(1/12) A NOTE TO PROFESSIONALS
A brief note to the professionals…allow me to humbly make one observation, which is that there is a severe imbalance on here of students vs teachers.
It’s possible I’m just an antiquated fossil from the days of old FinTwit, where posting your work in real-time, pitches and models, respectful discourse, “poke holes in my thesis,” like, that was just the norm…clearly we lost that…Gresham’s law but for tweets, where the bad drove out the good.
That said, I’m definitely not “that guy” nor am I fit to be… meaning, I started in the hf industry in 2009, I’ve met thousands of equity analysts since then, and I know where I stand: somewhere in the bottom ~10% of intelligence and ability. But those other 90%, they’re all definitely on here…in 2016 trump got elected and twitter became de rigueur…moves markets, gotta be on it.
I haven’t posted anything special, below-average pitches/analysis on a professional level…but to have 10-20 new DMs each time I log in, something is off…answering them doesn’t bother me, I wouldn’t be posting if it did, but my reaction each time is sort of just, like…really?…where the f is everyone lol
Plus, having been on here for a while…as soon as someone gets a bunch of engagement, it awakens the crabs in a bucket…like…”oh he wants to be THAT GUY? F him…I’ma get his ass.” Bro… I do not care about this twitter shit, trust me…I’m not here to be somebody. The brattlestcap account had a pretty big following, and the only thing it taught me is that this nonsense, grown men playing “engagement games,” spending 8 hours a day chasing anonymous clout, defending imaginary avatars of themselves…the whole snippy, snarky, faux-intellectual “gotcha” subculture… its a gigantic jerkoff, vanitas vanitatum.
To spend all day on here arguing with people, as if you’re going to singlehandedly eliminate ignorance on the internet, is no different than when Caligula declared war against the ocean…I look back at all the hours I’ve ever pissed away on these “scrolly apps” and am hard pressed to think of a bigger waste… literally jail is a more productive use of time.
I pop in a few times each week here to try and share something helpful, but I’m 99% in DMs, I stay off the feed and I become more anti-social media…anti-internet really…each day. This shit rots your brain and destroys your attention span, and if you try reading a paperback after a day of scrolling, you’ll see what I mean…rarely a day goes by where I don’t think about just hucking my phone into the intercoastal.
The times I do post, out of my 630 tweets, 620 have nothing to do with markets. The other ten are all prefaced by some degree of “FYI, I’m absolutely fucking retarded”… to borrow Seneca’s analogy, I’m speaking from the hospital bed next to you… no answers to give, just another sick patient searching for cures. Even putting aside my own fuck-ups, every single year I watch guys 10x older and wiser than me, my old role models and idols, all get blown out or fired. Trading markets is eternally humbling, an absolutely brutal way to make a living…L/S in 2025 exponentially harder than 2015…it’s been 16+ years since I started, yet many times I feel like I’m stupider than when I began.
anyway, look…to the professionals who are lurking…this app has a major “those who know dont talk, those who talk dont know” issue. I’m not “that guy,” but I know many of you are…if you ever decide to take 2 mins of your day and scribble some shit out, it will be VERY well-received on here, because the supply of wisdom is vastly outstripped by the demand to learn.
There’s an entire galaxy of potential content that doesn’t even touch “compliance land.” You can write out “10 things I’ve learned about L/S”, or about risk mgmt, about port construction…”the time I blew up my PA”…advice on getting hired….how to pitch a stock…traits of good vs bad analysts…SM vs pod, generalist vs sector focus… “what I learned dating a girl with 232k insta followers”…what I learned mixing leverage with stimulant abuse…theres endless stuff to write about that will help the 21-year old version of yourself, who is on here desperately searching for it.
to sum this all up: I’m 38 and no different than many of you – disillusioned and cynical, the inevitable toll of trading markets for a living – but you gotta step outside yourself, my brother…the 18-25 yr olds, they still have that fire that many of us lost lol.
And for those of you “old heads” of fintwit, yes, the vibes have drastically deteriorated, and yes, the last chopper out of Saigon took off a bit ago…think Obama was still in office…but complaining and whining is lame as fuck, and its foolish to ask the universe for energy that you arent putting out first…whatever this app may be, you can carve out a slice that “is” whatever you make of it.
To wrap this note up… if you believe in karma, believe in God, believe in paying it forward…twtr, as much as I’m burnt out on it, is like democracy in that it is “the worst form of internet except for all the others.” It remains an incredible force multiplier…and while I know you’re busy, I will gently plant the seed… should a time ever come where you feel like sharing, it only takes a small effort on your part to have a large impact.
