Continuing last week’s discussion, I share with you the remaining observations that you should know in order to succeed in your public equity job search.
The Non-Target Paradox
There was only one certainty going into my entrepreneurial endeavor – big portion of clients will be from non-target schools. Why I knew that? Because finance is a giant class struggle (the other class struggle being taking an airplane.)
I had a below 3.0 GPA in college. I did not get an internship until after graduation. I couldn’t land a full-time job for six months and then wandered around the middle office for five years. I did not study accounting or finance. I did not do investment banking or private equity. My point: I am a failed target school graduate, which makes me non-target equivalent. If I can make into the buy-side, so can you.
For public equity jobs, two things matter equally: product (technical skills) and sales channel (does your school help you gain visibility). The term “non-target” exists in the first place because your dream firms don’t target your school for recruiting. You know you need to hustle. The good thing about our profession: If you have good product, people want to talk to you.
Embrace Your Non-target Narrative
My underdog mindset has served me very well – being on time (because every chance I get could be my last), working extra hard to put out best products and networking relentlessly led to many interviews, job offers and lasting mentorships.
Public equity investing is competitive. Information is widely available. Why should you be right? There are pattern recognitions in forming variant views but there are no formulas. You need to put in the work. Always go the extra mile in your research because it can mean the difference between getting a job offer and not, and more importantly, making money or losing money.
Target school candidates understand work ethics and mental toughness are necessary components to success, by observing their peers and alums who have achieved great things. As a result, elite employers perceive target schools to be safer destinations for talent sourcing. To my non-target audience, you can take control of your destiny via products and create your own sales channel.
Because target school has higher absolute number of alums working in public equity, the candidates there know the recruiting process, what firms are like, and who is who in the business. They have a massive system knowledge advantage in a secretive profession where jobs are unposted and filled through referrals. To my non-target audience, understand the system. And you are in good hands because I am the industry expert here.
There is no shortcut
Many of you asked me to send industry primers. Yes, they save time, a not-so-well-kept secret you probably heard from your investor friends. But only the experienced can get the most value out of sell-side research. What you don’t see is the decades of voracious reading that got them to where they are.
Don’t get ahead of yourself. Develop a thorough, first-principle understanding of matters at hand. As newcomer investor, you should know as much as you can. Read the public filings, analyst day and earnings call transcripts. Only then leverage external opinions such as sell-side research reports, expert network transcripts or talk to industry experts.
Similarly, sell-side models are overly complicated and can contain mistakes. It’s hard to nail down what drives the business. Build a model from scratch because every business has its own nuances and you can develop a deeper understanding that way.
When you have looked at enough businesses, you can stress test a sell-side model to understand the range of outcomes for a business to save time. Because you are my potential clients, you are not at that skill level yet.
Goal seeking – Solve it backwards
A lot of you DM me “Do I have a shot at investment management?”
First of all, I believe everyone can become a great public equity investor. What’s the catch? Well, are you willing to work for it? That’s where the equation breaks down because “everyone wants to go to heaven but nobody wants to die.”
I can generally tell who will succeed in life. It’s very simple: If I can access your Instagram stories, and you are going out from Thursday to Sunday, you don't ever need to wonder why you don’t get into your dream profession or why you are lagging your peers at work. Oh yeah, the secret to success is really that simple but not easy – hard work.
Two, what’s your time frame? Warren Buffett did not become Warren Buffett overnight, though he succeeded earlier than most. How so early? Oh, voracious reading – he read over 200 books BEFORE he started college at UPenn that he got so bored during college. Tying back to my point in the last article – Don’t procrastinate, start now.
The key takeaway here: If you want a certain career path, understand the skill requirements - For public equity: Do you know
- How to model and value a business?
- How to do fundamental analysis on an industry or a business?
- How to effectively pitch a stock?
- How to network?
All these skills are learnable, I can save you time and effort when you need me!
If you are interested in learning more about professional equity investing (the "buy-side"), I have two other great articles for you:
Don't know where to start to research and value a company? Have trouble generating stock ideas and differentiating on stock pitch? I can help you. Let's meet!