Building an edge?
Junior incoming IB (EVR/MS/GS). I became interested in investing sophomore year so I’m not exactly sure what I want to pursue long term (PE, HF, Credit?). I noticed that a lot of the top investors I look up to have skill sets across a wide variety of fields. Rob Citrone, Seth Klarman, etc… all have a strong understanding of credit, equities in private/public markets etc…while also having a niche. I have a very rudimentary understanding of the above.
it seems that the paths I’m pursuing are leading to specialization. Banking (coverage group) —> PE —> etc. so…how do I build this wide skill set that top investors seem to have?
also, for the people with more experience on this forum. If you could go back to college, what would you do differently? Would you pursue another internship to explore a different field (I can do an additional off cycle in PE before I graduate - I did public equities last summer)? Would you read certain books? Would you spend less time doing X and more time doing Y?
How do I optimize for optionality and career success as a college student? Is it best to specialize early on and hammer down that path (ie: healthcare hf internship, healthcare ib internship, healthcare mfpe) Or should I explore a wide variety of fields (different verticals + different strategies)?
Where do you see the investing world moving over the next few decades? And which skills do I need to capitalize on this move? How to know if I’m a good investor (and how would you build that skill set over time?)
Building a broad skill set while navigating the path to becoming a top investor requires a strategic approach, especially when starting from a position in investment banking (IB) and considering future moves into private equity (PE), hedge funds (HF), or credit. Here's how you can optimize for both optionality and career success, based on insights from the Wall Street Oasis (WSO) community:
Embrace a Learning Mindset Across Disciplines: Top investors like Rob Citrone and Seth Klarman have deep knowledge in specific areas but also understand the broader financial landscape. To emulate this, focus on gaining a foundational understanding of credit, equities (both in private and public markets), and other investment vehicles. This can be achieved through coursework, self-study, and practical experience.
Pursue Diverse Internships: While specialization can be beneficial, exploring different fields through internships can provide valuable insights and skills. Since you've already completed a public equities internship, pursuing an off-cycle internship in PE could offer a new perspective and help you understand different aspects of investing. This aligns with the advice from industry COO AndyLouis on WSO, emphasizing the importance of being adaptable and well-rounded.
Invest in Self-Education: Reading books recommended by successful investors and participating in courses, such as the Wall Street Prep Financial Modeling Course, can deepen your understanding of investment strategies and financial modeling. The WSO forum also suggests books that can enhance your investing skills, providing a curated list of resources.
Network and Seek Mentorship: Engage with professionals across different areas of finance. Networking can provide insights into various career paths and the skills required for success in each. Mentorship can offer personalized advice and guidance based on your interests and goals.
Stay Informed on Industry Trends: The investing world is constantly evolving. Staying informed about current trends and future predictions can help you identify which skills will be most valuable. For instance, understanding the impact of technology on investing and developing skills in data analysis could position you well for future opportunities.
Evaluate Your Strengths and Interests: Reflect on your experiences and feedback to assess whether you have a natural inclination toward investing. Building a successful career in investing often requires a combination of analytical skills, emotional intelligence, and a passion for the markets. Continuously seek opportunities to test and refine your investment strategies, whether through simulations, personal investing, or internships.
Consider the Long-Term View: While it's important to build a broad skill set, remember that many successful investors also have a niche or area of expertise. As you gain experience, look for opportunities to specialize in an area that interests you and where you can add unique value.
In summary, building a career in investing requires a balance between specialization and a broad understanding of the financial landscape. By pursuing diverse experiences, investing in your education, networking, and staying informed about industry trends, you can develop the skills necessary to succeed and adapt to the evolving world of investing.
Sources: Top 3 Skills Needed for Investment Banking, Do What YOU Want on Wall Street, Best Books to Help Your Investing Skills, Internships early on?, How will Banks distinguish between top interns and good interns?
If I could go back to college, I would chill the fuck out more. Have some drinks, party, enjoy life. Once you're out, you're out and you can't go back (MBA is just not the same).
You're not going to get "edge" from a book or an internship.
