Defining the Job
There isn’t a lot of content out there on how to improve as an analyst; twitter, VIC/SA/SZ, and podcast content is centered on improvement in idea generation or portfolio construction, but not much on the actual job of being a junior analyst.
I’ve really only seen Fundamental Edge, Alix, and Toad capital (kind of) discuss this. Ogilvy on Advertising’s tips on being a better copywriter struck me because of the similarity with tips I’ve seen on being a better junior analyst.
The 3 main parallels I noticed are:
Make life easy for your boss
Systematize
Be good at your job
Brett and Andrew (Fundamental Edge) talk a lot about how analysts are cost centers for firms in their first 1-2 years, so the best thing you can do as a junior is to make life easy for your PM / senior analyst. What does that look like?
Preemptively printing documents (questions, notes, model) and ordering based on their company schedule during conference / earnings season
Preemptively checking in on question list, companies to talk to, and which management meetings to be at for conferences
Considering the book before pitching a name
The last point is more about understanding roles: PMs manage the book and you manage ideas to feed them. You should work to be aware of the book’s problems (asking is easiest) and then go solve them.
IE: if the book needs high beta shorts, then don’t pitch a high beta long because it not only ignores the problem but would make it worse. It would have to be the best highest beta long out there, and the PM will be so worried about finding high beta shorts they probably won’t give your idea a real read at the moment.
Both copywriting and investing require creativity to repeatedly create great pitches, but the creativity must exist within a structure. In copywriting, there are systemic rules to follow based on font type, size, color usage, placement of images, number of words to use in a title, etc. Each ad is creatively different, but top agencies have lists of rules that every ad must meet.
In the investment business, the creativity is your differentiated view on a stock while the structured aspect is the repeatable process you run ideas through (channel checks, reading documents, modeling, etc).
Fundamental Edge does a great job of breaking down how you should be spending time between field work, reading stacks, models, etc. and Alix has outlined key questions to answer when first screening an idea.
A public example of systemic structure in pitches is HawkShaw research. Kian Ghazi is a Tiger Cub who built the team to provide independent pitches on management changes / events. The first thing that strikes you is how formulaic every pitch is (or how well the stocks have done). Every single one follows the same 9 step format is the exact same in every pitch:
Dashboard
What you need to know
Backstory with metrics
Bull / bear setup
3 main KDs
Framing the potential
Assumptions behind risk / reward
Type of idea
CEO change vs. transformational event
Backdrop
Business quality analysis
Market share trends
Industry analysis
Walk through of 3 KDs
Valuation
Rehashing KDs’ effects on financials
Likes / dislikes
Source list
Being good at the job in this context is knowing what you get paid to do then doing it. I had never thought of the job of an analyst being to get ideas into the book until hearing it recently. My automatic assumption was that an analyst’s job is to pitch good ideas, but it is more than that.
The job isn’t to make your PM say, “great work,” it is to make them add your idea to the portfolio.
When I write an advertisement, I don’t want you to tell me that you find it “creative.” I want you to find it so interesting that you buy the product. When Aeschines spoke, they said, “How well he speaks.” But when Demosthenes spoke, they said, “Let us march against Philip.” Ogilvy page 7.
The job is to help your PM act, and a part of this is understanding your PM’s preferences to improve your pitch success rate. They are human with visible conscious and unconscious biases. Alix calls this “hacking your PM” and FE teaches something similar by studying old pitches which made it into the book and looking for commonalities in formatting / storytelling to use for your own. If the job is to get ideas into the book, then you must adjust pitches to improve those odds as much as possible.
The 1st duke of Marlborough was reconnoitering terrain before a battle. He and his staff were on horseback. Marlborough dropped his glove. Cadogan, his chief of staff, dismounted, picked up the glove and handed it to Marlborough. Later that evening, Marlborough issued his final order: Cadogan, put a battery of guns where I dropped my glove.
I have already done so, replied Cadogan. Ogilvy p. 53
I have really struggled with perfectionism ruining my pitches. I take way too long on things that don’t matter trying to chase “perfectionism,” and they come out stale / not actionable and frankly not great. This is the #1 priority I need to fix because speed matters and as an analyst you are only as good as your next idea.
‘Perfectionism is spelled paralysis’ - Winston Churchill
Ogilvy’s biggest pet peeve with researchers was that “they take three months when I only have three weeks.”
President Eisenhower called Dr. Gallup at 6 PM wanting to know public opinion on a foreign policy matter by 8 AM the next day. Gallup asked 8 men 3 questions who were told to tell 6 interviewers who interviewed 10 ppl each. By midnight they had data and had the final report done 2 hours before due.
Kennedy lost the Oregon primary in 1968 and his campaign manager had a research report on his desk 18 hours after polls closed analyzing the defeat.
All above examples of the necessity of speed from Ogilvy’s book.
If anyone has any advice / corrections to offer, please let me know. Always interested in learning about practical tips for the job outside of “have better stock ideas.”