Brett Caughran

Brett Caughran



HEDGE FUND TIME MANAGEMENT I've had a few DMs over the past couple months that went something like this: "hey Brett, I just started at a HF and I am really overwhelmed. It feels like I never have enough time to get everything done, and my list gets longer every day"

Welcome to the buyside, kid!!! The incessant nature of public markets and the demanding nature of PMs means that, whether you like it or not, the hedge fund analyst job is intense. There's no "quiet quitting" at a hedge fund, I'll tell you that much!


EMBRACE THE QUICKSAND. Life at a hedge fund isn't like life in college or even at an investment bank. At a bank, you are staffed on a deal, you work hard, then the deal is done. A clear start, a clear ending. NOT SO in public markets. Say an analyst is covering 30 stocks.

There is a LOT of news-flow on those 30 stocks. Earnings every 3 months. 20+ conferences, always an NDR or IR call. Sell-side downgrades. The information flow is immense and incessant. I know the feeling of having 10 things to do, finishing 2, then next day walking in having 15

things to do. Let me give you a secret - this feeling of overwhelm, this quicksand feeling like you are sinking, never ends. You have to learn to embrace the fact that you are going to let balls drop, and hopefully only let the less important balls go. There are going to be

ideas that you wanted to get to that double before you get to them. You might never have time to pick up that new subsector. That is just the way it is. A former colleague of mine described this job as an "escalating treadmill", which I found quite apt. Paul Enright on a pod

described this job as a Tour De France that starts fresh every year. It's tough, it's incessant. Get used to it. Work harder, and embrace the quicksand. AVOID THESE 3 PRODUCTIVITY KILLERS Quicksand talk out of the way, I've found 3 things that REALLY crush my productivity.

This comes back to the theory of interruption, supported by a UC Irvine study that found it takes most workers 23 minutes to get back on task after an interruption. (23 minutes seems long, but I agree directionally). Yet most HF investment professionals I know fill their

lives with these three productivity killers. 1) Constant IB/IM/Slack. Yes, I get it, you need to communicate. But if I'm doing a deep dive on a stock that requires a lot of intellectual energy and focus, getting an IB every 5 minutes is VERY counterproductive to that. Later in

my career I just turned it off, which caused some funny looks by my CIO. But I didn't care. I cared about my productivity. PMs, if you want an analyst to do high quality research, let analyst have undistracted time to get into flow state. Don't bug on IM with every single

curiosity (every "why is this stock down" becomes a rabbit hole of wasted time). 2) Bloomberg Launch Pad All the flashing green & red lights. It can so easily hijack your limbic system. Hey if you are a day trader, go wild, but for investors hunting for 9-18 month trades, turn

it off. Go focus on research. 3) Constant checking of P&L (PM side) Man I just hijacked my nervous system all day, every day, watching my minute by minute P&L. I swear some days at a pod I probably checked it 500 times. SUCH A BAD HABIT, but I did it. Don't do it. Your P&L is

the delayed output of the research you are doing now. Don't let the tail wag the dog. Yes if you are in drawdown management, keep an eye on P&L, but do your best to focus on the input and the output will take care of itself.

FIND YOUR 3 GOLDEN PROCESSES You will never complete your to-do list. I don't think I ever have. But rather than trying to do 20 things, and doing them poorly, think critically about the 3 core processes that matter in your role. At a Tiger fund, these were my 3.

1) Making sure I was maintaining ideas in the book, with constant primary research, mgmt outreach & modeling. If we had a sized position, I couldn't drop the ball on that position. 2) Delivering 2 new ideas per month, presented bi-weekly at our HC team meeting.

3) Being flexible and responsive to the requests of my sector head & CIO. Everything else was secondary, and I ultimately had some success there because I was very disciplined on prioritizing these 3 processes. Find your own golden processes.

COMPARMENTALIZE We all know multi-tasking is the biggest sham out there. So don't do it. I have one of these on my desk. If I decide I'm going to read a 10-K, I'll set this clock and tell myself "until this clock reaches zero, you are reading that 10-K!" And I will do my best to

stick to that process without distractions. I probably bat 5/10 on actually hitting the full 45 minutes of focus, but I'm really serious about trying. I'll throw these on my ears to no noise distracts me and I'll throw this on my door.

BATCH A lot of traditional time management teaching talks about batching. Plenty of books out there on it. We had a batching expert come in to a quant fund where I worked to give a seminar. And it works pretty well! On the buy-side you don't really need to check your e-mail

5 minutes, unless you are very actively trading. Check it 3 times a day, instead. I personally have a habit of not reading earnings transcripts on a screen - too many flashing lights. I'll print off 50 transcripts, go in a quiet room where no one can find me, and read 15

transcripts over a few hour period. It's really enjoyable. SHARPEN THE SAW The only one of the Steven Covey's habits that I remember, but is really helpful. My mind gets scattered and it's hard to focus when I'm tired, hung over, or stressed. I'm 100% team 30 minute power nap

(no taking a 30 minute nap does NOT make you lazy). If your brain is scattered, take a nap, go to the gym, get a good night sleep. Investing is a mental sport. Sharpen the saw, take care of your body & mind, and you will be much more productive.

BALANCE YOUR ENERGY DEPLETION I remember reading one time how many calories high level chess players burn over the course of a 3 hour session and it blew my mind. Yes, hedge fund analysts might work 10-14 hours per day, but I personally think it's impossible to do the most

intellectually depleting tasks that require the most intense thinking & creativity all day. So balance your time, and figure out when you personally are sharpest. I'm a morning person so I usually fade by 7pm. But the 7-9pm window can be a great time to throw on a podcast, CONT

and pound out the model. Scratch modeling doesn't require much thinking. COMMUNICATE I would recommend that when a new analyst & PM start, have an open conversation about PM's expectations for their 3 golden processes and work-flow. Does PM need an expect analyst to respond to

an IB every 5 minutes? That's ok, but know as PM that may inhibit the quality of the research that analyst does. Set some standards with your new hires about what is expected, how we should communicate. Is it a 15 minute morning huddle, then let the analysts do work all day

uninterrupted unless there is an emergency? Then 15 minute huddle after the close? Does your team do better with a quick morning e-mail? Or if it's a longer term strategy is one meeting per week sufficient? With a weekly e-mail summary? The best team cultures I have been in

have had empathy around the downsides of poor communication habits and open kimono about what works best. So communicate with your PM when you start - what is PM's communication style? How can you show PM you are a hard working, responsive analyst, while still having the

necessary space to go deep into flow state on the challenging intellectual task of finding alpha ideas. HOPE THAT HELPS! These are just my strategies and I'm no expert. Please reply with time management approaches that have helped you!

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