WSO Podcast | E187: How to Break into a Top Hedge Fund - The Analyst Speaks (Part 2 of 2)
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In this episode, we continue my talk with Propshead about his progression as an investor at a top hedge fund. Learn what is expected of you when you first start, how you can grow and listen to one of the trades that changed everything.
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WSO Podcast EPpsode 187 Transcript:
Patrick (CEO of WSO): [00:00:06] Hello and welcome. I'm Patrick Curtis, your host and chief monkey, and this is the Wall Street Oasis podcast. Join me! As I talked to some of the community's most successful and inspirational members to gain valuable insight into
different career paths and life in general. Let's get to it. In this episode, we continue my talk with Propst about his progression as an investor at a top hedge fund. Learn what is expected of you when you first start, how you can grow and listen to one of the trades.
Enjoy.
Patrick (CEO of WSO): [00:00:44] Tell me about like, do you feel like you are a natural? Natural investor, was equity long, short, kind of a natural fit for you? Do you feel like people have different? There's a very famous short sellers that just have a natural tendency to like, dig and look for just, you know, crap happening at these firms. So what's what's what did you feel like for yourself and for other people?
Propshead: [00:01:11] You know, it's the funniest thing. I don't know if it's just being like a mild worrywart about things or just in consulting, getting kind of dropped into all these different kinds of firms that had all these different kinds of problems. But I really felt like I was seeing how things could go off the rails operationally and how you wouldn't even see it show up as like a hole in numbers for, like a couple of months. I was like, That's very interesting, because that means you can see kind of things going wrong here, and then that's going to spell trouble down the line. But by the way, the whole way to when you're walking, when whatever management is walking the company off a cliff, they're telling you how great everything is. So they are never going to say, Hey, you know, I know you like our company, but I should probably tell you things are deteriorating at an accelerating pace. And, you know, unless you want to cancel Christmas this year, you should really just short this company as much as you as much as the market will bear. You'll thank me later. You know, management doesn't say that. And so you have to, you know, you have to put on your thinking cap. You know, you have to evaluate the claims. And you know, I know that there's a lot to do and there are a lot of models to update and a lot of things to keep track of. And it's enough to just even get the numbers right for the numbers that were reported. I understand that all is, is that but that's already kind of all in the stock. What you have to do next is see, do I have like a real differentiation? I was thinking about that just. When people first start out pitching stocks. I mean, how long have I done this and I don't know what words like surge or plummet mean? You tell me what percent, you know the stock is up, how much stock is down, how much, and then I'll I'll decide if it's surge plummets, like drop all the things people say. And so and that's actually another thing. At the end of the day, like the stock has to go somewhere and you know, in your pitch, you need to say, OK, the price is going to go to x y z. Is that because of the multiple moves or is that because something moves in the numbers and just understanding where like, how is it supposed to get from price A to price B? Is it just earnings? Don't go anywhere, and just people pay up more for the company for some reason. And there are reasons people do that, like take out speculation or what have you. Yeah, but understanding that is important. And so for me, do I feel like I was a natural with short selling? It's kind of a funny thing. I just almost all of the alpha I've generated on the buy-side has been on the short side, and that doesn't surprise me from just talking to you because you seem like you're very meticulous and so like, You need to be kind of like, see those little details in the earnings that are earnings reports that are changing slightly that maybe like you said, it's canary in the coal mine. Well, it's just one of those things because you could argue, you know, you could say, well, fine. If all of your alpha has come from your shorts, you could have doubled, your alpha by shorting your lungs since apparently there hasn't been much alpha in those. You know, it's just one of these funny things. You just kind of have to know where you tend to do better and you have to learn how to make a case. I do think that, you know, short selling is a very interesting crucible because there are just so many people who want stocks to go up. I mean, the management wants the stock to go up. The investors want the stock to go up. The people who own the ETFs that own the stock want it to go up like you're really you really better have your ducks in a row if you're trying to short anything because in and you know, we'll see what happens in kind of this in this rates environment, what kind of happens?
Patrick (CEO of WSO): [00:04:45] Yeah, very interesting time right now. By the way, this is being recorded Jan January 18th, 2022. So we're kind of...
Propshead: [00:04:53] Yeah, so here we are.
