Interview: Alex Hess on Preparing for Stock Pitch Competitions

Alex Hess is a first year who successfully recruited Equity Research this past fall. He will be interning at J.P. Morgan this summer. Alex, thank you for taking the time! 

Did you have a background in investing before business school?

I had a background as a financial journalist, so I had experience looking at public companies and determining how a big picture event could have implications for individual firms. Additionally, my experience gave me a good foundation for developing and communicating equity ideas.

Were you aware of stock pitch competitions going into your MBA?

The investment world is full of public facing stock “pitch” events, the most famous of which is probably the Sohn Investment Conference. At these conferences, well-regarded investors bring forward a thesis with actionable information and there is a public forum for agreement or disagreement. I was aware of these conferences due to my background as a financial journalist, so I had an idea of the format of a stock pitch competition, presuming they were modeled on investor conferences.

How did Johnson and Old Ezra prepare you for your stock pitch competitions?

At the beginning of every Old Ezra Meeting, there was a “stock pitch” debate in which two teams of three each presented the bull or bear side of an assigned equity. Teams were not allowed to distribute presentation materials and there was a strict presentation time limit, forcing you to be concise. Old Ezra played a big part in other areas, such as resume review and soft skills coaching, but the stock pitch debates and questioning in front of 100 people at the beginning of each meeting comes to mind as a key part in developing an investor thesis. Students are forced to answer, in relatively few words, “What is going to move the stock?”

How did you decide what competitions you would participate in?

We were given a list at the beginning of year by the Investment Management Club and then we gave a pitch, ranked our preferences, and were matched to competitions by the club. Everyone is typically able to participate in at least one competition but, this year, everyone could participate in two.

How to decide what to pitch at the competitions?

It varies by competition. Some competitions require you to individually pitch any US based stock, some define a universe for you, and some require you to pick a stock with a team. For example, the Alpha Challenge at UNC required teams to pitch two longs and a short.

The teams I was on played to our strengths in deciding which stocks to pitch. Each of us had an intrinsic interest in different areas and had been following certain stocks within our sectors. We explained our thesis and story to each other and then did due diligence to make sure our ideas had legs. After that, we transitioned into preparing materials.

At a high level, my process involved taking what was floating around in my head and, if and only if the data supported my conclusion, crystallizing it into an actionable thesis. Sometimes that involved a deep dive into accounting practices, and other times it involved weighing investor sentiment. You must be open-minded and responsive to data, but a good pitch should also explain why you disagree with consensus views!

How did you account for public market sentiment in your pitch?

Many people know the various long and short theses of well-covered ”battleground” stocks. The interesting challenge to me was finding a company where everyone thinks a certain way and then approaching it differently. This does not mean being contrarian for the sake of contrarianism. Rather, it means approaching things with an open mind and the confidence that the market will come around as circumstances coalesce.

Did you come to Johnson knowing you wanted to do equity research?

I came to Johnson very open-minded and with the knowledge that fit was going to be my biggest factor. My attitude was “you don’t say no to the job you don’t have.” A fantastic opportunity came along with a team of great people and I took it.

How did Old Ezra and Johnson support you during your recruiting process?

In the first week of school, I attended a lecture by Associate Dean Drew Pascarella entitled “Excellence at Johnson.” The talk was centered around establishing credibility through holding oneself to a high standard- even in things as simple as talking and acting the part. Drew emphasized that we would be entering some of the most heavily-regulated and analytically-intense industries in the world and we needed to represent ourselves and Johnson with aplomb while lifting up others around us.

Drew’s lecture on establishing credibility through holding oneself to a standard of excellence hit home for me. In my career, I want clients to make successful investment decisions based on my analysis. To establish my credibility and responsibly hold client’s trust, I need to develop sector expertise, communicate my ideas clearly, and develop a nose for strong investment theses. Drew’s lecture brought home the work I will need to put in to be successful.  

Old Ezra builds on Excellence at Johnson in a tangible way. The support work Old Ezra puts into candidates during recruiting - how to construct a resume, how to handle a challenging line of questioning, how to act at a networking event - these variables add up to the whole of how you are presenting yourself to a firm. Old Ezra instills a sense of pride in yourself and your classmates. I took all of Old Ezra’s and Drew’s advice to heart and I believe it has paid dividends.