Sonkin: Scaling an investment position requires transferring idea ownership from analyst to PM
Paul Sonkin · Paul Johnson and Paul Sonkin – The Perfect Investment (Capital Allocators, EP.32) · Nov 27, 2017 · at 32:49
Paul Sonkin, value investor and co-author of Pitch the Perfect Investment, discusses internal team dynamics and position sizing with Ted Seides.
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“In order to get the portfolio manager to actually scale the position, there has to be a transfer of ownership from the analyst to the portfolio manager, and the problem that you have is that there's a lot of subconscious emotions going on in the portfolio manager's head and in the analyst's head, so the portfolio manager is like, I can't scale the position up unless I feel as though it's my idea, so I have to do the research, I have to internalize it. But the analyst is holding on for dear life, and is very territorial, because they're afraid that if they give up ownership of the idea, that they won't be adequately compensated.”
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