Paul D. SonkinĀ (New York, NY) is a portfolio manager at GAMCO Investors / Gabelli Funds. Sonkin has over 25 years of experience researching small, micro and nanocap companies. Prior to analyzing stubs, spin-offs and micro-cap companies for GAMCO, Sonkin was for 14 years the portfolio manager of The Hummingbird Value Fund and the Tarsier Nanocap Value Fund. Ā He holds an MBA from Columbia University Graduate School of Business and a B.A. in Economics from Adelphi University. For 16 years, Sonkin was an adjunct professor at Columbia University Graduate School of Business, where he taught courses on security analysis and value investing. For over 10 years, he was a member of the Executive Advisory Board of The Heilbrunn Center for Graham & Dodd Investing at Columbia Business School.Ā He has extensive corporate governance experience having sat on six public company boards. Sonkin is the co-author ofĀ Value Investing: From Graham to Buffett and BeyondĀ (2001).
Paul JohnsonĀ (New York, NY) runs Nicusa Investment Advisors, an advisory firm focused on helping CEOs and Boards of Directors deal with operational and financial strategy, capital allocation, shareholder value creation, and corporate communications. Johnson applies his 35 years of experience as an investment professional, combined with 25 years as a business school professor, to help senior managers address these critical strategic issues. Johnson was given the Commitment to Excellence award by both the 2016 and 2017 Executive MBA graduating classes in recognition of his outstanding commitment to their educational experience. Johnson is a contributing annotator to The Most Important Thing Illuminated, by Howard Marks. Johnson is also co-author of The Gorilla Game, Picking Winners in High Technology. Johnson has an MBA in Finance from the Executive Program at the Wharton School of the University of Pennsylvania, and a B.A. in Economics from the University of California, Berkeley.
–This text refers to an out of print or unavailable edition of this title.
Advance praise for Pitch the Perfect Investment
“It is rare that you get a book on finance that is fun to read, immensely informative and deeply insightful. Sonkin and Johnson have pulled off the trifecta in this book. Read it if you work in the investing business already, plan to work in it or want to make sense of anĀ investment pitch made to you.”Ā ?Ā Aswath Damodaran Professor of Finance, New York University Stern School of Business and author of The Dark Side ofĀ Valuation,Ā The Little Book of Valuation and Narrative and Numbers.
“My decades of experience have taught me that pitching is a vital skill one must master to succeed on Wall Street. Sonkin and Johnson’s book gives someone new to the industry a significant head?start in obtaining this skill.” ? Regina Pitaro, Head of Institutional Marketing ? GAMCO Asset Management, Inc. and author of Deals… Deals… and More Deals. Ā Ā Ā Ā Ā
“On Wall Street, fortune favors the prepared mind. In
Pitch the Perfect Investment, Sonkin and Johnson provide a novel framework for this preparation, enabling you to both select investments and convince others of your view. Their explanations of market efficiency, the wisdom of crowds, and security valuation set a benchmark for clarity and practicality.
– Scott E Page, Leonid Hurwicz Collegiate Professor Complex Systems, Political Science, and Economics – The University of Michigan
“A successful investor has to say ‘no’ far more often than they say ‘yes.’The key is making it count when you find the right investment.Ā The first 30 seconds of your pitch are often the most important chance to win or lose your audience. Ā Pitch the Perfect Investment provides the toolkit to build conviction in your analysis and effectively articulate how it should be implemented.Ā Sonkin and Johnson follow their own advice with concise and persuasive principles.Ā Their guidance will neutralize the intimidation factor in pitching a portfolio manager,and allow the analyst to shine.” Ā – Bruce Geller, CEO of DGHM & Co., LLCĀ Ā Ā
“To the active portfolio manager, beating the market is essential. Sonkin and Johnson explain how to identify and exploit mispricings to accomplish that goal. It’s refreshing to read a book that stresses the importance of fundamental research in stock analysis, especially when active portfolio management is under attack by ETFs and passive investment vehicles.” –Ā Nicholas Galluccio, CEO Teton Advisors, Inc.
