START HERE - WELCOME TO PHOENIX!
Long/Short Equity and Idea Generation
Consumer: From 0 to 1: Business Fundamentals, Modeling, Idea Generation
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Understanding the business - Retail example
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Revenue and margin build - Excel file
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Pattern recognition in business fundamentals and modeling
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The core of idea generation in mature retailers
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Long TGT - thesis
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The core of idea generation in growing retailers - FIVE
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Idea generation on the margin side
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Modeling margins
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Forecasting in Fundamental L/S Equity
TMT: From 0 to 1: Business Fundamentals, Modeling, Idea Generation (TBA)
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How a Long/Short Analyst Would Model Spotify (From Scratch)
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Modeling Spotify (SPOT): Excel File 1
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Deeper Modeling for a Variant View
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Modeling Spotify (SPOT): Excel File 2
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The Process Top L/S Analysts Use to Turn Models Into Ideas
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How to Build a Scalable L/S Idea Generation Process
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The L/S Event Path: How Top PMs Monetize Ideas
(Allen W.) Investment Process Overview and Philosophy
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READ BEFORE YOU START
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Before you watch the videos in this section
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Contrarian approach (1:05)
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Drilling into the factors (0:59)
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Differentiated view on the factor (0:49)
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Justification for the factor (0:47)
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Risk framework - tighter book, unhedged risks (2:26)
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Adding to the position as it goes against you – risk/reward (1:07)
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Multi-manager world – looking beyond the next data point (0:53)
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Catalysts, time horizon, near-term momentum (1:54)
(Allen W.) Long DPZ / Short YUM: case study introduction and setup
(Allen W.) DPZ & YUM fundamentals and business models
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Intro
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DPZ: breakdown, EBIT, franchise business (1:28)
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DPZ: master franchise license model (1:08)
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Supply chain model and 3-5 year outlook (1:31)
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YUM: brands, EBIT breakdown (1:06)
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YUM: operating multiple brands pros and cons (1:07)
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YUM: emerging market exposure (0:50)
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DPZ vs YUM: delivery versus dine-in (0:56)
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DPZ vs YUM unit growth, DPZ healthy franchise economics (1:40)
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DPZ dependency on unit growth (1:17)
(Allen W.) DPZ same-store sales deep dive
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Before you watch the videos in this section
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Same-store sales (SSS) 1997-2018 (1:17)
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Technology, rebrand, high SSS numbers (1:04)
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Successful “fortressing strategy” (1:10)
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Sustainable initiatives to drive SSS (0:46)
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Unsustainable SSS numbers (0:55)
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Comps: tougher comparisons (0:46)
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SSS overview and slowdown in 2019 (0:21)
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Aggregators’ issue – Q1 2019 (0:31)
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Leading indicator of SSS (0:28)
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Stock inflection in Q3 2019 (0:44)
(Allen W.) Long DPZ: why the opportunity existed
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Why the opportunity has been created - DPZ (1:13)
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Aggregators – business models, subsidies, impact (1:32)
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Aggregators’ impact on all parties involved (3:01)
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Understanding the risk from the aggregators for DPZ (1:29)
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The rise of the aggregators – timeline (0:45)
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The driver of DPZ’s underperformance (1:33)
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Allen’s previous bet against DPZ due to the aggregators (2:03)
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How did the bet materialize? (1:04)
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The sole factor for DPZ’s underperformance (0:25)
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Gaining conviction in the trade – thought process (2:36)
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DPZ strong fundamentals and narrative shift (0:41)
(Allen W.) Short YUM: why the opportunity existed
(Allen W.) Long DPZ / Short YUM: trade deep dive
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Before you watch the videos in this section
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Why the opportunity existed – summary (0:44)
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Risk/reward of the trade (1:34)
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DPZ inflection point (1:05)
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Catalyst (0:48)
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Quantifying the bet (0:19)
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Sizing up the trade as it was going down (0:54)
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When the trade started working after Q3 2019 earnings (0:21)
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Position management - 1 (0:38)
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Lowering the position (0:20)
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Stock inflection vs SSS inflection (0:35)
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How risk/reward changes (0:44)
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Position management - 2 (0:22)
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Target upside (0:32)
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DPZ Q3 2019 earnings (1:04)
