Yet Another Value Podcast - How to win a stock pitch competition | lessons from an Ira Sohn winner

Starting point is 00:00:01 Hello and welcome to the yet another value podcast. I'm your host, Andrew Walker. And with me today, I'm happy to have on myself for a special episode. So look, this is a special episode. Get there in one second, but I'm going to let everyone know normally on this podcast. I have another guest on and you can listen to Audiovisual because the only visual is me and the guest talking. And I am a very handsome man. So you might want to see me talking.

Starting point is 00:00:22 But because it's just me today, I am going to share a brief slide deck that I made just kind of as a crutch for me to take off and tell the story. So if you want to go to video, you can. But I am going to try to do this in a way that anyone who's listening on audio will get everything. So that out the way, let me talk about, let's go to today's pitch. So not pitch, but actually it is a pitch. Today's presentation is how to win a stock pitch competition. And the reason I wanted to do this, it is Monday, August 24th. School is starting up again.

Starting point is 00:00:55 And every school year I get reached out to by a bunch of college students and MBA students who are doing a stock pitch competition and they want help with their stock pitch. So I was recently reached out to by one and, you know, I try to help anyone who reached out to me on basically anything. So I was recently reached out to by one and I was kind of swapping notes and I said, you know what? I do this so often I've been meaning to make a video on how to win a stock pitch competition. So I thought I'd just go ahead and do it now while school is about to get in session. And so, you know, for the students who find this, hopefully it is helpful for.

Starting point is 00:01:29 it is helpful for them. So that is the reason. And then the secondary reason is I had a podcast scheduled for day and got canceled. So I'd had this on my mind. I had a free block of an hour. And I was like, all right, let's do this. So that is all the winners. You know, oh, by the way, we'll talk about it later.

Starting point is 00:01:44 AI made this whole deck. So if you see something that's crazy in here, you can just be like AI, not Andrew, because AI obviously made the whole deck. I just told what I want. So that is the overview for today. Before we dive into the stock pitch competition and pitches and everything, let me give two disclaim. Let me go to two things.

Starting point is 00:02:01 First, number one, disclaimer. Same disclaimer I always give, but now you get to see it in video form. Nothing on this podcast is investment advice. It is how to win a stock pitch competition advice, but I don't think that's the same thing. Nothing's investment advice. You can see the full disclaimer on the website in the show notes wherever you want to at the end of this podcast, all that sort of stuff.

Starting point is 00:02:17 So that's this thing number one. And second, word from our sponsors, Trada. Trada is two bysiders swapping thoughts on a stock that they are involved in. the way to go see it is trada.com, T-R-A-T-A-com. I absolutely love it. Everyone who's reached out from this podcast has told me they love it. And, you know, if you're doing a stock pitch competition,

Starting point is 00:02:39 I think Trada would be really helpful if you go on there and you say, hey, I'm thinking about pitching company XYZ, find me someone to talk to about it, and they go, they'll find you someone and you can swap thoughts with them. And I think that would be a really helpful way to prep for a stock pitch competition. Prep for the questions you're going to get, prep, you know, maybe here are some other sides, here's some other angles you can pull on the stock pitch competition. All right, all that out the way. Let's dive into the stock pitch competition.

Starting point is 00:03:02 Why am I doing this? Well, you know, I mentioned up front. The real reason I'm doing this is college. School is about to start back up. And I have found that, you know, most stock pitch competitions are designed for college and MBA students. And I get reached out all the time. And I wanted something that would be helpful for them. But here's kind of the funny thing about life.

Starting point is 00:03:24 You know, when I was 20, if you were like, hey, Andrew, Do you want a sales job? I'd say, F, no, I don't want to sell. I hate selling things. And, you know, I'm getting a lot of gray hairs. I mentioned college college 20 years ago for me. I'm approaching 40. As you get older, you realize everything is selling.

