Getting into the investment industry

[Shane]

Yes thanks for everyone and their insight!

[oldschoolsting]

Hey Shane-

How are things going with this?  I know that you said in a different thread that you are hopefully starting at an investement firm soon. 

[Shane]

Oldschoolsting -

 

Yes, I have my final interview on wednesday.  There were 300 applicants and it has come down to me and one other person in a 7 hour interview...  Please wish me luck!

 

My strategy, if anyone is interested, was pretty simple:

 

1. contact every single asset manager I have ever heard of... literally.  I wrote letters to Mason Hawkins even.  I would shadow any person who would let me.

 

2.  Read everything I can get my hands on, every finance student can talk about what they teach you in college... but I don't think many have studied famous investors.

 

3. Stick to local firms - I honestly believe I got to this far in the interview process because I was passionate and was highly interested in staying in the area.  They expressed concern I would leave to go to NY.

 

I'd like to note to SD and Others - I understand your points and considered them, unfortunately (Or fortunately) my passion has shifted over time and I love analyzing stocks... I could not imagine a job I would like more out of college, I stay up late in the bloomberg room on campus until my GF makes me come home every night haha.  Thank you all for the advice.

[Myth465]

Thanks Shane Smith very helpful indeed. I would love to get into investing and plan to use your approach at some point once I resettle.

[EdWatchesBoxing]

I always think about Munger's thoughts when it comes to this stuff. It's unfortunate that smart engineering/science grads are looking at options in finance. It won't really do the world any good and they may not succeed in finance even if they do get in, which would make it even worse. I guess a lot of people are motivated by the dollar signs.

 

Shane, I'm not directing this towards you (or anyone else thinking about investment mgmt) it's just me thinking out loud. Working in finance, sometimes I think, "sure, I am earning a living," but I'm not really making anything better out there in the world.

 

 

 

 

[Myth465]

I always think about Munger's thoughts when it comes to this stuff. It's unfortunate that smart engineering/science grads are looking at options in finance. It won't really do the world any good and they may not succeed in finance even if they do get in, which would make it even worse. I guess a lot of people are motivated by the dollar signs.

 

 

 

These guys could have been some really crappy engineers basically doing low level R&D on pipe fittings. Not everyone is a rocket scientist. Buffett has surely made a difference working in Finance.

 

Do what you love, keep your noise clean (or not), and leave the world slightly better than you found it. Those are my rules. Trust me working in Audit, Low Level Engineering, or some other career does little to improve the world either.

[oldschoolsting]

Great for you, Shane!  That awesome.  And thanks for sharing.  Best of luck on Wed!

 

Ed-

I definitely see what you are saying, but I think there is a difference in the guys who want to be BSD's at Goldman creating new financial products and the folks that are passionate about understanding businesses/stock picking and find that they can do that as a full time job.  I'm guessing that the latter group is who you find here.  I'm really beginning to understand that you have to love your work or the days just get longer and the years shorter.

[Shane]

Thank you!

 

I actually had a conversation with a friend last night regarding how one can make a difference in the world.  I think maybe sometimes people determine one's role in life by their job.  If I were able to accrue significant wealth in the future I would most certainly feel great satisfaction doing something positive with it.  Be that investing in a new technology I think would have a positive impact... or donate to a charity I trust. 

 

Even though my career might not add much to the world, what I did with the earnings from that career could be tremendous... In fact if I were a lazy environmental scientist because I did not like my career I would argue that I would be unlikely to contribute much at all!

 

 

[Guest misterstockwell]

When I was a veterinarian, I worked on Kentucky Derby winners, sent bills to the Queen of England, and helped make thousands of babies, yet there wasn't an overwhelming sense of satisfaction after awhile. In the financial business, you will have days where you get clients that ask "what have you done for me lately?" It's a bummer. At times I thought it would turn out to be an awful business that added no real value to the world. However, I started ditching those clients that pissed me off. I whittled it down to good people that I liked, and it turns out that I could make a difference. My clients have donated a mountain of money to their favorite charities. The young people have grown up, paid for their own school, got married, bought houses, etc. The working folks have retired, comfortably. They don't worry about their future. I have been through client divorces, and both sides won. I have seen folks use their investment account to bail themselves out of various financial binds. I have a trust account for 8 brothers and sisters, all grown up, and I keep making money for them and they keep paying for their kid's education. I also feel good that I have gotten people to bring me their savings, taking it out of the hands of the vipers that were sucking them dry. So many came to me from brokers that were raping them with no results.

 

I'm not curing cancer or perfecting nuclear fusion, but in this small circle of people, I hope I have made a difference.

[biaggio]

good post misterstockwell.

 

reminds me of a quote I heard yesterday from one of my collegues:

 

“Everyone has the power of greatness; not for fame, but greatness. Because greatness is determined by service.” – Dr. Martin Luther King, 1929-1968

 

You may not be curing cancer but serving the best way you know, non the less. The world would be a better place if we all did that.

