I've never had a conviction call blow up in my face but I'm going to assume that would be just an amplification of what I'll describe anyway.

I recommended a retailer long right before earnings because I'd always liked the company and this was the earnings announcement that would set the stock off if they knocked it out of the park. I gave my PM the skinny on the trade, told him that you'd see 100% upside over the next few quarters or so if they beat and something like 25% downside if we sold on a miss. He was interested but ultimately said he didn't feel like making a trade like that since it wasn't his expertise. I told him that's fine, and ended up coming back to him and telling him even though I still liked the company to beat, it probably wouldn't be a good idea anyway and it wasn't a big deal to me. Sure enough he decides to put the trade on without telling me. Earnings miss heavy and the stock sells off harder than 25%. The dumbass decides to hold and we lose another 10% on it for a total loss in the 30-30% range before he finally got out. Naturally it's attributed to me and I have to live with shitting on our team's performance for the near-term.

Having to explain yourself to people that know nothing about the trade after the fact is one of the most painful things to do because everyone just hits you with the 20/20 hindsight and keeps asking the "how did you think ___" question. It's a pain in the ass but it's a necessary evil. So of course I have to explain myself to my PM's boss, my PM again for some reason (he was pretending to not know much, it was great), and my peer analysts. That part isn't the worst though, the toughest part is that your next few ideas all get second-guessed because your blowup is still fresh in everyone's mind, and unless you start seeing some success with your next ideas, you could be on the chopping block... and no matter how good you are or how long you've been around, that thought does cross your mind from time to time even if it's not reality, which makes it tough to walk into work sometimes. Like many others on WSO have said before, HFs are stressful and AMs are no different if you blow it. This example is from an HF obviously but I think if I had an investment thesis blow up at my AM I would have been out the door immediately. The whole point there was that you do so much research that it's almost impossible to be wrong, or at least that's the thinking.

I hate victims who respect their executioners

3/25/13

BlackHat:
karypto:
In all seriousness, great write up. If you have time BH, can you let us know what happens when an investment thesis tanks? Give some examples in your case, or those of other analysts.

This is a tough one. I've never had a conviction call blow up in my face but I'm going to assume that would be just an amplification of what I'll describe anyway.

I recommended a retailer long right before earnings because I'd always liked the company and this was the earnings announcement that would set the stock off if they knocked it out of the park. I gave my PM the skinny on the trade, told him that you'd see 100% upside over the next few quarters or so if they beat and something like 25% downside if we sold on a miss. He was interested but ultimately said he didn't feel like making a trade like that since it wasn't his expertise. I told him that's fine, and ended up coming back to him and telling him even though I still liked the company to beat, it probably wouldn't be a good idea anyway and it wasn't a big deal to me. Sure enough he decides to put the trade on without telling me. Earnings miss heavy and the stock sells off harder than 25%. The dumbass decides to hold and we lose another 10% on it for a total loss in the 30-30% range before he finally got out. Naturally it's attributed to me and I have to live with shitting on our team's performance for the near-term.

Having to explain yourself to people that know nothing about the trade after the fact is one of the most painful things to do because everyone just hits you with the 20/20 hindsight and keeps asking the "how did you think ___" question. It's a pain in the ass but it's a necessary evil. So of course I have to explain myself to my PM's boss, my PM again for some reason (he was pretending to not know much, it was great), and my peer analysts. That part isn't the worst though, the toughest part is that your next few ideas all get second-guessed because your blowup is still fresh in everyone's mind, and unless you start seeing some success with your next ideas, you could be on the chopping block... and no matter how good you are or how long you've been around, that thought does cross your mind from time to time even if it's not reality, which makes it tough to walk into work sometimes. Like many others on WSO have said before, HFs are stressful and AMs are no different if you blow it. This example is from an HF obviously but I think if I had an investment thesis blow up at my AM I would have been out the door immediately. The whole point there was that you do so much research that it's almost impossible to be wrong, or at least that's the thinking.

This is what scares me to be honest. I love analyzing companies, learning how the world works, and investing, but I'm uncomfortable with the amount of chance involved. The more I read about EMH, the less conviction I have in my ideas. This isn't a troll post, I'm honestly curious (will be working in SS ER this summer). How do you handle this/what are your thoughts on EMH?

"My dear, descended from the apes! Let us hope it is not true, but if it is, let us pray that it will not become generally known."

3/25/13

BlackHat:
karypto:
In all seriousness, great write up. If you have time BH, can you let us know what happens when an investment thesis tanks? Give some examples in your case, or those of other analysts.

This is a tough one. I've never had a conviction call blow up in my face but I'm going to assume that would be just an amplification of what I'll describe anyway.

I recommended a retailer long right before earnings because I'd always liked the company and this was the earnings announcement that would set the stock off if they knocked it out of the park. I gave my PM the skinny on the trade, told him that you'd see 100% upside over the next few quarters or so if they beat and something like 25% downside if we sold on a miss. He was interested but ultimately said he didn't feel like making a trade like that since it wasn't his expertise. I told him that's fine, and ended up coming back to him and telling him even though I still liked the company to beat, it probably wouldn't be a good idea anyway and it wasn't a big deal to me. Sure enough he decides to put the trade on without telling me. Earnings miss heavy and the stock sells off harder than 25%. The dumbass decides to hold and we lose another 10% on it for a total loss in the 30-30% range before he finally got out. Naturally it's attributed to me and I have to live with shitting on our team's performance for the near-term.

Having to explain yourself to people that know nothing about the trade after the fact is one of the most painful things to do because everyone just hits you with the 20/20 hindsight and keeps asking the "how did you think ___" question. It's a pain in the ass but it's a necessary evil. So of course I have to explain myself to my PM's boss, my PM again for some reason (he was pretending to not know much, it was great), and my peer analysts. That part isn't the worst though, the toughest part is that your next few ideas all get second-guessed because your blowup is still fresh in everyone's mind, and unless you start seeing some success with your next ideas, you could be on the chopping block... and no matter how good you are or how long you've been around, that thought does cross your mind from time to time even if it's not reality, which makes it tough to walk into work sometimes. Like many others on WSO have said before, HFs are stressful and AMs are no different if you blow it. This example is from an HF obviously but I think if I had an investment thesis blow up at my AM I would have been out the door immediately. The whole point there was that you do so much research that it's almost impossible to be wrong, or at least that's the thinking.

I actually have some questions regarding "The whole point there was that you do so much research that it's almost impossible to be wrong, or at least that's the thinking".

I'm working in a top HF but not in an investment team. Because of the nature of my work, I know the performance/timing of all the strategies. I can say at least 1/3 of strategies don't make money and it is pretty often to see strategies blowing up (say short heinz before Buffett step in). Not sure if it is the case at everywhere but it is pretty hard to image "always correct at investment" when you have billion of assets under management

3/25/13

diablo2man:
I actually have some questions regarding "The whole point there was that you do so much research that it's almost impossible to be wrong, or at least that's the thinking".

I'm working in a top HF but not in an investment team. Because of the nature of my work, I know the performance/timing of all the strategies. I can say at least 1/3 of strategies don't make money and it is pretty often to see strategies blowing up (say short heinz before Buffett step in). Not sure if it is the case at everywhere but it is pretty hard to image "always correct at investment" when you have billion of assets under management

It depends what kind of fund you work at. The asset manager I worked for would own a handful of businesses for hopefully an eternity, and if you spend the kind of time they spend on researching an investment, you end up becoming close to an expert in the field before you start putting heavy money into it. They aren't going to short Heinz, let alone anything, and you can't really know if you were wrong for a little while anyway, so the number of times you can check yourself is lower. That's not to say we never saw anything go wrong. In the early '00s they had an investment blow up on them because of some very strange/extraordinary circumstances and reactions to things like that are pretty tough to predict, but on the whole you almost never see an investment literally blow up when you do the level of diligence and look at the types of high-quality businesses that they were looking at.

