Hedge Fund Course: What is the Training Curriculum?
The curriculum of our intensive, hedge fund training program focuses on the process of performing fundamental equity analysis on publicly traded securities and mental frameworks to guide investment decisions.
Our hedge fund training program consists of six modules and 82 lessons in total.
| Course Curriculum |
Training Module Description |
| Module 1: Process Driven Investing |
- Understand the practical use cases of a financial model in the process of developing an investment thesis and stock selection frameworks to pick investments.
- Recognize the point of performing fundamental research and the steps in the investment process, including the role of financial modeling.
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| Module 2: Buy-Side Model Construction |
- Learn the distinct architecture of a buy-side model and modeling best practices, such as formatting conventions, to meet the expectations of a portfolio manager (PM).
- Establish a process for inputting data into a financial model, compiling financial data (SEC filings), and organizing the model into key sections to streamline analytical work.
|
| Module 3: Analyzing a Business |
- Develop a systematic process to research and grasp an in-depth understanding of a business using a step-by-step framework to determine the quality of a business.
- Identify the key drivers that underpin a company’s operating performance, including its unit economics and cost structure analysis.
|
| Module 4: Buy-Side Forecasting Frameworks |
- Build a detailed projection model using forecasting frameworks, with a deep dive into revenue forecasting, expense builds, and margin forecasting.
- Integrate management guidance and consensus estimates (and revisions) into the model.
|
| Module 5: Buy-Side Valuation |
- Analyze the core factors that influence the implied valuation of a company, such as its fundamental profile (e.g. growth, business momentum, business quality, capital deployment, capital structure, terminal value stability).
- Perform valuation techniques, such as the DCF, multiples (“comps”), price target derivation, and normalized earnings analysis (non-GAAP adjustments).
|
| Module 6: Buy-Side Thesis Development |
- Utilize a financial model as a tool to answer questions such as, “What is the risk/reward?”, “What is the upside / downside?”, and “What are the implicit assumptions baked in the current stock price?”
- Apply the FEV Framework (Fundamentals, Expectations, and Valuation) to evaluate the current market pricing and make an investment decision
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The course curriculum emphasizes engaging, “hands-on” training using real-world examples.
Understanding the process of financial modeling and key metrics such as ROIC is a prerequisite to being a successful investor, but the more challenging part is tying all of the analysis to formulate a defensible investment thesis.
For instance, Winnebago Industries, Inc. (NYSE: WGO) is the subject of the main case study, in which we’ll perform comprehensive diligence using a structured approach starting from scratch.
The hedge fund training course is an ~8-hour self-paced program that bridges the gap between merely understanding the mechanics of financial modeling in Excel and being intuitive in investing.
Financial models on the buy side are built to develop an in-depth understanding of the underlying business and formulate an investment thesis (and formal recommendation) on the opportunity at hand.
One critical aspect of working on the buy side is understanding that proficiency in financial modeling does not equate to being adept at investing in the public markets.
Constructing an investment thesis based on analyzing the company’s business model, financials and pricing by the market is a task with much discretion, wherein sound judgment and a structured process to select investments is required.
Hence, our hedge fund course goes far beyond teaching the mechanics of financial modeling by providing trainees with the mental frameworks and processes to sharpen their investing intuition, including practical tools to improve their performance on the job.
Course participants are equipped with the skill set to navigate the intellectually demanding tasks encountered in buy-side equity investing roles.
Over the course of the program, we highlight the fact that a financial model is the “centerpiece” of rigorous deep-dive analyses performed by buy-side equity analysts.
WGO Case Study Model (Source: Buy-Side Financial Modeling Course)
Hedge Fund Course: What are the Key Learning Objectives?
So, what will trainees learn by enrolling in the hedge fund course for buy-side training?
The following table describes some of the key topics covered in our Buy-Side Modeling course:
| Topic |
Learning Objective |
| Process Driven Investing |
- Form a structured process to analyze a business in-depth, which starts with creating a financial model (i.e. the reason for constructing a model is to understand the business)
|
| Business Analysis |
- Develop a comprehensive understanding of a business upon performing diligence on its financial data and public filings (e.g. 10-K/10-Q)
|
| Buy-Side vs. Sell-Side Model |
- Differentiate between a buy-side model and a sell-side model
|
| Consensus Estimates and Revisions |
- Identify the nuances of consensus estimates and revisions
|
| Current State – Future State Economics |
- Assess the health of a business by analyzing its current state economics (e.g. growth, margin, capital intensity)
|
| Unit Economics |
- Cost structure analysis, incremental margin, and identification of the key drivers (KPIs) that determine the valuation of a given company (e.g. ROIC)
|
| Growth Forecasting |
- Analyze business momentum and growth trajectory, including the underlying drivers causing the trends, i.e. right or wrong direction.
|
| Expectations Investment + Forecast Metrics |
- Derive an independent valuation to understand what is baked into the current stock price and the forecast metrics that serve as the basis of the valuation
|
| Earnings Beat / (Miss) |
- Estimate earnings revision opportunities and find opportunities in which the company might beat/miss consensus estimates
|
| Buy-Side Model Construction |
- Build a financial model as a tool to capture news flow and company information in an investment context
|
| Model Formatting |
- Learn Excel formatting conventions and model architecture (“best practices”)
|
| Company Guidance |
- Consider the role of company guidance and investor relations in the modeling process
|
| 3-Statements and Below-the-Line Items |
- Hands-on modeling of important accounting items, such as the tax rate, share count, and net debt outlook
|
| Buy-Side Valuation |
- Develop buy-side modeling intuition and the frameworks to abide by while estimating the intrinsic value (and comparison to market pricing) of a particular publicly traded company
|
| DCFs and Market Valuation (Comps) |
- Build buy-side models, namely a traditional DCF model and market valuation methods using multiples (i.e. “comps”)
|
| Key Drivers |
- Learn the importance of tracking and incorporating company-specific key drivers into a buy-side model
|
| Stock Valuation |
- Set up the dynamic model to develop a differentiated and actionable perspective on the valuation of a company’s stock
|
| Business Momentum |
- Gauge the momentum of the business to develop a differentiated and actionable perspective on stock valuation and to identify earnings revision opportunity
|
| Reverse DCF |
- Usage of the reverse DCF to determine, “What expectations are priced into the current stock price?”