“The job of a venture associate is to bring great investment opportunities to the general partners they support.Ā The models and frameworks inĀ Pitch the Perfect Investment,Ā although aimed at public stock investing, translate easily to venture capital, where young analysts make the same mistakes in pitching their recommendation to senior VCs.The authors present their ideas is a straight-forward, fun manner. Much heartache will be avoided and faster decisions will be reached by any VC organization that adopts these recommendations.”- Geoffrey Moore, authorĀ Crossing the ChasmĀ andĀ Zone to Win
“While Pitch the Perfect Investment might appear to be written for the equity investor, it also provides the credit or distressed debt investor with critical insights to gain an edge – especially through the authors’ discussion of risk and uncertainty. In the credit markets, finding mispriced investments with an asymmetrical return is extremely valuable. Sonkin and Johnson provide a rigorous framework to properly identify and vet these situations. In addition to investing, my other passion is teaching. As an educator of analysts and MBA students, I am surprised it has taken so long for someone to write a book like this one. Sonkin and Johnson have finally corrected the problem.” – Michael Gatto, Partner Silver Point Capital and Adjunct Professor Columbia Business School.
“I wish I had this book when I started in the business. Having recently retired from a successfulĀ 43 yearĀ career on the sell side, I remember my early days being characterized by a lot of hits and misses. Pitch the Perfect Investment provides the newcomer with valuable shortcuts so they can experience more ‘hits’ and fewer ‘misses.’ Sonkin and Johnson translate serious financial concepts into an easy to understand, enjoyable read.” –Ā Arnie Ursaner,Ā FounderĀ and Former President, CJS Securities.
“Pitch a Perfect InvestmentĀ succeeds at elucidating a set of concepts that are often difficult to wrap your brain around. There are many misconceptions regarding how the investment management industry works, Sonkin and Johnson do a great job of succinctly and judiciously laying out the truth regarding what’s really happening in this world.” –Ā Leigh Drogen,Ā FounderĀ and CEO, Estimize Inc.
“Communicating investment research in a thoughtful manner is both art and science, which Sonkin and Johnson masterfully teach inĀ Pitch the Perfect Investment.Ā Ā I found their work wonderfully illuminatingĀ and I’m sure eager students, of all backgrounds and ages, will as well.”– John Mihaljevic Managing Editor, The Manual of Ideas
“Sonkin and Johnson have written a superb book for investors. Their insights are timely but also timeless. As I discuss in my book, A Dozen Lessons for Entrepreneurs,a venture capitalist tries to buy long-dated, deeply-out-of-the-money call options at prices that are a bargain. However, a successful venture investment also requires a profitable exit. Pitch the Perfect Investment provides valuable tools to evaluate a company’s long-term competitive advantage, calculate the value of growth, and understand how investors in public companies think about value. In other words, their framework explains the critical elements that maximize exit valuations.” – Tren Griffin, Senior Director, Microsoft, 25iq.com, and author of Charlie Munger: The Complete Investor and A Dozen Lessons for Entrepreneur
“I always get asked the question – ‘If I want work for a money manager or a hedge fund, what should I do?’ While I have a condensed answer, it still takes hours just to get to explain basics. Now I can simply tell people you MUST read The Perfect Investment. The book does a great job at its mission – preparing analysts (or potential ones) for the job.” – Jacob Wolinsky, founder,ValueWalk.com
“Pitch the Perfect Investment is a must read for anyone who, having formulated an investment idea, must “sell” the idea to a harried portfolio manager who is beseeched with ideas from numerous sources. The authors, highly regarded Wall Street veterans, share with the reader invaluable insights regarding not only the development of an investmentĀ theme,but, more importantly, how to market the idea in the most efficient manner. I’m highly confident that every young Wall Street analyst will reap immeasurable benefits from this highly readable book whose conversational style makes the information in the book readily accessible.” ?Ā Robert Willens, President Robert Willens, LLC
“Pitch the Perfect Investment is a game changer. Whether you are an experienced investor or new to the industry this book serves as both a reminder and primer for what you need to know to stand-out in the crowd and apart from the competition. The book systematically challenges prevailing beliefs regarding market efficiency and outlines key rules for valuing stocks and presenting your ideas. More importantly, from the perspective of job search and career management, Sonkin and Johnson tell you how to create a differential advantage so that your ideas get the attention they deserve and you are viewed as a rockstar. The authors provide powerful insights in an industry where first impressions either resonate immediately with your audience or eliminate you and your ideas from the outset. And, these insights apply to virtually everyone in the food chain – from experienced professionals to undergrads seeking their first Wall Street internship.” – Roy Cohen, Career Coach and best-selling author of The Wall Street Professional’s Survival Guide
“Farnam Street’s mission is to help investors add to their mental toolbox, expand their knowledge and improve their thinking. Through its clear prose and interesting examples, Pitch the Perfect Investment offers thought-provoking views on many investing-related topics. Specifically, Sonkin and Johnson’s discussion of risk and uncertainty expanded my thinking on these concepts.” – Shane Parrish, Editor and Blogger, Farnam Street Media, Inc.
