Thursday, September 13, 2012

Prepare to Defend Your Stock Pitch







During your interview you will have to defend your stock pitch as the portfolio manager will be testing your logic, your assumptions, etc. to look for holes in your recommendation.  You should expect the PM to test your knowledge of the stock by asking seemingly unimportant yet highly detailed questions in order to see how well you know your stuff.

If the PM asks you a question you cannot answer, do not make something up. There is a decent chance the portfolio manager knows the answer (or has a good idea what the answer is) and will spot your fib.  Besides, beyond testing how well you know your story, the PM will be testing what you do when you are asked something you don't know.  The portfolio manager doesn't want you to fudge an answer because in the real world a fudge can ultimately cost a great deal of money. 

If you are faced with a situation where the PM catches you unprepared, it is better to say either "I will have to double check this, but given these 1, 2 or 3 facts I do know it is reasonable to think X" or "I don't know for sure but this is what I would do to find out".  Do not try to skate through with something you made up on the spot.  

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