I hate victims who respect their executioners

3/25/13

BlackHat:
diablo2man:
I actually have some questions regarding "The whole point there was that you do so much research that it's almost impossible to be wrong, or at least that's the thinking".

I'm working in a top HF but not in an investment team. Because of the nature of my work, I know the performance/timing of all the strategies. I can say at least 1/3 of strategies don't make money and it is pretty often to see strategies blowing up (say short heinz before Buffett step in). Not sure if it is the case at everywhere but it is pretty hard to image "always correct at investment" when you have billion of assets under management

It depends what kind of fund you work at. The asset manager I worked for would own a handful of businesses for hopefully an eternity, and if you spend the kind of time they spend on researching an investment, you end up becoming close to an expert in the field before you start putting heavy money into it. They aren't going to short Heinz, let alone anything, and you can't really know if you were wrong for a little while anyway, so the number of times you can check yourself is lower. That's not to say we never saw anything go wrong. In the early '00s they had an investment blow up on them because of some very strange/extraordinary circumstances and reactions to things like that are pretty tough to predict, but on the whole you almost never see an investment literally blow up when you do the level of diligence and look at the types of high-quality businesses that they were looking at.

OK. I get what you are saying. We are definitely not a value investing fund and holding period of each single name is usually less than 6 months. That's why I see a much different picture here. Thanks for the answer.

3/25/13

Great post.

Curious about post-MBA hiring. Do most of them actually hire post-MBA people to investment associate roles?

3/25/13

Great stuff!

3/25/13

BlackHat:
We had an analyst start pitching a gaming company and I don't think anyone took him seriously for at least 3 months after that.

Excuse my ignorance, by why is this?

"My dear, descended from the apes! Let us hope it is not true, but if it is, let us pray that it will not become generally known."

3/25/13

Maybe you could get a little more granular on comp. How old is the Non-PM analyst? $125k to $3.5MM is a big gap to bridge. Take a non MBA guy in his late 20's, equivalent to a senior associate on IBD side. What are they pulling in AM?

3/25/13

BCbanker:
Maybe you could get a little more granular on comp. How old is the Non-PM analyst? $125k to $3.5MM is a big gap to bridge. Take a non MBA guy in his late 20's, equivalent to a senior associate on IBD side. What are they pulling in AM?

The guy is mid 50s, so with a 30+ year age gap the compensation gap is understandable hopefully. I'd say a non MBA who's been at the fund since he left undergrad in his late 20s would probably pull down something like 500-600k with some cushion to the upside on that if they're good. The thing about these types of AM firms is they aren't very institutionalized and they don't have set career tracks the way an investment bank would or the way a traditional AM like Fidelity would. So you're going to get paid the minimum amount required to keep you usually, which can be very high if you're good or somewhat lower if that's not the case. Most of the time your exit opps are pretty damn good out of top AMs so the price to keep you is higher.

I hate victims who respect their executioners

3/25/13

BlackHat:
I'd say a non MBA who's been at the fund since he left undergrad in his late 20s would probably pull down something like 500-600k with some cushion to the upside on that if they're good.

First of all, thanks for writing about this topic. Asset management is a great career and it allows you to earn a good living while working reasonable hours. That being said, since your job is primarily to think, you think about the portfolio and your positions all the time, whether you are in the office or not. I agree with all of your major points in this article about what it's like to work in this field. I highlighted this quote above because this is the one thing that stood out to me as being different from my experience. At my firm, I think the average pay for someone still in their twenties as closer to about $200 - 300k. Certainly, we have paid people better than that in that age range, but it's far from typical. In my experience, everything would have to align to earn $500k in your twenties. It would have to be a great year for performance of the fund (both absolute and relative to your peers), significant asset raising, and your stocks doing well. That being said, I don't know if my firm or your firm is the outlier.
3/25/13

Did any analysts from your firm go to top business schools and is there any benefit of going to business school within top AM firms?

rufiolove:

When evaluating whether or not to post something on WSO, I think to myself, "would an idiot post this" and if the answer is yes, I do not post that thing...

3/25/13

I was wondering how HF recruiting is structured from these top AM firms? Is it as standardized as IB? I know a lot of HF recruit from investment banks, but it would make more sense to me if they actually recruited investment analysts from these AM firms

3/25/13

packmate:
I was wondering how HF recruiting is structured from these top AM firms? Is it as standardized as IB? I know a lot of HF recruit from investment banks, but it would make more sense to me if they actually recruited investment analysts from these AM firms

Very loose and ad hoc. If you contact a headhunter (or in my case get contacted by one) you usually have just as good a chance as anyone to get a gig at an HF since people rarely leave these funds and when they do people will want to at least talk to you if they've heard of / respect your fund. I'd say it's not as streamlined as IB but your chances are just as good if you're active about searching for opportunities.

I hate victims who respect their executioners

3/25/13

BH, or anyone else with top AM experience, how competitive is the job market for these and more traditional AM firms in comparison to IB, particularly at the undergrad level?

3/25/13

Thanks so much for posting this and a link to west coast's thread. Very intriguing obviously. I hate to "ride your dick" BH but you continually have the best posts that are actually useful and first-hand experience.

Financial Modeling
3/25/13

Just a broad question, do you know of any top asset managing boutiques in say Australia?

1/7/14

deleted

No bias, no ego and no emotion

3/26/13

Although I come from a target school... the experience of competing against over 500 candidates for every position is a very humbling experience.

@KarateBoy: I think you would like hearing this... but my firm (very small) prioritizes hunger/interest and quality of experience much more than any brand name. I am always disappointed when I see a resume with 3.9+ gpa from a decent school with a bb experience... when they talk about it and you realize that they didn't do anything at all and the bank was using them to do monkey work. It still confounds me how finance funnels some of the top minds to churn out excel monkeys. Complete waste of brainpower and talent. This obviously doesn't apply to everyone with that gpa and bb experience, but every time I do hear about one a part of me breaks on the inside.

3/26/13

Absolutely awesome post BlackHat. Thanks so much for this, it was super informative.

3/26/13

SB--happy to see thatAM gets some coverage on this site despite its IB/PE skew

3/26/13

Shit. This sounds awesome.

MM IB -> TMT Corporate Development

3/26/13

Awesome post. As a college student on WSO, it is fairly difficult to find a wealth of information on anything besides IBD; so thank you for that.

You spoke a lot about the culture, pay, etc. at Top AM and Traditional AM's- what is your take on BB AM in comparison to those previously discussed?

3/26/13

Does your firm trade around positions or just look to buy dips of the annointed holdings?

I've interviewed at a few firms with the "buy and hold forever" mindset, and it really just isn't my style. Maybe because of that, I've wondered about the impact of greater economic volatility on this sort of strategy. Have you ever had that sort of concern?

3/26/13

BlackHat:

Compensation
My personal experience with compensation was that my firm actually paid a bit above what my investment banking buddies at top shops were getting all-in, but other data points and experience has me putting the typically compensation numbers at or very slightly above street level. Salaries tend to be higher than banking, but like most AM firms the bonuses are significantly lower. At the end of the day, you're working basically a 9 to 5, so the slightly lower comp isn't gonna kill you and the exit opportunities are the same or better than banking if your ultimate goal is moving to a hedge fund or other asset manager that matches the investing style of your AM firm. In this environment, I would expect something like 80-90k base salary and a bonus in the 20-30% range for top AM firms, though it could be slightly lower if things have changed significantly. My salary was higher than that and my bonus was slightly above the 30% mark my first year, but that was 2006. After a few years those numbers go up pretty significantly, and I know for fact our highest-paid non-PM analyst (though he handled some separately managed accounts like most senior analysts) was getting all-in comp north of $3.5M, which you can't really complain about.

Would you say that compensation is structurally lower at AM, even top ones, versus a HF?

It is often describe by many on this forum that someone jumping into a HF after 2-years of exp. should expect a base of $100K+ and a bonus of $100K+. That's materially above what a AM would pay.

