Dan Loeb rips a job applicant; How to Get a Job in Money Management

1) A hat tip to Cundill Capital for tweeting this brilliant exchange between Dan Loeb of $16 billion hedge fund Third Point and a prospective employee named Alan Lewis...

It dates back to 2005 (when Loeb released it publicly), but the lessons here haven't changed a bit...

When Loeb asks, "What are your three best current European ideas?," Lewis (foolishly) replies, "I am sorry but it does not interest me to move forward in this way..."

To which Loeb writes:

One idea would suffice.

We are an aggressive performance oriented fund looking for blood thirsty competitive individuals who show initiative and drive to make outstanding investments. This is why I have built Third Point into a $3.0 billion fund average net returns of 30% over 10 years.

We find most Brits are a bit set in their ways and prefer to knock back a pint at the pub and go shooting on weekends rather than work hard. Lifestyle choices are important and knowing one's limitations with respect to dealing in a competitive environment is too. That is Lesson 1 at my shop.

After another (even more foolish) reply from Lewis, Loeb continues:

You will have plenty of time to discuss your "place in society" with the other fellows at the club.

I love the idea of a French/English unemployed guy whose fund just blew up telling me that I am going to fail.

At Third Point, like the financial markets in general, "one's place in society" does not matter at all. We are a bunch of scrappy guys from diverse backgrounds (Jewish, Muslim, Hindu, etc.) who enjoy outwitting pompous a**es like yourself in financial markets globally.

Your "inexplicable insouciance" and disrespect is fascinating; it must be a French/English aristocratic thing. I will be following your "career" with great interest.

I have copied Patrick so that he can introduce you to people who might be a better fit – there must be an insurance company or mutual fund out there for you.

2) Over more than two decades, hundreds of young people (sadly, 99% men – but the lack of women in this industry is a discussion for another day) have asked me for a job – or advice finding one in the hedge fund industry.

There were so many, in fact, that I published an article about it nearly 18 years ago entitled Breaking Into Money Management when I was writing for the Motley Fool website. It's no longer posted there, so you can read a PDF of it right here.

In it, I echo Loeb's advice to always be prepared with a well-articulated stock idea:

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:

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

Dear Mr. Nygren,

I am a college senior with a passionate interest in investing. I have been a great admirer of yours since I first read about you in Outstanding Investor Digest , and I now make it a point to check Oakmark's website regularly to read your letters to investors and other materials .

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 his office to follow up.

2) 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.

3) 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's 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).

I repeated this advice in an interview with Business Insider in 2012: Whitney Tilson Gave Us Some Incredible Advice For How To Get A Job At A Hedge Fund. Excerpt:

Tilson told us that the No. 1 question he would ask an aspiring analyst during an interview is, "What is the largest position in your personal portfolio and why?"

"I want a concise 30 seconds. Give me the 30-second elevator speech on why you own it, why you think it's cheap. And then, I'm going to drill down. Do you really know this company? Ultimately, that's what value investing, as I practice it, is all about. Are you the world expert? Have you done the work to generate some proprietary insight about a company or a stock?"

Best regards,

Whitney

P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com.