(Allen W.) Case study: thesis summary, defining the bet, resolution
(Allen W.) Case study: risk/reward, targets, comps, extras
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Parity and risk/reward (1:26)
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Potential upside at parity (0:19)
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Risk (0:46)
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Risk/reward dynamics during a trade down (0:45)
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Stabilization of the aggregators’ impact (1:17)
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Comps – using 2yr, 3yr trajectory to estimate forward quarter 1yr SSS (1:58)
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Use 3yr comp to double check (1:19)
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DPZ positive: levers to engineer better results – G&A and Capex spend (1:57)
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Consumer names – SSS discussion (0:48)
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DPZ inclusion in the S&P 500 (2:08)
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Stock reaction pre and post inclusion in the S&P 500 (1:09)
(Allen W.) Case study extension: DPZ & YUM since the trade, stock moves explained, key factors and debatesNew section
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DPZ stock and the aggregators space since the trade (4:27)
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DPZ and Uber Eats partnership (2:14)
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DPZ buffer and pricing power (2:21)
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An interesting point about the aggregators (1:37)
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Unit growth, SSS and margins – key factors for DPZ today (1:22)
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Buffet’s Berkshire’s position in DPZ (1:02)
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How did YUM’s thesis play out and how has the stock performed since? (2:25)
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The aggregators as an opportunity for YUM (1:47)
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DPZ stock movement explained (2020-2024) (2:32)
(Allen W.) Case study closing thoughts
(Allen W.) Investment process deep dive 1 (example walkthrough): idea/trade sheet, valuation vs earnings change, R/R, targets and more
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Before you watch the videos in this section
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MCD/SBUX introduction (1:50)
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Portfolio made up of pairs (0:43)
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Summary sheet introduction (2:14)
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Valuation downside (0:42)
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Valuation versus fundamental story (0:37)
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Assumption (2:10)
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Impact of new SBUX CEO announcement (0:19)
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Market dynamics – new SBUX CEO (1:14)
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My view versus the market’s view (3:45)
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Stock performance driver: valuation vs earnings change (2:03)
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Does earnings change result in multiple change? (1:42)
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Enterprise value buildup (0:32)
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Calcs sheet – quantitative look into multiples and R/R (1:10)
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Target discount/premium (2:38)
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Calculating the upside (1:27)
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Estimating target ratios (1:23)
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How to determine the target discount (0:21)
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Why is the 2025 upside number higher than the 2024 one? (0:23)
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Key takeaway – little downside (0:33)
(Allen W.) Investment process deep dive 2 (example walkthrough): sizing, portfolio construction, position management, market neutrality
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Before you watch the videos in this section
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Sizing types (2:50)
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Liquidity-based sizing (1:34)
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Portfolio weight sizing and leverage (2:25)
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Liquidity and takeout risk DPZ (3:07)
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Shorting M&A risks (1:06)
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M&A risks YUM (1:04)
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Familiarity considerations (1:02)
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Fundamental considerations and tactical trades (4:17)
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Quality trade (1:01)
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SBUX and MCD different business models (1:25)
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Building up position against short-term momentum (0:22)
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Beta neutrality part (1:32)
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Beta neutrality part 2 (0:58)
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Sizing – dollar for dollar (0:27)
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Trading increments and setup levels (0:54)
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Evaluating positions going against you (1:52)
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Borrow cost and leverage (1:12)
(Allen W.) Investment process deep dive part 3 (example walkthrough): evaluating a trade, risk/reward, valuation, stock performance, narratives, sentiment, short interest, pair correlations, liquidity, trade downs, expectations and more
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Before you watch the videos in this section
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Loss threshold and max exposure (1:14)
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Target upside and risk/reward (0:38)
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Evaluating risk (1:25)
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Risk numbers key takeaway (0:27)
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Relative stock performance (1:46)
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Current valuation (1:05)
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Historical valuation (2:12)
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Valuation numbers for MCD (0:22)
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What is MCD’s story in the current market environment? (1:55)
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Premiums expansion for a set of stocks (0:31)
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WMT vs TGT business models and trade downs (0:33)
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Is long MCD / short SBUX an attractive trade? (1:06)