For an example, I'm a 2010 graduate (so for those who can't count I'll be starting starting my 4th year this summer) and I (conservatively?) expected my compensation to be roughly in the range you described by BH.

In fact, I took a $10K cut in my base salary when I switched over from SS ER to my AM. We'll see where my bonus shakes out at...I was told by my PM "If you just stay employed you should be at least 40% and there's room to move up from there".

KB

Follow me on Twitter: https://twitter.com/KarateBoy

3/26/13

Let me see if I can tackle as many of these as I can before I head out for dinner.

KarateBoy:

Would you say that compensation is structurally lower at AM, even top ones, versus a HF?

Yes, even top AMs are going to pay less on average than an HF. The trade-off is that they're incredibly stable and the lifestyle is for the most part much better. However, the pay can still be very good and in my experience I was getting paid much better at the junior level than someone would have been at an entry-level HF job. But the mere fact that the HF comp structure has an unlimited ceiling based on performance gives it a structurally higher pay obviously. No matter how hard you crush it at an AM firm your firm doesn't take in any more for that other than as a function of additional investment based on past performance. Of course AUM balloons much quicker at an asset manager than an HF, so that mitigates the difference at least a little bit. All in all, the guys who the top AMs could easily break off and become billionaires running HFs but the stability and the lifestyle, plus the $50M or whatever my boss was taking home was probably more than enough to keep his simple ass happy.

I've interviewed at a few firms with the "buy and hold forever" mindset, and it really just isn't my style. Maybe because of that, I've wondered about the impact of greater economic volatility on this sort of strategy. Have you ever had that sort of concern?

To each his own, but our thought process is that what the market is doing is vastly irrelevant, and the only thing volatility is good for is getting us a cheaper price to buy more stock if we so choose. Never really had a concern that the market was getting too volatile for us to be able to do what we do. Definitely not.

You spoke a lot about the culture, pay, etc. at Top AM and Traditional AM's- what is your take on BB AM in comparison to those previously discussed?

No clue really, but to be honest the BB AM teams leave a bad taste in my mouth. I'm not sure if they do actual stock-picking as much or what their strategies are like. All I know is we've never hired someone from a BB AM team and I haven't bumped into one in the HF space in any peer firms, so haven't been able to ask about them at all either.

Are you currently pursuing the CFA?

I think I've brought this up at some point in the past, but certain AM firms will heavily encourage you to get your CFA, like T. Rowe Price, but most HFs and the top AMs that I'm familiar with could care less about the CFA. To be honest, I've never thought once about getting it, never plan on it, and there'd be no benefits to getting it. I share that sentiment with all of my coworkers and plenty of analysts in other hedge funds. Nobody at my AM firm had one either, and I honestly only think that it's helpful for client-facing positions and things like sell-side research where credibility is very subjective and important nonetheless. Some firms might offer pay bumps for CFA designation, but honestly other than that I can't see why I'd want one. Also beneficial for people without a finance background if they're making that transition to finance and want to show that they're serious about what they're going into.

On generating new ideas, where do you usually get your ideas from? Did you subscribe to Barron's or you usually get something off newspapers/magazines/sites you follow? You have mentioned in your mini HF series that you do printout and bring home a 10-k to read at night, do you do that everyday or just over the weekends?

I get my ideas from absolutely everywhere, the very least frequent being financial publications like Barron's or anything like that. I've gone over the deal generation process in some comments from somewhere and don't have time to go into it again here, but it's out there something. And yes, I read at least one 10-K a night. If you're not reading, you're not learning. It's all about learning the business, then asking the right questions to the right people, and coming to a logical conclusion based on that. I really can't stress reading enough.

I have been having interviews with a few funds but so far none of them asked me to walk them through current condition of equity markets / economic events yet? If lets say you were to interview me, how am i supposed to answer this question? Is it giving my opinion on current the Eurozone Debt Crisis (Cyprus), Fed Stimulus, Jobs market improvement, PMI releases and back to events six months ago (Fiscal Cliff, Elections between between Obama and Romney, Outright Monetary Transactions and Basel 3 Banking regulation?) I wouldn't how to answer such a question properly from beginning so i need a guideline on this.

This is actually a great question and different than the rest so I'll address it. The objective of me as the interviewer is to see how on top of current events you are, how well you know which ones are the important ones, and that you know how they connect back to whatever area the job interview is for. So for example, if you were interviewing at my AM firm and I asked your thoughts on the Eurozone Crisis and particularly Cyprus, Fed Stimulus, and Sequestration... I wouldn't expect you to know the gritty details of all of these events and exactly what each does to all interested parties... but I would like to hear you be able to coherently connect the events in Cyprus to how they would affect the other weak Eurozone companies, and how that might affect our economy back in the States. Then maybe the basics about how Fed Stimulus is propping up our equities markets and if you think that will make it harder to find good deals in the marketplace or how it would alter your strategy. I'd just want to see if you can take in this information that we usually don't care too much about (being anti-macro guys) and find a way to tie it back to what you do on a daily basis in evaluating a single business and making decisions.

I know I skipped a few questions but I'm sure I had a reason for it. Anyway, off to dinner.

I hate victims who respect their executioners

3/26/13

Someone asked a similar question, but you might have missed it. What would you say to someone convinced that public equity markets are efficient to make them consider otherwise?

3/26/13

2.71828:
Someone asked a similar question, but you might have missed it. What would you say to someone convinced that public equity markets are efficient to make them consider otherwise?

Boom and bust, baby.

Take a look at GMCR, AAPL, LEH, NFLX, etc... If markets were efficient, then prices wouldn't be so volatile.

Tech bubble, housing bubble, tulip bubble...I can keep going.

Follow me on Twitter: https://twitter.com/KarateBoy

3/26/13

Blackhat, thanks so much for doing this. Your responses have been incredibly informative. Now, I'm not sure if it was intentional, but you've ignored the three questions (including mine), about EMH. If you don't want to talk about it for some reason, that's fine. If your open to it though, I'd definitely interested in hearing your thoughts. As I mentioned in my previous post, I love analyzing companies but am uncomfortable about the amount of chance involved, so I'm second-guessing my career path.

Based on your love for reading and investing, I'm sure you've researched this before. Thanks!

"My dear, descended from the apes! Let us hope it is not true, but if it is, let us pray that it will not become generally known."

3/26/13

Illuminate:
Blackhat, thanks so much for doing this. Your responses have been incredibly informative. Now, I'm not sure if it was intentional, but you've ignored the three questions (including mine), about EMH. If you don't want to talk about it for some reason, that's fine. If your open to it though, I'd definitely interested in hearing your thoughts. As I mentioned in my previous post, I love analyzing companies but am uncomfortable about the amount of chance involved, so I'm second-guessing my career path.

Sorry, you're right I missed these, but not intentionally! Efficient market hypothesis is one of those things I'd heard about since freshman year of college in all my business classes and it seems to be academia's way of explaining the market into something of a science. I really hate that idea. If someone asked me what the split was between art and science in investing, I'd say it was 70/30 in favor of art. I don't have academic studies or keywords and finance jargon to back up my thoughts on EMH, but in my 6+ years of experience now, I've found that when you take all the people out there managing money, a good number of them absolutely suck at it. Put them all in front of the same 10-K, have them read it, and 90% of them will come away with a very rudimentary understanding of the business's potential problems or potential growth engines. There IS such thing as a superior manager, and there IS such thing as a superior company. So when you're in a position to pick some businesses for the long term that you think will outperform the market, and if you're a superior manager who knows what a good business actually looks like, it's very possible to do. In fact, if you happen to have this kind of skill, which I like to think people at my fund have, it's even easy. I can tell you if something is a good business in a week if you give me a few filings and a telephone. The hard part is finding the outstanding businesses and those tend to take months to finally get comfortable with. But look at the people who do beat the market consistently. Most of them follow this pattern. Long term picks, concentration in those picks, and intense research. All the information isn't out there and all the information isn't reflected in the price. Fear and irrationality are what make value investing possible, so EMH would put us out of business if it was 100% true.

