Josh Pearl is the Founder and Chief Investment Officer of Hickory Lane Capital Management LP, a fundamentals-based equity long/short asset manager. He is also the co-author of several books and courses on investing and investment banking. Prior to founding Hickory Lane, he worked as a Managing Director and Partner at Brahman Capital, an equity long/short fund focused on investing with best-in-class management teams. Prior to his investing career, he was an investment banker at UBS Investment Bank, Moelis & Company, and Deutsche Bank focusing on high yield financings, leveraged buyouts, restructurings, mergers & acquisitions, activism, and board advisory.
Josh is the co-author of several books and courses, including The Little Book of Investing Like the Pros; Investment Banking: Valuation, LBOs, M&A, and IPOs; Investment Banking Workbook; Investment Banking Focus Notes; and the Wiley Efficient Learning Investment Banking Prep Course. His work has been featured in media outlets including CNBC, Institutional Investor, AlphaWeek, Bloomberg Markets, Newsmax, The UK Telegraph, The Charles Mizrahi Show, The Princeton Financier, and Harvard College Investment Magazine.
He earned his B.S. in Business from Indiana University’s Kelley School of Business in 2003. Joshua grew up in Cleveland, Ohio, and currently resides in New York, New York with his family.
Where did the idea for your career come from?
My co-author and I wrote the original Investment Banking book back in 2009 because it was the book we were searching for when trying to break into Wall Street. At the time, there was no accessible guide for teaching the nuts-and-bolts of corporate finance. We realized that there was a noticeable gap in contemporary finance literature, which, at the time, focused on theory rather than practical application. There was nothing on the market that taught the pillars of valuation, mergers & acquisitions, leveraged buyouts, or IPOs. So, we were both forced to cobble together our own crib notes to prep for investment banking interviews.
We couldn’t figure out why no one had written such a book. Only once we began our careers in investment banking did we realize why those first few years on Wall Street are incredibly demanding in terms of learning curves and the physical hours required to master the craft. Those junior banking years don’t leave time for much else, let alone writing a book. We were just the ones that made the personal sacrifices to do it. A dozen years and three editions later, our book has now sold over 250,000 copies and is used in over 200 universities.
Years after the initial publication of Investment Banking, we realized the same paradigm existed for investing. Despite hundreds of books on investing, no one had written the book that the market truly needed: an accessible guide that provided a framework for stock picking to the unindoctrinated. Using real-world examples and with the help of some of the world’s top investors, we sought to demystify the investing process.
What does your typical day look like and how do you make it productive?
As with most people, my day is never typical. But in general, I’m often awake fairly early whether I’ve set an alarm or not. It starts with checking the markets, reading through the relevant news and alerts on my individual stocks, sifting through our internal team chat, and checking emails. If I’m feeling up to it, this all happens while I’m riding the stationary bike.
I try to get this all in before my kids wake up. But when the kids arise before me, and they feel the need to make sure I’m up early with them, then the priorities shift a bit. It also depends on what time of the year it is. If it’s earnings season, then my morning focus is centered on reviewing the earnings reports of the portfolio companies and chatting with the team on any shifts in our views.
Once at the office, I begin the day by chatting with the team, checking in with my CFO, and reviewing the portfolio. The day primarily consists of conducting ongoing research on the various positions in the portfolio, performing due diligence on new ideas, speaking with industry professionals, attending conferences, and making any adjustments to the portfolio if necessary.
Like many finance professionals, I often eat my breakfast and lunch at my desk, and sometimes dinner too. But I try to get home in time to do dinner with the kids and do some fun activities with them. Then it’s off to the gym. If I have any energy left, then I’ll read something topical in bed.
How do you bring ideas to life?
I’m truly inspired by the success of other people who have come before me. I look at industry scions and get inspired by the way they have scaled their businesses and the way they think, act, and live their lives. I often watch videos of these individuals on YouTube or listen to podcast interviews with them to get inspired.
What is one habit of yours that makes you more productive as an entrepreneur?
Discipline. Looking externally, it seems that success for some happens overnight, but that’s often not the case. It is typically the result of years or even decades of hard work. For the Investment Banking book, my co-author and I spent five years perfecting it before we were ready for primetime. And despite numerous sacrifices and setbacks along the way, we just kept plowing ahead because we believed in our mission and we were confident that the book would help generations of individuals land their dream jobs. Writing the book early in our careers required tremendous sacrifice. Late nights, weekends, holidays, and relationships all took a backseat to getting the book to market. Thankfully it paid off.
What advice would you give your younger self?
Take risks, be adventurous, and move outside your comfort zone. When you’re beginning your career, there is so much time to figure things out. Many individuals play it safe and opt for the sure thing and never truly seek to maximize their potential. Early in my career, I had the opportunity to travel to Japan numerous times and then was offered the option to move there. It would have been an incredible experience and would have likely advanced my career. However, I had my network, my group of friends, and was comfortable in New York. I always think back on what may have transpired if I had made the move. Since then, I’ve sought to employ the regret minimization framework purported by Jeff Bezos. We all have one life to live, and we don’t want to look back on it in our old age and ponder what could have been.
What is one strategy that has helped you grow your business?
Throughout my career and even in high school and college, I always had mentors. I was never shy about approaching people I respected and asking them for advice. It was always surprising that many of them would spend the time to provide thoughtful advice. Fortunately, I’ve had the opportunity to work with some amazing individuals and had tremendous mentors along the way.
My suggestion for your readers is to think about your career ambitions, identify the person who has achieved that type of success, and try to work for them. Even when selecting among different job opportunities, a main criterion should be working with someone who will serve as a mentor.
What is one failure you had as an entrepreneur, and how did you overcome it?
There is no one mistake I can point to because I’ve made many mistakes over the course of my career. The key is to learn from one’s mistakes and integrate the learnings into your process. The biggest mistakes I’ve made often revolve around not thinking through all potential outcomes of a particular situation, and most often not properly thinking through the possible negative outcomes.
What is one business idea that you’re willing to give away to our readers?
I’m truly inspired by the success of other people who have come before me. I look at industry scions and get inspired by the way they have scaled their businesses and the way they think, act, and live their lives. I often watch videos of these individuals on YouTube or listen to podcast interviews with them to get inspired.
What is your favorite quote?
I’ll include the quote from my high school yearbook: “Even if you’re on the right track, you’ll get run over if you just sit there.” – Will Rogers
Key Learnings:
- Standout – years before applying for your dream job, you must establish a track record of success, including in academics, leadership roles, and relevant experience
- Take risks – you have one life to live and you don’t want to look back on it and ponder what could have been
- Discipline – success for some happens overnight, but that’s often not the case. It typically takes years of hard work and sacrifice beneath the surface.
- Mentors – identify the person who has achieved that type of success you’re seeking to achieve and try to work for them
Steve (Stefan) Junge hails from Germany and helps with the day-to-day publishing of interviews on IdeaMensch. While he and Mario don’t share a favorite soccer club, their enthusiasm to help entrepreneurs is a shared passion.