Tuesday, March 7, 2023

Breaking Into Money Management (Part 2); You meet the nicest people picking up trash

By Whitney Tilson

1) In yesterday's e-mail, I addressed the question I often get from young readers:

I recently graduated college and would someday like to manage money. I would like to now, but no one will trust some 22-year-old kid, understandably. Could you offer me some advice on this and what you have learned since you began managing money full time?

My answer began by asking whether this career was right for everyone, and then focused on how one can get educated to become a successful investor.

Today, I'd like to pick up where I left off with some tips for actually finding a job...

First, you need to find targets: firms you're going to approach. I wouldn't waste a lot of time applying for jobs at big, well-known hedge funds like Citadel, Pershing Square, Greenlight, etc. They have very few entry-level positions.

Instead, look for big money management firms with established programs for recent college graduates like Fidelity, T. Rowe Price (TROW), and AllianceBernstein (AB). But don't limit yourself to asset managers... In fact, the biggest pipelines of talent into the hedge fund industry are the big investment banks like Goldman Sachs (GS), Morgan Stanley (MS), Citigroup (C), and JPMorgan Chase (JPM).

A common career path for many hedge fund analysts and managers might be a two-year post-college analyst program at Morgan Stanley, then two years at Blackstone (BX) or a hedge fund ("moving to the buy side"), then two years at a top business school, then landing at a hedge fund for a career that might end, say, five years later as a senior analyst making millions of dollars per year or starting one's own fund.

But to get on this track, you need to get your foot in the door – the first job...

You can be certain that all of the top firms are deluged with resumes, so you need to distinguish yourself from the crowd. First, never write to the human resources department – send your letter directly to a portfolio manager and include three things:

  • A one-page cover letter. Try something like this:

Dear Mr. [name],

I am a college senior with a passionate interest in investing. I have been a great admirer of yours [flattery gets you everywhere] since I first read about you in [publication]/saw you speak at [location], and I now make it a point to check your website regularly to read your letters to investors and other materials [more flattery, but don't overdo it – and be prepared to show that you really read it and you know the manager's largest positions].

I am writing in the hope that you can offer me some brief career advice, and perhaps you have an opening in your organization for an eager and hard-working young analyst...

Then mention the attached resume and investment idea, and say you'll call to follow up.

  • A one-page resume. This is least important. If you can't show direct investing experience, at least try to show strong analytical and quantitative skills.
  • A write-up of your single favorite investment idea at that time (or at the very least, an old write-up of an idea that has done well). Resumes are a dime a dozen, but well-researched, well-written, insightful investment ideas are rare and valuable. Try to tailor your investment idea to your audience (e.g., don't send a micro-cap stock idea to a large fund).

For examples of many good write-ups, check out ValueInvestorsClub.com – you can sign in as a guest and access all but last month's ideas. I know many outstanding value investors are members and suggest becoming a member. It looks good on a resume, and I know people have gotten jobs through VIC connections.

Tomorrow I'll continue with more in-depth thoughts about how to get through to busy, high-level people and build relationships with them – whether it's to look for a job or a mentor.

2) Here's a funny follow-up to the story I sent around in January about picking up trash and climbing a tree to remove a red shirt...

Normally when Susan is getting her coffee at Joe & the Juice, I pick up all the trash on the corner of 97th Street and Madison Avenue. There's usually a lot of it, so it takes me the entire time she's inside just to clean up that corner.

But the rest of block, as we walk down Madison before turning left on our block (98th Street), is equally trash-filled so, being the neurotic trash-picker-upper that I've become, I want to pick it all up...

But most mornings, by that point at the end of our walk, we're typically in a hurry to get home and start our days, so we walk past all the trash, which drives me crazy!

But on a recent beautiful Sunday morning, we weren't in a hurry, so I must have picked up 50 pieces of garbage as we slowly made our way down the block – even the nasty stuff in the street along the curb.

As I was doing so, a man walked up and said thank you. (About once a week, someone notices what we're doing and says something nice.)

I smiled and said, "Thanks!"

He then said, "I own the deli right here and usually I clean up the sidewalk in front of my business myself. Can I buy you a coffee?"

Susan was down the street and wanted to get the dogs home, so I said, "Thanks, but no thanks, my wife and I have to get the dogs home..."

So we smiled, he went back into the deli, and Susan and I started walking home...

But halfway there, I thought to myself, "You know, it might be interesting to meet that guy and he seemed really nice," so I told Susan I would be home in a bit, turned around, and walked back to the deli, where he was sitting at the window, having a coffee, watching life go by...

He was super friendly and we introduced ourselves – his name is Sam. After he ordered me a fresh-squeezed orange juice and breakfast burrito with bacon (yum!), we ended up chatting for well over an hour. Here's a picture of us:

My instincts were correct – what an interesting guy!

Sam grew up in Yemen, got married at 16, came to the U.S. for college at Fresno State, got divorced, married an American woman, lived in Michigan for 11 years where he owned a couple of Sunoco gas stations, then got divorced again, moved to New York City, and is now happily married to a Yemeni woman.

He is 50 now and has five children with his three wives, ranging in age from mid-30s (who has two children, making Sam a grandfather) to a 19-year-old son who lives at home while finishing college. Sam says he's really smart and is already running his business, so he expects he'll take it over someday.

Sam tells me that Yemenis own all of the delis in the New York City area. He now owns seven in the city and Westchester, plus this restaurant, Empire Shawarma Mediterranean & Yemeni Restaurant on 377 W. 125th Street. (I'll have to check it out!)

He told me his businesses are doing really well, though inflation in certain areas is really extreme – for example, he told me a crate of eggs used to cost him $37 and it's now $150! (See: What's Behind the Recent Rise in Egg Prices?) Sam said he has been able to raise prices to offset higher costs, but there are limits, as you just can't charge $8 for a breakfast sandwich...

I also asked Sam whether he has been impacted by the rise in crime and, to my surprise, he said no – even though he said he has a deli on 125th Street where there are lots of drug addicts around. (I wonder if criminals are more likely to target chain stores because an employee is less likely to take out a baseball bat or gun and fight back the way an owner-operator might?)

Here's a picture of us in front of his deli:

But wait, the story of meeting new, interesting people gets better...

As we were sitting there, the local parking enforcement officer came in and Sam knew her... so we ended up talking to her for half an hour. It turns out that her 14-year-old son attended the Harlem Hebrew Language Academy Charter School on 118th and St. Nicholas Avenue from kindergarten through eighth grade, which was founded by someone I know!

She told me all about the school and how a Dominican mother like her ended up deciding to send her son to a brand-new Jewish-themed charter school where he learned Hebrew. She said he was the only Latino kid in the school initially, but now it's much more diverse. She said he had special needs, so the school got him an Individualized Education Program ("IEP"), which allowed him to get extra services and support – and he just went on the school's two-week trip to Israel for half price!

Here's a picture of us:

In summary, here are the lessons I took away from this fascinating morning:

  • If you go through life cleaning up other peoples' messes, good things will happen to you.
  • Take every opportunity to meet new people, especially those outside of your usual "comfort zone."

Best regards,


P.S. I welcome your feedback at [email protected].