|
| WGO Case Study |
- Analyze the historical operating performance and business model of WGO to construct a revenue build and forecast model, which ties into valuation analyses
|
| Buy-Side Thesis Development |
- Obtain the skills required to construct a robust, defensible buy-side thesis, i.e. pitch recommendation
|
What is the Best Hedge Fund Course? (2023 Update)
So, why is our hedge fund course the top option for those pursuing a career in public equities investing on the buy-side, or those seeking to refine their skills to improve performance on the job?
Our hedge fund course is by far the top offering available on the market because the training material is based on the accumulated knowledge of a real-life, seasoned hedge fund professional.
The insights that the program trainees will derive from undergoing our hedge fund course are not just based on academic theory but were rather collected from the real experience of a seasoned, long-term practitioner.
Therefore, the topics taught by the course instructor – Brett Caughran – are directly based upon the lessons learned over a decade-long career, with engaging commentary on the most valuable pieces of advice that improved performance, including the lessons learned from prior mistakes.
At the end of the day, there is still no replacement for real experience, but our hedge fund course is a quick method to learn from the experience of an actual practitioner, effectively placing program trainees ahead of the curve for recruiting.
The lessons reflect the core concepts that are seldom taught by other hedge fund courses available in the market.
While there are rarely true shortcuts in one’s career, the option to learn from the musings of an experienced hedge fund professional is a unique opportunity and serves as a key differentiating factor that sets our hedge fund course far apart from any other sub-par offerings in the market.
Hedge Fund Training Program: What are the Course Prerequisites?
Quick disclaimer: our hedge fund course was developed to fast-track the buy-side career of candidates in the most efficient manner possible.
The objective of the curriculum is to condense the accumulated insights and investing knowledge necessary to be a buy-side investor – which formerly required years of experience – into a focused, boot-camp-style program.
With that said, our hedge fund course is fast-paced and assumes a baseline understanding of financial modeling, valuation techniques (DCF, Comps), financial accounting, navigating financial filings / reports, and proficiency in Excel, of course.
Therefore, for those with limited experience in any of those areas, or for those in need of a quick “brush-up” – it would be in your best interest to purchase and complete our prerequisite courses beforehand to ensure the lessons in the buy-side training program are more intuitive and valuable.
The specific prerequisite courses that we recommend are as follows, which are all offered at discounted pricing rates (25%), since our priority is to ensure the training program is easy to comprehend and the full value of the educational material is received by all of our course enrollees, irrespective of prior experience level.
- Accounting Crash Course
- Excel Crash Course
- Analyzing Financial Reports
- Non-GAAP Reporting
- Basic Financial Modeling
- Valuation and DCF Modeling
For a glimpse into the training material covered in our hedge fund course, fill out the form below to download the investment framework one-pager pulled directly from our buy-side modeling training modules.
The structured process outlined in the PDF one-pager provides the initial groundwork of the investing mental models, which Brett will teach how to apply in practice using an intuitive, step-by-step approach.
Who is the Hedge Fund Certification for?
The Buy-Side Modeling course serves as a practical training program for candidates recruiting for hedge fund analyst roles as well as for working professionals in the public markets.
In particular, those who fall into one of the following categories should obtain significant value by enrolling in our hedge fund training program:
- Aspiring Hedge Fund Analysts
- Upcoming Portfolio Managers
- Seasoned Asset Managers
- Sell-Side to Buy-Side Career Switchers (e.g. Investment Banking → Hedge Fund)
- Junior Hedge Fund Analysts
- Hedge Fund Interns (Undergraduate or MBA)
- Public Equity Investors
Upon completion of the Buy-Side Financial Modeling course, trainees are eligible to obtain a formal certification offered by Wall Street Prep and Fundamental Edge.
- Certification Exam Format → The Buy-Side Financial Modeling course examination will be conducted in an online format, with questions covering the most challenging concepts taught during the training program.
- Exam Score Requirement → The criteria to earn the certificate is an exam score above 70%.
While attaining the Buy-Side Financial Modeling Certificate is one component of our training program, note that the real value of completing our hedge fund course stems from completing the intensive training program and being capable of applying the concepts learned on the job.
Meet Your Instructor: Brett Caughran (Fundamental Edge)
The instructor of our hedge fund course, Brett Caughran, is the founder of the buy-side training firm Fundamental Edge.
Brett is a seasoned hedge fund veteran, with 10+ years of experience at several of the top investment firms such as Maverick Capital, D.E. Shaw, and Citadel.
Over the course of 7 years at Maverick Capital, Brett was an analyst on the consumer team, a senior analyst on the small-cap team, and a managing director (MD) on the healthcare team.
While an investor at D.E. Shaw, Brett managed a $1bn+ healthcare long-short equity (L/S) factor neutral portfolio, leading a team of 3 other investment professionals.
At Citadel, Brett managed a $1bn+ healthcare long-short equity factor-neutral portfolio leading a team of 9 investment professionals.
Brett is a graduate of Arizona State University (ASU), where he serves as an adjunct professor.