Disclaimer: I'm not an academic, and I have no clue what the semantics of EMH are. In fact, I'm not even sure if I know what EMH is anymore. I've just started equating it to "you can't beat the market cuz the market knows all the same shit you do." I'd never rack my brain on something that academic or let it stop me from going after a career I enjoy. So that part of your thought process actually upsets me a bit, I hope that doesn't end up being the case for you.

I hate victims who respect their executioners

3/26/13

Illuminate:
Blackhat, thanks so much for doing this. Your responses have been incredibly informative. Now, I'm not sure if it was intentional, but you've ignored the three questions (including mine), about EMH. If you don't want to talk about it for some reason, that's fine. If your open to it though, I'd definitely interested in hearing your thoughts. As I mentioned in my previous post, I love analyzing companies but am uncomfortable about the amount of chance involved, so I'm second-guessing my career path.

Based on your love for reading and investing, I'm sure you've researched this before. Thanks!


Even if BlackHat writes 100 pages on EMH, it will be a tiny fraction of what has been written on the topic by hundreds or thousands of people on every side of the issue. While he's a smart guy, there is very little he can say that hasn't been said before and should hold sway over your decision about your future career. Nobody is holding some tonic that can calm your nerves if you're on the fence.

My $0.02.

EDIT: he just responded to you.

3/27/13

SirTradesaLot:
Illuminate:
Blackhat, thanks so much for doing this. Your responses have been incredibly informative. Now, I'm not sure if it was intentional, but you've ignored the three questions (including mine), about EMH. If you don't want to talk about it for some reason, that's fine. If your open to it though, I'd definitely interested in hearing your thoughts. As I mentioned in my previous post, I love analyzing companies but am uncomfortable about the amount of chance involved, so I'm second-guessing my career path.

Based on your love for reading and investing, I'm sure you've researched this before. Thanks!


Even if BlackHat writes 100 pages on EMH, it will be a tiny fraction of what has been written on the topic by hundreds or thousands of people on every side of the issue. While he's a smart guy, there is very little he can say that hasn't been said before and should hold sway over your decision about your future career. Nobody is holding some tonic that can calm your nerves if you're on the fence.

My $0.02.

EDIT: he just responded to you.

EMH is the reason I ignored market-based positions during college. "Oh, active management is a sham. You can't consistently beat the market" Bullshit. Total bullshit.

Do not fall for academia's swan song. It sounds so easy, "Oh, just invest in index funds and rebalance quarterly". Top asset managers don't beat the indexes because the choose not to. You really think Will Danoff isn't smart enough to outperform the the S&P by at least a few percent a year? Of course he could. But he chooses to accumulate assets instead. Remember that mutual funds are paid by the amount of assets under management, not performance.

If you run a concentrated portfolio, you risk some short term volatility. And mutual fund investors are generally the "buy high sell low" type. It's better not to risk losing investors, and instead rely on advertising/marketing.

I am uniquely resentful of academia's love affair with the EMH; I would be at an asset manager today if I hadn't bought into it. By the time I realized Seth Klarman wasn't just a lucky coin flipper senior year, I had missed all the best recruiting opportunities.

11/14/16
West Coast rainmaker:

SirTradesaLot:

Illuminate:Blackhat, thanks so much for doing this. Your responses have been incredibly informative. Now, I'm not sure if it was intentional, but you've ignored the three questions (including mine), about EMH. If you don't want to talk about it for some reason, that's fine. If your open to it though, I'd definitely interested in hearing your thoughts. As I mentioned in my previous post, I love analyzing companies but am uncomfortable about the amount of chance involved, so I'm second-guessing my career path.Based on your love for reading and investing, I'm sure you've researched this before. Thanks!

Even if BlackHat writes 100 pages on EMH, it will be a tiny fraction of what has been written on the topic by hundreds or thousands of people on every side of the issue. While he's a smart guy, there is very little he can say that hasn't been said before and should hold sway over your decision about your future career. Nobody is holding some tonic that can calm your nerves if you're on the fence.My $0.02.EDIT: he just responded to you.

EMH is the reason I ignored market-based positions during college. "Oh, active management is a sham. You can't consistently beat the market" Bullshit. Total bullshit.

Do not fall for academia's swan song. It sounds so easy, "Oh, just invest in index funds and rebalance quarterly". Top asset managers don't beat the indexes because the choose not to. You really think Will Danoff isn't smart enough to outperform the the S&P by at least a few percent a year? Of course he could. But he chooses to accumulate assets instead. Remember that mutual funds are paid by the amount of assets under management, not performance.

If you run a concentrated portfolio, you risk some short term volatility. And mutual fund investors are generally the "buy high sell low" type. It's better not to risk losing investors, and instead rely on advertising/marketing.

I am uniquely resentful of academia's love affair with the EMH; I would be at an asset manager today if I hadn't bought into it. By the time I realized Seth Klarman wasn't just a lucky coin flipper senior year, I had missed all the best recruiting opportunities.

I think most of the hatred for EMH ultimately derives from the way it is taught in UG courses (which I also resent, for the record). I think it is one of the most misunderstood concepts in academic finance - it is not intended as a be all end all description of how markets actually work, but rather an useful framework that you can use to prove inefficiencies in the markets. Useful example to make the point, go look at some of the interviews of Clifford Asness, one of the co-founders of AQR who did his PhD in University of Chicago under the tutelage of the godfather of EMH, Eugene Fama - you will very quickly get the point that not even Fama believes that markets are fully efficient.

As many of the posts here have outlined, markets have a very heterogeneous group of participants with different time horizons, levels of risk aversion etc., and for a savvy investor who understands the imbalances caused by these different groups (or who has superior information/ways to process that information in his chosen market) it is absolutely possible to outperform the markets. What EMH does a good job of explaining is the fact that on aggregate, beating the markets is a zero-sum game - for you to make 100$ in alpha someone else has to under perform by an equal amount. Furthermore, it might be hard to distinguish between what might be alpha and just compensation for risk. In this sense, I strongly urge everybody with great resentment towards academic finance, especially the undergrads out there who are second guessing AM as a career path to dig into some of the work done by the top guys at AQR (Asness, Ilmanen, Pedersen etc.) to get a more modern, practical understanding of the way you can think about markets in a 'scientific' sense.

Array

3/27/13

Illuminate:
Blackhat, thanks so much for doing this. Your responses have been incredibly informative. Now, I'm not sure if it was intentional, but you've ignored the three questions (including mine), about EMH. If you don't want to talk about it for some reason, that's fine. If your open to it though, I'd definitely interested in hearing your thoughts. As I mentioned in my previous post, I love analyzing companies but am uncomfortable about the amount of chance involved, so I'm second-guessing my career path.

Based on your love for reading and investing, I'm sure you've researched this before. Thanks!


I'll throw in my perspective. I think it's pretty widely agreed upon that the market is not perfectly efficient. So, we're down to two things, is the market weak-form efficient or are there opportunities that one can capitalize on? There are many ways to approach this and I'll touch on just a couple.

