A Reader Asks for Guidance (edited for brevity)
I’m writing this e-mail to ask for advice, as I value your opinion.
Vanguard’s move into PE may change the landscape forever
I’m 22 and graduated in Psychology. I moved to New York back in March as everyone said this was the place to be to get a job in finance. Since then I’ve been networking a lot, learning, and pretty much bugging every fund manager I’ve managed to get a hold on.
Attached you can find my current security analysis template; in Word and Excel (tables). I’d appreciate any feedback on anything to add.
I’m writing to you as I’m almost down to the penny (excluding my investing capital which is untouchable) and I need actionable advice. I’ve been crashing at a girl’s place in Brooklyn for the last 2 months and down to $400.
For write-up purposes, looking at equities, I still believe ESV and CLD are among the best plays.
ESV is currently the only driller making a profit and management has proven wise. It’s a good play for both safety and capital gains. The same could be said about CLD.
Looking at bonds, I haven’t analyzed them quite as much as equity opportunities since I can’t invest there yet. However, from a glance at the BTU bonds trading at around 34 cents and maturing on Nov. 15 18, they seem as potentially worth a closer look. BTU’s dominant size, presence and assets makes it unlikely to go through a disastrous formal chapter 11, so if it goes through an out of court restructuring or simply plows through, you’re seeing either full recovery or getting new equity in the restructured entity. It seems as a similar play to the equities I’ve looked at, albeit less secure. Can’t say the same on the BTU equity.
I would really appreciate any actionable advice you have for me. At this point I’m even willing to mow the lawn of whoever takes me in (funny, but true).
Thanks for reading such a long message, and thanks again for sharing your knowledge. Your advice and the Deep-Value group’s really helped me both intellectually and psychologically as I was feeling a bit bummed out.
Dear D (name withheld)
I am not quite sure what you are asking advice on:
Your investing templates, stocks, and/or job/career advice.
First, I did not post your templates here for others to see and comment on because of privacy, but I do think you put alot of effort and thought into constructing them. Just remember John Templeton’s advice to his analysts, “We want our analysts to adopt whatever approaches are appropriate to a particular situation.” Use your templates as a guide but don’t cut and paste.
There are many in the Deep-Value group with varied experiences who could give you their thoughts. I find it is hard to give advice not knowing the person well. The key is knowing yourself which can be difficult for a young person starting out. You seem to have a passion to learn and become an investor, so you are part way on your journey, but you have much to learn (as we all do). You have met other money managers and what has been the response? I can promise two things:
No one trains you on Wall Street and you have to show what you can do. In your case, that would be a well-written research report on a company or an industry to show an employer your through process and skills. You need time to develop your skills–about five years.
Do you need to be in an expensive city like New York or even work on “Wall Street?” I place Wall Street in quotes because I mean the investment business. Could you work as an assistant to a CFO at a small growing company? Would you think of working as a broker or back office clerk to get your foot in the door. You could work in a job to keep food on the table while you constantly build your skills and a track record no matter how small and keep networking. Francis Chou did this while he worked at a telephone lineman (Francis Chou) But again, easy to give advice while not knowing all your alternatives.
Perhaps think through EXACTLY what advice you want, but other people reading this can also provide their thoughts.
Cheer up, I remember being broke and staring up at the ceiling in an Indian brothel and wondering how the hell would I ever survive?
If you are seeking ways to becoming a master investor/analyst, the road is a long but rewarding one:
Pavel Datsyuk https://youtu.be/gpDdaC1_UGg
Jordan on fire: https://youtu.be/hYntar_qeVk?t=41s
Keith Moon: https://youtu.be/NJH8DmPfVmU