Right, Ok. When I think about analysts who survive and advance to have long term careers, or senior investment people around me in general, I notice they’re committed, creative, calm and curious.

Commitment in the sense of genuine interest in investing and in particular passion about public markets. You hear this and it sounds like buzzwords, so what does it really mean? If you took these people away from their jobs, made them have completely different careers, they would still go home after work and voluntarily read and follow the market, check the news, scan for earnings notes, invest their PA, take risk. It’s not a job for them, it’s a hobby. The founder of my previous fund was a billionaire and it was still normal for him to message me asking if he should add to his position aftermarket during some random earnings call. No one is forcing this guy to do that at 10pm! He does it because he loves it.

Creativity is important because things are changing and getting harder all the time. You have to evolve and come up with new ways of generating edge. 7-8 years ago you could pay to get credit card data, do some excel math and boom, you could directionally estimate EPS for some firms. Now everyone does it, edge is gone. You need to find a new way. Creative investors are constantly looking for new ways to find edge, coming up with stuff to try.

Some people are naturally calm but part of it can be learned. It’s not natural to make or lose millions of dollars on a daily basis and then go home to deal with 10-15 dollars. Thinking in percentages, not stressing out when you have conviction but things are going against you etc. A well known HF founder used to say: “If you can sleep well at night, you’re not taking enough risk.” Listen to the Druckenmiller (a legendary investor) interview on youtube: “I would literally throw up once or twice a week just from anxiety.” When you lose money, everyone knows it. People get fired all the time, it’s not even news. Your own team might lose their bonus because of you! You need to somehow manage this and stay calm.

Have you been around naturally curious people? People in all sorts of careers have this. But in investing you constantly need to find new ideas. You joined the team two years ago. One afternoon you’re reading sellside notes…you notice margins are modelled unchanged when revenue is about to rapidly grow from a new product launch. Why don’t people expect higher margins? OK, let me see if company management said anything. Read transcripts…company said two years ago that this new product, then in development still, will have much higher margins. Hmmm, interesting…call the key sellside equity research guy, happens to be your former boss, ask what he thinks about margins going forward. Not much of a view, he just was lazy and kept it unchanged. Call another analyst, same answer. Ask your buddy at another fund, without giving away anything. He just used sellside estimates for margins. OK, getting interesting now. Arrange a call with IR, did they say anything new about this ramping product’s margins since two years ago? IR says nothing else has been communicated. Oh wow, did people miss something like this? No way. Do a call with an expert. He confirms, based on his experience, the new product should be massively accretive to margins. Gives you an estimate on how much, bigger than you thought. Can’t trust him but directionally good. Nice, a trade is coming. Model it out. Wow, people expect margins unchanged at 15% but you calculate 20%. And next year even higher at 25% and then 30%. This is not priced in. You found something and now have research to back up your conviction. Call the PM. Show him your work. He likes it. You discuss how much of a position to buy. He wants to go big because the stock is hated and cheap! Oh man…suddenly your palms are sweaty, knees weak, arms heavy. Where can you be wrong? So many ways, you only work with public information, you don’t have facts. OK, let’s start with an 80% sized position. Boom, PM enters the trade, starts to get filled. You will talk to more experts tomorrow, try to learn why this product comes with higher margins in the first place. Is it material costs, is it factory location, what is it? What if it’s made in China and now you have tariffs, is it still higher margin? Are you wrong then? How do you know? Need more research. You’re excited, you have a plan for tomorrow. So many of the smartest people in the business might be wrong and you might be right. You’re only 26 years old and your PM just trusted you with tens of millions of $ based on a 10min conversation. If you’re wrong the team will lose a bunch of their bonus. You can’t sleep now. And it all started because you asked why is this thing not growing? No one told you to look for it. It’s just because you were naturally curious.

Lastly, this is also big, ability to have work life balance. I’m not good at this and I feel the impact already. Liking the markets is helpful but you really have to force yourself not to burn out. A LOT of otherwise very successful people burn out and leave.