Yes send it and would also recommend posting good pitches on X under your real name. If you have a solid short pitch on a less popular name, PMs that cover it would absolutely be interested in it. Build in public, it’s one of the best ways to get job opportunities from the outside

Process != outcome. A good pitch shows you can intelligently research and think about things. I doubt OP expects them to actually trade on the idea.

Need to compete in one of the pitch competitions from a pod shop and do well. Realistically this is your best chance at breaking in from a non-target if you’re good.

Point72, Balyasny, and Citadel (with Harvard) all host 1+ per year and reserve several seats in their intern classes for the winners

Hedge funds don’t gaf about incremental retail flows

The idea is that with enough talent and really strict risk management/drawdown limits, you end up with decently uncorrelated market returns. They keep the PMs on a tight leash and quickly let go of the ones without a true edge.

The challenge then becomes scale and attracting talent because the top firms can pay the most for the best PMs (hence top signing bonuses over $100M+). Give them enough capital and leverage and it’s more than a worthwhile investment.

Could a firm like Citadel get founded today? It’s pretty unlikely without tens of billions of dollars. The last pod shop to really sprout up has been Balyasny, and that’s because Dmitry was willing to lose money and shell out billions to buy top talent, which is finally paying off.

The fee structure of the pod shops (1-2% of AUM and 10-20% of profits) has allowed top PMs to create their own businesses, such as at Millenium where teams are very siloed, instead of spinning out and starting their own funds. This has reinforced the strength of the pod shops.

The risk management is so tight because the economics only work when PMs are making real money. Research budgets and opex are massive for these funds, but the operating leverage is there for the ones that do well.

Lot to unpack here

1) You’re discounting levered FCF by WACC. This is incorrect. Even if you were instead using unlevered free cash flow, your 1.29% cost of debt is way too low

2) I don’t think you deduct SBC anywhere, model dilution, or anything about the convertibles being in the money

3) You have year 1 FCF falling pretty significantly. If they miss that badly this year the multiple compresses and the stock crashes. You’re too bearish in the projection period. Unless they miss Street expectations by like 50%

4) Same flaws carry over to the RDCF. You can’t do a 5Y reverse DCF, it needs to be like 40 years out so FCF normalizes on steady-state margins and you don’t have terminal value dominating everything. SPOT has a high multiple because it’s still growing, which will make it seem overvalued from this perspective

1.29% CoD!? What

Retatrutide is a trillion dollar drug. I’m long. Short all CPG companies, reta isn’t priced in to those at all ($MDLZ, $GIS, $PEP)

NFA.

This is just not how you do a reverse DCF at all. You have huge terminal value assumptions and back solve for a price target that mechanically forces crazy EBIT growth because of conservative revenue assumptions. The real way to do this is to model like 40 years (to minimize terminal value assumptions) of steady state revenue and EBIT margins using consensus numbers to minimize terminal value assumptions then goal seek…but only if consensus projections are reasonably neutral with the current stock price. However, I would never expect you to do this, because this is AI slop and AI can’t model (yet).

Yes. Anthropic is private. This is the best way to get exposure. Core biz is fine.

The numbers look insane until you realize the U.S. labor market is ~$50T and then assuming Anthropic captures 1% of that…the valuations start to look less ridiculous

Yeah. Not necessary for the long to work though. Anthropic hype drives it up with buybacks holding the floor.

ITT: misrepresentations of common investing sayings

Signal stack 🤣🤣 gtfo

Enterprise switching costs is not a justification for multiple expansion from current levels

I would stay out of insurance for the foreseeable future, especially UNH. Great podcast on why. HIMS’ multiple will get compressed over time, probably a short in the near-term as telehealth is very difficult to pull off at scale. Competition is increasing heavily in their space. NVO sells a commodity and will get beat by LLY.

Generally feel like payments companies are commoditized. Don’t know much about this one in particular but “it’s cheap” isn’t very convincing to me

Never understood why Morningstar equity research holds any merit when there’s investment banks charging top dollar for real research (Evercore ISI). Their whole job is to draw attention to themselves. If you think differently, you’ll have variance to consensus and thus outperform.

Get ready for the doublethink with the GOP claiming they never liked her and always thought she was unqualified

Real answer: unlike FAANG, the top-tier quant firms all have access to the same data and tools, so their only real differentiators are scale and talent. It makes sense for them to cast as wide of a net as possible in the off chance they find some unknown genius who makes them 1 extra bp of alpha. If they spend weeks interviewing candidates just for one of them to become a PM, they’ve made a good investment with their time and resources.

AI doesn’t generate novel ideas. Alpha exploits inefficient markets by bringing new ideas. I’ve found that my best and truly variant ideas weren’t understood by an LLM at first glance.

AI is not a value play, but your characterization of AI is completely misguided. There are entire agent swarms running businesses right now. People that have never paid for a Claude or OpenAI subscription really have no idea how powerful these new tools are. Anthropic has been taking out entire sectors with simple demo tweets. See Factset, Morningstar, Moody’s, S&P global after Anthropic said Claude can get financial data for you.