Starting point is 00:03:40 Now, it might not be selling in a, you know, hey, I'm selling time shares or I'm selling life insurance or whatever way, which are completely fine jobs, right? It might not be that. But you're always selling yourself. And a stock pitch competition is selling yourself. And, you know, the way you want a stock pitch competition, maybe, again, they're different. designed for college students, MBA students for the most part, people earlier in their careers. But guess what? What's the difference between going and pitching something in a stock pitch

Starting point is 00:04:04 competition as an MBA student or a first or second year investor versus going and pitching, you know, say you're running $250 million and you're raising an SPV to invest in one idea? Guess what? You're about to have to do a stock pitch to everybody you want to invest in that SPV. You're running $500 million and you're pitching to a big new client. Guess what? If you're a fundamental investor, you're about to do a stock pitch for that client. So while this is ostentably designed and it's really going to focus on the stock pitch of a contest, if you're an investor, you are always selling yourselves and the way you sell yourself a lot of times. Now, if you're an investor, it's returns and tracker and all that sort of stuff.

Starting point is 00:04:45 But a lot of times it's stock pitches. And it is the currency of the realm, right? When you talk to other investors, I end every call with, hey, you know, what ideas are you looking at that I should be looking at? And you don't have to give a full stock pitch. but the investors you want to talk to more, the investors who are thoughtful, and when you ask that question, who give a thoughtful response are an interesting idea. So you are always pitching stocks as an investor, whether it's for a competition, for a job, for an SPV, or just to other investors. So a lot of the things I'm going to talk about here, I think, are really broadly applicable

Starting point is 00:05:13 to all of those types of things. So that is why I'm doing this, how I'm happening. So let me go to this. I might say, hey, Andrew, who are you to talk about stock pitches? Well, I run another value podcast and I've had, you know, about 400 stock pitches done on the podcast. So I've judged, quote unquote, a lot of stock pitches. But I've also, you know, I don't know if I say this with a lot of ego or no ego at all, a lot of humility or no humility at all. I've won a lot of stock pitches too. You know, I've, if you're watching on video, I won Ira Sown in 2018 and I think that's

Starting point is 00:05:48 probably the most prestigious stock pitch competition there is. I've won that, you know, online, there's lots of different sites that have, I pretty much won all of them at some point. So I haven't just judged, quote unquote, a lot of stock pitches from the podcast. I've won a lot of these things too. And when I win these things, and I haven't done a stock pitch in a stock pitch competition in years. So, you know, I do do stock pitches because I am an investor.

Starting point is 00:06:15 When I've won these things, you know, I've used a lot of the things I'm going to talk to you about here. So hopefully I do have some street credit in terms of I have won these things before. You know, if you're watching, you can see the clip of me on CNBC talking about winning Irosone. I do look at that. I say, my hair line is different now. I think, hopefully I've lost a little bit of weight. I think my face is a little firmer.

Starting point is 00:06:35 Oh, my God, I'm such a, I'm such a narcissist. But anyway, neither heard nor there. But I do have a track record of winning these things. So I think this comes from a good place. And another thing you can say is I have, you know, on the podcast, I've hosted the past three winners of the Pergian Square Challenge on the podcast. And I think the Perjing Square challenge is probably, again, probably the most prestigious NBA competition for stock pitches. So not that I've had anything to do with these guys winning because I did not.

Starting point is 00:07:01 These guys are just awesome. They all won on their own. But, you know, I have had the people on and talk to them about how they've done the pitches. So I think I'm coming from a pretty good place of, hey, I know kind of what it takes to win a stock pitch competition. All right. So I'll try to put my narcissism out the way. Again, I tried not say that with any ego, but maybe it was a lot of ego.

Starting point is 00:07:16 Who knows? Let's talk about why you should care about wanting these. Again, we hit on these a little bit, but you're always selling yourself. And if you win a stock pitch competition or if you give a great stock pitch for an SPV, you know, you are bought, when you do a stock pitch, you're buying a lottery ticket, but you're buying it for free. The downside of you give a great stock pitch and you don't win or you don't get the SPB, what's the downside? There's literally no downside except you put a couple hours into a great stock pitch. The upside is unlimited. Somebody invests a huge amount of money into your SPV.

Starting point is 00:07:45 You win the, you win one of these stock pitch competitions. Often there's a significant amount of money associated with winning the stock pitch competition. There's a lot of reputation. I'll point to the CSL team that won the Purchin Square Challenge 18 months ago or so ago. They came on the podcast, and I got like 15 people who emailed me were like, these guys were unbelievable. I would hire them right now if they were looking for a job. And now, fortunately for them, I believe they all had internships.

