Pitch the Perfect Investment: The Essential Guide to Winning on Wall Street

by Paul D. Sonkin, Paul Johnson

Learn the overlooked skill that is essential to Wall Street success Pitch the Perfect Investment combines investment analysis with persuasion and sales to teach you the "soft skill" so crucial to success in the financial markets. Written by the leading authorities in investment pitching, this book shows you how to develop and exploit the essential, career-advancing skill of pitching value-creating ideas to win over clients and investors. You'll gain world-class insight into search strategy, data collection and research, securities analysis, and risk assessment and management to help you uncover the perfect opportunity; you'll then strengthen your critical thinking skills and draw on psychology, argumentation, and informal logic to craft the perfect pitch to showcase your perfect idea. The ability to effectively pitch an investment is essential to securing a job on Wall Street, where it immediately becomes a fundamental part of day-to-day business. This book gives you in-depth training along with access to complete online ancillaries and case studies so you can master the little skill that makes a big difference.

It doesn't matter how great your investment ideas are if you can't convince anyone to actually invest. Ideas must come to fruition to be truly great, and this book gives you the tools and understanding you need to get it done.

Persuade potential investors, clients, executives, and employers Source, analyze, value, and pitch your ideas for stocks and acquisitions Get hired, make money, expand your company, and win business Craft the perfect investment into the perfect pitch Money managers, analysts, bankers, executives, salespeople, students, and individual investors alike stand to gain massively by employing the techniques discussed here. If you're serious about success and ready to start moving up, Pitch the Perfect Investment shows you how to make it happen.

Genres: Finance, Business, Nonfiction

462 pages, Kindle Edition

First published June 27, 2016

About the author

Paul D. Sonkin (New York, NY) is a portfolio manager at GAMCO Investors / Gabelli Funds. He is co-Portfolio Manager of the TETON Westwood Mighty Mites Fund, a value fund which primarily invests in micro-cap equity securities. 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. 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. He has extensive corporate governance experience having sat on six public company boards. Sonkin is the co-author of Value Investing: From Graham to Buffett and Beyond (2001).

Reviews

[Asif · Rating 3 out of 5]

A good book for beginners. Slightly less useful for experienced guys.

[Loh · Rating 5 out of 5]

Literally think this is the only book on investing you'll ever need (especially if you're considering a career on the buy-side). The chapters about EMH, variant perception, thinking about consensus and how to structure the pitch are probably worth the price of the book itself.

As an incoming buy-side analyst graduating from college soon, I cannot thank Paul enough for writing this book - I suspect I will be referring to it many times over when I start working.

[Thomas Harris · Rating 4 out of 5]

Excellent book for analysts. Best part for me was the PITCH design. I have been analyzing stocks for years, but it is difficult to communicate my ideas. The deeper my analysis, the harder it is to clearly state my position.

Ironically, my best ideas are the my most difficult to present.

This book gives you a good format for the pitch. Plus, it explains the REASONING behind the design. This is crucial, because I can further tailor my pitch design based on the strategy of portfolio manager.

Half of the book is about FINDING the Perfect Investment. This was mostly a review for me, but it was still useful. The crystal clear communication made it easy to skim and pull out important points.

[吕不理 · Rating 4 out of 5]

我以前可看不上只看畅销工具书的人（暗指男领导们）但其中一个人为了让我快速掌握新技能推荐了两本他觉得外行菜鸟也可以看懂的书 我看了 还真觉得诶可以可以可以。然后就不鄙视他了。

但脱离专业的部分那味儿还是重 啧

[Pedro Ceneme · Rating 3 out of 5]

I have mixed views regarding this book. The first time I’ve read it my knowledge of finance was very limited and I thought it to be great but reading a second time was a drag. I believe this change of mind comes mostly from the depth of the subjects that it deals with: it’s like a large summary of how to price, think about market pricing and pitch stocks, with the first 2/3s of the book adding very little to anyone that has some knowledge on the subject. The last 1/3 of the book has a very interesting discussion on the factors of a pitch and a neat framework on how to structure and deliver one, which I believe remains valid.

Despite the basic feel of the content from most of the book, I still commend it by the very clear and simple explanations it gives on a wide range of topics. The book also contains a handful of useful frameworks on how to think on market efficiency, pitch structure and delivery as well as asset pricing.

[scordatura · Rating 5 out of 5]

This book should be amongst the first read by any aspiring equities investor. The frameworks presented are practical, clear, and relevant, and while the topics will be elementary for the more seasoned investor, the lessons are paradigm-shifting for the beginner.

The first four chapters are the least impactful, and can be skipped. Any corporate finance/valuation course, and numerous other books or courses on business strategy, will offer a more robust treatment of asset and business valuation and company competitive advantage. Chapter 3 has an interesting decomposition of share price into (1) the present value of a company's invested capital, (2) the present value of a company's competitive advantage, and (3) the market-implied EV of growth. The first is essentially the company's WACC multiplied by total capital; the second, the ROIC - WACC spread multiplied by total capital. The third is the remainder of the share-price. I've never seen this generate alpha, but it seems to be an insightful exercise and an interesting way of understanding edge and growth.

