STOCK PITCHERS - DECIET (2/2) There are some  analysts and PMs who give compelling pitches but who are frequently wrong. These people are dangerous because they come off as credible until you do your own work.  They are more likely to trick allocators and PMs than someone who clearly lacks talent. A 🧵 on how to identify these people. In general, I would argue talent is pretty self evident in the HF industry - the number of people with unique ideas who do good, detailed, intellectually honest work is limited. But some people can be very persuasive, know how to give a good pitch, and either lie to your or themselves by creating a storyline that while compelling, is exaggerated or just wrong. The only surefire way to identify stock pickers from stock pitchers is to do you own work - if you overlap on a few ideas with someone, have open dialogue, and tend to reach similar conclusions, that’s likely to be a productive relationship. If, however, the pitch is usually much better than what you find on your own, you are likely wasting your time. The process of vetting everyone you ever meet is impractical, so here are some hopefully helpful shortcuts of 🚩’s to look for: 1) Is this “too good to be true”? As with most things in life, if it sounds too good to be true, it probably is. Lack of risks, “no downside”, multibagger potential, hyper growth / speculative pitches are more likely to be wrong and lose you a lot of money. 2) track record, bro Keep records of ideas people pitch you - either informally or on VIC where it’s easy. If someone has a track record over multiple years of being right a lot (and admitting when they are wrong), they’re more likely to be reliable.  Likewise, context can help - someone who is respected by people you respect is more likely to be credible. Good people tend to know other good people and be good judges or talent. Same for the opposite - bad reps amongst people you respect tend to be well deserved.  3) Says other things you know to be false If there are aspects of a pitch that ring false to you, in terms of aggressive assumptions / valuations / or observations, chances are much of what you don’t know is likely to be false or exaggerated as well. 4) not interested in or overly defensive of pushbacks If the person gets visibly upset or frustrated with constructive criticism, that’s usually a big red flag. Being transparent about risks (and trying to learn what you might be missing) is usually a sign of someone who cares more about being right then selling you on an idea. While these are good shortcuts, the easiest and really only way to assess people is to hear pitches of ideas they’ve done a lot of work on and do the work yourself. How accurate a story did they tell?  I’ll often follow up with people and give feedback - do they seem genuinely curious about pushback, or are they defensive when challenged?  Credible, talented people tend to want to learn the truth, are open minded, and always a little paranoid they are wrong. Likewise, the more defensive, dismissive, and secretive the person is when challenged, the less I trust them. Once I’ve seen someone over pitch something once, upon doing my own work, I perpetually discount anything they say going forward. There are too many ideas and i don’t enough relationship bandwidth to talk to people who aren’t really good, who are open and honest, and additive either by sourcing good ideas or criticizing / making better my own ideas. Feel free to add your own anecdotes.