–This text refers to an alternate kindle_edition edition.
From the Back Cover
Respect and fear the old men…
…in a profession where men die young
“Pitching stocks is a dark art. What begins with meticulous research, cold and rational analysis, and clear judgment, must then become seduction. Sonkin and Johnson explain this alchemy in wonderful detail. They’ve structured their book around an unappreciated key to success in finance: Nothing is as important to landing your first job, and then thriving there, as pitching the perfect investment.”
?Jeff Gramm, Portfolio Manager, Bandera Partners, and author of Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism
“It is rare that you get a book on finance that is fun to read, immensely informative, and deeply insightful. Sonkin and Johnson have pulled off the trifecta in this book.”
?Aswath Damodaran, Professor of Finance, NYU Stern School of Business and author of Investment Valuation and Narrative and Numbers
“My decades of experience have taught me that pitching is a vital skill one must master to succeed on Wall Street. Sonkin and Johnson’s book gives someone new to the industry a significant head???start in obtaining this skill.”
?Regina Pitaro, Head of Institutional Marketing, GAMCO Asset Management, Inc. and author of Deals???Deals???and More Deals
“Sonkin and Johnson’s explanations of market efficiency, the wisdom of crowds, and security valuation set a benchmark for clarity and practicality.”
?Scott E. Page, Leonid Hurwicz Collegiate Professor Complex Systems, Political Science, and Economics, The University of Michigan, and author of The Difference and The Diversity Bonus
“Pitch the Perfect Investment provides the toolkit to build conviction in your analysis and effectively articulate how it should be implemented. Sonkin and Johnson follow their own advice with concise and persuasive principles. Their guidance will neutralize the intimidation factor in pitching a portfolio manager and allow the analyst to shine.”
?Bruce Geller, CEO of DGHM & Co., LLC
“Communicating investment research in a thoughtful manner is both art and science, which Sonkin and Johnson masterfully teach in Pitch the Perfect Investment.“
?John Mihaljevic, Managing Editor, The Manual of Ideas –This text refers to an alternate kindle_edition edition.
From the Inside Flap
Investors who succeed on Wall Street spend their careers analyzing companies, and honing and refining their investment strategies. But they had to start somewhere.
Training for research analysts is basically nonexistent on Wall Street resulting in a “baptism by fire” that forces the new analyst to develop expertise on their own through an agonizing process of trial and error. To overcome this deficiency, Sonkin and Johnson have written the ultimate “survival” guide for someone embarking on a career as an investment professional. Arnie Ursaner, a sell side veteran, who retired after 43-years on Wall Street said, “I wish I had this book when I started in the business. I remember my early days being characterized by a lot of hits and misses. This book provides valuable shortcuts to experience more hits and fewer misses.”
The single most important element in survival is having knowledge, as knowledge dispels fear, and on Wall Street, fortune favors the prepared mind. Pitch the Perfect Investment accelerates the learning process, giving the college or MBA student the edge they need to succeed, whether they are pitching a stock idea in a job interview, in a stock pitch competition, or for a student-run investment fund. Echoing this sentiment, Aswath Damodaran, a prolific author of over 20 books on valuation and award-winning professor at New York University, said, “…this is a book that most of my students would have loved to have had before their first interview and job.”
Sonkin and Johnson also seek to push the open-minded, seasoned investment professional out of their comfort zone and challenge them to think about familiar concepts differently. In an industry where even the most successful veterans must worry about younger managers snapping at their heels, Pitch the Perfect Investment equips the Chief Investment Officer or Director of Research with new tools, enabling them to tighten their analytical process and significantly improve communication and efficiency throughout their organization. As noted by Geoffrey Moore, author of several highly-acclaimed strategy books in the technology industry, “Much heartache will be avoided and faster decisions will be reached by any organization that adopts Sonkin and Johnson’s recommendations.”
Nicholas Galluccio, CEO of Teton Advisors, added, “In this era of hyper-competition on Wall Street, active portfolio management is under attack by ETFs and passive investment vehicles. In this new environment, beating the market is even more essential to the active portfolio manager and even the smallest edge can make the difference between success and failure. Pitch the Perfect Investment will give the professional investor that edge.”
No other single resource will provide students, money managers, analysts, bankers, executives, salespeople, and individual investors with a faster way to improve their performance. Pitch the Perfect Investment is the essential guide to winning on Wall Street. –This text refers to an alternate kindle_edition edition.
