Success as a junior investment banking analyst has little to do with developing investment acumen. The job primarily tests one's ability to manage a process—checking models, formatting decks, handling logistics—and endure abuse. Being good at these perfunctory tasks doesn't mean you will be a great investor.
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Investing in financial services forces a 360-degree analysis of asset quality, originators, and servicers. This complexity makes it a superior training ground for a generalist investing career compared to analyzing simpler businesses where the focus is narrower.
Leaders in investment organizations are often promoted for their exceptional technical skills—analysis, presentations—not for their management abilities. This creates a leadership deficit that requires deliberate focus and coaching to overcome.
Mamoun Hamid's key advice for young investors is to get exposure to the absolute best founders and management teams early. Witnessing an "A++ team" operate firsthand provides an invaluable benchmark. This direct experience makes it much easier to spot true excellence in the wild and to hold other portfolio companies to that high standard.
Before hiring for a critical function, founders should do the job themselves, even if they aren't experts. The goal isn't mastery, but to deeply understand the role's challenges. This experience is crucial for setting a high hiring bar and being able to accurately assess if a candidate will truly up-level the team.
Moving from science to investing requires a critical mindset shift. Science seeks objective, repeatable truths, while investing involves making judgments about an unknowable future. Successful investors must use quantitative models as guides for judgment, not as sources of definitive answers.
In rapidly evolving fields like AI, pre-existing experience can be a liability. The highest performers often possess high agency, energy, and learning speed, allowing them to adapt without needing to unlearn outdated habits.
The immediate threat of AI is to entry-level white-collar jobs, not senior roles. Senior staff can now use AI to perform the "grunt work" of research and drafting previously assigned to apprentices. This automates the traditional career ladder, making it harder for new talent to enter professions like law, finance, and consulting.
In a paradigm shift like AI, an experienced hire's knowledge can become obsolete. It's often better to hire a hungry junior employee. Their lack of preconceived notions, combined with a high learning velocity powered by AI tools, allows them to surpass seasoned professionals who must unlearn outdated workflows.
Herb Wagner advises young professionals to focus on learning and joining a high-growth industry over immediate compensation. Being in a nascent, expanding space like early distressed debt provides accelerated responsibility, learning opportunities, and ultimately greater long-term rewards.
The "CEO of the product" role at a large company involves managing the inertia of an already successful product. This is fundamentally different from founding, which requires creating value from nothing with no existing momentum. The skill sets are deceptively dissimilar.