Propshead: [00:04:55] My my. The only thing that I can share is I would have thought that rates would have gone up earlier. I mean, I thought the ten year yield was going to be a two by the end of 2022 or by the end of 2021 when we were in like June of twenty one. Didn't happen. You know, things, things, things show up when they show up, not when you hope that they will show up. So, you know, you kind of have to be prepared for that. But yeah, I mean, so learning kind of what kind of investor you are, that's actually an important thing it's it's strange to say understand who you are in terms of investment style because people say, I'm not even I don't even have an unpaid internship on the buy side, and I'm supposed to understand who I am and it goes back to the same problem. But here's something you can do that doesn't require working somewhere to understand a little bit about what kind of investments stand out to you. There are all these books out there where they have interviews with investors, you know, hedge fund market wizards, where the guy interviews a whole number of different stars in the hedge fund world. And you can see, you know, is, did one of those people say something that kind of resonated more with you than the other ones? And all you had to do was read a book like you didn't have to get on LinkedIn and, you know, worry that they didn't respond because you proposed tea instead of coffee. Like, you can just read a book. And when you see those things, I know it sounds so open ended and subjective and you know, a little a little bit out there. But really, understanding how you invest has meaningful practical implications, both with regard to where you apply and work, as well as what sorts of ideas you pitch to your PM and how likely it is that your PM is going to put that position in the book. You know, if your PM is investor Type X and you are investor type Y, and for some reason those styles are not complimentary or compatible, probably you're going to part ways sooner rather than later.
Patrick (CEO of WSO): [00:06:51] So tell me about it. So let's go back to your story this you get this internship at this large fund and you know, you're kind of just like no experience. You're coming in. Suddenly, you're having to initiate some coverage and tell me what that transition was like for you. Was it easy? Was it something where you just working crazy hours or what?
Propshead: [00:07:07] I I was rather accustomed to working crazy hours. So that for me was never. I never. I know that sometimes people come from very grueling jobs to the buys, and they say, last, I can stretch my feet out, I can go get brunch. I'm not like a brunch person. You know, if people want to do coffee chats, I do a phone call. I'm not. I just I don't know where people find the time that way. So I was I wasn't opposed to working hours and I said, You know, this is your shot. It's so like, think of all the things that had. Fallen to place, just to sit in this seat, and I'm not sitting in the seat to feel like, you know, to see what. Sitting in a seat feels like like, I got to do something. I need to demonstrate some value. All the things that I wrote about in my cover letter that I hope to learn all this, all that. You know, this is it. The clock is on. The race is happening right now. And so what I did as best as I could was and what does that mean? Check frequently. Like once a week, you're bothering him.
Propshead: [00:08:13] Here's what I did. I mean, during during. I would say with the markets open, unless it's very important, don't bug your PM because probably the question that you have is going to be a costly question because of the attention that it diverts away from the market. And you know, it could easily wipe out your pay with one tick like. So it's not to say that it's unimportant that you're working at the fund. It's just to say no, the right times to approach your PM. And so what we did was in the morning before anything really happened, we'd say, OK, you know, here's here's what's laid out for the day. Here's here's what we're working on. And then at the end of the day, you know, after the close, we'd check in and say, OK, here's where I got. Here's what I got lined up next for this evening, and then I'll send you a thing at the end of the night. And so just I would we had kind of...
Patrick (CEO of WSO): [00:09:04] Like what would give me an example, like when you say thing, when you say things like, what does that even mean? Like an analysis on an industry like coverage.
Propshead: [00:09:11] But so when things started. My PM was picking up an industry that was new. So it wasn't just I have all the answers and you're going to learn the answers. We were learning this together. So it almost echoed what I did for the very first internship in that fall where I had to look at the landscape, understand kind of the lay of the land, the different players. And so this is easy in public markets because unlike private markets where you can go out and knock on every single door, there are only so many listed companies. So these are the ways that you can express a view on an industry of this internship. And so each company I did what they do, what they're what is actually meant by the revenue items because some companies will be like sales, but some will do grow sales, some will do net sales. So you just have to really understand what's going on. And so I put that together and then I read through the old earnings calls to try to understand what was important. I think I think people will find that most stocks trade at any given time on like one or two fundamental inputs from that company. And sometimes the debate will be priced. Sometimes it'll be volume, you know, in simple terms. But one of those things is going to matter a bunch and then, you know, maybe, maybe next week it changes and it's some new thing. But just generally speaking, the best thing you can do is just understand kind of what music is playing like, Oh, it's the volume matters. Music, OK, so any news I see about volume, I should wait more heavily than news about price these days, that kind of a thing. Right? And so I would have kind of this skeleton framework coming together during the week and then by, call it, Thursday or Friday, we'd sit down and go through it and I'd have like a skeleton model. I probably got it from the sell side or something, but just for four expedient, you know, for the sake of expediency, that'll do just fine.