Indices:
Most indices are weighted by market capitalization. When you buy an index fund today, the stocks that have the largest weight in your portfolio are the ones that have already outperformed the others, not necessarily the ones that will outperform in the future. The stocks that get dropped from the index are those that have underperformed the most. Obviously, it would be better if these weights were applied before the under or outperformance. People have proven that small adjustments to this methodology by making a passive portfolio weighted by dividends or cash flow (or some other valuation metric) can outperform on a risk-adjusted basis for a very long period of time. If someone is able to overlay value metrics with human judgment about the quality of the underlying business, the sustainability of earnings, and the awareness of major hurdles for the business, it seems to me like a recipe for outperformance. I certainly think being smart helps in this regard, but it is much more about being methodical and consistent in application than just pure brainpower. I'm sure Buffet is intelligent, but he's not Einstein. He just applies his methodology consistently. (He has some other advantages now that he's so established, but I won't go there)

Time horizon:
Different investors have different time horizons. Some people are simply looking for a big pop in the next couple of months. Personally, I think trying to time events like that is bordering on impossible in most cases. However, if someone else has an eye for the long-term and is willing to stomach some interim volatility, they can rummage through the names that others are shunning or aren't paying attention to. Things like spin-outs, stocks getting dropped from a major index, emergence from bankruptcy, and earnings misses are often areas for opportunity. Two investors with different time horizons might approach those situations from an entirely different perspective. The most telling period in my career was the late 1990's. Stocks were skyrocketing, but for the most part, the worse the fundamentals of the company, the better it performed. Trust me when I say it was difficult to stick to basic value based strategies. People thought you 'didn't get it' because you weren't investing in many of these internet or cutting edge technology companies. We underperformed. However, in the early 2000's when the market deflated, we actually had positive performance in 2000 and 2001 which was a nice vindication. People were starting to actually care about things like cash flow again.

Maximizing risk-adjusted returns:
It must be true that all or the preponderance of investors are seeking to maximize their risk-adjusted returns if EMH is true. In my experience, this is not the case. The problem is that most investors buy stories. By their nature, people are generally optimistic and are overconfident about the decisions they make. This means you have people overpaying for stocks like Facebook, Pets (dot) com, or some other unproven company, because people want to believe there is a parabolic growth story. They often fail to consider less optimistic scenarios and minimize outright negative scenarios. As unsexy as it may sound, avoiding investing in companies like these is half the battle. I would be curious to see how much an investment in the S&P 500 would underperform an investment in the same universe of stocks that excluded the 10% of worst performers. In other words, if you just avoided the Lehman Brothers, Enron, AIG, and other lousy performers, how much would you outperform? My sense is that it's by a fairly significant margin.

I'm curious to read what others have to say.

3/27/13

There is a lot of info here, I just skimmed over most of it, so you may have already awnsered but

Would we be comparing apples to oranges- If we were going to compare the competitiveness of getting a job at a top AM firm compared to a BB FO position? I would imagine their ocr is more geared towards ugrad b-schools rather than the tradition liberal arts targets, or is it the same schools with OCR, and a few non-targets who networked their way in? Do top AM firms offer internships?

Thanks BH great post

3/27/13

Are you under 30 and a PM? Respect.

3/27/13

finally, someone giving a full analysis on how AM is going, and how it works

I can also confirm that my firm's hours are pretty much 9-6 with anything past that being very late

SB to you BlackHat

I eat success for breakfast...with skim milk

3/27/13

TonyPerkis:
finally, someone giving a full analysis on how AM is going, and how it works

I can also confirm that my firm's hours are pretty much 9-6 with anything past that being very late

SB to you BlackHat

For some additional perspective, my work day is 7am-6pm.

I think I'm working the longest, on average, of all the other analyst. But, there is usually at least 1 other analyst that's working more hours on a particular day than me.

Follow me on Twitter: https://twitter.com/KarateBoy

3/27/13

KarateBoy:
TonyPerkis:
finally, someone giving a full analysis on how AM is going, and how it works

I can also confirm that my firm's hours are pretty much 9-6 with anything past that being very late

SB to you BlackHat

For some additional perspective, my work day is 7am-6pm.

I think I'm working the longest, on average, of all the other analyst. But, there is usually at least 1 other analyst that's working more hours on a particular day than me.

We're styled very much like a long-term value AM player at my fund, and I'm working 6am-2pm usually, 7am to 6pm isn't terrible for a more junior guy I would think and when I was at my AM fund I routinely got in earlier and stayed later than most analysts simply because I felt like I could always be getting more work done as the most junior guy on the team. Even then, working 8am to 8pm isn't an awful workday when it's pretty cushy and you're working at your own pace. But I very much preferred the days when it was cool to roll at 5pm, which was most of them.

I hate victims who respect their executioners

3/27/13

BlackHat:

We're styled very much like a long-term value AM player at my fund, and I'm working 6am-2pm usually, 7am to 6pm isn't terrible for a more junior guy I would think and when I was at my AM fund I routinely got in earlier and stayed later than most analysts simply because I felt like I could always be getting more work done as the most junior guy on the team. Even then, working 8am to 8pm isn't an awful workday when it's pretty cushy and you're working at your own pace. But I very much preferred the days when it was cool to roll at 5pm, which was most of them.

With the 6am to 2pm hours I'm guessing you're on the west coast?

And it seems that since your interview series this past summer you have been promoted to PM? If you don't mind answering a few questions I'd really appreciate it:

Is there anything specific you believe facilitated your promotion to PM after only being out of school 6-7 years?

What is your process in evaluating an investment thesis brought to you by an analyst?

Even further, as a specific hypothetical-- Say an analyst brings you a thesis w/ extremely high conviction (and has a solid track record to date), but you are only "so-so" about it. Are you likely to say "scrap it" or take the kid's word for it and roll the dice?

Could you outline a "day in the life of a PM" so we can really see how your responsibilities and functions have changed since you outlined your typical day over the summer in the interview series?

Thanks!

patternfinder:

Of course, I would just buy in scales.

See my WSO Blog | my AMA

3/27/13

Simple As...:
BlackHat:

We're styled very much like a long-term value AM player at my fund, and I'm working 6am-2pm usually, 7am to 6pm isn't terrible for a more junior guy I would think and when I was at my AM fund I routinely got in earlier and stayed later than most analysts simply because I felt like I could always be getting more work done as the most junior guy on the team. Even then, working 8am to 8pm isn't an awful workday when it's pretty cushy and you're working at your own pace. But I very much preferred the days when it was cool to roll at 5pm, which was most of them.

With the 6am to 2pm hours I'm guessing you're on the west coast?

And it seems that since your interview series this past summer you have been promoted to PM? If you don't mind answering a few questions I'd really appreciate it:

Is there anything specific you believe facilitated your promotion to PM after only being out of school 6-7 years?

What is your process in evaluating an investment thesis brought to you by an analyst?

Even further, as a specific hypothetical-- Say an analyst brings you a thesis w/ extremely high conviction (and has a solid track record to date), but you are only "so-so" about it. Are you likely to say "scrap it" or take the kid's word for it and roll the dice?

Could you outline a "day in the life of a PM" so we can really see how your responsibilities and functions have changed since you outlined your typical day over the summer in the interview series?

Thanks!

I'll save this for another post, but it will come! Yeah I'm West Coast now and it's hard to really distinguish the difference between being an analyst and being an actual PM now since my job before was fairly similar but now I have much less red tape and an official title. I'll definitely get around to this though once I feel like it'll actually be helpful and different enough from the old writeup I did on the investment process. Great idea though thank you.

I hate victims who respect their executioners

3/27/13

BlackHat:

I'll save this for another post, but it will come! Yeah I'm West Coast now and it's hard to really distinguish the difference between being an analyst and being an actual PM now since my job before was fairly similar but now I have much less red tape and an official title. I'll definitely get around to this though once I feel like it'll actually be helpful and different enough from the old writeup I did on the investment process. Great idea though thank you.

Thanks a ton. Looking forward to it!

patternfinder:

Of course, I would just buy in scales.

See my WSO Blog | my AMA

3/27/13

BlackHat:
KarateBoy:
TonyPerkis:
finally, someone giving a full analysis on how AM is going, and how it works

I can also confirm that my firm's hours are pretty much 9-6 with anything past that being very late

SB to you BlackHat

For some additional perspective, my work day is 7am-6pm.

I think I'm working the longest, on average, of all the other analyst. But, there is usually at least 1 other analyst that's working more hours on a particular day than me.

