Pitch The Perfect Investment – The Essential Guide To Winning On Wall Street [Book Review]

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Whether you work at a money management firm, hedge fund, investment bank, or private equity firm, the ability to pitch a compelling investment idea determines not only your bonus, but your success on Wall Street. If you don’t have a great investment idea, there is nothing to pitch. If you have a great idea but cannot communicate it, your pitch will fall on deaf ears.

As said by Nicholas Galluccio, CEO of Teton Advisors, “To the active portfolio manager, beating the market is essential. It’s refreshing to read a book that stresses the importance of fundamental research in stock analysis, especially when active portfolio management is under attack by ETFs and passive investment vehicles.” Given this intense pressure, managers are desperate for good investment ideas and look to analysts to provide them. Pitch the Perfect Investment shows the reader how to satisfy this need by developing the perfect investment and crafting it into the perfect pitch.

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Although these skills are so essential, they are rarely taught on Wall Street. As a result, analysts are forced to develop this expertise on their own through an agonizing process of trial and error. Pitch the Perfect Investment provides the tools to significantly accelerate this learning process. In this era of hyper-competition on Wall Street, even the smallest edge can make the difference between success and failure. Arnie Ursaner, a 43-year Wall Street sell side veteran said, “I wish I had this book when I started in the business. I remember my early days being characterized by a lot of hits and misses. Sonkin and Johnson provide the newcomer with valuable shortcuts so they can experience more ‘hits’ and fewer ‘misses’.”

In an increasingly competitive job market, the stakes are also extremely high. The book gives the college or MBA student the edge they need to succeed, whether they are pitching a stock idea in a job interview, in a stock pitch competition, or for a student-run investment fund. Pitch the Perfect Investment accelerates the learning process of the recent college or MBA graduate who is embarking on their career on Wall Street by giving them most of what they need to know in a single book. Echoing this sentiment, Aswath Damodaran, a prolific author of over 20 books on valuation and a professor at New York University, said, “…this is a book that most of my students would have loved to have had before their first interview and job.”

Sonkin and Johnson also seek to push the open-minded, seasoned investment professional out of their comfort zone to think about familiar concepts differently. In an industry where even the most successful veterans must worry about younger managers snapping at their heels, the authors provide tools to augment and improve their investment process. Pitch the Perfect Investment equips the Chief Investment Officer and Research Director with new tools, enabling them to tighten their analytical process and significantly improve communication and efficiency throughout their organization. As said by Geoffrey Moore, author of several highly-acclaimed strategy books in the technology industry, “Much heartache will be avoided and faster decisions will be reached by any organization that adopts these recommendations.”

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Advanced praise for Pitch the Perfect Investment

“My decades of experience have taught me that pitching is a vital skill one must master to succeed on Wall Street. Sonkin and Johnson’s book gives someone new to the industry a significant head?start in obtaining this skill.” ? Regina Pitaro, Head of Institutional Marketing ? GAMCO Asset Management, Inc. and author of Deals… Deals… and More Deals.

 “To the active portfolio manager, beating the market is essential. Sonkin and Johnson explain how to identify and exploit mispricings to accomplish that goal. It’s refreshing to read a book that stresses the importance of fundamental research in stock analysis, especially when active portfolio management is under attack by ETFs and passive investment vehicles.” Nicholas Galluccio, CEO Teton Advisors, Inc.

“I wish I had this book when I started in the business. Having recently retired from a successful 43 year career on the sell side, I remember my early days being characterized by a lot of hits and misses. Pitch the Perfect Investment provides the newcomer with valuable shortcuts so they can experience more ‘hits’ and fewer ‘misses.’ Sonkin and Johnson translate serious financial concepts into an easy to understand, enjoyable read.” – Arnie Ursaner, Founder and Former President, CJS Securities.

“It is rare that you get a book on finance that is fun to read, immensely informative and deeply insightful. Paul Sonkin and Paul Johnson have pulled off the trifecta in this book. Read it if you work in the investing business already, plan to work in it or want to make sense of an investment pitch made to you. Heck, just read it, even if you never plan to be in investing.” ? Aswath Damodaran Professor of Finance, New York University Stern School of Business and author of The Dark Side of Valuation,  The Little Book of Valuation and Narrative and Numbers.