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Long SBUX commentary (1:06)
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Pair options for SBUX (1:05)
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Dunkin’ Donuts commentary (1:01)
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Leverage and 1yr and 2yr beta (1:12)
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Liquidity (0:34)
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Pair correlations (0:39)
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Sentiment (1:43)
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Hedge fund ownership (0:41)
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Change in short interest (1:10)
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Is the change in short interest meaningful? (1:09)
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“Current days to cover” metric (0:26)
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Narrative of the stock is critical (1:34)
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Long MCD / Short SBUX – conclusion (1:08)
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What to do to confirm the thesis (1:05)
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The argument for Short SBUX (1:25)
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The worst case scenario for the trade (0:56)
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MCD risks on the long side (0:19)
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The recent E. coli outbreak for MCD (1:40)
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Expected time horizon and contrarian bet (1:12)
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Is it easier for SBUX to beat expectations? (0:53)
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Same-store sales numbers (0:18)
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MCD, SBUX (0:19)
(Allen W.) Long MCD / Short SBUX: drivers, defensive trade, narratives
(Allen W.) Investment process deep dive part 4: what is priced into a stock, short-term vs long-term fundamentals, competitive advantage and more
(Allen W.) How to leverage the sell-side like a pro MASTERCLASS
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Sell-side quick intro and thoughts (2:31)
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How to leverage the sell-side like a pro (5:05)
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Disclosing your position (1:53)
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Updating your view (0:50)
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Gauging everyone’s opinion (0:44)
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Published sell-side consensus isn’t real consensus (1:05)
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Rating changes (1:38)
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How to stand out as a junior analyst (3:06)
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Read everything (0:56)
(Allen W.) Investment process deep dive part 5 (with examples): pattern recognition, building conviction, story, position sizing and more
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Pattern recognition, different subsectors, key factors (1:52)
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Conviction, pattern recognition, market reaction (2:26)
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SSS and factors that move a stock (2:17)
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WMT drivers, pattern recognition (2:40)
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WMT / TGT business models (1:00)
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WMT – capital allocation story (1:51)
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Product exposures (0:31)
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Negative stock reaction on an expected earnings miss (1:27)
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Are earnings purely fundamentally driven? (0:06)
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Modeling and competitive advantage (1:10)
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Position sizing (2:01)
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Number of positions, stale ideas, portfolio management (1:43)
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Building conviction (1:32)
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Do the pairs ever trade at the extremes? (2:01)
(Rich F.W.) Asset classes, investment philosophies, L/S equity intro
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Asset classes intro (distressed credit and equities) (2:29)
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Credit and distressed debt example (5:56)
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Equity strategies & philosophies: SM value-oriented vs MM pods vs Tiger Cubs (2:33)
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Distressed “similar” to value-oriented L/S equity (2:02)
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Credit markets philosophy (2:08)
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Quants, fundamental L/S and PE analysts, quantamental (6:30)
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L/S equity: risk management (6:54)
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L/S equity: convergence in ideal holding period (4:13)
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L/S equity: position sizing (4:10)
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Deep dive: what sectors to cover and how they differ (7:45)
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Advice on sector coverage (5:08)
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Consumer & healthcare sectors; secular movers (4:12)
(Rich F.W.) Idea generation, key debates / alpha drivers, ramp up, alt data, stock charts
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Ramping up intro: concentric circles (6:18)
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Deep dive: steps of the ramping up process (8:34)
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Sketching out unit economics: prep for idea generation & the model (8:25)
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Impactful differentiation: used car prices & 4 lines of business examples (6:28)
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Summary of the ramp up process (0:42)
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Identifying 1-3 alpha drivers & key debates (copper, software, cyclicals) (8:05)
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Alternative data: intro, integration, tracking (8:18)
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Alternative data as part of the ramp up process (1:43)
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Core fundamental numbers to know (1:19)
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How to look at and analyze a stock chart (4:51)
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Ramping up on one name vs a whole sector (1:49)
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How to approach reading and organization during ramp up (2:56)
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Outline of ways to determine key debates for a stock (2:56)
(Rich F.W.) How to sketch out unit economics from scratch
