Leon Cooperman, 69, is, by all accounts, a successful hedge fund manager. After spending more than 24 years in the research and asset management departments at Goldman Sachs, Cooperman started his own fund, Omega Advisors, in 1991.
He's now worth $2 billion, according to a March 2012 report from Forbes. The firm invests primarily in U.S. stocks, targeting equities if Cooperman thinks the stock market is going up and holding cash and bonds if he thinks the market is likely to be weak.
So what makes a good analyst or portfolio manager? Cooperman listed 14 attributes he thinks are absolutely necessary. Whether you want to get into the asset management game or just like to dabble, if you don't have most of these characteristics, you might think about a different profession.
Leon Cooperman tells FINS reporter Julie Steinberg how to impress him enough to land a job at his firm.
No. 1: The desire and commitment to be the best
"You're not punching a clock," Cooperman says. "I'm 69 and I walk in at ten to seven each morning. I don't want people to be hanging around. I want them to make their own way, be enthusiastic and show good work ethic."
No. 2: Strong work ethic
No. 3: Thorough and penetrating analysis/in-depth research with a strong analytical foundation
No. 4: Good communications skills [are] critical. Can easily write a several page summary of his or her investment views
"People need to be able to communicate effectively. They have to sell me on their ideas. When I read something, I write questions in the margin and discuss them. If you can't write, you're at a disadvantage."
No. 5: Have an intensity which leads one to be on top of positions and ahead of the crowd
No 6: A good nose for making money, e.g. know a good idea when you see one
No 7: Have conviction with respect to investment recommendations and confidence to add to a position if fundamentals are intact but stock is down.
"When a stock goes down and is not performing in a manner that's anticipated, you capitalize on the weakness. if you know what you're doing, buy more," he says. "Be able to defend your ideas."
No. 8: Be aware of not only absolute P&L but also return on capital.
"You don't want to create an environment where people hog capital. If one person comes up with the idea that results in $50 million but used $500 million to get it, it's better to have someone who gets the same $50 million but only uses $100 million. Use less capital to get what you want."
No. 9: Team player
Analysts at Omega need to be comfortable sharing information and helping one another, says Cooperman.
"For example, within Tyco, there is a health care company," he says. "The Tyco analyst needs to learn more about that company. I'd expect our health care analyst to be helpful to him even though he's not responsible for that company. I would expect them to provide information and input. Someone who puts the firm's interest into their own interests and thinks about the firm's widespread positions."
No. 10: In a typical year, an analyst should be able to produce at least three of four core investment ideas and 10 to 12 trading ideas
No. 11: Pride of ownership, sense of loyalty to the organization and commitment to clients
No. 12: Unbiased and willing to admit mistakes, skeptical, creative, curious, bold/edgy, able to take risk
No. 13: Can identify his or her comparative advantage
"What is that person's knowledge base? Are they knowledgable about structured credit? Where is their skill set the greatest? Where does their expertise lie? How can they capitalize on that expertise?"
Know what you're better at than anyone else and talk about it. If an analyst understands health care better than the competition, he or she should be vocal about investing ideas for the sector.
No. 14: Identify variant perception
"Where does your view differ from the consensus that could spark the reason you're getting the return you're looking for? If you have a view variant to the consensus with positive expectations, that's how you make money. You see things that someone else doesn't see. How is your view different than the consensus view? Where do you differ from the consensus? if you turn out to be right, that's where the reward is."
Write to Julie Steinberg at firstname.lastname@example.org