 “The job of a venture associate is to bring great investment opportunities to the general partners they support.  The models and frameworks in Pitch the Perfect Investmentalthough aimed at public stock investing, translate easily to venture capital, where young analysts make the same mistakes in pitching their recommendation to senior VCs. The authors present their ideas is a straight-forward, fun manner. Much heartache will be avoided and faster decisions will be reached by any VC organization that adopts these recommendations.”- Geoffrey Moore, author Crossing the Chasm and Zone to Win

 “Pitch the Perfect Investment is a must read for anyone who, having formulated an investment idea, must “sell” the idea to a harried portfolio manager who is beseeched with ideas from numerous sources. The authors, highly regarded Wall Street veterans, share with the reader invaluable insights regarding not only the development of an investment theme, but, more importantly, how to market the idea in the most efficient manner. I’m highly confident that every young Wall Street analyst will reap immeasurable benefits from this highly readable book whose conversational style makes the information in the book readily accessible.” ? Robert Willens, President Robert Willens, LLC

 “A successful investor has to say ‘no’ far more often than they say ‘yes.’  The key is making it count when you find the right investment.  The first 30 seconds of your pitch are often the most important chance to win or lose your audience.  Pitch the Perfect Investment provides the toolkit to build conviction in your analysis and effectively articulate how it should be implemented.  Sonkin and Johnson follow their own advice with concise and persuasive principles.  Their guidance will neutralize the intimidation factor in pitching a portfolio manager, and allow the analyst to shine.”  – Bruce Geller, CEO of DGHM & Co., LLC

“Communicating investment research in a thoughtful manner is both art and science, which Sonkin and Johnson masterfully teach in Pitch the Perfect Investment.  I found their work wonderfully illuminating and I’m sure eager students, of all backgrounds and ages, will as well.” – John Mihaljevic Managing Editor, The Manual of Ideas

“As a recent graduate from business school, I find myself pitching investment ideas more often. Pitch the Perfect Investment provided me with helpful recommendations on how to structure my presentations to make them more effective, persuasive and successful.” – Brian Pellegrini MBA, Columbia Business School, class of 2015

Pitch the Perfect Investment pays for itself by providing useful tools, clever diagrams and important insights into how to think about risk, return and estimates of value. Sonkin and Johnson give the reader the ability to examine investments from multiple angles, understand how other investors value companies, and avoid common mistakes and dodge empty logic. These tools will make all the difference to new or experienced investor alike.”- Nick Gogerty Co-founder and CTO of Healthcoin, CEO of SolarCoin, and author of The Nature of Value

About the Authors

Paul D. Sonkin (New York, NY) is a portfolio manager at GAMCO Investors / Gabelli Funds. He is co-Portfolio Manager of the TETON Westwood Mighty Mites Fund, a value fund which primarily invests in micro-cap equity securities. Sonkin has over 20 years of experience researching small, micro and nanocap companies. Prior to analyzing stubs, spin-offs and micro-cap companies for GAMCO, Mr. Sonkin was for 14 years the portfolio manager of The Hummingbird Value Fund and the Tarsier Nanocap Value Fund. Sonkin was previously a senior analyst at First Manhattan & Co., and an analyst and portfolio manager at Royce & Associates, Inc. His employment also includes a stint at Goldman Sachs & Co. and the U.S. Securities and Exchange Commission. He holds an MBA from Columbia University Graduate School of Business and a B.A. in Economics from Adelphi University. Since 1996, Sonkin has been an adjunct professor at Columbia University Graduate School of Business, where he has taught courses on security analysis and value investing. For over 10 years, he was a member of the Executive Advisory Board of The Heilbrunn Center for Graham & Dodd Investing at Columbia Business School and co-author of Value Investing: From Graham to Buffett and Beyond.

Paul Johnson (New York, NY) is the founder and investment manager of Nicusa Capital Partners, a private investment partnership that he started in 2003. Johnson has more than 30 years of experience as an investment professional and has invested in all industry sectors of the economy. Prior to founding Nicusa, Johnson was a Managing Director in the Equity Research Department of Robertson Stephens. In his 20 years as a sell-side research analyst, he analyzed all sectors of the technology industry, ranging from semiconductors and mainframe computers to networking and telecom equipment. In addition, he has participated in more than 100 venture capital investments and investment banking transactions in his career. As an Adjunct Professor of Finance at the Columbia University Graduate School of Business, Johnson has taught 28 courses since 1992 on securities analysis and value investing to more than 1,500 students. He is co-author of The Gorilla Game, Picking Winners in High Technology, which reached Business Week’s best seller list and was the number one best-selling investment book on Amazon.com for several weeks in 1998. Paul was also a contributing annotator in 2012 to The Most Important Thing Illuminated, by Howard Marks. Institutional Investor magazine, The Wall Street Journal, U.S. News & World Report, Smart Money, Red Herring, and Bloomberg have all ranked Johnson as one of the top investment analysts in the country. Johnson has an MBA in Finance from the Executive Program at the Wharton School of the University of Pennsylvania, and a B.A. in Economics from the University of California, Berkeley.

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