In this episode of Invest Like the Best, Paul Enright, managing partner at Kranos Capital, explores the ins and outs of hedge fund investing from both the buy-side and sell-side perspectives. He breaks down the distinctions between long-only and long-short funds, clarifying essential terms like gross and net exposure, as well as leverage. Enright categorizes long-short funds into three models: platform, established manager, and emerging manager, each requiring unique skill sets for success. The discussion highlights the vital skills of research, analysis, and decision-making, stressing the need for a clear narrative paired with solid mathematical analysis for compelling stock pitches. Enright also expresses his concerns about market liquidity and the growing trend of passive investing, yet he remains optimistic about the long-term potential of strong businesses.