Starting point is 00:08:10 But you never know when someone being a big fan of yours will, you doing a great stock pitch, someone being a big fan. You never know when it will pay off down the line. You know, for me, I were sewn, 2017. It's a really long time. go. Like, sometimes I forget it even happened. But I still have, I had somebody email me last month and be like, hey, I loved your pitch at Iris Zone eight years ago, right? So it's just a long tail. So there's, you do a great stock pitch. There's absolutely no downside. And there's unlimited upside, whether it's winning now and getting money instantly if there's, or the reputation instantly, or you just do a great stock pick and a year down the line, two years, 10 years, whatever it is. Somebody comes up and says, hey, I thought that was awesome. I'd love to talk to you about something else. Okay. So that's what it gets you. Let's talk about planning. to win a stock pitch. Here's the game plan.

Starting point is 00:08:54 And again, I may, hey, I don't really make all this. But first, you have to remember with the stock pitch. You're playing a game, and you have to remember to play within the rules of the game. We'll talk about that. Then we're going to talk about the story, framing the story for the stock pitch. And then finally, we're going to talk about the traps that you can fall into when you're doing a stock pitch. So let's start by talking about the game. The game starts the moment you decide to enter a stock pitch competition.

Starting point is 00:09:15 And the most important thing, more important than any of the research, any of the story, anything you put together, is actually knowing what type of game you're playing. And a big part of that is knowing the judges. So if you enter a stock pitch competition, you want to design a pitch that can win the stock pitch competition. And there's two things that are critical to that. Number one, if you enter a stock pitch competition and they explicitly say, you know, we want stocks that are going to work on a three to six month time frame,

Starting point is 00:09:38 then you better design your pitch around a three to six month time frame. If they want stocks that are going to work on a five-year time frame, you better design a pitch that works on a five-year time frame. And those are very, very different things, right? So know what type of pitch you're doing. If you're doing a best idea of the year pitch competition, you better have something that you think can work in the next year. And you should explain the reasons why it's going to work in this specific year, right? Again, that can be very different from something that's going to work this quarter or something that's going to work over the next five years.

Starting point is 00:10:07 Doesn't mean something that works this year doesn't do great over five years, right? But you want to be focusing on what's going to work this year if the pitch is in this year stock pitch. The second thing is you want to know your judges. You should look them up. Most stock pitches make their judges known ahead of time. If all of your judges are, you know, if you're doing a stock pitch and your judges are Warren Buffett, Bill Ackman, and insert one other, you know, super concentrated value investor here, you're probably going to want to pitch a super, a portfolio that would go into

Starting point is 00:10:37 a super concentrated portfolio. You know, you're going to want to pitch something that's Motie, that's got a big reinvestment, a compounder type stock, right? That's what fits their book. That's their way of thinking. so you should pitch something that fits their way of thinking. In contrast, if you go into a stock pitch competition and they've got five guys up there who run event funds and, you know, all of their investments are in restructurings and mergers

Starting point is 00:10:57 and spinoffs and quirky events, well, you should probably lean into a quirky event situation. And if you go and do a stock pitch and all of the people are podchops, you know, potchaps are very, very broad. But for the most part, a lot of the people, especially if you've got a lot of analysts on there, a lot of the potchop people, they're focused on quarters and they're focused on consensus number, consensus numbers and where consensus numbers right be wrong. It might be right or wrong. So if you're going to go pitch and everybody's a pod shop job or you're pitching in the way of I'm applying for a job, you should focus on what the pot shop's like, right? You should probably say, hey, you know,

Starting point is 00:11:29 consensus is this company is going to grow revenue 5% and EPS is going to be 20 cents. And I think they're going to grow revenue by 15% and EPS is going to be 40 cents. They're going to smash it. They're going to raise guidance and everything's going to go up. You should be focused on that, right? So design a pitch that works for your contest and your judges. That's rule number one. And those are very different things. You know, what would win with concentrated judges, with concentrated books judges, might not win with Podshop judges.

Starting point is 00:11:56 So make sure you're thinking about that. And I'll refer again to Team CSL. If you go listen to that podcast, one of the things they said was, hey, we knew we were pitching in the Pershing Square Challenge. When we were trying to find an idea and find it, we were specifically looking for an idea that fit the framework of the challenge. and the judge's investing styles. And I thought that was so brilliant on their end.

Starting point is 00:12:16 So you've really got to be thinking about that when you pitch. Okay. So you've got your idea. You've got your pitch we lined up. What's rule number one of pitching? You're telling a story. Tell a compelling story. And there are three real ways to do that, right?