Propshead: [00:11:06] And you say, OK, here's kind of how it's laid out. Here's kind of the growth algorithm they grow top line this kind of rate, they grow eps, that kind of rate. Here's the valuation. Here's where it is relative to peers. Here's why I think it trades at a premium to peers or a discount to peers like either they got some juicy contract that they've been locked into for like 10 years that others can't achieve or maybe they have superior management, and so their cost control is second to none. So they're always going to have the best operating leverage, just those kinds of things. But this would be the kinds of things that I would send, and this was where I was beginning to fuse together the things that I was learning in business school with kind of the work product that was required. And and I managed to do it without slides, and I managed to do it without translating all the stuff that that I was accustomed to. I said, you know, those were things that I did do. They helped me get in the door. But now what's going to move the needle is what I do on this side of the door. And you know, for anybody who is glum about their, I'm not really recognizing what they used to do in their past life. Why hold such high hopes that someone who hasn't done this thing that you've done is going to be able to fully appreciate in the same way you do the thing that you did? It's a big ask.
Patrick (CEO of WSO): [00:12:20] So it sounds like you did really well.
Propshead: [00:12:23] I got to ask back, and actually I was knocking on the door beginning in January because I thought, Well, why don't I just resume doing a semester internship again? And. So I took a break in the fall, and then I actually scooped another internship during the fall, and I should point out some of these internships. The reason I got one internship that I did was because I was the first guy to reply to the email. That was it. Just the guy emailed back and said, you were the very first one to reply to the email, so I guess it's yours. And so sometimes that's how it goes. And so I did some other stuff, and I think it was good. One way that I made, you know, a great use of the time during business school was to just interact with so many different investment styles because it gave me a mental framework being out and about in the real markets later on to understand, Oh, you know, with this boss have bought that or sold that. Would that boss have bought that or sold that? Would they have stayed away entirely? Why would they do that? And just the more kind of personalities you come into contact with, the more you can imagine what they would do. So, you know, I'm not going to call it like my investing Mount Rushmore or anything like that, but it's just kind of my bag of memories that I can draw from when I think about, Oh, what would so-and-so do in this situation? What would they say? Would they be buying it at the top and saying, Oh, you know, it only looks expensive? Or are they going to try and short it just all those kinds of things. So I resumed working in January, coming into spring semester of business school.
Patrick (CEO of WSO): [00:13:53] How are you doing classes and working? How many hours are you putting at the hedge fund and how many hours at school?
Propshead: [00:14:00] This is another one of those things that I can say now, and it's not as alarming. I had a spreadsheet of and I think I called it like the No. And I had done well enough in business school that graduating wasn't really in jeopardy on condition that I completed my requisite credits.
Propshead: [00:14:17] So I did like sometimes they'll have a week where you can get you can pick up a few credits. And so you do just this one week where it's like 9:00 to 5:00 and then you get three credits just like that. So then that frees up a little bit of time during the real semester. So it was like, OK, you know, you sprint a little bit here and then you can stretch out and work a little bit during this time.
Propshead: [00:14:36] So I was doing that.
