Alright so, the question on everyone’s mind: what do I have to do to have an attractive application? Writing a good application for any undergraduate club shouldn’t be too hard, and the purpose of this blog post is just to give some extra helpful hints. Also, we have some incentives to help people with their application to make our lives more interesting when we review all of the submissions, so let’s jump into it.
VVI’s application is mainly composed of three parts: the resume, the why VVI question, and the stock pitch. Perfecting your resume needs to be done independently, as we can’t really help you with that. The University of Michigan’s Career Center provides far better tips than we can: https://careercenter.umich.edu/article/resume-resources
Thus, the main content on this post will focus on that latter two parts of the application: the “Why VVI” question and the stock pitch.
It’s certainly a bit weird for us to give advice on this question, but we can give some tips regardless that may help. The biggest piece of advice we have is to really understand what the club does. To do that, spend some time on the website, read some of our other blog posts, and maybe do a little research on what value investing is. The fact that you ended up on this page probably means that you’ve been doing some of that ablready, but if you understand what the club does well, then you should know what excites you about the club already.
Maybe you do the research and decide that you’re not as interested in joining, which is okay too. For any club you want to join, make sure you’re actually interested in the club for what the club is, instead of applying without thinking about it. That may sound obvious, but the whole club application process can be daunting especially as a freshman. By simply knowing the specifics of what any club does, you’ll have a much better sense of what you’re getting into.
Additionally, here are some of the questions you should be thinking about, for any club application:
- What interests you about the club?
- Does what the club do align with your career goals?
- Do you think the club is a good environment for you to grow? What’s the social life like?
- Do the club’s goals/values align with your own?
- What value can you bring to the club?
- What other benefits does the club offer? Professional development? Alumni base? Health insurance with no copays?
The biggest piece of advice we can give for your stock pitch is not to over complicate it. Simply understanding the fundamentals of the company will get you most of the way there. You should explain what the company does, how the company makes money, who the competitors are, and why you think the company is in a good position going forward. If you can do all of that, then you’re pretty much set honestly.
If you want to go deeper, here are some other things to think about:
- What can you learn from recent news about the company? Where can the company grow going forward?
- Why are you looking at this company instead of a competitors? What are the competitors strengths? Where does your company excel?
- Who’s in charge? What’s management’s background?
- Another step is to think about where you could be wrong. What are the risks to holding the business? What assumptions did you make for your thesis? What questions do you think we would ask you if you were presenting in person?
- How is the company doing financially? With no accounting experience, this may be difficult, but is revenue growing? Is net income growing? Which is growing faster and what do you think that means?
These steps aren’t necessary for the application, but you should be thinking about this stuff to understand the company better.
Example: if I was pitching Credit Acceptance (CACC)(which is currently our biggest holding) for this application, here are some points I would think about including:
- What the business is: “Credit acceptance is one of the biggest subprime auto lenders in the nation. Dealerships use Credit Acceptance to sell more cars to people who may really need them to get to work. 60% of borrowers successfully pay off the loan, which helps rebuild credit. The dealership always lends some of the money, which aligns the dealer with…”
- Who the competitors are: “The subprime auto lender market is very fragmented, with CACC capturing less than 5% of the market share. Other competitors include Santander Consumer USA and Ally Financial (another one of our holdings by the way), and they only buy the full auto loan instead of splitting the loan with the dealer. This means…”
- Why the company is in a good position going forward: “CACC’s disciplined management team, excellent company culture, and ability to align itself with dealerships position the company well for continued growth in the auto lending space. Additionally…”
Other things you can do to help yourself is just to do something simple like look up how to pitch a stock on Google. Most of the results jump straight into the valuation aspect which we don’t require at the inexperienced level (valuation just means figuring out what to pay for the stock). Again, just knowing the fundamentals of the company is the best advice we can give.
At the end of the day, you’re applying to an undergraduate club, not college, and not a job. The application is just for us to get a better sense of who you are before an interview where we get to meet you in person. Of course you should take it seriously, but by keeping it simple and know the basics well (both about the club and the stock you’re pitching), then you should be just fine.