Starting point is 00:12:31 A, you want to focus on something unique. B, you want to be bold. Don't be hedging yourself. You know, I find great investors hedge and they think about the downsides. Great pitches do not do that. And the third thing you want to do is you want to do the labor. So let's dive into those.

Starting point is 00:12:42 focus on something unique. You know, I start every podcast off and I say, the market is a competitive place. What are you seeing that the market's missing? That is the best pitch you can give, you know. If you go up there and you pitch, hey, you know, this stock trades for 100 and this average sell side target on is 120, that is the worst pitch I've ever heard, right? You're saying 20%, which anybody would take 20% in a year, but that is a terrible pitch. If you say, hey, this stock is currently trading for 10 times price earnings and historically it's traded for 20 times price earnings.

Starting point is 00:13:16 So I think it's a double. Awful pitch. These are things that an intern with a Bloomberg could tell you. You want something that only you know. And the more you can focus on that in the pitch, the better the pitch is going to be. So I'll give two examples. Let's say that you are a trained scientist, a doctor, whatever it is. pitching a biotech is very difficult because the judges often don't have the expertise.

Starting point is 00:13:42 But if you could go up there and do a pitch that said, hey, I am an oncologist and I am here to pitch this cancer company because the market is pricing in 30% odds that the drug works. And based on my review of the evidence and my training, I think there's an 80% chance that the drug works. That is an unbelievable stoppage. Now, you want to make sure you don't have NFI or something, right? Like, we're not trying to go to jail for a stock pitch. But that's an unbelievable stock pitch. Let me give it another example. My IRISone winner was Lakeinta.

Starting point is 00:14:17 What happened there was Lequinta, the hotel chain was a publicly traded company. They were selling the brand to Wyndham, and they were spinning off all of their owned hotels into a new reed. So my pitch was twofold. Number one, this was an incredibly weird one-of-a-kind situation. It wasn't just a merge. with a spin-off. It was a merger of a C-Corp into a reet. And reits are very different. You know, it's a different type of company. There's a different shareholder base. And most reits are judged

Starting point is 00:14:45 on dividend yield. So they were spinning off a reet with no dividend history. So you were going to have a lot of turmoil. And the second interesting thing, and this is something unique at Captain Herman home, I said, hey, the trailing financials of this reet are based on Lakeinta as a standalone company, right? Once they're spun, Lequinta, the brand, is going to go into Wyndham. And they're going to get all the Wyndham Resorts members. And they're going to get the Wyndham back office and everything. And my pitch was, as they integrate Lakinta with Wyndham, you know, they're going to get all the, there's synergies between Windham buying Lakeita. But the REIT is going to benefit from these synergies, right?

Starting point is 00:15:21 Hotels that were 60% occupied will be 70% occupied as Wyndham reward members start filling up that. They're going to have a better, you know, they're going to be able to acquire customers easier. Their cost of customer acquisition are going to go down. So, at all these ways that the change. trailing financials of this reed that's getting spun are not meaningless, but they're going to be significantly improved once the steel closes and nobody's factoring that in, right? So I had two really unique angles to that pitch. And probably as you're hearing it, you know, particularly if you're an investor and you've been investing

Starting point is 00:15:50 for a while, you heard like four or five things where you said, oh, that's something interesting. That's what I like. You know, that's a sign that something could be mispriced. So lean into something unique is the first thing I would say, whether it's a unique situation, your unique background that lets you pitch something better than an interesting. else, lean into that is the first thing I would tell you. Second thing, be bold and aggressive. You're not going to get up there and say the stock trades for 100 and my price target is

Starting point is 00:16:13 115. That's boring. That's 15% upside. That's terrible. Not terrible. I mean, again, 15% upside's fine. But that's boring. You're doing a pitch and you have to sell yourself a little bit, right?

Starting point is 00:16:24 So your price target isn't 115. Your price target is 150. And I'm not saying do something crazy, right? If the stock's 100 and you say my price target is 3,000, well, you gosh, darned. better have really good reasons, right? It's 3,000 because if you do something incredulous, then people are going to discount you and they're not going to trust anything you say. But you don't want to be hedging yourself, right? Take it, take what would normally be kind of your bullish case, you know, your softball case. Make that your base pace. Because again, you're telling a story.

