The BlackHat Interview: 4/4

Mod (Andy) note: The much anticipated BlackHat interview is here (see part 1, part 2, part 3). Questions came from myself and members of writing and intern teams. BIG thanks to BH for his really in-depth/quality/quick responses. I promise all of you will have some great takeaways from this series.

If you don't know of BlackHat, he has been in the HF industry for 5 years (broke in straight from ugrad), has been one of the most active members on the site this year, and boasts a formidable 278:30 sb:ms ratio.

Here's how the four part series will go:

  1. Background / breaking into HF
  2. Working in HF, Money & Motivation
  3. Career advice for all you WSO Monkeys + how he advanced in his career
  4. This post: BH's future, and some miscellaneous tips and thoughts


First question of Part 4: What's your next step?

(btw, try to keep your questions relevant to the current post as he may have likely already answered it in a previous or upcoming post.)
My next step isn’t really decided yet. Like a lot of people out there my goal was to be able to run my own money, and as far as my boss is concerned, anything I recommend pretty much goes into the fund, so I’m satisfied in that regard. The only event in my life I have to focus on right now is my wedding and my fiancée. Until that’s out of the way, I feel pretty satisfied with where I am professionally, but that doesn’t mean I don’t have grand aspirations on deck…

What are your future milestones?
Future milestones for me are hard to quantify. I'm not going to sit here and say with a straight face that a goal of mine is to hit $X in net worth or to buy a X,000 square foot house or anything like that, because it's just not true. The only big professional goal I have right now is to be my own boss. I have plans to make that happen, so it's not something I'm stressing about. And even if it doesn't, it's not a very serious goal but it's a goal nonetheless. Most of my goals from here on out are family related. I want my wedding to go smoothly, I want a few great years alone with my wife, and by then I might even want kids, who knows. But I think I'm too young to put too many big milestone goals into my head. The last thing I want to do is set myself up for disappointment.

If you werent working in HF what do you invision yourself doing?
If anything I think I’d want to have become a lawyer or a writer. Like I said I think one of my best qualities is being a good judge of character and having a unique perspective on life, so putting those together I think would work really well as a writer or some sort of speaker, or as a lawyer. As some of you know I’m a huge Suits fan and that’s pretty much because I had wanted to be a lawyer for a lot of my childhood. Then again that’s probably because my parents told me I had two choices: doctor and lawyer. It was a 50/50 shot.

What have been some of your highest highs and what were some of your lowest lows (in your life and career)?
The lowest I’ve ever been was definitely during the depression/drug-laced years, and the highest high is definitely proposing to my fiancée. I like to think it’s nearly impossible for something career-related to occupy either of those spots, but I’ll include career high and lows too. The high was probably getting hired at my current firm, since it is very similar to the firm I worked in right after undergrad, and fit my personality and style perfectly. The lowest low and highest high or usually related, and for me that’s the case here. The lowest I had ever been during my career was during the latter part of my time at my last HF, where I felt basically stuck in an environment I didn’t like and was convinced there was no way out. Coming to work every day actually got to the point of being a pain in the ass and I was routinely leaving work earlier and earlier and luckily snapped out of it and pushed myself to go find a new gig.

From a female monkey: What could girls do to snag a man like yourself?
Haha, well first of all let me remind you that you probably don't want a man like me, I'm kind of a nutjob, but I'll take a crack at this one anyway. I guess in the same vein as my last answer, guys with substance are looking for someone special. If you take a look around there's a lot of good looking women out there, so that's not enough to be special. I was attracted to my fiancee because she was a classy girl who had her own things going on in life, and most importantly she was INTERESTING. So many girls I've dated or simply spent time with are just totally boring.

I don't know what it is about you girls but I think it's instinctual that you think your main responsibility is to sit and smile and just laugh at everything I say. That's probably the worst thing you can do, especially considering I'm insecure enough to think you're totally bored with me if you never contribute anything to the relationship. It also helps to take some initiative and show that you actually care about us or are interested. A lot of guys are afraid of rejection, so even if they've made all the right moves and you're interested, if you don't make at least some indication that's legitimately explicit, that could be a missed connection and 9 times out of 10 that's what happens. I'm personally attracted to a girl who's a little bit more forward than all the others, and that's another way you could be special. No mind games, just be a real person for once. That, and some slight gesture to show that you care, and you've probably got all you need to reel me in. Being cute helps, but it's definitely not a requirement... in fact I hope my fiancee stops caring about her appearance once/if we have kids... She's got bigger things to be focusing on once that happens.

