Day in the Life of a Hedge Fund Analyst

Few live to tell the tale.

"Was it like Billions?"
"Describe ur investment process?"
"What did u learn?"

I get these questions all the time, but for a while I was afraid of answering publicly. No more!

Hedge fund story time.
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1/ https://abs.twimg.com/emoji/v2/... draggable="false" alt="⏰" title="Wekker" aria-label="Emoji: Wekker"> 6AM Pre-Market Review

Wake up thinking about ur overnight positions.
What happened during London/Asia trading?
Scan the major news on ur way to office.
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🏢" title="Kantoorgebouw" aria-label="Emoji: Kantoorgebouw">https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚕" title="Taxi" aria-label="Emoji: Taxi">https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚶‍♀️" title="Lopende vrouw" aria-label="Emoji: Lopende vrouw">

Think about how ur getting screwed by beta (general macro, FOMC, inflation, etc.) cuz ur net long (or net short).
2/ 7AM Portfolio Review

U& #39;ll typically have ~250 names in the portfolio "universe" (stocks w/ active positions & those on watchlist but already modeled).

Review each thesis vis-a-vis new market conditions. Anything changed?
Should u downside/upsize any?
New trade opportunities?
Here& #39;s a checklist of top items to check per company:

- Any earnings calls this week?
- Any product releases?
- Any new sell-side reports? Downgrades/Upgrades?
- Any M&A rumors in the space?
- Any management change announcements?
- Any guidance revisions?
- Any legal happenings?
3/ 8AM Plan out your daily/weekly agenda

Major types of events that& #39;ll populate ur calendar:
- Investor day at XYZ
- Q1-Q4 earnings call
- XYZ road show
- Dinner event w/ IR (investor relations) at XYZ
- Private buy-side bus trip (w/ mgmt @ XYZ) arranged by GS
- JPM conference
4/ 9AM Team meeting just before markets open

Discuss w/ ur PM:
- whether overnight news impacts/changes ur thesis on each open position
- prep work & questions u compiled for XYZ upcoming event later in the day
- pre-mortem on some new positions ur considering adding to the book
5/ 10AM Listen to XYZ earnings call

Every day a subset of the ~250 companies in ur universe will have earnings calls.

When start:
pre-market, during, or post-market

Structure:
- first CEO gives his spiel
- then CFO gives his spiel
- then sell-side analysts ask dumb questions
6/ 11AM - 3PM: Read/make/revise financial models

This is the crux of ur job.
So lemme describe what exactly this entails.

A "financial model" is just 3 accounting statements stacked on top of each other in Excel:
- income stmt (IS)
- cash flow stmt (CFS)
- balance sheet (BS)
Why & how to "link" the 3 statements:

The reason why analysts stack all 3 on top of each other is cuz all interwoven:

- net profit:
flows from bottom of IS to retained earnings in BS & first line of CFS
- working capital:
from CFS, is the diff btw current assets & liabilities
Where do you get financial models from?

Typically, u buy from sell-side & modify as necessary.
Historical statements are found in all 10K/Qs. Easy to verify.

But what u really want to modify are the projections of FUTURE metrics.
After all this is the fundamental analyst alpha.
7/ 4pm Coffee & gossip

Markets just closed. Your PM is doing some intense clean-up/post-mortem or squeezing in post-market adjustments.

You get coffee, run into other analyst, & complain/brag about headcount at other teams, who& #39;s allocations getting slashed, who& #39;s doubled, etc.
8/ 4:30pm Post-Mortem

Markets just closed, so u got some reflecting to do:

Any major gains?
Any major losses?
Why did the moves happen?
Did u anticipate them?
How can u better anticipate & respond going forward?

See https://abs.twimg.com/emoji/v2/... draggable="false" alt="đź§µ" title="collectie" aria-label="Emoji: collectie"> below on how to do a post-mortem: https://twitter.com/FabiusMercurius/status/1393319910575538176">https://twitter.com/FabiusMer...
9/ 7pm-9pm

[--- Insert Boring Mandatory Dinner Event ---]

U tell ur boss ur there for info gathering.
U tell urself ur there to hobnob in case book blows up tomorrow & #39;n u gotta jump ship to Millennium.
Ur really there to stuff ur face w/ schnapps & salmon heuer d& #39;oeuvres.
10/ 9:30pm Asian markets open

I will not check markets.
I will not check markets.
I will n---

HOLY SHIT! BABA DOWN 9% ALREADY?!?!

WTF tere& #39;s like no news.
Damn retail stocks!

U whip out ur laptop & start planning how u& #39;ll respond tomorrow. More post-mortems in the queue...https://abs.twimg.com/emoji/v2/... draggable="false" alt="🤦‍♀️" title="Facepalmende vrouw" aria-label="Emoji: Facepalmende vrouw">
11/ 12AM Existential Musings

Wonder if ur life would& #39;ve turned out easier if u& #39;d taken that Google software engineering internship instead of GS banking internship sophomore year in school.
JK.
Life is way more exciting now & u& #39;ll never regret it.
You can follow @FabiusMercurius.
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