/fin
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(2/12) Q&A – “STOCK PITCH” FOLLOW-UP
[thread: https://x.com/gregoryblotnick/status/1960404057467892161]
Answering all DM’s at once because I’m lazy… two of the most common questions were:
1. Do you have any 9/10 or 10/10 pitches
2. Do you have any quality models to share
the answer to both is similar – no, because those were employer property. every time you change seats, you rebuild all 50-60 of your models from scratch, so you get used to them being ephemeral. the models I do have, they’re okay, but not something I’d hold up like Link holding the Triforce…you can do much better, and most importantly, the best way to learn is as follows.
pick a random company, pull the last 5 years of 10Ks and 10Qs, and build out the historicals by hand.
project 8 quarters forward, grow revenues by say 3%, expenses by 2%, make sure your BS/CF are airtight, and assume that one wrong number means you will get fired (generally true).
Ask AI for help when stuck – “how do I forecast qtrly accounts receivable days” – but do the heavy lifting yourself.
This model will take you a few days, probably longer. When its done, pick a different company and do it again. Do this over and over and over until you can build a perfect model from scratch in 3-5 hours.
It will take years to get there. Until you reach that point, dont bother with Twitter, dont bother DMing people, dont worry if the model looks “pretty,” dont worry about the accuracy of the forecasts, dont worry about the drivers…that all comes later…without this technical proficiency, you have no career in L/S.
Some may say “AI will do all of this in the future” – the issue I see is that this is one shortcut you cannot afford to take. Building models from scratch is how you learn financial statement analysis, the way the 3 statements connect, the “guts” of accounting…you can’t skip this part. It sucks, it takes forever, it’s boring as fuck compared to trading markets. But the actual job, many days, you’ll just get asked “go learn xyz ticker and give me your thoughts” – the model cannot take you more than half a day to throw together, and anyone my age or older (40+) will almost certainly insist that you input each number by hand…this is what you get paid for as a junior, doing shit that your boss doesn’t want to do, and anything standardized (even BBG or street models) risks variance from the source docs (10K/Q).
Even if the technology is “there,” which it certainly doesn’t seem to be yet, tack on 3-5 years before its “trusted”…it may never be fully trusted, just because the pnl risk from a single number being off is not worth the time saved…my gut says there will always be a need for human oversight, even if its just spot-checking each number in the output. So don’t assume that these jobs are gone, finance/banking moves slow, and doomers are wrong more than they’re right…put in the hours.
Much of the AI doomerism is merited, but I also remember 2008-2009 very vividly, as a senior in college…the S&P was trading at 700, Wall Street was dead and buried and it was NEVER coming back. If you had an offer, it got cancelled…you’d email the guy who was going to be your boss, “ERROR: shitcanned”…email HR, “ERROR: also shitcanned”…no jobs anywhere. Mercilessly blighted by the cruel hand of Fate.
Yet things turned out okay, just as they always do…doomers never win…always be an optimist, in markets and in life. If investing is your passion, if you have a winning attitude and you’re willing to work your ass off, there will be a seat for you.
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(3/12) MODELING PROCESS
“What should my models look like?” The answer to this, is the same answer as “whats the best religion”… the religion of your father. Wherever you work, they’ll have a format you use.
“But what about for my own personal models” – the best model is the one that is consistent, repeatable and leads to you GETTING THE CALL RIGHT.
These are probably not the answers you wanted to hear, so I will explain while also doing my best to paint an unbiased picture of the industry…both the good and the bad… in hopes of helping you determine whether it’s the right path for you.
This tweet on modeling is written in a way that doesnt open a can of worms…the reason being that everyone on twtr has opinions on modeling, and these opinions will do you more harm than good. Before you take anyone’s opinion, the very first question should be along the lines of – “dude…who are you?” Do you have P&L, a track record, even a list of places you’ve worked to support your opinion on why your way is the best? Because a process is worthless if it doesnt produce results…plenty of pretty swings don’t win majors…yet people will endlessly expound upon their process as if outcomes don’t exist.
You hear “process vs outcome” regularly, and emphasis on process over outcome…this is mostly correct, but the rubber HAS to meet the road at some point. On what timeframe, that’s a question with no answers. In theory I would say 18-24 months as for how long a winning process can be “out of sync” with a mkt regime…thinking of Munger down 30% in both 1973 and 1974… but in reality, the leash today in L/S is far shorter than that. Either way, ongoing debate slash above the paygrade of this post. The point is that a process which doesn’t have years of outcome validating it (ideally 5-10 years) is useless, it’s noise… all hat no cattle… all process no outcome.