What are 3 tips you have for picking up chicks in a bar?
When I was younger I had this great idea for how I was gonna work on my game. I’d call up the operator and if it was a chick I’d start hitting on her, testing out all my pick-up lines and usually getting hung up on, but I had a little success getting them to play back when I complemented them in a really flirty way. Girls love to be complemented, especially if you’re not horrible looking because then it just seems creepy, and it’s always been a great opener. So here’s my tips:

1) Complement her in some sort of mildly sexual way, maybe something about what she’s wearing or even sometimes what I’d do is complement them on something that makes no sense to complement. Tell homegirl she’s got the sexiest neck you’ve ever seen. Or her knuckles are absolutely gorgeous. I’m tellin’ you, it works.

2) Don’t be creepy. This is partially in the way you say whatever you say and partially in the way you look. Some of you are creepy as hell to begin with so I don’t hold out much hope for you, but that’s what I got.

3) Don’t be boring. If there’s something interesting about you make sure you casually slip it into conversation. Nobody wants to go home with “that guy who worked in finance” but I’m sure lots of girls out there want to check off their bucket list sleeping with “that guy who’s wanted for grand theft auto.” If you’re not wanted for grand theft auto and this is a one night stand situation, you have my permission to make something awesome up. Like the guy who posted saying he was a rodeo clown, that’s just plain baller.

What are 3 tips for living in NYC?
1) Make sure you don’t have a problem going places by yourself sometimes

2) Don’t be too far from work unless you’re okay with sweating your balls off on the way or riding the subway and all the pain in the ass that comes with it. I’ve never been a subway guy though so I can’t really judge the subway crowd, which is pretty damn large and probably has no problem with its subway-ness.

3) Find a gym that’s close to work and use it. NYC is an easy place to get fat pretty quickly. Just look around and you’ll see evidence of it.

Tell us your thoughts on the book 50 shades of grey, it seems like you've mentioned it a few times.
My fiancee was reading 50 Shades of Grey and I had heard all the fuss about it, and I was talking about how stupid the book probably was and she challenged me to read it, so I did. It might sound crazy but after I finished I was sorely disappointed by the lack of "dirtiness" after hearing how nasty it was supposed to be. Apparently most people think that book is pretty "out there" but to me it was actually fairly vanilla. Some might be surprised but BlackHat isn't afraid of a whipping or two. I'm actually getting my own Red Room of Pain built into my apartment next month...

 
Neighbor:
Good stuff Black. Quick question:

From a male monkey: What could I do to snag a man like yourself?

Two words: Banana Hammock.

I hate victims who respect their executioners
 
Neighbor:
Good stuff Black. Quick question:

From a male monkey: What could I do to snag a man like yourself?

BH don't deal with such petite question. As his assistant, I give you a shot: SURGERY (You know the kind) Friendly reminder: after you get it done, stand in line right behind me. It is gonna be a long one for the mistress opening.

--Money can't buy happiness. it can only buy orgasms. --Who the hell says I want happiness? Orgasms all I need.
 
Misspartiesalot:
Neighbor:
Good stuff Black. Quick question:

From a male monkey: What could I do to snag a man like yourself?

BH don't deal with such petite question. As his assistant, I give you a shot: SURGERY (You know the kind) Friendly reminder: after you get it done, stand in line right behind me. It is gonna be a long one for the mistress opening.

I second the recommendation for that kind of surgery. As my plastic surgeon friend says... "it's always easier to dig a hole than build a pole"

I hate victims who respect their executioners
 

Vote BlackHat 2012.

Also, please explain the ostensible contradiction below.

BlackHat:
1) Tell homegirl she’s got the sexiest neck you’ve ever seen. Or her knuckles are absolutely gorgeous.

2) Don’t be creepy.

 
Ron Paul:
Vote BlackHat 2012.

Also, please explain the ostensible contradiction below.

BlackHat:
1) Tell homegirl she’s got the sexiest neck you’ve ever seen. Or her knuckles are absolutely gorgeous.

2) Don’t be creepy.

Just take your pants off at that point, now that I think of it.

I hate victims who respect their executioners
 
Ron Paul:
Vote BlackHat 2012.

Also, please explain the ostensible contradiction below.

BlackHat:
1) Tell homegirl she’s got the sexiest neck you’ve ever seen. Or her knuckles are absolutely gorgeous.

2) Don’t be creepy.

haha. totally agreed. A baller like you should have come up with better lines THAN THAT. Ok, well, his non-PUA trait is a turn-on to me somehow.

--Money can't buy happiness. it can only buy orgasms. --Who the hell says I want happiness? Orgasms all I need.
 
Misspartiesalot:
Ron Paul:
Vote BlackHat 2012.

Also, please explain the ostensible contradiction below.

BlackHat:
1) Tell homegirl she’s got the sexiest neck you’ve ever seen. Or her knuckles are absolutely gorgeous.