Propshead: [00:14:36] But then also I thought, OK, why don't I just do some of these like seminar classes that meet, like a few times? And I said, you know, I think that after graduation, the only interaction that the business school is going to have with me is. Asking for donations, so. Moreover, I understand that the school is very focused on making sure that everybody is employed after graduating. There is a very important distinction between a job and the job. They will help you get a job and they're very good at it. But if you want to get the job, you have to take some personal well, you know, I don't mean to sound very. Rim, but it is very hard for a business school to sell an empty second year seat on the open market. You know, they can't just stand on the corner and say, get your second empty second year seats here. They can't do that, so they'll find a way to make sure that you pay and graduate because the graduation statistics also matter. So anyway, back to this number spreadsheet, I as I completed these classes, I said, OK, well, you know, I've done these and I've gotten these grades. So here's how bad it would have to be in my remaining classes so that I couldn't graduate. And so as long as I just got over those bars, I said, You know what? I so far have not found any hedge fund that was so preoccupied with my graduate school grades. They look at undergrad GPA good enough, and then they just want to know that you do the work. So I thought, OK, I just need to graduate. And then this just becomes like a, you know, a what should I even say? A matter of logistics
Ok, so you can you can start on that day, you know, that kind of thing. Of course, it wasn't that easy because I went on the graduation trip and this was the graduation trip was to kind of a, you know, a very hot place in the Caribbean. But I think I was sweating maybe three times as much as everybody else because I still didn't have a job lined up because kind of the wheels were turning inside and graduation was coming. And, you know? It's not my first rodeo of graduating from an from a secondary program and not having a job, you know, I'll get through it, but I was worried about that. But then at the end, you know what the final toll was. This is actually kind of funny. My Bloomberg stopped working, and so I called Bloomberg and I said, You know, Oh heavens me, what has happened? My Bloomberg stop working. And the account manager said the account has been terminated, but not there. There are different kinds of terminated and this is the kind of terminated that usually happens when somebody is being converted from an intern to a full time employee. Oh, good. So, you know, that's not the same thing as an offer letter, but it's like this basically how you found out you had the job. That's kind of how I found out. And so but you know, you don't want to walk. I mean, what can you even say? You can't walk around and say, Oh, I've got an offer. Why do you have an offer? Oh, the account manager from Bloomberg told me that my account was terminated, but it wasn't a regular. You know, nobody wants to hear that they want to hear offered. Right. So but that that was kind of a hint. And so I went back to sweating to a much more modest two times as much as everybody else after that phone call.
Patrick (CEO of WSO): [00:17:48] I love it. So you ended up working there for a good number of years? Tell me a little bit about obviously the pay was probably even better than than what you're making at the consulting firm.
Propshead: [00:17:57] That is a fair characterization. This was a worthwhile trade. Yes.
Patrick (CEO of WSO): [00:18:02] And do you mind sharing a range or anything like that or. Yes. Three hundred. By murder, you know, the numbers that you're describing are not outlandish, let's say, but because, you know, I'd rather just respect anonymity, and that's fine, that's fine. Yeah.
Patrick (CEO of WSO): [00:18:24] I would never ask for exact number, just just getting a range. But no, I understand if it's sensitive, it's what I can say is in the hedge fund world, the cone of outcomes is widened substantially as in. Some people say, Oh, my worst year, I'll probably make it. Well, it's a little different than the hedge fund industry because in your worst year, you don't finish the year so they fire you. Yeah, I think I think that's an important distinction between that and other jobs.
Patrick (CEO of WSO): [00:18:51] But yeah, you can make three hundred percent of your base or five hundred percent of your base in a crazy year, an amazing year, but you can also lose your job.
Propshead: [00:18:58] You can also familiarize yourself with Cobra insurance. Yeah, you know, so those are the kinds of things that can happen.
Propshead: [00:19:05] But you know, it's one of these things, you know, for the love of the game, just you always want to have exposure to the upside. And there's there is just the thrill of investing.
Patrick (CEO of WSO): [00:19:14] Sure. And so tell me a little bit about how things progress. You'd already kind of been working with the fund for a while. The internships
have kind of probably felt really natural. You're working through the semester through business school, kind of just trying to get through business school. You graduate, you finally get you. Finally, eventually, I assume officially here that you have the job.
Propshead: [00:19:33] I do. I do have the job and I have a diploma too.
Patrick (CEO of WSO): [00:19:38] So you start working right away right after you come back from the trip.
Propshead: [00:19:41] I think it was very quick. I'm trying to remember, you know, I know people have stories like graduated on Friday, started on Monday. You know, I don't remember the specifics, but I did not have time off. Yeah, in between and I didn't want it, frankly. I mean, I wanted to kind of
Propshead: [00:19:54] Get in the game ready to go.
