Ruane Cunniff & Goldfarb - Reputation

I've seen a few topics posted about them but nobody ever giving out any real information. What is their reputation like on the street? Most younger people probably haven't even heard of them I'm guessing. Final round interviews for SA are on Tuesday and I'm trying to get an idea of how they compare to working in IBD or ER if HF is the ultimate exit opp... particularly in their Sequoia Fund. Any insight would be appreciated.

 

I met Goldfarb last year and the others in my group showed him a LOT of respect. I think he's one of those old guys that's been around wall street for a really really long time, great track record, and knows everybody.

That probably doesn't help you much, though.

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

If i remember correctly, the entire firm has around 40 or so employees. Assuming that number is right, it could be some arbitrarily large number if they enjoy bringing a lot of summer help on for some odd reason, or maybe as small as one person - who knows truthfully.

I'm curious how many final round interviews are taking place

 

All I've heard is that interviews are with the manager of the Chicago office and the New York office. So I'm assuming they take at least one for each? Who knows. Definitely an interesting place though I'd like to know more about if anybody has worked there or knows what the deal is.

 

I interviewed with them for a summer internship, they told me they generally take 1 intern. So possibly one for each office, but it could simply one overall. They are one of the top hedge funds on the street and a great place to learn investing. In terms of exit opps, plenty of hedge funds would want you, but their comp is great and they give tons of freedom to their analysts so there is little turnover.

 

I'm interested in doing an internship with them, but don't know what they look for in candidates. How did you land an interview? How was your background like? And how was the interview process?

 

Good post (I own plenty of SEQUX). I try to read everything that these guys post (going back to when the fund was started in 1970). They have beaten the S&P 26 of out 44 years. S&P offered a 10.6% compounded return while Sequoia offered 14.5%. That spread since the fund's inception means a Sequoia investor has made over 4x as much money as the S&P investor. Index at your own risk suckers.

 
Best Response

Thanks for this - this really is gold.

While I appreciate their discussion, I can't say I agree with their take on Fastenal. They basically admitted that neither earnings or growth justify the valuation, rather the stock price is high because the market believes management is strong and the company has a compelling business model that can sell anything. I have trouble buying into that thought process because if management is as strong as the market believes, then they should be able to grow the company at a rate that justifies the valuation. The company either needs to focus aggressively on product line expansion or the international market, and even still, I struggle to see how the company could grow fast enough to justify valuation. Something has to give.

 
glide9811:

Thanks for this - this really is gold.

While I appreciate their discussion, I can't say I agree with their take on Fastenal. They basically admitted that neither earnings or growth justify the valuation, rather the stock price is high because the market believes management is strong and the company has a compelling business model that can sell anything. I have trouble buying into that thought process because if management is as strong as the market believes, then they should be able to grow the company at a rate that justifies the valuation. The company either needs to focus aggressively on product line expansion or the international market, and even still, I struggle to see how the company could grow fast enough to justify valuation. Something has to give.

Have you met Will Oberton?

I don't own any FAST anymore, and I agree with the spirit of your point that the valuation is above what one could expect him or any other manager to do in terms of near-term performance, but the point is that this is a team that can grow its business at a rate far above satisfactory for a good investment, independent of its valuation. If I were to own the shares today at this price, then the satisfactory rate would have to be infinitely higher, but if I'd owned the stock at 80% of today's price originally, then I'd say it's certainly a hold. If I've already compounded value at 25% for the past 8 years, if I start compounding at 10% I'm still going to be doing way better on my money (since 10% of that new enormous sum is way more than 10% of my original position) than I otherwise would.

Of course, if you think you have a new name that can do 25% in this environment at these levels, then sure, I'd rotate into that. But given the level of conviction you get from this management team and the current investment RCG has in it, I'd say it's a very strong hold and their logic makes very good sense.

On an unrelated note, it's "Cunniff" ... Billy Cundiff is a kicker for the Browns.

I hate victims who respect their executioners
 

For those of who might be interested... They post transcripts of their annual investor day meetings on the website. The most useful practical thing that I've read on the internet.

Go to sequoia funds website and then clock on the fund reports link.

 

I'm interviewing for a summer investment analyst position in one of their hedge funds. How would this compare to a BB S&T or IB SA position as a sophomore (I'm interested in working at a top HF after graduation)?

 

Hi Omega- I know this was long time ago. How did you get an internship here ?I'm interested in doing an internship with them, but don't know what they look for in candidates. How was your background like? And how was the interview process?

 

Hi Omega- I know this was long time ago. How did you get an internship here ?I'm interested in doing an internship with them, but don't know what they look for in candidates. How was your background like? And how was the interview process?

 

I spoke to a recruiter there a while back. Their intern classes are pretty small, and a lot of the work is self-directed. I think she mentioned that their past interns were traveling to meetings/conferences on their own.

Don't know how the interview actually works, but I'd assume there's going to be some stock pitching, and you might be expected to show interest in a given industry and know it somewhat well.

 

Bump. Maybe I should clarify. Is this the kind of place you spend your whole life working at, and if not, is it easy to lateral to a hedge fund? Or would there be more opportunity for me a few years down the road in investment management if I had BB IBD experience?

I am fundamentally interested in value investing, which is why I am interested in Ruane, Cunniff & Goldfarb but am also interested in event-driven/deep-value/special situations investing which is why I'm comparing a first year research analyst role there vs. a IBD analyst role.

 

I have a friend that worked in the chicago office. Seems like it was a super autonomous (also read lonely) role with a lot of independent research. I am not sure how many of his investment ideas turned into positions, but I don't think it was very high. Lifestyle was good

 

interviewer told me all about firm then began asking questions. Was asked to walk through resume, picked at different things on resume, favorite class, least favorite class, why specific college, why major, whats in your portfolio, what positions do you like, why, asked some about value investing

 

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