2) Don’t be creepy.

haha. totally agreed. A baller like you should have come up with better lines THAN THAT. Ok, well, his non-PUA trait is a turn-on to me somehow.
BH already addressed this. He doesn't need the lines, he just takes his pants off then boom it's on.
 
go.with.the.flow:
Great interview BlackHat whats your take on dating at the office?

Never, unless it's a genuine attempt at uncovering marriage material. So basically no fuck buddies. Been there, it doesn't work. Even (read: especially) with back office / HR / etc.

I hate victims who respect their executioners
 

Serious, if weird, question. Have you ever heard of value-oriented hedge funds like the place you work at hiring, like, investigative reporters? What about financial crime detectives / FBI types?

Super random, I realize, but it seems like much of what you do for your job is deep investigations of companies and industries, not number crunching.

Maybe it's just my hard-on for Law & Order that makes me think that, haha.

 
TheKing:
Serious, if weird, question. Have you ever heard of value-oriented hedge funds like the place you work at hiring, like, investigative reporters? What about financial crime detectives / FBI types?

Super random, I realize, but it seems like much of what you do for your job is deep investigations of companies and industries, not number crunching.

Maybe it's just my hard-on for Law & Order that makes me think that, haha.

Fantastic question actually. Not as much anymore, but a lot of the guys who started here when our PM founded the place were actually financial journalists. And at my first firm the same was the case. A lot of people at my old firm were pretty prominent WSJ reporters or otherwise before joining.

I hate victims who respect their executioners
 
BlackHat:
TheKing:
Serious, if weird, question. Have you ever heard of value-oriented hedge funds like the place you work at hiring, like, investigative reporters? What about financial crime detectives / FBI types?

Super random, I realize, but it seems like much of what you do for your job is deep investigations of companies and industries, not number crunching.

Maybe it's just my hard-on for Law & Order that makes me think that, haha.

Fantastic question actually. Not as much anymore, but a lot of the guys who started here when our PM founded the place were actually financial journalists. And at my first firm the same was the case. A lot of people at my old firm were pretty prominent WSJ reporters or otherwise before joining.

That's awesome and makes a ton of sense. I sometimes hate how silo'd things have become, and not just in this industry. It's tough to break into these sorts of roles with unorthodox backgrounds anymore, even if they might make a ton of sense.

 
Best Response
TheKing:
BlackHat:
TheKing:
Serious, if weird, question. Have you ever heard of value-oriented hedge funds like the place you work at hiring, like, investigative reporters? What about financial crime detectives / FBI types?

Super random, I realize, but it seems like much of what you do for your job is deep investigations of companies and industries, not number crunching.

Maybe it's just my hard-on for Law & Order that makes me think that, haha.

Fantastic question actually. Not as much anymore, but a lot of the guys who started here when our PM founded the place were actually financial journalists. And at my first firm the same was the case. A lot of people at my old firm were pretty prominent WSJ reporters or otherwise before joining.

That's awesome and makes a ton of sense. I sometimes hate how silo'd things have become, and not just in this industry. It's tough to break into these sorts of roles with unorthodox backgrounds anymore, even if they might make a ton of sense.

Agreed. As a result of the success he's had with journalists and more research-related roles like ER or value AM type guys, my boss has become supremely anti-IB, so much so that we won't interview bankers without some sort of connection or recommendation from someone close to the firm. That said, we're still taking most people laterally from other HFs and most of those guys were bankers but I think he just pretends he didn't hear them when they say they spent 2 years at Goldman TMT.

I hate victims who respect their executioners
 
BlackHat:
TheKing:
Serious, if weird, question. Have you ever heard of value-oriented hedge funds like the place you work at hiring, like, investigative reporters? What about financial crime detectives / FBI types?

Super random, I realize, but it seems like much of what you do for your job is deep investigations of companies and industries, not number crunching.

Maybe it's just my hard-on for Law & Order that makes me think that, haha.

Fantastic question actually. Not as much anymore, but a lot of the guys who started here when our PM founded the place were actually financial journalists. And at my first firm the same was the case. A lot of people at my old firm were pretty prominent WSJ reporters or otherwise before joining.

For some reason I pictured firms hiring people like Lisbeth Salander(Girl with the Dragon Tattoo) to dig up dirt on companies or something lol.

Thanks for doing this interview series BlackHat!

 

Great stuff, BlackHat. Your life story is inspiring! You're welcome at any of the Happy Hours anytime (just be aware that monkeys will probably be asking f your autograph).

Metal. Music. Life. www.headofmetal.com
 

Blackhat, apologies if you have already answered this but why did your job at the previous fund become so awful? Was it the work? The people? The lack of responsibility?

How long were you in a rut for there and how did you deal with it / motivate yourself?

 
Maherj1:
Blackhat, apologies if you have already answered this but why did your job at the previous fund become so awful? Was it the work? The people? The lack of responsibility?

How long were you in a rut for there and how did you deal with it / motivate yourself?