We're styled very much like a long-term value AM player at my fund, and I'm working 6am-2pm usually, 7am to 6pm isn't terrible for a more junior guy I would think and when I was at my AM fund I routinely got in earlier and stayed later than most analysts simply because I felt like I could always be getting more work done as the most junior guy on the team. Even then, working 8am to 8pm isn't an awful workday when it's pretty cushy and you're working at your own pace. But I very much preferred the days when it was cool to roll at 5pm, which was most of them.

I hope my post didn't off as if I'm complaining. The hours are similar to when I was on the SS, but my new job is much more interesting/rewarding. I often stay later because I get caught up doing analysis and lose track of time. I'm pretty happy.

Follow me on Twitter: https://twitter.com/KarateBoy

3/27/13

Hah, How I wish I hadn't read 'The Intelligent Investor' and gotten addicted to value investing!

Very insightful post btw! Thanks!

3/27/13

Agreed...I work at a fund like Blackhat describes and one which Westcoast Rainmaker named in his similar post. My average day is about 9am-7pm...definitely not bad and when you get lost in the analysis the time can fly by before you know it. We are the kind of shop that spends weeks considering one investment from start to finish so you truly are working at your own pace and digging as deep as possible into the weeds (because we buy to hold for the long term). It has been said before but I will echo the point that while the hours in the office are lax, and facetime is nearly non-existant, if you are doing the job well it is almost always on your mind. I read Barrons, the Economist, Fund letters, books, etc. on the weekends and at night I often find myself randomly looking up investment ideas on Bloomberg or running a screen based on something I saw on the news. If that sounds interesting to you then yes these gigs are as sweet as they sound. But, don't think that you just turn it off when you leave the office. My comp I would describe as banking-lite at the Associate level but my lifestyle is great and I'm certainly not complaining. Making PM and/or gaining equity in the firm would certainly change that equation over the next 5-7 years.

3/27/13

Thanks for the great insight and discussion. BlackHat. As someone who is looking to understand different investment styles among asset management firms, what is your view of pure quantitative investment shops like AQR Capital, Acadian Asset Management, Martingale Asset Management, etc.? Do you think quantitative investing has a place in the industry, going into the future?

3/27/13

foobar4life:
Thanks for the great insight and discussion. BlackHat. As someone who is looking to understand different investment styles among asset management firms, what is your view of pure quantitative investment shops like AQR Capital, Acadian Asset Management, Martingale Asset Management, etc.? Do you think quantitative investing has a place in the industry, going into the future?

I still don't understand it really, and there's clearly a place for it in the industry, as we've seen by their success in the past. I don't want to get too much into it since honestly i just don't know enough about quant funds, but for what it's worth I'll continue trusting my money to human stock pickers and could never feel comfortable giving it to a computer...

I hate victims who respect their executioners

3/27/13

foobar4life:
Thanks for the great insight and discussion. BlackHat. As someone who is looking to understand different investment styles among asset management firms, what is your view of pure quantitative investment shops like AQR Capital, Acadian Asset Management, Martingale Asset Management, etc.? Do you think quantitative investing has a place in the industry, going into the future?

My firm (~200bn) aum has both quant and regular, as well as our way of saying hedge fund side, ie more trade frequency and less long term goals. Our quant team has been growing, however it seems that our more fundamental/less algorithmic teams do better as those AUMs are growing at a more rapid pace.

I eat success for breakfast...with skim milk

3/27/13

Since Blackhat does not seem to have much knowledge about the AM arms of BBs (the institutional side, not PWM or PB) can anyone else shed some light on how they are different from (or similar to) the top AM firms Blackhat is talking about and how those top AM firms view AM at BBs?

3/27/13

Do top AM summer internships typically end in a full time offer? I've heard rumors of places like Fidelity taking 10 summer analyst and offering only 1 position

3/28/13

packmate:
Do top AM summer internships typically end in a full time offer? I've heard rumors of places like Fidelity taking 10 summer analyst and offering only 1 position

Fidelity's yield isn't that bad. I think last year it was 3/6 interns that got FT offers. Other large AMs tend to have better yields. Fido is just a bit more cutthroat than many asset managers - I have heard the word "shark tank" thrown around by current employees.

3/28/13

I've heard similar things about the culture also.

3/28/13

I don't work at a name shop but a lot of the work that I do is the same. Usually work like 8 - 6ish. Latest I've stayed in the office has probably been like 10pm.

Definitely always thinking about investments when meeting people and doing things. If I meet a sales rep at X firm you can be sure that I'll be asking some questions. Also like to read some investment ideas at night.

3/28/13

So BlackHat...what's your opinion on Herbalife?

3/29/13

Dhanam:
So BlackHat...what's your opinion on Herbalife?

I'd stay as far away from it as possible. Not because it's a bad company or anything (it's a horrible company though) but because you're no longer betting on the fundamentals with this clash of the titans brewing. I've explained it a few times in different threads but that's the long story short version of it. And I definitely don't like to bet on anything but the fundamentals, I'm not that smart.

I hate victims who respect their executioners

3/28/13

Considering the instability in the Eurozone, would it make sense to consider starting your career in asset management over there?

3/28/13

Awesome post, Blackhat. Incredible amount of info.

You may have covered this but could you go into how you actually landed your position, any recruiters/websites you used, the job hunt preparation process, etc.?

3/28/13

Excellent post Blackhat and also to the other contributors. It's good to read a post concerning this topic, with respect to smaller AM houses that take a long-term value approach, when so much of what I observe and read these days is about the increasing importance of quant based investment firms that build uber-complex quantitative models that require an analyst with a doctorate in physics to create. It's nice for me as a more traditional finance guy to be reminded that there exist many many different firms that employ an equal number of methods and approaches to determine how they will invest and that many firms still follow the tried and true method of just spending the time and effort to really understand what makes a business exceptional or perhaps not so exceptional.

"Successful investing is anticipating the anticipation of others". - John Maynard Keynes

3/28/13

This is probably a stupid comment but I've always been a little confused on where/how you draw the line between AM firms and HF funds. It sounds like AM takes a longer term view but there are also value hedge funds that make similar type investments right? Is there a clear delineation that I am missing or is it somewhat fuzzy?

3/29/13

mappleby:
This is probably a stupid comment but I've always been a little confused on where/how you draw the line between AM firms and HF funds. It sounds like AM takes a longer term view but there are also value hedge funds that make similar type investments right? Is there a clear delineation that I am missing or is it somewhat fuzzy?

A mutual fund (i.e. traditional AM firm) is organized under the investment company act of 1940. Anybody can buy into these companies.

A hedge fund is only open to accredited investors. They are regulated based on what they invest in (e.g. a commodities fund would need to comply with CFTC rules).

3/28/13

Solid post

I'm on the pursuit of happiness and I know everything that shine ain't always gonna be gold. I'll be fine once I get it

3/29/13

I'd add that some Asset management firms also have hedge fund strategies under their management.

3/29/13

Great Article! I wish that I would have read it 4 days ago. I had an interview with a similar firm 3 days ago and this info would have come in handy before hand. How many AUM did the company you worked for have? I am trying to see if the compensation at the firm that I interviewed with would be similar. It is a 6 person office and they have roughly 250M AUM.

4/7/13

[My question had been covered earlier, but I overlooked it]

"Do not go gentle into that good night"

3/30/13

First and foremost Blackhat thanks for the post, it's really difficult to find high quality AM rather than IB discussions.

Karateboy, to elaborate on Blackhat's answer on how to answer "walk them through current condition of equity markets / economic events yet" I would add one more thing, that has consistently helped me stand out in interviews. That is:
1.Know the macroeconomic trend,
2. Who are affected the most, and the least, and the impact ideally on the firm your interviewing for
3. The investment opportunities that this trend provides (the more specific the better) e.g. Eurozone crisis > most affected European companies > investment opportunities =value stocks. Typically, undervalued peripheral European companies who are suffering from being listed in Europe, but actually get the majority of their revenue from emerging markets thereby providing notable upside opportunity.

If you do this 1.You'll stand out 2.It's better for you,to quote Napolean Hill "all knowledge is pointless, unless it is applied", what's the point of knowing the trend, if you can't make money of it? this is what we're all interested in lol!

