Variant perspective in (value) investing for the long term

Hi guys,

I work for a small, long-only fund in Asia with "value investing" as its investment philosophy. This is my third year working as an investment analyst (a generalist with no particular sector for coverage). Unlike many HFs in the US or elsewhere where an analyst is required to pitch her idea and thereby contribute to the firm's P&L, here we're basically assigned 2~3 companies a week (more like 4 days) to do research on, to be presented to the PM the following week. Due to time constraint, our research largely ends up being descriptions about the company business, its industry, recent trends, etc. and a very rough valuation. Although I am a believer of the firm's investment philosophy and its concentrated positions, the lack of depth in our research and culture discouraging independent thinking have led me to look elsewhere.

I'm trying to come up with stock pitches for interviews and am having difficulty coming up with a variant perspective (that is different from market consensus) and a catalyst to push up/pull down the stock price. The research I've been doing thus far focused primarily on whether the "company" was good, not necessarily on whether the "stock" was a buy/short.

1) I am wondering if the situation is similar at value funds with long-term perspective? i.e. even if your view does not necessarily differ from the consensus and there's no identifiable catalyst, if the company has solid business, its shares would slowly but climb up in the long run? Like Visa and MasterCard. So you'll make money by identifying a wonderful business and let time work its magic?

2) Does coming up with a variant perspective and identifying catalysts pertain primarily to L/S HFs with shorter investment horizon? Are most HFs run this way?

3) How do you come up with a variant perspective when you're a generalist with not much depth in one particular area but a little from here and there? (Is this where problem solving and thinking-out-of-the-box come in?)

My apologies for being verbose. Thank you for reading thus far and really appreciate your taking the time to share your thoughts with me.

Comments (1)

Nov 22, 2017

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