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How to break into the hedge fund industry with an internship

Posted on October 17, 2011 at 12:45 pm

It’s not easy to break into the hedge fund industry.

As today’s guest on Tradestreaming Radio (enrolled in a joint JD/MBA program at Harvard) can attest, even great credentials aren’t enough to land you your first job.

I will respect our guest’s request for anonymity (he’s still got to fight for a job when he graduates). But this show is jam-packed as he shares

  • what works (and doesn’t) to land a hedge fund internship
  • how you can land a buy-side job without experience on Wall Street
  • how you can standout from other applicants
  • how hard work can help you penetrate the old-boys network
  • how to make sure research gives you an unfair advantage

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  • Yes, getting a hedge fund internship is hard (even if you’re MIT/Harvard MBA)

    Posted on October 27, 2011 at 12:57 pm UTC

    I recently interviewed a student in the Harvard JD/MBA program on Tradestreaming Radio about his advice on landing a hedge fund internship.

    It was a good program — he provided actionable advice from his own successes breaking into the hedge fund industry.

    Lisa Du at BusinessInsider picked up the interview and layered in expert advice on finding hedge fund jobs.

    “If you know you want to get into hedge funds, you have to specialize yourself,” he said. Nowadays, hedge funds will usually target MBA students that have already have work experience in a specific industry, and bring them on to analyze the sector they used to work in.

    The diversity and breadth of the stories and advice from both Pierson and the interviewee combine to lift the usual veil of mystique that surrounds the process of entering the hedge fund industry.

    “It’s all about having ideas, making them known and being able to substantiate your ideas at any moment,” Pierson said about interviewing for and working at a hedge fund. That’s the ability that will get someone hired and allow them to move forward in their career.

    In BI’s inimitable style, the site even made a slideshow full of hedge fund job search tips using my interview as the crux.

    Anyway, if you missed it, you can check out my interview below.

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  • Breaking out of short-term investing to build greater value – with Al Rappaport

    Posted on October 26, 2011 at 12:39 pm UTC

    Investors seem to be more focused on the short term than ever.

    You can credit hedge funds and institutional investors having to report performance on a monthly basis. CNBC’s 24/7 coverage of financial news doesn’t help, either.book by Alfred Rappaport

    However we got here, many analysts are calling for a return to longer term frameworks for investing — for investors and managers that run the companies they invest in.

    Finance professor, Al Rappaport has been analyzing shareholder value since his first paper on the subject in 1965.

    His new book, Saving Capitalism from Short Termism: How to Build Long-Term Value and Take Back Our Financial Future is a clarion call to break out of our current myopia and find a way to focus on long term value.

    Rappaport joins us on Tradestreaming Radio today.

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  • Replicating activist portfolios is tough

    Posted on October 25, 2011 at 11:53 am UTC

    Joe Light at the WSJ did a good job over the weekend analyzing portfolios of activist investors and whether they are good candidates for piggyback investing (ie, cloning, replication).

    The idea would be to invest in a portfolio of securities held by a particular activist investor by following their 13-F, 13-D public filings.

    I’m quoted in the article, as are the usual suspects on the subject (AlphaClone, Todd Sullivan).

    The article brings some interesting research to light:

    One 2008 study by Duke University professor Alon Brav and other researchers found that an investor who constructed an equally weighted portfolio that bought activist targets a month after the initial filing, and held it for three months afterward, beat the market by more than one percentage point a month, on average, after adjusting for risk and other factors. But Prof. Brav notes that the outperformance disappears if all of the conditions aren’t met.

    Research in 2007 by Harvard University professor Robin Greenwood and then-student Michael Schor found that companies that become the target of an activist are more than twice as likely to be acquired within a year than companies that aren’t targeted. The targets that were ultimately taken over had risk-adjusted returns 15% and 20% better than the overall market—but companies that missed the boat didn’t have any outperformance.

    In spite of the research, the article concludes that replicating the portfolios of activist investors can pay off but it’s hard citing the volatility around changes in positions and the holding period.

    Other hedge fund strategies (like most popular positions among multiple hedgies, best ideas, newest holdings) replicate much better.

    Read the article

    Investing with Carl Icahn (WSJ)
    October 22, 2011

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  • Big trend investing: How to spot winning ideas and invest in them – with Vishaal Bhuyan

    Posted on October 24, 2011 at 10:52 am UTC

    It’s really hard to invest in trends. Big ideas don’t always translate down to concrete investing ideas.

    Today’s guest Vishaal Bhuyan is the author of The Esoteric Investor. He’s an author and money manager who looks at big demographic trends and tries to profit off his research.by Vishaal Bhuyan

    He walks us through the process of coming up with compelling trends and finding an appropriate investment vehicle to profit from the playing out of our ideas.

    In this episode, we discuss:

    • how to invest in the aging of America
    • why Japan is in real trouble and what Vishaal is doing about it
    • peak fish — the world is running out –> how to invest
    • more about the process of investing in demographics

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  • Your brain on stocks: a neuroeconomic view

    Posted on October 21, 2011 at 2:20 pm UTC

    From Barry Ritholtz’s recent conference (The Big Picture Conference), this deck came from Barry’s own presentation entitled “Behavioral Finance, Neuroeconomics and Cognitive Psychology, and Investor’s Decision-Making Process” (whew, LOOONG title.)

    I wasn’t there — anyone attend?  How was it?  Let me know in the comments.

    Ritholtz

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About Tradestreaming

Tradestreaming is a community of investors learning directly from experts. I’m Zack Miller, investor, entrepreneur, and founder of Tradestreaming.com and I literally wrote the book on how to invest in the age of Facebook and Twitter. Tradestreaming is the resource I’ve created to help me become a better investor.  I believe it will help you … Continue Reading