Chapters 5-9 discuss identifying mispricings. Chapter 8 is the chapter most worth reading, because it contains a thorough treatment of the concept of "catalyst", and the various sorts of edges one can have as an investor. It also summarizes the claims made in Chapter 5-7. Essentially, the reader can take away clearly that for you to make money on an idea, (1) Info must be adequately disseminated, (2) It must be processed without systematic error, and (3) It must be aggregated/reflected in price information.

The real gems in this book come from Ch. 10 and Ch. 11. They offer insights on how to pitch to a PM from the perspective of an extremely busy, mentally scattered PM. First, adhere carefully to both the objective and observable subjective criteria that your manager might have for an idea investment. Critically, however, you might need to dig further and figure out what their "hidden" subjective criteria are, and adjust your security selection/idea presentation process to meet those criteria. In other words, don't pitch something that doesn't fit your PMs style. Ch. 11 contains the ideal structure for a pitch - 30 second hook, 2 minute "drilling" of info, and then command over sufficient facts for Q&A. Many frameworks and mental models (Steinhardt and Toulmin) are explained, which I find helpful in structuring my pitches.

[Dave S · Rating 4 out of 5]

The authors synthesize authorities like Klarman, Marks, Buffett, Greenblatt, Munger, Schiller, tie together all the thinking, and provide helpful visual examples of how to think of things like wisdom of crowds and efficient market hypothesis. There is also work on risk and market psychology that address non-fundamental aspect of investing. The second half of the book about pitching is something I wish I had 5 years earlier. The actual "pitching" of an investment idea is rarely cover in most books, but it is actually equally important in practice than the investment analysis. As an investment professional you have to master both disciplines: finding the right investment and sell your idea.  Especially helpful was the concepts of “schema.”  Understanding the objective and subjective criteria are paramount to converting an idea into a position. The section on the hair styles and proper attire was somewhat redundant, but looks do play a role (does Bill Ackman sound convincing because he is charming?)

The following summarizes points I found noteworthy
- Limits of CAPM - Volatility is not a risk to fundamental investors
- Uncertainty (unknowns) and risk (possibility of loss) are different - Exploiting other investors' confusion of risk and uncertainty can be highly profitable
- We need efficient market hypothesis (EMT) to generate alpha - Have a thesis on how the information will get disseminated, processed and incorporated into the stock price. Liquidity is the #1 barrier to incorporation
- Is the crowd’s madness irrational? No. EMT may not work forever if the market participants lack diversity or independence, or are subject to a systematic bias
- Intrinsic value is expressed in a range - analyst’s job is to build “variant perspective (i.e. info advantage and make our intrinsic value distribution more positively skewed
- Time is a critical factor for realized rate of return, and as a consequence, an additional source of risk - investor must be accurate in his estimate of the amount of time it takes to close the gap between market price and intrinsic value

[Matias Alanko · Rating 2 out of 5]

The book got to its actual point only in the last 50 pages. Even then a lot of the points made were very general and self-evident to anyone who has ever worked in business (such as the effect of appearance on one's credibility). The introduction of the general aspects of investing in the beginning was well-balanced and realistic, and thus a good starting point for beginners.

[Monty Law · Rating 5 out of 5]

I trade using technicals, and still I found a lot of value from the second half of the book around structuring a pitch. The Toulmin model of argument they propose is worth its weight in gold to organize one's thoughts around a trade idea, and the pitch framework lines up with what I've interviewed/talked to with the top hedge fund people in Hong Kong. Highly recommended!

[Ghassan Linjawi · Rating 5 out of 5]

Essential read for stock investors

Essential read for anyone who wants to write an investment thesis for a stock.
The book is devided into two parts, security analysis and building a message

[Yuhsin Zhou · Rating 5 out of 5]

First time to read a formal book related to investment. This book explained various theories regarding investment, and gave a concise framework for anyone wishing to recommend securities. Very suitable for a beginner in investment to understand how everything should works.

[Tuan Nguyen · Rating 5 out of 5]

Good introductory book on what makes a good investment and how to best structure a stock pitch from two leading experts in the investment business. Will be referring back to the book for nuggets on stock pitches.

[chilli bear · Rating 5 out of 5]

Wholistic foundational book that lays the framework to be a buy-side analyst

Begins on understanding what and where value is

Ends with how to pitch a stock

Get the hardcover it feels good in your hands

[Nathanael · Rating 2 out of 5]

Too basic

[Ray Kyo · Rating 5 out of 5]

This is the best textbook type of investment book I have ever read.

[Per Wikman Svahn · Rating 5 out of 5]

One of the best beginner textbooks on investing I have read.

[Jakub · Rating 3 out of 5]

A mixture of two books (value investing and analyst pitch with), many parts are skippable, sometimes too academic.

[Philip · Rating 4 out of 5]

The book explains terms in the simplest way possible - reading it was a breeze. While it is perfect for beginners, it also gives the more experienced ones different perspectives on how to look at investments. I think the visuals made it stand out from your typical wordy finance books... worth a second read in my opinion!

[Yechan · Rating 4 out of 5]

One of the very few decent introductory reading that I can finally recommend to someone starting his/her career in investing

[周 大為 · Rating 5 out of 5]

這本書說明了所謂投資的最基本核心觀念，包括金流、財報解讀、市場效率、價值估算等，要認真看待投資，應該先看這本。