Keys to Success: A Career in Investment Management and Beyond (abridged version)

Transcription

1 Keys to Success: A Career in Investment Management and Beyond (abridged version) David C. Chung, CFA Class of 2009 May 28, 2009 Note: All materials in this presentation are intended strictly for educational and informational purposes for the presentation at Dongguk University on the date above. Use of any material outside of these purposes should require written consent from the presenter. 1

2 Presentation Outline Background / Resume Getting Into Business School in the U.S. Application Process, admission tips Investment Management in the United States Overview Why a Career in Inv Mgmt? Keys to Success How to Position Yourself for a Career in Investment Management Career Path Interview Process General Career Advice Q&A 2

3 Where Have I Been? Ages 16 18: Northbrook, IL Ages 27 29: Boston, MA Ages 22 27: San Francisco, CA Age 28: Denver, CO Ages 3 16: Manhattan, KS Ages 18 22: Durham, NC Ages 0 3: Seoul, South Korea 3

4 Current Resume 4. Harvard Business School 1. Duke University 5. Janus Capital Group 3. Grand-Jean Capital Management 2. Cornerstone Research 4

5 : Duke / Cornerstone Freshman year vs. Last 3 years Pre-med vs. Economics 3.0 GPA vs. 3.9 GPA Fraternity, Cameron Crazies, ODE Co-President, London School of Economics Investment banking vs. Economic Consulting Quantitative and analytical work: Excel, financial statements, modeling Worked with world-renowned faculty: Bill Sharpe, Paul Gompers, Michael Gibbons Leadership: Managing analysts, Head of Analyst Recruiting Earned CFA designation 5

6 What is a Cameron Crazy? 6

7 What is the CFA designation? CFA = Chartered Financial Analyst Three Levels Level I: June or December Level II: June Level III: June Each level demands minimum of 250 hours of study (according to cfa.com) Pass rate (June 2008) Level I: 35% Level II: 46% Level III: 53% Topics Covered Ethics Economics Accounting Corporate Finance Portfolio Management Equities Fixed Income Derivatives Alternative Investments Global network of 100,000 members Investment companies Mutual funds Banks Consulting firms Insurance companies Pensions and foundations Research and academic institutions 7

8 : Grand-Jean, Harvard Business School, Janus Small firm ($350 M), U.S. equities (Long-only), Generalist, 10 month stint. Co-President of Investment Club, spent considerable time recruiting. 12-week summer internship, 3 MBA interns, Mohawk Industries (MHK) and Rolls-Royce Group plc (RR.LN) 8

9 Getting Into Business School Admissions Criteria College GPA GMAT Work Experience Extra-curricular Activities Recommendations Essays HBS Leadership, leadership, leadership. What is your story? Make the pieces fit nicely into a puzzle. What drives you? 9

10 U.S. Investment Management Industry Investors (Retail investors, high net worth individuals, pensions, endowments, foundations) $$$ Big Banks Goldman, Morgan Stanley, JP Morgan Public Market Buy-side Equities Bonds Commodities, currencies Private Market Private Equity TPG, Blackstone, Bain Capital, KKR Venture Capital Benchmark Capital, Sequoia, Accel Bank Loans Real Estate Mutual Funds Fidelity, Janus, T Rowe Price Small Long-Only Firms Hedge Funds Fund of Funds (Hedge funds or private equity) Will focus the next slides on: Equity analyst / portfolio manager Mutual funds, hedge funds 10

11 Why a Career in Investment Management? Learning How will the world look in 2 years, 5 years? Interact with smart people everyday (CEOs, industry experts, sell-side and buy-side analysts) Creating value for investors Number one mission is to increase investors wealth. Interdisciplinary Analysis of Businesses Finance, accounting Strategy, marketing, operations Meritocracy Scoreboard everyday (1 yr record, 3 yr, 5 yr, 10 yr) No corporate ladder Competition Chess match between smart people: Who s right? Who s wrong? Work / life balance and financial rewards Hours in the office better than investment banking Can be lucrative financially 11

12 Keys to a Successful Career in Investment Management Passion for the Markets The world is changing You must love this to follow all the news and be successful. Passion to become a Great Investor Read, learn, try and become a better investor everyday. Intellectual Ability Accounting and finance skills, financial statement analysis Analytical power Creativity in attacking problems Personal Traits Patience (i.e. Can you wait for the fat pitch?) Greed and fear (i.e. Hold when you should sell? Sell when you should buy?) Stress-handling ability Curious Learn from mistakes Flexibility Luck 12

13 How to Position Yourself for a Career in Investment Management Training Finance, accounting, building blocks, DCF valuation. CFA Program READ, READ, READ! Do not re-invent the wheel. Learn from the best investors in the world. Develop an investing philosophy and style. Practice Paper portfolio Personal account ( PA ) Monitor performance. Possible Career Paths Investment banking Sell-side research CFA MBA Industry expert It s tough but think of musical chairs or dinner -- Just get a seat at the table 13

14 Recommended Reading List Essentials The Intelligent Investor by Benjamin Graham Berkshire Hathaway Annual Reports Letter to Shareholder by Warren Buffett One Up on Wall Street by Peter Lynch Common Stocks and Uncommon Profits by Phil Fisher Money Masters of Our Time by John Train Others Value Investing: Margin of Safety by Seth Klarman Value Investing: From Graham to Buffett to Beyond by Bruce Greenwald Special Situations Investing: You Can Be a Smart Market Genius by Joel Greenblatt Historical or Biographical: When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein Buffett: Life of a Capitalist by Roger Lowenstein Academic: A Random Walk Down Wall Street by Robert Shiller Irrational Exuberance by Burton Malkiel Others: The Art of Short Selling by Kathryn Staley Pioneering Portfolio Management by David Swensen 14

15 Famous Investors Old School: Benjamin Graham New Generation: Seth Klarman (Baupost Group) Warren Buffett John Paulson (Paulson & Co.) Charlie Munger James Simons (Renaissance Technologies) Peter Lynch Ken Griffin (Citadel) John Neff Bill Ackman (Pershing Square) George Soros Stephen Cohen (SAC Capital) Bill Miller Eddie Lampert (ESL Investments) Julian Robertson Steve Mandel (Lone Pine Capital) Mario Gabelli John Griffin (Blue Ridge Capital) T Boone Pickens Lee Ainslie (Maverick Capital) Carl Icahn William von Mueffling (Cantillon Capital) 15

16 Interview Process 50% Behavioral / Fit Walk me through your resume. Why do you want to do investment management? What is your investing philosophy? What is your favorite investing book? When did you start getting an interest in the markets? What do you think of the stock market right now? List goes on and on. Interviewer is assessing: Do I think you have the passion? 50% Stock Pitch Tell me about a stock you like. Do you like any stocks right now? Investment Thesis Valuation Facts and figures, models What is your edge? Risks Do I like the way you analyze a stock? 16

17 General Career Advice Career Trajectory: You don t always need to know where the finish line is. Focus. Aim high. Invest in yourself all the time. Choose your own path. Stay humble and stay hungry. Don t burn bridges. Maintain your network. Work hard. _Play_ hard. 17