NOW ENROLLING: AUGUST 7 ANALYST ACADEMY

I am very excited to officially open enrollment for Cohort 4 of the Live Fundamental Edge Analyst Academy.

Live Academy is our most rigorous, flagship program that aims to distill a decade+ of buy-side learnings into a 4-week masterclass This program includes everything I wanted to teach my junior analyst as a PM of a $1.5bn portfolio (but didn't have the time)

Who should attend? This isn't an "introduction to stock selection" class, but a rigorous deep dive into the role of the buy-side analyst.

STOCK PICKING & PHILOSOPHY OF THE FINANCIAL MODEL

CHAT GPT FOR STOCK PICKERS?

Throughout the course of my 15 years as a stock-picker I've always erred on the side of being a luddite.

To me, developing a great stock idea is an artisanal process and the same way a painter might find joy from cleaning his brushes, I found joy from printing a 10-K, closing my office door, and spending an hour with a pen & highlighter.

I've generally been skeptical of technology efficiency tools, and default recommend buy-side analysts build their own models from scratch & own the research process from

ANALYST EVALUATION, A 6-PART FRAMEWORK

Over the course of my 13-year buy-side career I had the challenge & honor of managing a total of 9 analysts, not including 3 on an in-house team in India and not including 6 interns.

First, I found managing a team as a PM to be HARD. The stress I felt as analyst dealing with the uncertainty & volatility of markets was intense...throw some additional souls into the mix with their unique mix of goals, biases & emotions, and at times it seemed an impossible task.

WHAT'S BAKED IN?

A common mistake that I made early in my career as a fundamental equity analyst was "first order thinking" - reflexively seeing something good as good and something bad as bad.

After being repeatedly pushed by my PM with the question, "that's great, but is it already baked into the cake?", I came to understand the importance of assessing market embedded expectations.

When I was first asked this "cake" question, I honestly looked back at my PM dumbfounded, not knowing how to answer.

Today, I view the ability to assess market embedded

11 STEPS TO DISSECT A LOSS

Early in my career as a hedge fund analyst I had this naïve and delusional belief that I could avoid big losers.

That I would work harder and be more clever than the pack, and subsequently not deal with the losing side of the stock picking ledger. Oh, the naivety of youth. With experience & maturity, I realized (*painfully*) that losses, sometimes gigantic losses, are part of the game.

As stock pickers we have to accept that reality.

That brings me to...

SVB & 5 DIMENSIONS OF EQUITY FRAGILITY

As bull turns to bear on Wall Street, the market mentality is shifting to "what can go right" for a stock to "what can go wrong".

The best investors I've worked with have always have a keen sense of what can go wrong (in any regime) and are more focused on the asymmetry of the bet (i.e. making $2 when right and losing $1 when wrong) than misplaced confidence in the probability of the bull case.

This humility usually comes from years of getting punched in the mouth and experiencing a wide range of outcomes.

OPEN ACCESS GUEST SPEAKER EVENT: ASWATH DAMODARAN, April 11th at 4:30pm EST

The Fundamental Edge Academy is a 4-week program encompassing two weeks fundamental equity analysis content, one week of guest speakers (experts in their fields) and a capstone pitch week. As part of the March 27th Academy guest speaker week, I am incredibly excited to host Aswath Damodaran @AswathDamodaran, a legend in the field of equity analysis and valuation.

This session will be an open event, free to access, with the recording available post event.

ENROLLMENT NOW OPEN: MARCH 27th LIVE ACADEMY

I am excited to announce that today we are opening enrollment for our March 27th Live Academy.

Seats are limited and we cap this program at 30. If you are interested, please apply early!

fundamentedge.com/analyst/

https://twitter.com/FundamentEdge/status/1631306165853507586

I hosted an information session on Live Academy today - for the replay please e-mail info@fundamentedge.com

Thanks!

Hello! Less than a week left to sign up for the Fundamental Edge Crash Course March 7th & 8th in NYC.

As a preview, here are FIVE THINGS YOU WILL LEARN in Day 1 of the Crash Course.

https://twitter.com/FundamentEdge/status/1627789832675274754

1) ROAD-MAP FOR YOUR FIRST 12 HOURS ON A STOCK

COMMUNICATION ON THE BUY-SIDE, 4 RESOURCES THAT HELPED ME

When I first joined the hedge fund world, I figured success or failure as an analyst would be mostly about my technical skills.

