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Pitch the Perfect Investment

Book Description

Learn the overlooked skill that is essential to Wall Street success

Pitch the Perfect Investment combines investment analysis with persuasion and sales to teach you the "soft skill" so crucial to success in the financial markets. Written by the leading authorities in investment pitching, this book shows you how to develop and exploit the essential, career-advancing skill of pitching value-creating ideas to win over clients and investors. You'll gain world-class insight into search strategy, data collection and research, securities analysis, and risk assessment and management to help you uncover the perfect opportunity; you'll then strengthen your critical thinking skills and draw on psychology, argumentation, and informal logic to craft the perfect pitch to showcase your perfect idea. The ability to effectively pitch an investment is essential to securing a job on Wall Street, where it immediately becomes a fundamental part of day-to-day business. This book gives you in-depth training along with access to complete online ancillaries and case studies so you can master the little skill that makes a big difference.

It doesn't matter how great your investment ideas are if you can't convince anyone to actually invest. Ideas must come to fruition to be truly great, and this book gives you the tools and understanding you need to get it done.

  • Persuade potential investors, clients, executives, and employers
  • Source, analyze, value, and pitch your ideas for stocks and acquisitions
  • Get hired, make money, expand your company, and win business
  • Craft the perfect investment into the perfect pitch

Money managers, analysts, bankers, executives, salespeople, students, and individual investors alike stand to gain massively by employing the techniques discussed here. If you're serious about success and ready to start moving up, Pitch the Perfect Investment shows you how to make it happen.

Table of Contents

  1. Cover
  2. Preface
    1. Notes
  3. Introduction
    1. Notes
  4. PART I THE PERFECT INVESTMENT
    1. Chapter 1 How to Value an Asset
      1. Three Primary Components of Value
      2. Gems
      3. Notes
    2. Chapter 2 How to Value a Business
      1. Defining Cash Flow
      2. How to Calculate Present Value Using a Discounted Cash Flow Model
      3. Predicting the Future Is Not Easy
      4. How to Calculate the Present Value of a Bond
      5. How to Calculate the Present Value of a Perpetuity
      6. How to Calculate the Present Value of a Business
      7. How to Calculate the Present Value of a Growing Cash Flow Stream Using a Two-Stage DCF Model
      8. How to Think About the Discount Rate
      9. Gems
      10. Notes
    3. Chapter 3 How to Evaluate Competitive Advantage and Value Growth
      1. Cash Flow Generated by Selling Assets
      2. Cash Flow Generated by Operating the Assets: Return on Invested Capital, Cost of Capital, and Excess Returns
      3. Gems
      4. Notes
    4. Chapter 4 How to Think About a Security’s Intrinsic Value
      1. What is “Intrinsic Value”?
      2. Thinking of Intrinsic Value as a Range of Values
      3. Gems
      4. Notes
    5. Chapter 5 How to Think About Market Efficiency
      1. Market Efficiency Is More of a Concept Than a Law
      2. The Holy Grail of Money Management: Generating Alpha
      3. Generating Alpha Is a Zero-sum Game
      4. Defining Market Efficiency
      5. The Rules of Market Efficiency
      6. When the Rules of Market Efficiency Operate Flawlessly
      7. The Mechanism That Implements the Rules of Market Efficiency
      8. Gems
      9. Notes
    6. Chapter 6 How to Think About the Wisdom of Crowds
      1. “And the Oscar Goes to …”
      2. The Wisdom of Crowds Is Critical to Market Efficiency
      3. How the Wisdom of Crowds Implements the Rules of Market Efficiency
      4. Tenet 1—The Dissemination of Information
      5. Tenet 2—The Processing of Information
      6. Tenet 3—The Incorporation of Information
      7. Examples Illustrating How the Wisdom of Crowds Implements the Rules of the Efficient Market Hypothesis
      8. The Wisdom of Crowds Applied to the Stock Market
      9. The Crowd Is Smarter Than the Experts Most of the Time
      10. How the Crowd Can be Fooled
      11. Gems
      12. Notes
    7. Chapter 7 How to Think About Behavioral Finance
      1. The Moody Mr. Market
      2. When the Wisdom of Crowds Becomes the Madness of Crowds
      3. Is the Crowd’s Apparent Madness Irrational?
      4. How Can Fama and Shiller Both Be Right?
      5. The Magnetism of the Efficient Market Hypothesis
      6. Limits to Incorporation: When the Crowd Cannot Act
      7. The Efficient Market Hypothesis Remains “King of the Hill”
      8. Why Do We Care About Market Efficiency?
      9. Gems
      10. Notes
    8. Chapter 8 How to Add Value Through Research
      1. Informational Advantage
      2. Analytical Advantage
      3. Informational + Analytical Advantage
      4. Trading Advantage
      5. Catalysts
      6. Gems
      7. Notes
    9. Chapter 9 How to Assess Risk
      1. The Difference Between Risk and Uncertainty
      2. Confusing Uncertainty and Risk Causes Mispricings
      3. How Confusion of Risk and Uncertainty Manifests in the Wisdom of Crowds Framework
      4. When Uncertainty Becomes Risk
      5. Margin of Safety Is Really All about Risk
      6. A More Certain Business Can Actually Be Riskier
      7. Time Matters . . . and Matters a Lot . . .
      8. How Increased Accuracy and Precision in Estimating Intrinsic Value Affects Risk
      9. How Increased Accuracy and Precision in Estimating Time Horizon Affects Risk
      10. Risk and Variant Perception—Skewing the Distribution in the Investor’s Favor
      11. The Risk of Underperforming
      12. Gems
      13. Notes
  5. PART II THE PERFECT PITCH
    1. Chapter 10 How to Select a Security
      1. The Importance of Matching a Portfolio Manager’s Schema
      2. Identifying a Manager’s Fundamental Criteria
      3. What Went Wrong?
      4. Identifying a Manager’s Valuation Criteria
      5. Other Barriers to Adoption
      6. Overcome Barriers by Learning How to Read a Portfolio Manager’s Mind
      7. Other Communication Pitfalls
      8. Gems
      9. Notes
    2. Chapter 11 How to Organize the Content of the Message
      1. How to Capture and Keep a Portfolio Manager’s Attention
      2. Constructing a Formidable Argument Using the Toulmin Model
      3. The Stress-Tested Argument
      4. Gems
      5. Notes
    3. Chapter 12 How to Deliver the Message
      1. The 30-Second Hook
      2. The Two-Minute Drill
      3. Make It Easy for Them
      4. Topography of a Simple Slide Deck
      5. How to Handle Q&A?
      6. Stock Pitching Contests
      7. Delivering the Message—You Are the Envelope
      8. Anatomy of a Meeting
      9. Other Not So Obvious Barriers to Communication
      10. How Do You Get to Carnegie Hall?
      11. Gems
      12. Notes
  6. Acknowledgments
    1. Notes
  7. Art Acknowledgments
  8. About the Authors
  9. Index
  10. EULA