Women in Investing conference 2011
What it Takes to Succeed in an Investment Management Career
Communicate. Think. Creative. Curious. Caroline Randall started out a panel discussion at this year’s Women in Investing (WIN) conference by showing a word map compilation of responses to the question, “What makes someone a successful manager?” These were among the largest, most prominent words.
They fall right in line with what the women MBA student participants identified as being among the most compelling features of investment management as a career: work that is intellectually stimulating, exciting, dynamic, and entrepreneurial.
Randall, who flew over from London to speak at the WIN conference, is a vice president and investment analyst at Capital Research Global Investors. She was joined by several Capital Group Companies colleagues for this Capital Group Luncheon Panel, “What it Takes to Succeed in an Investment Management Career,” including Barbara Burtin, investment analyst at Capital World Investors; Natasha Braginsky Mounier, vice president and investment analyst at Capital Research Global Investors; and Karen Choi, fixed income investment analyst at Capital Research Company. Capital Group Companies was a key sponsor for WIN 2011.
Here are a few of the tips for achieving success in investment management these panelists offered women MBA participants:
Be concise in your presentations. You have to be concise – both orally and in writing, said Randall. Think of all the information you gather about an investment as an iceberg: you know the full story, but your portfolio manager needs to know just the tip. “Write as if you’re writing in blood; make every word count,” she advised.
Be curious about everyone. “It’s important to be able to interact with a range of people,” said Randall. “Be able to develop a rapport not only with senior management, but with second and third-tier management, and with hourly employees.”
Be keen in hunting down information. “You should be interested in everything,” said Randall, noting that curiosity and creativity are the hallmarks of a successful investment manager. “Dig deeper: Everything’s online, read the annual report, earnings results, transcripts of calls. Do that, and you will start to use the right language.”
Don’t be afraid to have a different opinion. “Even if something you’re looking at sounds a little crazy, don’t dismiss it; don’t rule anything out,” said Burtin. “Your ability to think differently is very important; at Capital, your opinion will be respected.” Randall noted: “Some of my best recommendations were based on a completely different perspective. Be flexible and open-minded. Be willing to make a mistake. Have the integrity to do that.”
Discover your own investment style. Burtin especially values the autonomy and independence she enjoys as an investment analyst. “There is a lot of flexibility in terms of managing your time and how you do your job,” she said. “You might think you have a very clear idea of what you want to do now – but be open, you’ll find out/learn what you’re good at.” Choi agreed: “We all invest in our own style,”
Know your sector. “I believe it is important to know the direction of the sector,” said Choi. “What are the big issues facing the sector over the next three to five years? Can this sector outperform its peers? Does it make sense to invest in the sector? Owning the best company in the sector will not protect your investment if the entire sector is doing poorly.
“I cover fixed income, or more specifically, investment grade corporate bonds,” Choi continued. “As a corporate bond analyst, I am very focused on the downside risks of any of my investments. Bonds are different from equities as the returns can be zero and the upside is limited. I have seen zero to little recovery on some bonds, and the best returns I have seen on individual bonds in my sector have been 40 percent.”
Don’t ask questions that confirm your assumptions; ask questions that challenge them. “I’ve followed the same sector for 12 years,” said Choi. “I like the management teams [I deal with], but over time I need to step back and gauge their performance.”
What can you do if you’re in business school now, and you want to make sure you’re a top candidate for a career investment management? Randall enumerated several tips:
- Get good accounting and evaluation skills.
- Get good grades.
- Read international papers. Gain an understanding of the world, and form opinions.
- Develop an investment portfolio, real or fantasy. “It’s so disappointing to hear a candidate say, ‘I don’t have a portfolio,’” said Randall.
- Make your investment portfolio – real or fantasy – your main hobby over the summer. Have three or four stocks you can champion; know everything about them. Be able to say, “This is valued at X. I think it is worth Y because...”
- Practice your pitch: “I want to work in investment management because...”
- Read The Little Book of Behavioral Investing: How Not to be Your Own Worst Enemy by behavioral finance expert James Montier.
In spite of the fact that only 10 percent of investment managers are women, Randall said, “It’s not just a man’s world. If you choose the right firm you can work anywhere, you’re in control of your schedule.”