(Rich F.W.) FRC unit swag, SVB collapse, positioning
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Value of sketching out the unit economics (2:21)
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FRC unit swag interpretation (3:17)
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Implications for FRC and the broader market (4:01)
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Summary of key takeaways and where to look next (4:48)
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Why SVB failed: were unrealized losses the key? (3:14)
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SVB: what analysts should’ve been doing ahead of time (3:37)
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Why did SVB start selling their available-for-sale book? (1:43)
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In retrospect, long or short SVB? (2:21)
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How to know if a name is shorted (7:22)
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Hedge fund positioning ahead of SVB collapse (1:15)
(Rich F.W.) Consensus/market views, differentiation & profitability
(Rich F.W.) Conviction, shorting a stock, commerciality
(Rich F.W.) PITCHING MASTERCLASS
(Rich F.W.) Background (interesting in finance, choosing IB, skills, life advice)
(Rich F.W.) Transitioning from Investment Banking to Hedge Funds
(Thomas Li) Background, idea generation frameworks, true edge, sentiment, get ideas into the book
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Background - joining P72, coverage (1:25)
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Being an analyst at a multimanager (2:24)
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Skillset - junior vs senior analyst (2:42)
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Finding a true edge - hardware & supply chain example (3:41)
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Doing impactful research (1:40)
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Idea generation deep dive (3:57)
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NVDA example - shareholder base, incremental framework (3:35)
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PnL explained: velocity, hit rate, slugging (3:25)
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Idea generation framework - second-order effects (3:06)
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Idea generation framework - capital inflow and outflow (4:08)
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How to track sector order inflows and outflows (1:47)
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Sentiment (3:18)
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Why is my idea not in the book? (2:07)
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Advice to get your ideas in the book (2:51)
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Upside/downside - when to cut/flip/get out of position (2:08)
(Thomas Li) Modeling AAPL walkthrough (part 1)
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Intro: reported numbers, guidance, drivers (5:29)
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Forecasting revenue segments (5:37)
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Forecasting services revenue (6:09)
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Research the largest driver of change (0:57)
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Decomposing services revenue explained (2:14)
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Forecasting growth margins (5:44)
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Forecasting R&D and SG&A (6:29)
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Guidance/geo breakdown comparison (3:33)
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How do you research geographical revenue? (1:36)
(Thomas Li) Modeling AAPL: L/S playbook, scaling ideas, shareholder base, buy-side consensus, forecasts (part 2)
(Thomas Li) Market neutrality deep dive, key narratives for a stock, risk/factors
(Thomas Li) Pitching, cash flow, multiples, conviction, macro, failure
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Pitching & getting an idea into the book (3:23)
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What makes a great business, cash flow (4:12)
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Multiples, proxy for cash flow, fundamental numbers (1:05)
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Conviction, hit rate, circle of competence (2:35)
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Bull/bear view, spectrum of outcomes (2:15)
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How to think about macro factors (2:32)
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How to deal with failure as an analyst (4:24)
(Thomas Li) Deconstructing fundamental and systematic movements, portfolio construction
(Thomas Li) IPOs, sector coverage, cyclicals, small caps
(Thomas Li) Smaller vs larger fund, prep & skills for HF, ramp up process, impact of AI on research process
(Stefan T.) Modeling Revenue - Full Stock Example
(EXCLUSIVE) Session with a former partner & PM at Citadel
(Arun Dhar) Head of Eisler Capital USA and Senior Portfolio Manager
(Qaisar Hasan) Data-driven investing, buyside expectations, alternative data nuances
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Background, coverage, investment style (1:07)
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Alternative data evolution - Majestic, intro of MScience/Yipit (3:40)
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Why do stock prices move? (1:39)
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Data-driven stock price movements are on a spectrum (0:25)
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Investment process as a mosaic (1:47)
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BURL – data, building block of valuation, timing, stock price reaction (3:01)
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Forecasting KPIs - fill period & confidence (1:21)
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Sell-side numbers, buyside whisper, investor positioning (4:04)
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Alt data modeling nuances, non-traditional alt data sectors (2:29)
(Qaisar Hasan) Shorting WW (Weight Watchers) deep dive
(Qaisar Hasan) Idea generation, using alternative data in your process, multiples sensitivity
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How to generate an idea (2:01)
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How do you measure impact of data on stock prices? Inflections, quant strategy (1:38)
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Do you have a different to approach to idea generation for non-alt-data names? (0:55)
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Idea generation framework (1:15)
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Using data in your overall process – model relevance, portfolio construction, expectations (2:17)
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Alt data forecasts and feature selection (NFLX, META, SNAP) (3:29)
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Simpler vs more complex models (0:49)
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Multiples sensitivity to data: biz model, free float, borrow rates (subscription vs cyclical vs transaction-oriented) (1:18)
