Housekeeping; Analyst Position and Finding an Analyst’s Position

We’ve had cloning in the South for years. It’s called cousins.–Robin Williams

Housekeeping

Once the Value Vault has been reorganized, I will send an email with a key to all who have received a key before. Meanwhile, I will send out keys to the people who have requested entry into the video vault for 2010 Greenwald Lectures. Thanks for your patience.  Also, I will fix the comment section per a reader request so it is easier to follow a discussion.  The blog will become better organized as we move forward.

Tilson Posted a Job Opening for an Analyst’s Position

Don’t forget to visit www.tilsonfunds.com to see his writings on value investing. To read his funds’ investment letters–username:tilson and password: funds.   The Tilson Fund has had a difficult year (-20% or so) in 2011. Hopefully, 2012 will bring sunshine.

From Whitney Tilson:

A friend of mine who’s really knocking the cover off the ball is looking for an analyst:

Greenwich-based hedge fund seeks an analyst who is smart, hard-working, honest and eager to learn and contribute. The candidate should be able to efficiently analyze businesses across multiple industries and have done so professionally for three or more years. He or she should have an MBA or have earned their CFA designation. The candidate should also have a personal or professional track record that demonstrates strong analytical and stock-picking ability.

Our firm employs value-based, event-driven strategies with a macro overlay. The Fund has had a strong start, rising over 400% in its first three years since inception in 2009. Our company is seeded by a well-known and highly-respected hedge fund icon.

Please direct inquiries to analystposition99@gmail.com

Finding An Analyst Job

A reader sent the following email seeking advice:

Here is the situation in a nutshell: my goal since high school has always been to break into some fund where I can do research every day but due to a lapse in judgment and practical financial needs, I took a job as a management consultant right out of college. I’ve been working at this job for two years now and while it has given a ground-level perspective of how some large businesses are run, it has been predominantly a waste of time (pleasing clients, building pretty power points, etc.) and I am very eager to get out.

However, I have found it very difficult to break into the investment management/hedge fund world. I am trying to figure out how to land an entry-level research role at a fund, preferably value-oriented.

OK, readers may have their own suggestions and ideas which I am happy to post.  There are many ways to get to heaven (become a good investor) so working at a fund is not the only way. But I will return with some ideas later after I post the Coors case study and new case study this afternoon.  Let’s think about a good approach to finding a job as an analyst to help this reader.

7 responses to “Housekeeping; Analyst Position and Finding an Analyst’s Position

  1. In case this is helpful, here is how I went from being an electrical engineer to getting work as a consultant in equities analysis.

    (1) Earned my MS and BS in electrical engineering

    (2) Worked as an engineer for 4 yrs. before developing an interest in investing

    (3) Continued working as an engineer for another 3 yrs. using huge amount of my free time reading investing books, doing my own trading

    (4) During this time, began sitting in on annual meetings a friend had with her money manager, putting in my own 2 cents about the portfolio and potentially undervalued stocks she didn’t own yet

    (5) Moved from working as a full time engineer in an office to doing the same work as a consultant from home.

    (6) Began the CFA program despite having no avenue to get the work experience required to actually earn the title. Didn’t matter to me b/c I was more after the information contained in the course and knew that it had to enhance my resume for potential investing jobs to at least be able to say I passed the exams.

    (7) During this time I continued sitting in on the annual meetings with the money manager mentioned above – sometimes exchanging emails about ideas for undervalued stocks.

    (8) Passed CFA Level 1 and was offered part-time paid consulting work by the money manager, which I continue to this day. To him, passing Level 1 was a sign that I was really serious and not just dabbling. My daily work for him just consists in looking for undervalued stocks that have some durable competitive advantage a la Buffett, and weekly conference calls to discuss together what we’ve found.

    (9) I’m preparing (a second time now) for the CFA Level 3 exam and still have no work experience toward the title since it must come from full-time positions. Doesn’t matter – I achieved my goal of getting a good survey of what is taught in modern finance. That being said, I find the information on this website and the value vault much more relevant and actionable to what I do each day.

