Skilfully interviewing company management is one of the most daunting and challenging tasks of an equity analyst or portfolio manager. Top class analysts who have learnt to do it well incorporate it as a key part of their process, and it puts them at a meaningful advantage over their peers. These analysts will come away with valuable and unique insights, while more mediocre analysts come away with the same information that everyone else already knows. In my career as a fund manager I took hundreds of these management meetings myself and sat in on hundreds more with our buy-side analysts. Here I’d like to share some of my experience as to what makes for a good meeting
1. Prepare Dilligently
This is the single most important factor in determining the value of a meeting with management. Those who use management meetings to ‘get up to speed’ on a company are simply wasting the opportunity. When you meet company management you should at least know the answers to some basic questions – what business are they in, what is the revenue split, what are the key drivers of profitability and returns, and what are the major trends impacting the business? Ideally you should know a lot more than that. Management don’t like to explain things from first principles with every meeting and they’re likely to be much more helpful if they see you’ve done your homework.
2. Listen
“When people talk, listen completely. Most people never listen” Ernest Hemingway
Many analysts really suck at listening. They go into meetings with a certain bias, and then look for evidence that will confirm that bias. They hear what they want to hear and discard everything else. Regardless of what was said in the meeting, they seem to come out with renewed confidence in their own thesis. Note that good listening doesn’t mean you should believe everything that management tells you, but you need to hear what they are saying before you’re in a position to challenge it.