Starting point is 00:16:51 And a story works better when there's a little bit more upside, when it's a little sexier, right? I said selling yourself earlier. A timeshare salesman doesn't come and say, hey, you're going to love going to Hawaii Beach. I mean, it does rain sometimes. And look, you're locking yourself into a 30-year contract and maybe you're 50 now, but maybe when you're 75, you don't want to fly to Hawaii. That's a pretty long flight. But you're going to love it for the next five years as long as you get good weather. No, they don't hedge themselves like that, right? They say, you're going to Hawaii for the next 20 years. You're going to love it. The beautiful beaches, the weather, everything. It's going to be your little tropical paradise. So just remember you don't want to be hedging yourself.

Starting point is 00:17:27 Put out a price target that when people see it, they think, hey, I'm going to make alpha here. It has to be reasonable. It has to be supported by facts. You have to have reasons to support it. But don't hedge yourself. Okay. And remember, the judges are seeing a lot of pitch. Pitches. If they say, hey, I think this pitch, if they see something that says the base case is up 15%, up 20%, they're kind of going to say, oh, that's an average idea. It's human nature. When you see something, hey, my base case is 50%. Well, no, we're talking. My base case is plus 75%. No, you're talking. You know, you excite them. Remember, you're telling a story. Make sure something justifiable. You can back it up. You can tell why you

Starting point is 00:18:00 think, but tell a good story. Be bold, be aggressive. Don't hedge yourself. Third thing, do the legwork. There's this famous short seller maxim. If you see the CEO wearing a hard hat, it's a short, right? The opposite is true for stock pitches. If you can throw yourself on a slide wearing a hard hat, well, that's a sign you've done the legwork. And honestly, wearing a hard hat and doing site diligence is generally not great for stock pitches, right? Or for investing, you know, going and visiting a coal mine, generally you're not going to learn anything new when you visit the coal mine that makes you think, oh, this company's a buyer is a sell. Honestly, for the most part, when you do a stock visit, because unless you do a ton of them, you're not trained, the company can present it in such a way that anything looks good, right? So I would say visiting a store or a mine, whatever, not great for investing, but for stock pitches, it shows you've done the legwork, right?

Starting point is 00:18:55 If you can say we went to this company's mind, we went to their headquarters, whatever it is, you show that photo, that's just a little credibility that you've done the legwork. And for stock pitches, that matters. Again, everything's telling a story. Let me give another example. You go and you say, hey, I think this company is undervalued because they're taking share from competitors. If you say that, that's just the claim, right? If you say, hey, you know, last quarter the company grew 10%, and their key competitors grew 8%, so they're taking share. Okay, that's nice, but that's something anyone can know.

Starting point is 00:19:27 Now, let's talk about ways to spruce it up. Based on, I called five different industry insiders, and all of them think the company's new product is better than the competitors, and based on that, they're going to take market chair. That's something, to go back to my earlier point, that's something unique, that's something edgy, and that's something that shows you done the legwork. Let's take it a step further. I called five of the companies, I called five customers, and those five customers said,

Starting point is 00:19:53 we are switching dollars to the company's product versus the competitor's product. That's unique thing that backs up everything you're saying. Now you're telling a story and you're giving the judges things that aren't in an SEC filing. You're giving the judges something unique that is very legal, but you're giving them something unique, right? There's no MNPI here. Every time I say unique, I'm worried people are going to think, hey, you know, break into the company's email and get some MNPIA. No, no, no. But, you know, you can call customer.

Starting point is 00:20:19 You can call competitors. You can do expert calls. And especially because most stock pitches are, again, people earlier in their careers, MBAs, or college students, you've got some credibility when you call a customer and say, hey, I just want to talk. I'm learning about the industry. Most people will try to do kind of college, will try to give college students, MBA students, kind of a solid and talk to you for free. Whereas, you know, if you're calling you say, I'm a 40-year-old research analyst, and I'd say, cool, go through an expert network. I don't want to talk to you. So you've got a little bit of that.

Starting point is 00:20:46 And I'll point to, you know, CSL team did this, but Team DoorDash did this too. you go and just at the end they say, hey, here's all the research we did. And I think Team DoorDash had like 40 expert calls. Like, again, 40 expert calls is probably overkill for a stock idea or to make an investment. But for a stock pitch, this is telling a story, right? You're saying, hey, judges, you can trust me. Here's all the work that I've done on this. And the same, you're raising an SPV.