Patrick (CEO of WSO): [00:19:56] Yeah, so tell me where you're working 70 hours a week. Sixty hour weeks. Was it? Or were you pushing yourself harder? Because it seems like with veterans, you could never you could work off one hundred and twenty hours a week if you wanted to. There's always more research to do. There's always more stuff. It's a wise thing that you share. I kind of, you know, I might even say I lived in the office a little bit just because I was so focused on getting everything just right. And I and this was kind of part of my progression and evolution. I was very focused on getting these little details right, which is part of the picture, but you don't want to do that to the exclusion of the rest of the picture. And it kind of goes back to thinking back to the investment committee at the PE fund. I guarantee you they're not thinking about like, Oh, is that 40 bits? Is that probably the right? That's not what they're thinking. They're taking a step back and say, you know, is this an attractive opportunity? Is there a secular tailwind? Is it cheap, those kinds of things?
Propshead: And so at the beginning, I was just making sure. And by the way, this is a normal thing that happens with new analysts. Maybe one of the first things you do is you're creating capacity for your PM. So all the models are up to date. Like you, you note in them what the company guidance was. You have maybe a cover sheet and you have some kind of a framework and that's kind of where you start things out. But you're not. You're not kind of you're not paying for yourself by just keeping the models tight, they can always pull one down from a sell side website, so you have to go beyond that.
So how do you go beyond that? Your next evolution is going to be when you can start pitching ideas that generate real P&L. And I went from just like, you know, guy who updates models to somebody who's really pitching meaningful ideas. And there was a company in my coverage where. The company was a turnaround story, and just there was a lot of blocking and tackling that had been neglected forever, and they brought in new management.
They were a couple of years in and they were starting to see some positive signs show up in the metrics. But then out of nowhere, they go and buy this company. That's in another, that's on another continent. There is no connection between other than incidentally doing the same types of things there. There's no connection, no synergy, no nothing. And so to me, it struck me as odd because here they were saying, you know, we were doing all this blocking and tackling, and that was so great. And then there was this unexplained departure from that strategy, massive acquisition. I sensed kind of, you know, either a cleave and management and maybe some debate about that. And I thought, you know, I need to get on the phone and talk to the company. So an important thing as an analyst is that you, you know, you always keep a good relationship with companies. So I was on the phone with IRA and I said, you know, I can't help but notice. I mean, we've seen all this continued progress. I guess why take your eye off the ball of the blocking and tackling now? Just this is when the rubber is really going to hit the road. And the response was, you know, I'm not going to quote it verbatim or anything, but it was just, you know, I see the point that you're making, but you can't control when good things come up for sale on the market. And if we had waited to complete all of the blocking and tackling. Who's to say it would have still been around to buy by the time we finished that?
So this is, you know, maybe we're going to take our foot off the gas a little bit, but we're also going to be integrating this other one. And so to me, I just thought, I don't think everybody is ready for how big of a shock this is going to be that just they have to take their foot off the gas from the thing that everyone was buying the stock for? Well, a scant number of weeks later, the company has kind of, shall we say, a negative pre-announcement. And they reaffirmed guidance where the bulls had been playing for the company to raise guidance. And so they just said, Yeah, it's going to be kind of what you thought it was. And so the bulls, you know, nothing left to play for there. And then there were some unexpected liabilities that cropped up from something that had happened like 15 years ago under prior management. But this is one of these companies where just these liabilities don't just evaporate on their own like they need to be, they need to be dealt with. And I said, you know, so we had been positioned short coming into it. And then the announcement hits and the stock is already down. Like, I think first tick, it was down like 10 percent.
So, you know, now we're talking. And I think when when the dust finally settled, I think maybe on the day, you know, I'd have to go back and look, but it was down like, you know, mid high teens percent on the day. And then later on when I when I got on the phone with the company kind of after they had their earnings call and stuff like that, the I'm trying to think if this was either hearing this or someone was telling me about this call, or maybe I was on the call, but they said, Oh, you know, before we kick things off, I just want you to know that we we also have our retained counsel on the line as well. And so I thought, you know? Having your retained counsel on the line during a call with investors doesn't sound like regular dude things. This sounds like something that happens in unusual circumstances.