This is why I dont say “invest THIS way” or “build models THIS way” – I haven’t earned the right to. When I have a process that yields 5-10 years of outperformance, I will confidently “post hog”… Until then, whatever “process” I have is just hot air, another worthless opinion from another blowhard on the internet. Hence why anything I write is cautious and measured as fuck, strictly “mistakes I’ve made” or “best practices I’ve seen.” Do NOT blindly follow anyone on here, not me, not anyone, without some assurance that they’re either good at what they do (measured by P&L/track) or were at the very minimum mentored somewhere “real.”
This industry is amazing in that 99.9% of professionals underperform the mkt, and yet all will opine like they know what they’re doing…its simply unparalleled…imagine an architect telling you how to build a house, when in every single house he’s built over the last five years, the roof collapsed onto a family of four. Thats asset management in a nutshell, and thats the “professionals,” much less twitter.
I make enemies and attract criticism when I say things like this, because it is effectively a “stop posting” to many accounts…and no one likes being told that their opinion doesnt matter… but whatever disdain and scorn you hear in my tone, it’s always aimed at myself first, or a former version of myself that I still hold in contempt.
It’s not that ends justify means, or that good outcomes vindicate bad process…it’s the act of measuring “are you doing your job.” The hard reality is that P&L/track is the ultimate arbiter of truth…there is nothing else…if you are losing money or underperforming for any reason, you are WRONG.
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(4/12) PROCESS VERSUS OUTCOME IN L/S
This is why the extent of my “advice” on modeling is to do what is consistent, repeatable, and allows you to GET THE CALL RIGHT…if you cannot do that, you don’t have a future in L/S…the industry is just far too competitive today. 15-20 years ago, you could be a “nice guy”…hang around at a single mgr L/S that runs 140/40, charges expenses & 20…you can suck at picking stocks and still make $2-3M a year…but those days are over, as they should be. The pod model is just vastly superior in all aspects, the “flows” have it right (both $ and talent), and the industry is both brutal and undeniably fair… you perform, or you get the fuck out.
I would venture that no one has ever left a pod seat by choice, other than to take a higher-paying seat, or to have a mental health crisis, or maybe to get indicted. There is zero reason to leave…you’re given billions to manage and are paid a fixed cut of profits, which is all you can ask for in a career… to be compensated in-line with your performance. Better, cleaner, healthier model all around…no single-mgr glass ceiling or politics or murky P&L accountability…you have everything you could ever ask for, more $ than you could ever hope to raise…there is zero reason to ever walk away from that setup.
At the same time, those who don’t make the cut, esp aged 40+, are in a tough spot… lately it feels as if L/S is “one-way exiting” an unsettling amt of people…as in, you worked at the 4 or 5 firms that are hiring, you got chopped, and that’s the end game because the rest of the industry is bombed out… mogged by multis, 10-15 straight years of bleeding $ and talent…every single month, another 1-2%, year after year, doing what everyone else wishes they could do, and doing it at scale.
No single mgr’s pitch can compare…wtf do you do better than them? Every single angle, you can punch a hole through it, either as an archaic/obsolescent offering (the classic net long L/S SM) or as a battle where you are going head-to-head against an 800 lb gorilla, and are subscale in every single facet of the biz.
The question “why do you exist?” is one that is increasingly hard to answer…it’s a legitimate existential crisis that will end the way it should: undifferentiated L/S strategies close up shop, winner gets the prom queen. Gun to my head, L/S industry headcount is FAR lower 10 years from now…AUM flat to up, # of funds down 25%, headcount down 40%…probably still oversupplied…I just don’t see where the new seat growth comes from.
What exit opps does this leave for 40 yr olds with highly-transferrable skills like “grinding bps of residual” or “proficient in YipItData”…many brilliant individuals are grappling with that question as we speak.
I say this not to scare juniors – there will be a seat for you if you are talented, without question. I’m just outlining the reality for old farts like myself. But if you are a junior, and you DO want this life, you must give it everything, 100% commitment, and even then, the job market may not forgive you if you’re merely good or very good. To be truly safe, you must be elite, the best of the best, because those people will always be compensated, and they will be revered and venerated. But you gotta be S-tier at your job. I’m not a top 10% analyst, so I’ve had to scratch and claw to get by…I made it this far only by staying 50-70 hrs/wk on job #1, then burning nights/weekends on job #2, trading my PA, 16 straight years, no days off, it’s no way to live. Market’s been my mistress since I was 21, it’s absolutely drained me, I’d never wish this life on my kids… I don’t care how much money you have, it will fuck you in the head to make a living from betting on stocks.
