Invest Like The Best
Episode 222 The Buy Side Primer
Invest Like The Best

Episode 222: The Buy Side Primer

Invest Like The Best

Episode 222

The Buy Side Primer

Paul Enright is the managing partner at Krainos Capital, with previous buy-side and sell-side experience at Viking Global and Morgan Stanley. We demystify high finance – exploring the buy-side and sell-side, the different kinds of funds, and the skills required for success.

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[00:03:39] - [First question] - His history in both the buy and sell-side

[00:05:20] - Different types of roles on the buy-side and sell-side

[00:06:48] - Interest-sets that best align with being a buyer or a seller

[00:07:57] - The emotional experience of being exposed to risk on the buy-side

[00:08:53] - How the nature of buying and portfolio construction has changed 

[00:10:15] - What Regulation Fair Disclosure (Reg FD) is

[00:12:46] - Key terminology and definitions of long-only and long-short funds

[00:17:40] - Varying clusters of long-short funds and defining each type

[00:21:48] - Differences in exposure between a platform model versus a traditional long-short stock-picking model

[00:25:16] - Skill-sets that are most important to have when navigating this space

[00:29:03] - Good versus great “digging” of information for investments

[00:31:20] - Why the quality of one’s analysis matters

[00:33:10] - Having a potential edge when deciding based on someone else’s analysis

[00:35:19] - Foundational building blocks of an effective stock pitch 

[00:37:20] - Finding wrongly categorized stocks and reaping the rewards

[00:40:49] - Overview of good portfolio construction and lessons learned over the years

[00:44:06] - Why hedge funds tend to traffic heavily in T.M.T. and consumer sectors

[00:45:53] - Elements that strike him as great in a business

[00:48:05] - Businesses that once seemed great but has since faded away

[00:49:22] - Why hedge-fund managers always seem to make the most money

[00:53:50] - What a well-run hedge fund looks like

[00:56:39] - Characteristics that may make you well-suited for a career in fund management

[01:00:23] - Why quality mentors and portfolio managers are so important when deciding where you want to work

[01:01:38] - What interests him most in markets today

[01:05:20] - Useful frameworks and formulas used when approaching a new business

[01:08:15] - Interesting features about telecom businesses and what defines them

[01:10:45] - The future of the modern world’s internet infrastructure

[01:14:44] - Abundance vs zero-sum and fixed vs growth mindsets 

[01:18:12] - The kindest thing anyone’s ever done for him

The Buy Side Primer

Introduction

Patrick
My guest today is Paul Enright, managing partner at Krainos capital, his family office. Before running his own family office, Paul worked on the buy-side at Viking Global for over a decade, managing their consumer and technology portfolios, and before that at Morgan Stanley on the sell-side. I thought Paul would be the perfect person to help me demystify the world of hedge fund investing, explaining the difference between the buy-side and the sell-side, how long-short funds differ from long only's, and walking through the various jobs in the investing world. In addition to setting that foundation, we also cover the evolution of the buy-side, what makes someone a great researcher versus a great stock picker, and various portfolio construction methodologies. Paul brings such a wealth of knowledge and experience to the table. I think this episode will be enjoyable for investing novices and professionals alike. Please enjoy my conversation with Paul Enright.

Buy-Side Versus Sell-Side

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