I did have a couple of questions of my own though and I would appreciate it anyone or Blackhat could answer this:

1. A common trend I have heard is AM doesn't take sell side investment reports seriously why is this?
Building on this, from my understanding sell side analysts give you recommendations for investment ideas how do you separate the analysts on the sell side worth listening to? from the fickle ones.
2. We've talked a lot about the good, but what in your experience is the Worst thing about asset management?
3. aspect of evaluating a stock is the quality of management, and I know ben graham goes into this, but I would appreciate your personal opinion on what has made management good quality and worthwhile investing in?
4.Finally you've obviously done very well for yourself, so I just wondered what do you feel differentiated you from your peers to get where you are today.

Thanks in advance

3/30/13

Hey Blackhat,

Thanks for this post - it's solid gold. I was wondering how difficult it would be for a student with a non trad background to make it into AM - hopefully on the west coast. I'm not looking for high pay or a tip top shop just for a place where I can develop and apply the skills I've learned.

I've been investing my own money for a few years and have followed the market since I was in 3rd grade, I was going to LS but dropped out after I get deeper into Value Investing - right around when I finished Security Analysis for the first time. It sort of just clicked and I realized that I couldn't do anything else. I've read all of the books you recommended in addition to the collected letters of Berkshire Hathaway and Phil Fisher's stuff etc.

I'm networking with a few family friends - including one guy with over 250M under management at a large institution like JP Morgan/Wells/BofA etc and he says that I have the chops to do it - but he is getting very close to retirement and has been there so long (45 years) that he is very far removed from the hiring process - he's looking for some leads on my behalf though.

I graduated a year and a half ago from college at a top UC with a 3.9 GPA with two degrees - but none in finance related subjects. My biggest problem is getting to the position where I can have a face to face interview - all my resumes have been blanket rejected even though I think I have a baseline of knowledge - I think enough to get an internship at least despite not having the rubber stamps on the resume. I wrote a professor teaching a Security Analysis class at the MBA program at my alma mater and sent him some of my analysis - to my surprise he waived the requirements for me - so I think that could be a good thing and would give me some relevant experience to put on my resume (which is pretty lacking). The guy runs a risk management department at a large institution, so I think if I can do well in the class he might let me intern or give me a lead.

I started to write for SeekingAlpha (even though I'm not a big fan of the websites analysis and the posters on it sometimes but I thought I could put it on my resume and have an archive of research built up - I write about 10 pieces a month or so to keep myself sharp, all my articles get accepted)

Any tips for a wayward ape?

Thanks in advance - this thread shows me that there is a light at the end of the tunnel.

3/30/13

BlackHat I was hoping you could shed some light on the best way to work up to a Lead/Sr. Portfolio Management role.

Would it be something like starting in equity research, get your CFA, and then move on to Junior/Assistant PM roles?

3/30/13

StryfeDSP:
BlackHat I was hoping you could shed some light on the best way to work up to a Lead/Sr. Portfolio Management role.

Would it be something like starting in equity research, get your CFA, and then move on to Junior/Assistant PM roles?

It's pretty much what you'd expect. The best way is to stick around at one place for a while, or lateral from a bigger place after a few years down to a smaller or less-successful fund where you'll be more of a big fish in a little pond, if that makes sense. But yeah, generally the approach is that you'd come in as a junior analyst or associate and spend a few years in that role gaining the trust of senior analysts and eventually becoming an analyst yourself. From there a combination of success with your recommendations, a positive relationship with your lead PM, and time can get you in a role as a junior PM or senior analyst where you actually have direct influence over where capital is allocated. From there you pretty much just need to perform well and eventually you're running your own book. Sure, plenty of people come from sell-side and jump straight to analyst or something, but if I wanted to construct the most fast-track way possible I think I'd suggest starting in a junior buy-side ER role and if you're really good the upward mobility is probably much better earlier.

I'd also note that designations like the CFA or an MBA are much less useful and aren't really something that gets considered when deciding who should get the promotion and who is gonna get snubbed... some place do however think highly of CFA and if that's the case they'll make it perfectly clear. But I would never say it's a universal step in the process.

I hate victims who respect their executioners

3/30/13

BlackHat:
StryfeDSP:
BlackHat I was hoping you could shed some light on the best way to work up to a Lead/Sr. Portfolio Management role.

Would it be something like starting in equity research, get your CFA, and then move on to Junior/Assistant PM roles?

I'd also note that designations like the CFA or an MBA are much less useful and aren't really something that gets considered when deciding who should get the promotion and who is gonna get snubbed... some place do however think highly of CFA and if that's the case they'll make it perfectly clear. But I would never say it's a universal step in the process.


Awesome thanks.

I was wondering about the CFA because I know at the AM firm I interned at they don't consider anyone for PM roles without the CFA.

3/30/13

StryfeDSP:
BlackHat:
StryfeDSP:
BlackHat I was hoping you could shed some light on the best way to work up to a Lead/Sr. Portfolio Management role.

Would it be something like starting in equity research, get your CFA, and then move on to Junior/Assistant PM roles?

I'd also note that designations like the CFA or an MBA are much less useful and aren't really something that gets considered when deciding who should get the promotion and who is gonna get snubbed... some place do however think highly of CFA and if that's the case they'll make it perfectly clear. But I would never say it's a universal step in the process.


Awesome thanks.

I was wondering about the CFA because I know at the AM firm I interned at they don't consider anyone for PM roles without the CFA.

Right, ya that's the case at some firms... most notably (and I've probably said this 10 times by now) T. Rowe is really anal about this. We work with them a lot and it's funny because they do tout that all their analysts get the CFA designation and I've never really understood why they were so adamant about it. Some places just dig it I guess, even if it's not because they're trying to convince customers they know what they're saying.

I hate victims who respect their executioners

3/31/13

First day of work tomorrow at a place that's hopefully like this!

3/31/13

WhiteHat:
First day of work tomorrow at a place that's hopefully like this!
Good luck.
4/2/13

Thanks for this thread, Blackhat. Very informative. Can I PM you about an asset manager that has hired me for a FT role?

4/2/13

Markov:
Thanks for this thread, Blackhat. Very informative. Can I PM you about an asset manager that has hired me for a FT role?

Do it!

I hate victims who respect their executioners

4/2/13

This post is very solid. Not to hijack from BlackHat here, but I'm currently at a smaller shop where the environment spoken of is quite accurate. It depends on what each individual is looking for, but hours are totally manageable, balance with life is great, and the degree of exposure/experience you get at a younger age is an excellent thing. I think the point about emphasizing "thought" is so crucial, and at these types of shops the mentorship and ability to go in and talk back and forth with the PM about anything freely is really cool. If you want to be a really good investor, you can learn that in a variety of different shops. That said, I think that these types of firms are quite useful in helping a young analyst develop into a really good investor over time.

4/3/13

I am aware that sell-side equity research roles require the Series 86/87 Exams, but are there any FINRA licenses required (e.g., Series 7/63/79) of buy-side equity research roles once hired? Particularly at smaller boutique AM firms, where the research and analysis would be solely used within the firm and not available to the public. Thanks in advance.

4/3/13

kMz:
I am aware that sell-side equity research roles require the Series 86/87 Exams, but are there any FINRA licenses required (e.g., Series 7/63/79) of buy-side equity research roles once hired? Particularly at smaller boutique AM firms, where the research and analysis would be solely used within the firm and not available to the public. Thanks in advance.

No sir.

4/3/13

Great posts BlackHat, thanks for sharing with us.
I am seriously considering going into AM to build the skills and network necessary to create a PWM company in a few years. Do you think this plan makes sense? As an equity research and now PM, do you meet often with the clients (private or institutional) ?
Thanks for your help.

4/3/13

Great article. How do you recommend getting over the challenge of the "tight-knit" culture while recruiting?