Starting point is 00:21:15 You know, I don't think you need to do 40 expert calls to understand an industry or something, raise an SPV. but when you go and you say, hey, write a big check, here's all the diligence, people just feel more comfortable. You know, you've got to sell yourself. You've got to sell the story. So do the legwork. Go get a picture of you with a hard hat. Go to an industry conference and get a photo of you in front of, you know, the power association conference, you pointing at that and pitch the thing. But do the lay work. That's a really compelling part of a stock pitch. And that's the type of thing that puts you over the edge. What to avoid? Three things to avoid that I see all the time when I work with, especially college students and be students on stock pitch. First, excessive

Starting point is 00:21:49 of modeling. You know, every college student wants to show, hey, I've mastered Excel, MBA student, I've mastered Excel. Look how good this model is. I've seen stock pitches that are 10 pages and five of them are the Excel model. You know, they've got the income statement, the DCF, they've got the income statement, the balance sheet, the cash flow, and then the DCF, that's four and then maybe one bonus one. I don't know.

Starting point is 00:22:09 Any time, if you spend more than 15 seconds on the model, you're killing yourself. Why? Numbers are boring. You want to say, hey, my price started is 150. it's supported by a DCF, you can see the assumptions of the DCF in the appendix. And then if there's a Q&A time, the judges can start talking about the, the judges can ask you a question of the DCF if they want. Guess what? Nobody does, right?

Starting point is 00:22:32 I'd actually argue that not only is talking about the model boring, but I talked earlier about when you do a stock pitch, it's a lottery ticket. It's all upside and no downside. For a stock pitch, the more time you spend talking about your model, it is no upside and all downside. Why? Because if a judge notices an error in your model or even if your model's perfect, but they notice an assumption they don't disagree with, all of a sudden you've taken them out of it. Right. So 10 seconds on the model. Hey, our price salary is 150.

Starting point is 00:22:59 It's supported by the DCF. It's in the appendix. Or don't even put it in the appendix. Just have the judges ask you about it. But anytime you're spending talking about numbers, diving into the numbers, is actually counterproductive. And it's taking you out of the story, right? You want to be hitting them with what's unique, the legwork, the story. You're spending time in the model.

Starting point is 00:23:16 It's awful. Drotting Risk. Kind of mentioned this earlier when I said don't head yourself, but the risks, you want to acknowledge them. You want to say, we've thought about them, and you want to move on. You know, in a pitch, one slide on the risks. Here's your risk, and you just want to say, you know, McDonald's, GLP1s are a risk. We've thought about it. We've looked at the data.

Starting point is 00:23:36 We don't think it's a risk. Maybe a little bit more than that, but you don't want to spend a whole ton of time on the risk factors. There is one exception to that. if you are investing in something that is a complete binary, you know, just the risk is so obvious and so massive that is close so binary, you need to acknowledge that risk. So, you know, I'll give you an example, cigarette companies in the 90s. They had that huge tobacco lawsuit, right? A lot of them filed for bankruptcy or they had huge, huge damages. If you've got something that big and that obvious, you know, there's a going concern warner or something, then you need

Starting point is 00:24:11 to acknowledge it and you need to talk about the downside. But hey, there, guess what? The pitch is on the binary, right? So you're actually doing a different pitch and you want to make sure because that's a dangerous pitch. Some places that pitch would work really well, some places that pitch would work really poorly to go back to my earlier, choose your games correctly. So if you're doing something that that's binary or with that huge risk, you are going to have to talk about it. But that's probably a very specialized pitch, right? In general, you're pitching Facebook, right? You're pitching Facebook right now. Facebook is facing, I'm sure there's some type of.

Starting point is 00:24:43 of EU investigation, but the real thing in the headlines for Facebook is they're facing a lawsuit in, I think it's in Nevada and a few other places for, hey, were you addictive to teens? Did you design Facebook, Instagram, whatever, to get teens addicted? They're facing liabilities there. Acknowledge it. Say, we think it's covered. We think the consensus is right. And move on.

Starting point is 00:25:03 You don't want to spend a lot of time diving into that. You spend tons of time, all downside, no upside. And then last thing, death by backgrounds. You know, I do a lot of the, I see a lot of these pitches. and they'll spend the first, if it's a 10-page deck, they'll spend the first three pages on, here's a 20-year background of this company. No, absolutely not.

