Hego Damask

It is easy as a stock picker to blame the external environment. "My portfolio sucks because the market is all about AI and retail flows". I had an experience with this early in my career that stuck with me. The investment team was bemoaning the macro driven market (this was '08/'09), citing high correlations as a challenge to L/S spread generation. The head of the fund responded with a table of realized stock price dispersion, "our job is to, ex-ante, identify the winners and the losers...and I don't know about you, but I see a lot of spread potential in this analysis". The message was clear: winners don't complain, they figure it out. This was a clear pattern I saw in the best PMs I worked with over my career. They didn't complain, they just figured it out. The job of a L/S PM is to find spread between longs & shorts, wherever it is. They adapted to the market environment when necessary. I saw this in real time when I was a PM at a large multi-manager. Sure, great PMs would have drawdowns as market conditions would change, but they were flexible when needed, flowing with the market regime to make money in new ways. Sort of the antithesis of the calcified value investor "I have one way of making money, buying cheap assets, and I'll go to my grave doing so". And even in this AI & retail driven tape, there is plenty of evidence of dispersion. In my healthcare coverage of 152 names, 75 of them have of them have hit threshold returns this year (longs up over 25% and shorts down over 15%), only halfway through the year. A few of these are AI-influenced, but the vast majority are idiosyncratic and business/industry driven moves that could have been identified with the right research (of course, it's always clear in hindsight). There is plenty of spread potential in this tape, you just have to find it. (Caveat: it's insanely hard. But it should be, as the rewards to consistently generating 5%+ long/short spread in equities are immense. And I fully grasp that I am shouting this message from the sidelines, not "in the arena", so evaluate this message as such)

there is a gap between intention and perception probably 20 times now I have looked at a stock pitch or similar and replied w some version of: “this looks like an LLM did it. You may have done the entire thing by hand, the long way, whether u did or not is none of my business. But someone u send this to - someone who actually matters - is going to have the same reaction I did. And that ain’t gonna be good for ya. Do with this information what u will.” ur intentions don’t matter u have to mentally bridge the gap over to the other person’s perception and say “how will this appear to them when they first see it” this dynamic will only become more prevalent as robots create all this shit, and I guarantee it is not limited to stock pitches, it goes for ALL work product “but I had good intentions” isn’t enough….world don’t work like that…go the extra step.