Propshead: [00:25:00] And so I thought, whatever it is, it actually is worse because. They can only articulate to the investing public what has been approved and likely
settled or identified so they can ring fence that. But it would not at all be in their interest to state more than that, no because of matters that were pending and not yet settled. This would give kind of a bogey for the plaintiff side to chase. And so they cannot give you a single opposing counsel. So, you know, I thought about that a little bit and I thought, You know this thing, this seems like a huge short. Anyway, long story short, the the stock got cut in half in like two weeks. And, you know, it wasn't even one of these SAS stocks and a rising rate environment. This was a real, you know, fundamental thing that kind of cut it in half. And so that was where I think I'd really turned the corner and it was like, Oh, you know, this is actually like he came up with that idea. He chased it down. He did the research. He articulated kind of what was uneasy. And then because I kind of had like, you know, I'm not just sitting in the office doing nothing all the time, you know, you've got to got to work sooner or later. I had kind of a grid of what bulls and bears play for along different time horizons. And I thought, Wow, the longest owners
of this stock are going to be completely blindsided by the turnaround being put on pause. And I could not possibly have anticipated these unexpected legal liabilities. It was simply not even something I thought about. I already thought taking taking the foot off the gas with the turnaround that was going very well was already enough cause for concern. But that was that. So why did I? Why did we go on this whole Segway?
It was to say that when you first start out, you're going to just be getting numbers in the models. You're going to make sure that your PM has enough to work with and things are up to date so that they can kind of tinker around in the model and flex different scenarios. And then as you get to know your companies, that's when you start to evolve to an analyst who can generate P&L and start pitching ideas that generate real, real dollars. And that's actually another important skill. You know, I know I said like remove words like surge and plummet from your vocabulary, but you also need to be able to pitch it in 30 seconds or less. And like, even though it's your boss who brought you on and kind of took you under their wing. Time is still finite, so you need to be able to just get out the headlines. Boom, boom, boom. And not just kind of reason it out while your PM is listening like you need to have it ready to go. And actually, there's another thing that I'd point out there, which is you shouldn't be afraid to stick your neck out when you articulate a view. I mean, it's unlikely that half the stocks in your coverage are going to get cut in half during the next earnings season, but probably doesn't.
Probably not happen could. But probably not. But you need to, you know, you shouldn't be afraid to be bold. And the reason why is when you articulate your view, you're helping other people see what you're playing for. And also by being by articulating your thesis, they can understand how they should respond to new developments.
Propshead: [00:28:23] So if you say this stock has eroding pricing power and when the market figures that out, the stock is going. People are going to have to cut their earnings numbers by 10 percent and the stock probably loses some multiples. So we're playing for like 15 percent downside here. Well, now that that kind of toothpaste is out of the tube, your pm is going to say, Oh, so when I see news about cutting price, that really means something for this stock or in talking with the company.
Patrick (CEO of WSO): [00:28:51] You know, the game that's being played. Like you said, you know what song is playing? So the volume stuff you can kind of, you know, it's of some informational value, but not not super informational value at that time. Later on, watch, it'll be the volume thing and then you have to go back through all your volume stuff. So that's but, but you have to be OK to stick your neck out because fundamentally, this is a game about taking risks. And it goes back to
Propshead: [00:29:13] What I was saying about the way you are rewarded is by breaking consensus, not by following it or by building it, just you. Either either everything is priced perfectly right now and so shall be forever in perpetuity or new information is going to come out that is going to change what people think. It is worth paying for a share of XYZ Company stock on any given day. And maybe it's a long and it goes up. Maybe it's a short and it goes down, but your fundamental premise is the stock is overvalued or undervalued, and here's why. And here's the work I've done and people will sit up in their seat when and it could be, you know, the company is going to go talk at conferences or there's going to be earnings or something like that. And so you want to have this kind of catalyst path that you should always have that in mind when you're pitching things, because that's how you know when you're wrong. Otherwise, it's like two people arguing about who would have won a rained out baseball game. It's just a totally pointless discussion, waste of time that you could be working on anything else. So yeah, that's that's a little bit about the analyst progression and kind of how you go to generating P&L. And then when you when you're looking at, you know, should should it come to pass that you're looking at other places, they're going to start asking you like, Hey, what are some of your ideas? Pitch me an idea. What do you like? What do you like short? And unlike when you're first doing this, you're a lot more up the curve. Understanding your companies. You still need to be tight on the numbers. You can't just say, Oh short until I say, let's stop shorting it. Like, you have to be tight on the numbers, but you can articulate a view and you have something of a track record.