Focus on being a smart, diligent, enjoyable person to be around and senior people will mentor you and get you involved in more interesting projects.
When I interview people and any one with like 3 years of experience suggests they have any type of edge or specialized knowledge, it gets heavily discounted. Or, worst case, they get grilled by people who have been doing the work for 10+ years, and are shown to be clueless.
Not only have the people you mentioned been doing this forever, they've done it in completely different market conditions. There was a time when investors did real diligence, transactions were complex, and information wasn't google-able.
Don't conflate book knowledge with real live deal experience - most books are theoretical or biographical.
Take some time to enjoy your life, otherwise get ready to burn out and be bald by the time you get kicked off your parents' health insurance.
Hey man, I really appreciate this advice. I saw from your recent post history that you've been in the industry for a little over 10 years now. How has your motivation and interests changed over that time-frame and what's a common theme you see in analysts that thrive/succeed?
I think one thing that I struggle with is a strong desire for control. As a student, it seems like a lot is unpredictable (whether I get X job or X return offer) so I'm really trying to plan and prepare to maximize that control. I'm sure as I graduate and become more established, other things start mattering more (WLB, Fun, etc...). Right know, I'm pretty sure I know I want to pursue the 2+2 model just to have that optionality later in life. How would you recommend I approach the next few years of my career? I know you mentioned to have fun and enjoy the moment (which I'm certainly doing right now). But would preparing well make my experience better at banking and PE respectively, and allow me to stand out?
My motivations and interests have changed significantly. Up until a year ago, I basically worked around the clock, everything took second fiddle. That resulted in me going to the hospital at 33, thinking I had a heart attack. Basically I'm at the point now where my entire body is in pain, I'm working to prioritize family time, and everyday I have some sort of anxiety I need to work through. It's going to be a journey to get back to normal, all because I didn't give a shit about anything but work.
The juniors who do well are people who are smart, responsive and open to learning. Regardless of what anyone posts, no one knows shit the first few years of their career - you should focus on learning and not being a fucking weirdo.
In my day to day in the RX world, I work with a ton of "skilled" investors that benefitted greatly from financial leverage and ever expanding multiples - these people have no idea how their businesses work or how to even figure that piece out. They made investments based on theses that were actually impossible to achieve (growing revenue but cutting investments in the business, getting location based synergies from two locations that are hours away, shit like that).
Everyone looks smart when the main focus is deployment of capital.
My advice to you is to be curious, find things that interest you and learn about them. If you're interested in a particular industry, try to learn everything you can. Don't discount the knowledge from people who are actually operating businesses, they may not make as much but they're often way more intelligent than the financial folks.
Learn the technicals to the point you don't need to think about them, that's table stakes. Otherwise, be interested in learning - don't worry about the rest of the shit, most of that is luck.
Edit: to your comment on control, you will never have the level of control you think. As a sell sider, the client will be calling you; as an investor, your LPs or management team will be calling; unless you hit billionaire (your wife will be calling) and get full financial freedom, or decide you don't need to chase money and get comfortable with a different life, you'll never have control. And, even if you feel like you have personal control, you can't control your health, your kids' health, your parents' health, etc. You gotta get very comfortable not having control or you'll drive yourself insane.
I had the opposite experience. I wish I took college more seriouly outside of just the classroom. Graduated with latin honors but didn't do any meaningful internships. Goofed around and did have a great time with friends, stupidly just didn't think much about my career. Barely did any recruiting while I was there. I remember nearing graduation and realizing I had no clue what I wanted to do. Took me until my late 20s to have a better understanding of what I want. I struggle with networking still in my early 30s as I really didn't start doing it until I got into graduate school. I feel behind the 8 ball. Somehow landed a prestigious MBA internship where they rarely recruit out of the T15 (I'm from a T20 school) but I feel a large part of that was becaue the interviewer and I clicked immediately. Had so many interviews that I got rejected from (for internships and full-time) where I felt my EQ is way behind some of my peers. Had a very meh career pre-MBA that's holding me back for some roles I want post MBA.
Don't particularly have regret but I can't help but feel I would have done college very differently (gone to a different school, different major, and different mindset).
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