Pitch the Perfect Investment

I have not seen the videos in the link below.  Let me know if you learn anything practical.

Pitch the perfect investment (videos)

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Listen to the interview: https://soundcloud.com/valuewalk/pitch-the-perfect-investment-with-paul-sonkin-and-paul-johnson

Other than seeing the videos and listening to the interview, I have yet to read the book.  The book may help an analyst learn how to form their ideas into a concise report.   Remember than many money managers have nano attention spans, so you must get your idea across quickly in a compelling way.

That said, one area that might not have been covered is how to KNOW THYSELF!    What approach fits your interests, skills and talents and how do you accomplish the goal of knowing your circle of competence?   Then how do you learn from mistakes?  How do you track your learning and results?   Because of randomness, learning from past investments is more difficult than it appears.  Spend as much time studying yourself as the company you are pitching!

The above is not a knock on the book; I believe self-knowledge is an underemphasized skill of the investment game.

UPDATE: 9/27/2017 http://pitchtheperfectinvestment.com/2017/09/27/92617-video-from-book-launch-event-at-fordham/     A more recent set of videos explaining the motivation for the book.

3 responses to “Pitch the Perfect Investment

  1. John – Thanks for the mention. Readers can obtain more information (and download a sample chapter) at our website, http://www.pitchtheperfectinvestment.com

  2. The Book:

    I did a cursory review of the lectures. The Author’s take on pitching the investment appears to be fairly similar to the material contained in the Harvard Business Review (HBR) Top Ten must reads on Managing People. This is a viewpoint worth considering for those not previously exposed to it; pitching an investment to your portfolio manager has strikingly similar characteristics to what’s required in managing one’s boss in other contexts (see the HBR top 10) and the Author’s appear to pick up on this. Empathy (i.e. putting yourself in the other persons’ shoes) is the key here.

    The Author’s discussion of distributions in value / price is somewhat misleading. The Author’s don’t discuss modeling assumptions and their effects on one’s posterior distribution of value but this may be in the book. That aside, at 6 minute or so in Part 2 the Author discusses the notion of risk in terms of distribution of values above/below market price; this is misleading in at least one significant way. Value *usually maps to price over long periods of time but that is a far cry from the notion that the risk of an investment is entirely characterized by the probability that the value at present time is lower than the market price. This is a topic requiring some technical detail that I can get into if desired, but readers need to be careful in their quantification of risk based solely on a distribution of present day values.

    All in all based on the lecture the book appears to be worth picking up at the right price (I wouldn’t be a true value investor if I didn’t add that last part!)

    Blog Post:

    I concur that reviewing investment successes ex-post is fraught with all manner of opportunity for hindsight bias. The reality is once an investment has or has not worked the post-mortem will typically be drawn to major deviations in events from those predicted in the original thesis; but these deviations may not be the reason for the investment working/not working, they just happen to be the most salient because of their strong relationship to the original body of work (which we are now anchored on).

    But this post-mortem isn’t really affected by randomness. Randomness is a catch all term for our current state of ignorance (except for areas dealing with Quantum mechanics). A more apt description of what happens is that there are confounding effects that make it very difficult to extract and learn from a signal amongst our noisy data.

  3. Thanks for your thoughts. I am reading the book now, but won’t comment until finished.

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