Propshead: [00:30:51] And what's more, through your interactions with other besides which you are sure to have doing this job. They, too, can kind of comment on your good trades you've had or pitches things that you pitched before anybody even knew what was going on and that you were right on. Yeah, we'll probably if they're pushed, if you know their arm gets twisted, they'll probably share something about a bad trade. You had to. But you know, there's a lot of informational value in those, too. Did you just say, Oh, it's got to be algos? And that's why my trade didn't work? Or, you know, did you examine like, how could I be wrong? What am I missing, right? Those kinds of things. It's fascinating.
Patrick (CEO of WSO): [00:31:29] Love it, love a great insight. Really appreciate your time. Before we call the pod any kind of final words of wisdom and just for people listening, you can speak with. Prop said he is a mentor in the mentor program, so if you are interested in speaking with him, there'll be a link in the podcast and in the Q&A. We hope to twist his arm to get him to do. But yeah, I was going to say for for this and other types of information helpful on your hedge fund investing career. Please sign up for a mentoring session. Yeah, there you go.
Patrick (CEO of WSO): [00:31:59] Yeah. Any other words of wisdom?
Propshead: [00:32:02] I would say we call it if you're. If you're very early in the journey of deciding whether you want to work in the public markets, pick up a book where they interview hedge fund managers who could be the market wizards book. There was a great book called Diary of a Very Bad Year, where a Vanity Fair reporter happened to be covering hedge funds and asking, What is it that a hedge fund manager does? And they have these weekly check ins? Except these weekly check ins were taking place during the was going on when. And so that was a very exciting read, I thought. And so understanding how different people invest is the right thing to do if you're on the fence about if you should get into investing, if you're further along in that and you're working at a bank or a private equity shop or you're in business school and you're looking about what should I do next? I think something that's important to do is. Talk to people who do the job, maybe you have some friends who do it and just set aside some time because, you know, if they're your friends or they're your classmates, they can share something with you and you're not burning anything by doing that as opposed to, you know, you can kind of get out a lot of questions that would have otherwise been asked for the first time with somebody whose time is hard to get a hold of. You can ask those questions of somebody else first, and you know you're never going to have all the answers to all the questions. There's always going to be more questions. In fact, if you don't like asking questions over and over again, the public markets will be very challenging because you have to constantly be updating your thinking on things. Nothing is ever set and done right. And then if you're if you're thinking. Suppose you're on the recruiting pipeline and you're wondering kind of how to refine your pitch, there are, you know. It should it be the case that we can't meet for a mentoring session. There are some great books. There's one thing called a pitch the perfect investment and it goes through. It's written by a couple of hedge fund managers and for what they wrote, is kind of a primer about a lot of aspects of doing this job and. Working out kind of what's important to put in a pitch and what your PM might be looking for. These are things that that book touches on as well. And so I think that's kind of maybe for kind of the intermediate, you know, aspiring hedge fund analyst, that would probably be a good read.
Patrick (CEO of WSO): [00:34:25] You know, what I would say is get the hedge fund interview course from Wall Street races, but then follow it up, develop your own pitch and then hire a mentor before you. Actually real before your real interview.
Propshead: [00:34:34] You know, it's a great point that you make Wall Street choices of the things that I've gone through on the site, including some of the other courses and some that I took for fun. They've been organized, they've been put together well, and I could easily point to what I learned after completing the courses. And so I can't speak to the
Patrick (CEO of WSO): [00:34:50] Plug nice plug at the end here. Well, you
know, I can't, I can't speak.
Patrick (CEO of WSO): [00:34:54] I can't speak to any person to do that. I promise.
Now the just on a lark, I did some of the data analytics ones and stuff like that, as I do think that there is going to be a trend in the hedge in the public markets world, where there's a convergence between those who understand data analytics and things like that and who can wed that with traditional fundamental investing. In fact, you know, do you know Python are, you know, Python? That was one of the seminar courses I took during business school. Oh, cool. Yeah. So and then I also did the Python refresher. But you know, it's not that they ring a bell when it's time to learn something, but I think that the appearance of a Python Course on a website that historically has done interview preparation is a very strong signal that it's worth taking the time to do such a course. Appreciate it,
Patrick (CEO of WSO): [00:35:41] And we'll talk soon. Thank you very much. And thanks to you, my listeners at Wall Street Oasis. If you have any suggestions whatsoever, please don't hesitate to send them my way. Patrick at Wall Street Oasis dot com. And till next time.
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