I'm wondering if people can share their experience working as an analyst for a mutual fund, hedge fund, family office, etc. What's expected when you're pitching an investment idea? What happens if your idea tanks after an investment is made? Who's held accountable for an investment idea? Thanks!
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post this in the Asset Management forum for better insights
the investment ideas generation and the final decision to go along with an investment idea are usually responsibilities of the Fund Manager, the analyst usually do her/his bidding (by asking "what is thy bidding my master?!") ... some senior analysts in the team sometimes do generate ideas which are discussed in meetings ... these practices vary from country to country and firm to firm
Ah okay. So the analysts are like the worker bees. And thanks, I posted this under Asset Management. Hopefully I won't get dinged for asking the same question.
yes most jobs are like that basically "sophisticated clerical work" at best that will get boring after 4 or 5 years for most people, i really don't understand why people think there is some magic in some job that they want to do; and even in jobs where a lot of creative work is required the level of competition, office politics make a person's efforts rather difficult to get noticed ... think of office politics as tripping people on the sidewalk so that a car/bus/elephant runs over them while you give them the warmest and most welcoming smile they have ever seen, that is how most people succeed or climb the corporate ladder
I have spoken to people in different fields since I was 15, trying to understand what is it that people think about their jobs, when I realized that while everyone at that point knew what was best for me because they had that one Golden Advice (there are no silver bullets only trade-offs) that would save me from a miserable career but still they regretted their careers (these everyday do-gooders rarely have any facts to support their convictions)
so initially when I used to ask people about their jobs most people used to portray as if their job was real hard work but once I used to start asking about the office politics and the daily tasks, that is when all the frustration and the boredom used to spill out, with every person thinking some other career, work in some other country, etc is some how what they want and is the ideal opportunity and I quote " that job must be better that this one" when they know really nothing about the reality of that job or country
it is just a matter of making trade-offs, not confusing opinions with facts (for finding this out keep questioning people about the details of their jobs) that will more or less let one make decisions that he/she can somewhat live with
now on the fact vs opinion part, what I have just said is all just a bunch of opinions (potentially all bullshit) and anecdotal 'evidence' (if you could call it evidence) at best, so find the facts and then make your decision, however if opinions make logical sense then maybe that opinion is reliable but even logic is biased so it becomes a little bit dicey
Yeah, I think it's like for most jobs in general. The investing business is a very emotional one. And sometimes you don't really have control over all the volatility that goes on. Thanks for the added insight!
The answers to your questions will vary tremendously by firm. I'm not sure that there is an "average" answer for the industry. My answers are below
Depending upon how familiar my PM is with the industry, I might give a brief industry overview and talk about the basics of the business. I then give my 3-5 points why I think this is a good investment. I'll next walk through my valuation and talk about some mandatory information such as the company's balance sheet, corporate governance, capital return, etc. If my PM is familiar with the company this might be distilled down into just a few pages. If it's a new idea the report might be 20 pages.
I'm expected to contribute 10-15 names to our portfolio, so no one portfolio position is going to make/break me. If a name plunges, my PM will of course ask me why and whether we should still be in the name. My performance is evaluated on a longer term performance though and on the basis of all my recommendations. FWIW, people tend to remember the really bad recommendations though.
The PM will hold me as analyst responsible for the name. Clients will hold the PM responsible, since it was his/her decision to add the name to the portfolio. If my name was one of the top 5 detractors, I might have to explain to top clients what happened and why we were wrong. Ultimately the PM is responsible though.
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