    If anyone wants any further information they can contact me through my website (luminouslogic.com)

    • Hi Lumilog, thanks for sharing your experience. I completely agree with your observation about the information on John’s blog being much more valuable than CFA material. With that said, it seems to me that the CFA designation is a highly desired credential by many firms. Has this been the case in your experience? What would you recommend to the non-CFA candidate in terms of standing out?

      • Hi llmarsii,
        Yes it is still highly desirable in my experience to have the CFA. I actually had more than 1 unsolicited job offer after passing Level 1 after getting into deep conversations with people I bumped into who worked in the business. My sense was that it was the combination of the Level 1 pass and my enthusiasm for investing that resulted in the offers. I don’t think just enthusiasm alone or a Level 1 pass alone would have worked.

        What I believe is that just having the CFA brands you as a Really Smart Person who likes to learn, and that’s got to be attractive to employers even if they themselves question the real-world applicability of all the theoretical CFA material.

        I also used to tell people that there’s no reason not to sign up for Level 1 if you even think you’re interested. It’s only going to make your resume look better and there’s no GPA (all tests are pass/fail) so you can test and re-test until you get through. I recently found a big flaw in that argument though, and that is that it does factor in opportunity cost. The time I spend studying for the upcoming Level 3 exam is time I can’t spend working through case studies on this site.

  2. In response to the reader seeking to make a jump into an analyst role at a fund, I have been in a similar position, so hopefully I am able to provide some insight as I am still seeking my own personal Shangri La in getting that position. First, my background is very different from the typical applicant. I came from working as an engineer/Project manager for my family’s construction business to wanting to become an analyst at a fund. As I’m sure many of you can relate, I have an unbridled passion for equity research (of course, I only figured this out after 3 years of working at the family business), which drives me today to never rest in this pursuit.

    I have been on this journey for quite some time and these are the steps I’ve taken to date (besides learning the basics of equity research, of which this blog is a great resource):

    1. Produce write-ups (I’ve been posting them to a blog for greater exposure)
    2. Enter the CFA program (I’m currently a Level 2 candidate)
    3. Network
    4. Attend industry events

    Currently, I have been invited to interview, so far, with two funds, one in which I am still going through the process, so it is possible.

    One thing I’ve learned is that the hedge fund business is very relationship oriented; if you have an in, use it to your advantage. Since most jobs I know of today are based on who you know, that is most likely how you will get a HF job. I was at a disadvantage in that respect as well, but I’ve been networking like crazy in order to be put in a better position. That’s my 2 cents, but I’m sure there are others who can chime in with additional advice.

    • Hi John – first of all, congratulations on landing two hedge fund interviews and I hope you do well on them.

      I agree with you on the importance of networking – I have a friend who keeps a wonderful investing blog that has been sourced/quoted multiple times even in the WSJ but it has not helped him land a hedge fund job.

      I also want to ask you the same question regarding the CFA designation. How important do you fell the CFA credential is in getting hired?

      Personally, I feel that some firms an applicant working towards the CFA as an indication that they’re not just dabbling. Others believe in the academic and practical value of the CFA.

      • My thoughts on going through, and achieving, the CFA charter are probably a bit different than others. I’ve been told that going through the CFA program is an alternative to going through an MBA program, except more relevant to the task of security analysis. Personally, I thought of attending an MBA program, but I couldn’t justify spending $160k-$200k when I could enter the CFA program for a fraction of that price (and just think of the opportunity cost as well!) I’m not taking anything away from those who have an MBA, it’s just my feeling that mankind was not meant to sit in a classroom to learn, especailly from those who rarely have practical experience, which was the case in my engineering studies.

        As far as getting hired, in my experience, having progress towards the CFA charter is an advantage and does show how serious you are, especially with a non-traditional background. That being said, so far, I’ve learned little from the CFA curriculum that I have applied in practice; I believe the only way to learn something is by actually doing. That being said, going through the CFA program can show competency as well. After all, it is a grueling program to complete.

  3. Thanks for the thoughtful post; we can learn much from each other.

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