 

On that note I have to go to work.

[Guest Feynman]

1. contact every single asset manager I have ever heard of... literally.  I wrote letters to Mason Hawkins even.  I would shadow any person who would let me.

 

I am trying to do the same thing - I sent letters to about 45 investors I have studied and was willing to move any where in the world to work/shadow them for the summer for free. I want to learn everything I can. I got about 5-7 responses(all no), but two managers chatted a little over email with me and were very nice. Both of those managers sent me the attached article on how to break into the field. Just though you might like to read it.

 

 

Cheers!

[Shane]

Thank you, If I don't get the job I will be back on the search.  Still in contact with two other funds who hopefully will allow me to do an internship if the job falls through.

[EdWatchesBoxing]

 

These guys could have been some really crappy engineers basically doing low level R&D on pipe fittings. Not everyone is a rocket scientist. Buffett has surely made a difference working in Finance.

 

Do what you love, keep your noise clean (or not), and leave the world slightly better than you found it. Those are my rules. Trust me working in Audit, Low Level Engineering, or some other career does little to improve the world either.

 

You mean "nose" right?

 

I don't think I was complaining before, just putting my thoughts out there. My goal is to leave the world a better place, but I also understand that I will need resources to do what I want to do. Funny you mention audit and engineering. I see auditors on an annual basis at our office and many don't know much. I used to work in design at a semiconductor company and I could see then that my work wasn't going to matter much. Oh, and rocket science isn't all that either  ;) I have started to gain traction with my personal investing approach, but I don't see myself managing other people's money (well, not anymore anyways). I have come to the conclusion that very few people will ever be completely happy with their work/job. I think it helps me to think practically. Being happy 75-85% of the time sure beats being happy less than 50% of the time.

 

When I was a veterinarian, I worked on Kentucky Derby winners, sent bills to the Queen of England, and helped make thousands of babies, yet there wasn't an overwhelming sense of satisfaction after awhile. In the financial business, you will have days where you get clients that ask "what have you done for me lately?" It's a bummer. At times I thought it would turn out to be an awful business that added no real value to the world. However, I started ditching those clients that pissed me off. I whittled it down to good people that I liked, and it turns out that I could make a difference. My clients have donated a mountain of money to their favorite charities. The young people have grown up, paid for their own school, got married, bought houses, etc. The working folks have retired, comfortably. They don't worry about their future. I have been through client divorces, and both sides won. I have seen folks use their investment account to bail themselves out of various financial binds. I have a trust account for 8 brothers and sisters, all grown up, and I keep making money for them and they keep paying for their kid's education. I also feel good that I have gotten people to bring me their savings, taking it out of the hands of the vipers that were sucking them dry. So many came to me from brokers that were raping them with no results.

 

I'm not curing cancer or perfecting nuclear fusion, but in this small circle of people, I hope I have made a difference.

 

Your message was good, but I always find the use of this term disturbing. Maybe it`s the anonymity of the internet. I used to lurk on a poker forum where the average user was probably between 15-25. They used that term liberally. Hell, people posting their video game recordings on youtube used it a lot too. Maybe I`m too sensitive, but this bugs me a lot.

[Shane]

I didn't get the job, It is encouraging to get through 297 applications... in the end they decided to go with someone else.  Looks like I'm back at it again.

[stahleyp]

I didn't get the job, It is encouraging to get through 297 applications... in the end they decided to go with someone else.  Looks like I'm back at it again.

 

shane, if you don't mind me asking, what firm did you interview with?

[eclecticvalue]

When I was a veterinarian, I worked on Kentucky Derby winners, sent bills to the Queen of England, and helped make thousands of babies, yet there wasn't an overwhelming sense of satisfaction after awhile. In the financial business, you will have days where you get clients that ask "what have you done for me lately?" It's a bummer. At times I thought it would turn out to be an awful business that added no real value to the world. However, I started ditching those clients that pissed me off. I whittled it down to good people that I liked, and it turns out that I could make a difference. My clients have donated a mountain of money to their favorite charities. The young people have grown up, paid for their own school, got married, bought houses, etc. The working folks have retired, comfortably. They don't worry about their future. I have been through client divorces, and both sides won. I have seen folks use their investment account to bail themselves out of various financial binds. I have a trust account for 8 brothers and sisters, all grown up, and I keep making money for them and they keep paying for their kid's education. I also feel good that I have gotten people to bring me their savings, taking it out of the hands of the vipers that were sucking them dry. So many came to me from brokers that were raping them with no results.

 

I'm not curing cancer or perfecting nuclear fusion, but in this small circle of people, I hope I have made a difference.

 

Misterstockwell, this response is basically the reason why I want to manage money because I see many people who lose money in the market. Unfortunately, not everyone is fit to invest money. I would like to make a difference so they can have enough money to live comfortably. One question if you don't mind answering is why do you want to get out and why the market isn't the same anymore?

