In an interview with Barron’s last year, veteran portfolio manager and Columbia Business School adjunct professor Paul Sonkin discusses his 2017 book Pitch the Perfect Investment: The Essential Guide to Winning on Wall Street.

Here are highlights:

• Sonkin’s experience includes 22 years as a portfolio manager and 16 years teaching over 450 students at Columbia. He says the book (co-authored with Nicusa Investment Advisors founder Paul Johnson) “addresses everything we’ve seen our students experience.”
• Convincing yourself that an investment idea is good and then convincing someone else, Sonkin explains, requires different skillsets. While many analysts can generate investment ideas, he adds, not many can communicate them well, which then creates tension with portfolio managers.
• To pitch an idea well, he argues, you must be able to answer the following four questions:
  • What is the upside?
  • What is the downside?
  • Is there genuine mispricing?
  • What will “act as a catalyst to close the price and intrinsic value?”
• A successful investment pitch requires touching on the portfolio manager’s objective criteria first. Once you have their attention, Sonkin explains, you can address their subjective criteria. “Things like strong competitive advantage or good capital allocation can be very different to people.”
• Sonkin says the book is intended to get analysts “up to speed, to give them the vocabulary and the tools” they need to pitch their ideas.
• Credibility, capability and likability are the three main things that influence a portfolio manager, according to Sonkin. So, the book delves into “nonverbal communication, body language, how you dress and present yourself, the tone of your voice, pitch, inflection.”
• “What you want is the portfolio manager pulling information out of you as opposed to you pushing information at them,” Sonkin says, adding, “Get them to engage. Once you’ve piqued their interest, they want to take a look.”