I have an interview for a position of junior portfolio manager in a small hedge fund investing globally. It’s the second round and I have been asked to prepare a portfolio consisting of stocks, bonds and/or commodities which will later be discussed. I can invest both long and short. I would appreciate any ideas. The timeframe for the portfolio is the end of the year.
Short frozen concentrated orange juice, then when the crop report comes out cover your position.
Sweep the Leg Wrote: ------------------------------------------------------- > Short frozen concentrated orange juice, then when > the crop report comes out cover your position. Hahahaha. Great movie.
Only if you are betting one dollar.
I assume you’re going to do legwork on your own, but I don’t recommend getting investment ideas off of this forum. I would discuss the idea(s) behind your portfolio construction methodology (what’s your edge? how do you capture it? why do you capture it your way?) more so than the details of what’s in the portfolio. Discuss your process for continually coming up with trade ideas. How do you measure your performance? What are your risks? How do you measure them? How do you mitigate them? What will you do if/when things go wrong?
Sweep the Leg Wrote: ------------------------------------------------------- > Short frozen concentrated orange juice, then when > the crop report comes out cover your position. too funny.
do you really feel competent as a manager if you have to ask other ppl for investment recommendations?
FrankArabia Wrote: ------------------------------------------------------- > do you really feel competent as a manager if you > have to ask other ppl for investment > recommendations? ouch. he does have a point
I’m a little out of my league but… I would start top down, as in where do you think the economy is going in the next year (be able to defend that idea using economic indicators), what effect will that have on interest rates, what will that do to commodity prices, what sectors do you think will perform the best, and what can you do to hedge just a bit in case these assumptions are off.
I’d say if your time horizon were shorter, I’d be interested in buying up some community banks in stronger markets (DC area, NYC area, etc.).
EDIT: if your time horizon were longer…
volante99 Wrote: ------------------------------------------------------- > I’m a little out of my league but… > > I would start top down, as in where do you think > the economy is going in the next year (be able to > defend that idea using economic indicators), what > effect will that have on interest rates, what will > that do to commodity prices, what sectors do you > think will perform the best, and what can you do > to hedge just a bit in case these assumptions are > off. Sorry to hear about Walmart. Did you try this pitch ?
Wow, what a great opportunity and good luck with that. On top of what has been said above, bets have to be about turning points that are critical this year assuming you have to run the portfolio until the end of the year. I’m thinking UK election bet with a hung parliament, Chinese demand for commodities (Check copper on the FT), Euroland if any of the PIIGS get into more trouble. That sort of thing. There has to be an element of looking ahead at events that will trigger market changes. What happens once the government stimulus stops. Which countries have a better opportunity if the recovery doesn’t happen. So you need your global thesis. Are you a recovery guy or a double dip recession kinda guy? There are hundreds of trades depending on that. Consumer goods vs non-cyclicals. Inflation vs deflation. Commodity producing EM surplus countries vs tapped out G7 deficit countries. And so on and so on. Talk about the technical side - the appropriate hedging vehicle using futures, options etc Have a macro view and substantiate it. Then discuss your trade ideas with an appropriate trigger. No doubt you will be challenged with alternative view points. As long as you can make a robust defence (not too robust though!), they will see that you have thought about it and that gives you a chance. Quick recap: top down approach/ macro viewpoint with bottom up trade selection based on trigger events. Again, good luck.