Could I build error free models?

Could I accurately assess EPS estimates? Could I analyze lots of data and correlate that to the key drivers of the company?

And yes, as a junior analyst, those quantitative skills are really important.

And I was pretty good technically. I built good models.

But where I was REALLY bad was communication skills.

HEDGE FUNDS - BREAKING IN:

Our mission at Fundamental Edge is to train the next generation of fundamental equity investment professionals.

Roughly half of the participants in our three FEA (Fundamental Edge Academy) cohorts have been Learners (happy with seat, often fund sponsored) and half have been Candidates (looking to break in). A core part of our work is doing what we can to help those Candidates find the right seat. I know there are many on FinTwit that fit that Candidate bucket, so I thought it would be helpful to share some of our core

NYC FUNDS LOOKING TO HIRE?

If you are in the NYC area and looking for an innovative approach to talent acquisition & development, I would love to meet! I will be hosting a group lunch for hiring funds Tuesday March 7th at noon in midtown where I will walk through our unique approach to talent identification.

BREAKING IN: A FREE WEBINAR

In conjunction with the launch of our online Talent Hub, we will be hosting a free webinar on Tuesday February 28th titled "Breaking In: Landing the Seat".

https://twitter.com/FundamentEdge/status/1628383847149867009

We will walk through:
1) "Climbing the right mountain"
2) Self-awareness & identifying your entry point
3) Building your buy-side resume (in 3 years, 3 months or 3 weeks)
4) Identifying opportunities
5) Interview prep

FUNDAMENTAL EDGE TALENT HUB

I am really excited to unveil the new & improved Fundamental Edge Talent Hub at fundamentedge.com.

A big part of our mission here is to *open doors*. To open doors for great talent to find great seats. And to help funds find great talent. Having hired ~15 analysts onto my team over the years, I know first hand of the pain points in the hiring process.

It can be a long, frustrating process. We have plans to leverage the Fundamental Edge community to make it easier for you.

ACADEMY CRASH COURSE, LIVE IN NYC MARCH 7th & 8th Our goal at Fundamental Edge is to become the "Training the Street" for the fundamental equity buy-side.

By that, I mean that we aim to become the standardized Day 1 educational program for new hires at large equity asset managers and a source of education

UNIVERSITY WEBINARS

Our mission at Fundamental Edge is to become the "Training the Street" of the public equity buy-side. Just as you wouldn't have an investment banking MD teaching new analysts how to do an accretion dilution analysis, you shouldn't have a busy hedge fund PM teaching fresh analysts how to analyze unit economics, model with incremental margins, forecast normalized earnings,

NORMALIZED EARNINGS ANALYSIS

"Normalized earnings analysis", or "earnings power" analysis is one of the oldest tools in the fundamental analyst toolkit, discussed in depth by Ben Graham in Intelligent investor over 70 year ago.

Despite it's longevity, I often find myself surprised by how much of the analyst community focuses on valuation on near term earnings vs. the much more important "normalized earnings" valuation.

I made this mistake myself early in my career. Looking at a stock that seemed "expensive" on near term earnings because the FY1

Exciting day. We (finally) have a website!

fundamentedge.com Been a labor of love for a first time entrepreneur. But it is live!

You may now apply for either the Feb 13th Asynch Academy or the March 27th Live Academy through the website.

UNIT ECONOMICS

"Unit economics" is an important tool in the tool box for the buy-side analyst that, surprisingly, is not discussed often by the sell-side outside of businesses that explicitly report enough data to calculate LTV (life-time value) and CAC (customer acquisition cost), two important, but incomplete metrics in understanding the totality of unit level profitability.

Honestly, when I joined a hedge fund and heard other analysts talking about unit economics, I was lost. I hit the google machine and looked through

"IS THIS INTERESTING?" A framework for assessing single stock opportunity.

Fundamental equity investors love to talk about their "process". Good analysts will have a fancy, disciplined, structured deep dive process that can take days, weeks, or even months to execute. But what if we drop bait in a hole with no fish? What if we sink a drill bit into dry sand? After all, in school, we were taught that markets were efficient. $100 bills shouldn't be lying on Park Avenue, and a stock selected at random shouldn't offer superior risk-adjusted return