I was at a really big fund that was relatively bureaucratic... I had a team of 4 analysts and myself working under one of like 10 PMs, all working under our founder / the head honcho. As analysts we weren't really allowed to source, we did a lot of stupid research work for our PM on stuff he told us to look at... there were plenty of situations where I was doing research on something for a company I knew nothing about and had no idea why I was collecting the data. Then I'd just report it to him and that would be the end of it. I had no ownership of any idea, no motivation, and felt like the fund just wasn't giving me any opportunity to learn very much or take on responsibility. It also became pretty obvious after a while that all of our picks were absolute horseshit. The people weren't great either, not that I didn't like a lot of my fellow analysts (and I still keep in touch with many of them today), but just the senior guys were more or less all from the banker mindset and that just didn't sit well with me. I prefer the more intellectual investor crowd than the number crunching "buy this the model says it's good" type of shit. And that's what our life was forced to boil down to there.

I hate victims who respect their executioners
 
BlackHat:
Maherj1:
Blackhat, apologies if you have already answered this but why did your job at the previous fund become so awful? Was it the work? The people? The lack of responsibility?

How long were you in a rut for there and how did you deal with it / motivate yourself?

I was at a really big fund that was relatively bureaucratic... I had a team of 4 analysts and myself working under one of like 10 PMs, all working under our founder / the head honcho. As analysts we weren't really allowed to source, we did a lot of stupid research work for our PM on stuff he told us to look at... there were plenty of situations where I was doing research on something for a company I knew nothing about and had no idea why I was collecting the data. Then I'd just report it to him and that would be the end of it. I had no ownership of any idea, no motivation, and felt like the fund just wasn't giving me any opportunity to learn very much or take on responsibility. It also became pretty obvious after a while that all of our picks were absolute horseshit. The people weren't great either, not that I didn't like a lot of my fellow analysts (and I still keep in touch with many of them today), but just the senior guys were more or less all from the banker mindset and that just didn't sit well with me. I prefer the more intellectual investor crowd than the number crunching "buy this the model says it's good" type of shit. And that's what our life was forced to boil down to there.

The previous fund you worked for could not be anymore in line with my experience at the mega fund I worked at, and was the exact reason I left.

"Jesus, he's like a gremlin; comes with instructions and shit"
 

Thanks for the interview and your insight! I was curious if you/any other people you know have ever invested based on gut instinct. What do you and other hf industry people feel about that sort of investment? Do you think most investment ideas come from this type of feeling and then supported by qualitative/quantitative information?

 
californication:
Thanks for the interview and your insight! I was curious if you/any other people you know have ever invested based on gut instinct. What do you and other hf industry people feel about that sort of investment? Do you think most investment ideas come from this type of feeling and then supported by qualitative/quantitative information?

You don't invest on gut, but you can source on gut. I started pulling 10-Ks on all the social media companies because my brother is obsessed with them and I think he's retarded (I think this qualifies as gut instinct) and from there, I'll admit I had a negative bias the whole time because of my gut instinct, but the numbers added up and the logic was there for a short thesis. So in a way I guess that was a gut instinct investment.

But more or less I don't think this is something a lot of people do, and if they do they won't be telling you that's the reason they made an investment. I wouldn't be surprised if a lot of investing goes on that way even at the founder/PM level, but you'll never hear them say it obviously. Don't think any investor would be pleased to hear you threw 9 figures at an investment cuz you were "totally feelin' it."

I hate victims who respect their executioners
 

Great series BH and thanks for taking the time to do it. I went through many of the same "depression" problems through high school and into college and while not allowing it to royally screw me over it has set me back quite a bit. I am working towards being where are as an associate at a value oriented fund. I have been a reader of many years, but just started posting so I can't PM yet. Would you mind PMing me so I can ask your advice on what steps to take to get to where you are?

 

Great series BH and thanks for taking the time to do it. I went through many of the same "depression" problems through high school and into college and while not allowing it to royally screw me over it has set me back quite a bit. I am working towards being where are as an associate at a value oriented fund. I have been a reader of many years, but just started posting so I can't PM yet. Would you mind PMing me so I can ask your advice on what steps to take to get to where you are?

 

Does your fund prefer to hire laterals from other HFs as opposed to value AMs? You mentioned that the first HF you worked for you didn't like - so I'm wondering if you have any suggestions on what type of HF to join first if coming from the AM side.

 

And to follow up that question - do HFs ever hire for jr. analyst type positions? Given that someone coming from the AM side has no experience with shorting or with some of the other nuances that differentiate HF investing from AM investing, would funds be open to hiring someone in a more jr role who would learn from some of the other sr. analysts? Or is it generally the idea that you first spend enough time on the AM side that you should be able to hit the ground running on the HF side as a full fledged, autonomously working analyst?

 

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