Starting point is 00:25:21 Just say this is what the company does and move on. And I will say, you know, in terms of, remember, everything is selection and trying to work towards the pitch. It is a little bit easier to pitch a simple company that a lot of people know than a really specialized company. So, you know, if you're pitching a super specialized chemical company, you might have to spend a little more time on, hey, here's what they actually do, here's where the chemicals go.

Starting point is 00:25:41 but the background section, there's a background section of the 10K. The judges can go read it, they can go look at it, they can do work. You just want to say enough where people know what the business is and then you can get into your really unique stuff.

Starting point is 00:25:53 Again, you're telling a story. The more time you spend in the background, the worst. Tell the story, get to your best stuff. So those are what to avoid. Let's see. Oh, last thing, on the risk. It is funny saying this because, as I mentioned,

Starting point is 00:26:07 this whole thing was designed by AI. You just sort of, hey, here's what I'm looking for. move these slides around, I really didn't do a lot. The words on this, on all of these slides are, don't hold me to them because I had the AI do a lot of this. But the last thing I'll remind you is proper formatting is table stakes. You know, there's this old thing where you're an analyst at an investment banker or a consulting firm. And you present this big pitch deck. And, you know, on slide 17, the, your MD circle something that says, hey, these two numbers don't add up. Can you tell me what's going on here? And why does that matter?

Starting point is 00:26:41 It doesn't matter because, you know, or they'll say, hey, this slide is formatted slightly different than all the other slides in the deck. It doesn't matter on the absolute, right? What matters is once they see one thing that's sloppy, they can't trust the rest of your work. A stock pitch can be similar, right? I've seen stock pitches where the formatting switches from slide to slide. I've seen stock pitches where there's one typo in the deck or there's one number off or something. The moment you have something like that, the judges are taken out of the story and your credibility goes down. Right.

Starting point is 00:27:12 So design these. Don't do what I did and have AI put all the words in. Make sure all the words make sense. Make sure that everything flows into your story. Make sure that the formatting is good. Make sure that all the numbers are right, all that sort of stuff. Again, having formatting perfect is your formatting, it's very low upside. You know, it's table sticks, but it's really hard downside.

Starting point is 00:27:34 You're a great pitch. It's probably going to lose to an average pitch. if the average pitch has just a normal slide deck and the great pitch has a terrible slide deck that keeps taking the refs the judges out of it. One last thing. This was designed by AI, whatever. Go for the win. I mean, look, I want you to win.

Starting point is 00:27:50 I want you to do the stock pitch competition. So look, I think I've rambled on about this for a long time. I think I've rambled enough. A lot of this does have overlap. I did an episode. I'll include a link in the show notes or how to get a job in investing. You know, there are a lot of parallels because, again, how to get a job investing. you're kind of selling yourself.

Starting point is 00:28:09 A lot of getting a job of investing is doing a stock pitch saying, hey, I follow finance. I follow the markets. Here's my stock pitch. So there is some overlap here, but hopefully this was helpful for, again, college season, MBAC, stock pitch season is coming up. Hopefully this is helpful. Where you can find me, get another value blog.com. You can find my podcast, all that sort of stuff. I'm always happy to help.

Starting point is 00:28:28 I made this podcast because I'm always happy to help. But I also made this podcast because I give the same advice over and over again. So if you're doing a stock pitch, listen to this podcast. hopefully learn from it. Hopefully you helped. I'm not saying that everything I said here was perfect. You know, hopefully you can say, hey, I'd love it. If everything here makes sense to you, take it all. If two of the things made sense and nothing here, everything else didn't make sense, take the two things and then ignore everything else. And if everything I said didn't make any sense, do the opposite of me. I don't care. It's not my stock pitch. It's your stock pitch. But again, I've got a lot of experience with these. Hopefully everything here I said was helpful.

Starting point is 00:29:02 And I'm always personally happy to be hopeful if I can. So easy to reach out to, easy to get in touch with. That is my How to Win a Stock pitch. I'm going to wrap it up there, and we will chat soon. A quick disclaimer. Nothing on this podcast should be considered investment advice. Guests or the hosts may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial advisor. Thanks.

Yet Another Value Podcast - How to win a stock pitch competition | lessons from an Ira Sohn winner

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