 

Your message was good, but I always find the use of this term disturbing. Maybe it`s the anonymity of the internet. I used to lurk on a poker forum where the average user was probably between 15-25. They used that term liberally. Hell, people posting their video game recordings on youtube used it a lot too. Maybe I`m too sensitive, but this bugs me a lot.

 

Your message was good, but I always find the use of this term disturbing. Maybe it`s the anonymity of the internet. I used to lurk on a poker forum where the average user was probably between 15-25. They used that term liberally. Hell, people posting their video game recordings on youtube used it a lot too. Maybe I`m too sensitive, but this bugs me a lot.

 

Well that is my generation for you a lot of words have lost their meaning.

 

[Myth465]

I honestly dont want to manage money. Im the most rational person I know and even I turn into an emotional basket case when my portfolio is down 25% in a few days. After 5 years, I have learned to avoid the sell button, but the average guy has to be going crazy. Thats just too much stress. I wouldnt mind doing something in Finance, but picking up the phone and explaining whats going on 25 times on a down 3% day would get old.

 

Congrats for getting so far Shane, I am sure someone will see value eventually.

 

Regards.

[eclecticvalue]

Thank you for starting this thread Shane, I am also an undergrad trying to break in. I would like to talk to you sometime. I'll pm you.

 

Myth- that is why you have the right clients and if you have their trust then you should not be as stressed if the market is down. Unless it is like 2008. I dunno if we will see it again anytime soon.

[Myth465]

Thank you for starting this thread Shane, I am also an undergrad trying to break in. I would like to talk to you sometime. I'll pm you.

 

Myth- that is why you have the right clients and if you have their trust then you should not be as stressed if the market is down. Unless it is like 2008. I dunno if we will see it again anytime soon.

 

The guy in the mirror is my favorite client, and even he still drives me crazy. But yes you are correct. I guess I wouldnt mind managing money, as long as its the right kind of people. But everyone is the right kind of person, until they arent it seems.

[S2S]

Myth- that is why you have the right clients and if you have their trust then you should not be as stressed if the market is down. Unless it is like 2008. I dunno if we will see it again anytime soon.

 

I happened to have a conversation on this very topic with an august investment advisor half an hour ago; "getting the right clients" is about easier said than done. If anything, it's about the hardest thing to do in this business; trust (and a decent track record) can take decades to establish. There's a massive survivor bias when one thinks of Klarman, Berkowitz et al.

[Shane]

 

 

shane, if you don't mind me asking, what firm did you interview with?

 

I'm not very comfortable sharing that information sorry, I am hoping that they will keep me in mind for future positions and don't want to risk having that information out on the internet.  It was a institutional firm with $7 billion in assets, I doubt many people would have heard of them though.

[Shane]

Myth - Retail and Institutional investing are two different worlds.  You seem like you would fit in much better at an institutional firm.  Basically, the difference is the level of knowledge your client has.  Institutional funds are being chosen by highly educated fund of fund managers which are intelligently comparing your long-term performance, they are much less likely to be concerned with your dips in performance in the short term.

 

We tend to idolize retail fund managers because they are in the lime light, the firm I just applied for was in the top 1% of Large-cap value managers in the most recent 10 years... I would never know they existed had they not been located next door to my church back home.  Similarly there is another fund whom is rated 5 stars in the small-cap value by morningstar 2 hours from me, they manage less than a billion and are largely unknown.  Even people in the industry in their town of operation have no idea, unless the specifically look them up.  They don't do interviews, don't take on many of the clients who apply to their fund, and don't manage enough to attract attention!

[ExpectedValue]

Ultimately  Shane it's a numbers game. Breaking in requires just a bunch of interviews and a good dose of luck. In the meantime, work on beefing up your analytical/accounting/financial modeling skills.

[alertmeipp]

Shane,

 

"Experience is what you get if you don't get what you want". I too want to get into investment industry, but just passed mid 30 with no CFA, no MBA nor even a finance degree with kids... I feel it's too late.

 

:'(

 

All the best to you and others trying to get their dream jobs!

[oldschoolsting]

Ultimately  Shane it's a numbers game. Breaking in requires just a bunch of interviews and a good dose of luck. In the meantime, work on beefing up your analytical/accounting/financial modeling skills.

 

How important do you all think that modeling skills are?  Or should I say, how advanced should modeling skills be?  The advice that I have gotten from several value investors that I highly respect is that the modeling is probably where I should focus the least amount of my time.  The majority of my time should be spent reading (both books and financials) and getting a better understanding of businesses.  I'm under the impression that the "valuation" should be a fairly simple process and most of the folks that I talk to don't put a lot of weight on complex dcf models.  I have a Wall Street Prep program but didn't finish as I felt my time was better spent elsewhere. 

 

What are the thoughts around here?