4/3/13

how much time, on average, you spend to finish a typical 10K:
1. at the beginning of your career
2. now when dealing with familiar industry

I understand that when one is in-search for value the timing of reading might be irrelevant, but just trying to benchmark myself.

Thanks

4/3/13

naivekid:
how much time, on average, you spend to finish a typical 10K:
1. at the beginning of your career
2. now when dealing with familiar industry

I understand that when one is in-search for value the timing of reading might be irrelevant, but just trying to benchmark myself.

Thanks

At first I read everything in the K and paid special attention to things that nowadays I know are standard in every K regardless of the company... so I've gotten a lot quicker at reading them obviously. I still re-read every K that I every print out at least once, and I make sure to spend as much time reading K's as possible. Filings are really the only reading I ever do that's not on the computer/my phone... I can probably get through a typical company's K in 2-3 hours fully annotated with a cup of coffee. Some companies take much longer, and if it's a company that's completely foreign to me I'll re-read sections a handful of times to make sure I understand what the hell it is this company actually does. That's becoming less and less frequent since now there's not nearly as many industries I'm unfamiliar with.

The bottom line though is, you do get faster reading them, but you should still take a ton of time to make sure you understand them and have given them a fair amount of scrutiny. God I fucking love annual reports, not even sarcasm.

I hate victims who respect their executioners

4/4/13

Ditto the loving annual reports part haha. I get so excited this time of year with fresh material. Nothing worse than using December 31, 2011 data in Jan 2013.

BlackHat:
naivekid:
how much time, on average, you spend to finish a typical 10K:
1. at the beginning of your career
2. now when dealing with familiar industry

I understand that when one is in-search for value the timing of reading might be irrelevant, but just trying to benchmark myself.

Thanks

At first I read everything in the K and paid special attention to things that nowadays I know are standard in every K regardless of the company... so I've gotten a lot quicker at reading them obviously. I still re-read every K that I every print out at least once, and I make sure to spend as much time reading K's as possible. Filings are really the only reading I ever do that's not on the computer/my phone... I can probably get through a typical company's K in 2-3 hours fully annotated with a cup of coffee. Some companies take much longer, and if it's a company that's completely foreign to me I'll re-read sections a handful of times to make sure I understand what the hell it is this company actually does. That's becoming less and less frequent since now there's not nearly as many industries I'm unfamiliar with.

The bottom line though is, you do get faster reading them, but you should still take a ton of time to make sure you understand them and have given them a fair amount of scrutiny. God I fucking love annual reports, not even sarcasm.

4/6/13

BlackHat:
naivekid:
how much time, on average, you spend to finish a typical 10K:
1. at the beginning of your career
2. now when dealing with familiar industry

I understand that when one is in-search for value the timing of reading might be irrelevant, but just trying to benchmark myself.

Thanks

At first I read everything in the K and paid special attention to things that nowadays I know are standard in every K regardless of the company... so I've gotten a lot quicker at reading them obviously. I still re-read every K that I every print out at least once, and I make sure to spend as much time reading K's as possible. Filings are really the only reading I ever do that's not on the computer/my phone... I can probably get through a typical company's K in 2-3 hours fully annotated with a cup of coffee. Some companies take much longer, and if it's a company that's completely foreign to me I'll re-read sections a handful of times to make sure I understand what the hell it is this company actually does. That's becoming less and less frequent since now there's not nearly as many industries I'm unfamiliar with.

The bottom line though is, you do get faster reading them, but you should still take a ton of time to make sure you understand them and have given them a fair amount of scrutiny. God I fucking love annual reports, not even sarcasm.

Hey BlackHat,
Once again another awesome thread, thank you. I was just wondering if you could share with us any tricks of the trade you have learned when reading and analyzing a companies 10k. What are things we should be looking for and paying close attention to? What things should we skip over or omit in our analysis (you mentioned some things that are recurring in many 10k's). Obviously all the information is important, but I was just wondering what parts are more important than others, or anything else you would like to share with novice readers. Maybe this question deserves a separate thread?, as many of us on here are huge fans of your viewpoints and logic.
Thanks again

4/4/13

Thanks that helps. Yeah, by reading your posts it is quite easy to guess that you have a thing for 10Ks.

And since I like where this is going I will go ahead with a follow-up:

1. How are you taking notes? There is tons of info, how you keep everything organized? Do you just skim first?
2. When reading 10 Ks of competitor companies, Do you do it simultaneously (section by section, let's say you have read MD&A of THI and now you go and read MD&A of MCD instead of finishing entire THI 10K)?
3. Since you print them out, I guess you take notes by pen, do you transfer them to doc/ppt/excel later?

P.S. Incredible, I am getting credible answers while not leaving my apartment for questions that I couldn't get answers by going miles...Thank you!

4/7/13

naivekid:
Thanks that helps. Yeah, by reading your posts it is quite easy to guess that you have a thing for 10Ks.

And since I like where this is going I will go ahead with a follow-up:

1. How are you taking notes? There is tons of info, how you keep everything organized? Do you just skim first?
2. When reading 10 Ks of competitor companies, Do you do it simultaneously (section by section, let's say you have read MD&A of THI and now you go and read MD&A of MCD instead of finishing entire THI 10K)?
3. Since you print them out, I guess you take notes by pen, do you transfer them to doc/ppt/excel later?

P.S. Incredible, I am getting credible answers while not leaving my apartment for questions that I couldn't get answers by going miles...Thank you!

Don't take my methods as "the way" to do it, but I do feel I have a few peculiarities that make the way I do things pretty efficient (for me, anyway).

1. I have, more or less, a pretty photographic memory. I always read Ks, Qs, broker research, transcripts, etc. cover to cover, preferably with my feet up on my desk and a highlighter in hand. Whatever oddities that go on in my brain for it to happen I'm not sure of, but after I highlight something I tend not to forget it. So I don't write a lot of notes but I highlight pretty liberally and one read-through of a K is usually enough for me to get all the key risks, metrics, and broadstrokes of the business down. As I go along the only thing I write notes about is bullet points on things that are major areas of concern/need more color that I would want to bring up in a call to IR or some sort of industry professional. I'm not a big skimmer of anything.

2. Nope, going along with my answer above, I would write down some points from the THI report that I might want to look into when I read MCD, but I wouldn't jump from one to the other and then back.

3. No, everything is paper. Paper reports, paper notes, paper everything. My office looks like this, and I'm not exaggerating: http://insanity.blogs.lchwelcome.org/files/2011/05... (also not sure how I found that picture but it's pretty accurate)

I hate victims who respect their executioners

4/8/13

BlackHat:

3. No, everything is paper. Paper reports, paper notes, paper everything. My office looks like this, and I'm not exaggerating: http://insanity.blogs.lchwelcome.org/files/2011/05... (also not sure how I found that picture but it's pretty accurate)

BlackHat, I got a question for you - Why do you hate trees so much?

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."

4/8/13

duffmt6:
BlackHat:

3. No, everything is paper. Paper reports, paper notes, paper everything. My office looks like this, and I'm not exaggerating: http://insanity.blogs.lchwelcome.org/files/2011/05... (also not sure how I found that picture but it's pretty accurate)

BlackHat, I got a question for you - Why do you hate trees so much?

What you talkin' bout? I love trees.

I hate victims who respect their executioners

4/4/13

Thank you for the great info BlackHat and everyone else. It is extremely useful as I am at the very beginning of my road to a shop that's hopefully something like the ones being discussed.
I know BlackHat mentioned that some non-traditional backgrounds like financial reporters can be very useful on the business. Along the same lines, I was wondering if a background in audit could be marketable? I fell into it right out of undergrad and was interning at a big4 firm for almost a year (not a typical internship but a long story). The one part of the job that was actually interesting is the ability to get familiar with the 10Ks and all of the inputs as well as the business processes relating to it. I was wondering if employers in AM shops would look favorably to a skill like that or would it get discounted as accounting bs and monkey mechanics?

4/4/13