Anyways, to bring this back to process vs outcome, if you find a process that consistently GETS THE CALL RIGHT, stick to it… does not matter what it looks like, does not matter what others say, as long as it has validated outcomes. That is ALL that matters in this industry, because it’s all that is left when you strip away everything else. If you find something that gets you to the right answer, don’t overthink it…the market doesn’t pay you for process, it pays you for P&L.
(5/12) DRIVERS & QUARTERS
After you master the “3-5 hour model from scratch,” the next q is on drivers, which many of you asked about. For formatting purposes, this “scenario drivers” tab is bare-bones but sufficient – some version of this is used in many L/S models… 1-3 rev drivers, 1-3 expense drivers, with a scenario toggle. These are only the flex drivers – the model itself has other drivers but are “base case only” so to speak. The tab/format takes 5 minutes to build – the skill and experience is in knowing what the right drivers are, the values, the width of the range of outcomes…again, this is a can of worms that I’m not opening…maybe you want 10 drivers, 20 drivers…maybe you want per-store drivers…or y/y in $ and not %, or q/q instead of y/y, or q/q $ instead of %…the possibilities are endless. Everyone on here has an opinion, a process, but without outcomes that validate the process, it’s all one gigantic circlejerk…x dot com, the mental masturbation app.
On top of that, despite all these drivers…probably 90% of the time, the only variable that matters is “next quarter’s revenue growth.” This sounds like a drastic oversimplification, but ask anyone in L/S and they’ll agree…you might spend 250 hours doing primary rsch, expert calls, HQ visit, traveling the country visiting stores…all to answer one question, “should I model a 3% or a 4% for SSS%,” aka base case rev growth for next qtr in a Consumer stock. Truth be told, the greatest model probably has just one line…rev growth. Accelerating = long, decelerating = short…you don’t need all those other numbers, the rest of the model is pretty much irrelevant – if they print 4% you will make money, if they print 3% you will lose money. You might have 20 other tabs in the model full of data, but they all just exist as support for whether you type “3%” or “4%” in that one cell. It sounds laughable but this is frequently L/S at the highest level…the most brilliant minds in the universe, slaving away at our planet’s toughest questions like “will SBUX do a 3%, or will they do a 4%”…realistically, SF isnt much better (“will they click this ad or not?”) but thats none of my business…kermit sipping tea dot jpeg.
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(6/12) DATA & DOMINANCE
In all seriousness, calling qtrs sounds pedantic but isn’t… an analyst is measured by their ability to forecast earnings, and quarterly earnings are where you monetize your research…there are mountains of studies on this (“majority of alpha is generated on prints”). Same goes for that rev growth example – there’s mountains of studies on sales growth being the primary driver of shareholder returns. So where should an analyst spend the majority of their time? Follow the data…if quarterly earnings day is where the alpha comes from, and revenue growth is the most important component of that alpha…you would want to devote the majority of your time to forecasting next quarter’s revenue growth…and this is exactly what pod analysts do.
To draw any other conclusion besides “this is 100% logical” is the sign of a confused or ignorant mind. Its a much harder job than single-mgr L/S, but the pod model, once again, is a vast improvement in all aspects… everything is data-driven and empirically supported…and the “flows” have it right, measured by both financial and human capital. The outcomes (performance), month after month, year after year, continue to justify the process, and anyone who has been in L/S for a few decades can only react with respect and humility…the longer you’ve been around, the more you appreciate what an outlier this all is, both in the consistency and sustainability of performance…and that’s BEFORE factoring in size. The results are strong on a $1B capital base and outright absurd on $75-100B. It’s truly wild and as a business analyst you can’t help but respect industry dominance when you see it…and while anyone who has been around, or worked at both a single-mgr and a pod will agree with this sentiment…twtr doesn’t seem to.
As with anything in these tweets, I openly encourage you to confirm with someone who you know is “real”… if they co-sign, compare these views to what you read on twtr and you’ll see a massive divergence. To quote one of my first mentors, “bad color is worse than no color”…ie you’re better off learning on your own than having someone here steer you down the wrong path…x dot com, the bad color app.
And so just to repeat, do not blindly follow advice from anyone on here, not me, not anybody else, without “checking their paperwork” so to speak. So what drivers should you use? You already know… use whatever is consistent, repeatable and leads to you GETTING THE CALL RIGHT…because if you consistently call quarters wrong, it doesn’t matter where you work, pod, single manager, LO… you will get fired.
Thanks for reading! For part two of this series, click here.