My Daily Schedule as a Portfolio Manager

In class at ASU I had a PM at a NYC hedge fund come in as a guest speaker.

A student asked him the typical "day in the life of a Portfolio Manager" question and we got a good laugh thinking about a "Hedge Fund Morning Routine" post...his first step was "wake up in a panic" and oh man it brought me back...

Rather than attempt to be purely comedic, I thought it might actually be helpful to some analysts to see the day from the PM perspective and a few takeaways from my ~5 years of the daily balancing act of being a PM. The reality is that the PM seat (this is from my pod era) is an incredibly demanding life, which I'll discuss a bit here.

I do occasionally hear the perspective from analysts of "what does my PM do all day?" - it may feel to the analyst like YOU are doing all the work - building the models, generating the thesis, etc., and that the PM is just overseeing that process. I would push back on that view, in most cases, and hope to give you a perspective from the other side of the table.

BREAKING DOWN THE DAY

First, a caveat: I can give you a much more accurate "quarter in the life" than a "day in the life". The quarters are predictable...earnings, conferences, dead zone, repeat. The below script makes the day look much more predictable than it really is. Is it earnings season? Am I at a conference? Did my biggest long blow up and I'm in all-hands-on-deck triage mode?

With that caveat, my *general* day was a 16.5 hour day with 7.5 hours of sleep (I did and still need my sleep). About an hour of time for personal needs, 1 hour with my kids (part of the reason I retired...I wanted more), 1-2 hours with my wife, and 1 hour commuting.

That left roughly 12 hours for work focus. That seems like a lot, right? It gets chopped up quicker than you think.

In this scenario, I'm spending 2-3 hours on my phone / iPad reading news, sell-side research, spec sales notes simply digesting the news flow of the day. Some of this while I'm on the treadmill in the morning, in an Uber, the rest at home in the evening. With a portfolio of 60-80 stocks and a broad coverage of 250 stocks there is a LOT going on each day.

In this scenario, I'm spending 1-2 hours on the tactical considerations of the day. The morning huddle, speaking to my trader, making nips & tucks on positioning, watching the open, watching the close. This part has a gravitational pull as the blinking lights on Bloomberg can really pull me down a rabbit hole...

This leaves 5-6 hours for actual research work. The outbound, intentional, rigorous work that is required to generate differentiated investible insights is needed to generate consistent alpha. Speaking with companies. Calls w/ sell-side & other investors. Reading source documents. Joining expert calls w/ my analyst. Evaluating data sources w/ data science team & analysts. Doing analyst model reviews. This is on an ideal day, which happens about as often as an ideal NYC weather day (i.e. 20 times a year). More often, this gets compressed to 2-3 hours per day as my calendar gets filled with compliance training, internal interviews, broad sector meetings, etc. Doesn't seem like enough? Doesn't seem like enough to me, either. This was a genuine struggle I had. How do I carve out enough time to generate alpha insights when my day is crowded by these other considerations? My only real answer was to lean on my team, build the trust in other team members to do good research. But that can be a chicken & egg problem...if I don't have enough time to train my juniors & engage with them deeply on a due diligence process and lead by example, how will they ever learn?

Thinking through this reality, as an analyst, and this is mostly pod-specific but has applicability to other firms as well, there are four things I would propose at takeaways from the typical PM schedule.

A 24-HOUR PARANOIA ON NEWSFLOW

Even if your PM "seems" like he or she is not working 14-hour days, your PM is almost certainly tied to e-mail / Bloomberg / Street Accounts/company IR alerts with an intense paranoia about news. Steve Schwarzman said there are no old brave people in finance. Senior PMs live with an intense paranoia around the news, pretty much around the clock. This doesn't make for a peaceful life, but you as an analyst should align with that...i.e. wake up early and distill news for your PM, constantly monitor news around the clock and contextualize key news / sell-side actions with your specific expertise. If your company blows up on news at 7 am, you should be digesting that immediately and responding to your PM as close to real-time as you can. These are the moments when your expertise of being closer to the situation matters.

VERY LITTLE ACTUAL RESEARCH CAPACITY

BY FAR the hardest transition for me from Tiger-style analyst to pod PM and from single man to married man with 3 kids was the compression of my research capacity. As a 25-year-old Tiger-style analyst so many days I could work 7:30 am to 10:30 pm and get 12 hours of true research done in a day. I was a psycho and intentionally lived at 56th & Lexington by the Harley Davidson store so I had a 5-minute walking commute. I was all in. Per the schedule below, as a 32-year-old father of 3 living in Battery Park City that was no longer possible. On a BEST case day, I had 6 hours to lock in and dig through companies. On a more typical day, that is 1-3 hours. How can I hope to do differentiated stock research in that situation? I can't unless I have good team members around me. It's also the reason after I left Citadel that I considered a concentrated boutique small cap long-only strategy where I could go back to 8-10 hours of true research in a day, but that's a story for another day. Know that in this context as an analyst, your job is the be the lead on the due diligence process.

ANALYST TRAINING. INTENTIONS VS. REALITY

I've beat this dead horse a million times here. But my opinion is a junior analyst needs 100-150 hours of training & mentoring to get up to speed in the first 6 months on the buy-side. Our Academy is 60 hours over 6 weeks. With this schedule, I led a team of 9. 100 hours of training for 4-5 junior analysts was just not time in my schedule that I could spare, despite my good intentions. If your PM is neglecting you as a mentor, my hunch is that it's the same story. It's (likely) not personal, it's just the simple reality of the crushing responsibility of the PM seat. This creates an environment where being a self-starter and a self-learner differentiates success vs. failure (insert obligatory plug for the Fundamental Edge Analyst Academy...)

A GENUINE STRUGGLE WITH BALANCE.

The sad part about revisiting this schedule is the minimal time I had to spend with my kids. Many days it was only 10 minutes in the morning, 10 minutes in the evening. I get a pit in my stomach thinking about it now. This job can absolutely dominate your consciousness and I have insane respect for the PMs who can balance everything. I still mark my second son's birth to the day Valeant blew up and my third son's birth to the day our biggest short MRK missed and cracked. It's sad to me that my focus on my portfolio crowded into those special moments in my life. Not to mention, on this schedule below I didn't have much time to be helpful around the house / a super participatory parent outside of the weekends.

There are numerous reasons that my PM career was relatively short (4-5 years), not least of which is that I was not a top 5-10% ace, but ultimately the biggest reason was the nearly unending and crushing responsibility that comes with being a fiduciary of capital and being in a seat where the difference between down 3% and up 3% is the difference between being fired & ostracized and being paid 7-8 figures...the intensity of the incentive can create a real addiction. For me, it was a simple story of burn-out and shifting desires in life. If you are in that situation...I've been there, and unfortunately I never found the perfect answer to manage it.

Well per usual I intended to write a short blog and I wrote a long one. I must get back to work!!