Starting out on the Buy Side vs. Sell Side

What's up guys... glad to have finally joined SF after many years of lurking.. Of all the fashion forums on the web, SF seems the most appropriate to ask for some first hand advice on working in the world of finance. In a few months I will have to make the decision to start my career as a buy or sell side analyst. I have done much research, and have asked many of my mentors, yet they all seem to have different opinions on which direction is best for me.

A concern of mine regarding the sell side is that it seems many equities are picked with bias. As someone who loves to invest with conviction and short companies I feel that the sell side would be a little restrictive.

On the other hand, I hear that the buy side oftentimes simply uses the sell side research. I really enjoy picking apart companies and am not sure if this is as big of a portion of a buy side career. Additionally, I know the hours are much better on the buy side, but it seems the exit opportunities on the sell side are much better. But, I guess if one ends up a rockstar on the buy side there would be no reason to ever leave...

Thanks in advance for your help... looking forward to contributing to the classic menswear section once I'm suited up on a daily basis.

Do you have job offers from both? When you say analyst are you referring to equity research, investment banking, S&T...?

It is very difficult to start out fresh from school on the buy side. Very few buy-side shops hire significant numbers of non-experienced employees. There's a reason the norm is 2 year sell-side analyst program, followed by either MBA then buy-side, or if you are very lucky, straight to buy-side.

If you get an offer at buy side, go for it, especially for straight out school undergrad

Thanks for the replies guys.

It's looking like I will have offers for both. If I went to the sell side, I would likely take an IB opportunity over equity research (assuming I still have the chance to chose buy side over equity research.)

Although this hasn't been told to me directly, I assume my opportunity on the buy side will be dependent on passing the level 1 CFA before I finish undergrad. (I know this is very difficult.)

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I just want to assure everybody that I'm not trying to be a hot-shot over here bragging about my potential career path. The two main reasons I am asking these questions are: 1- I truly cannot get a grasp on which is the more desirable route, and 2-Whenever I am networking with people in these fields, the first question they ask generally incorporates whether I want to be buy side or sell side. It seems to be a question that they ask with considerable importance, and I feel my neutral responses do not fit the bill.

So sell side IB in what exactly, and where Tier 1?

Equity research in buyside is always shop dependent. CFA level 1 is not hard, you can get it if you devote a month to it (i.e. study 6+ hours a day for 20+ days).

What is the buy-side offer like? There's a big difference between e.g. a Bridgewater and some little mutual fund shop.

Keep in mind that the buy side is more strategy specific--once you get pegged as, say, a European mid-cap distressed debt guy, it's going to be hard to transition into a fund with a different strategy. Sell side, all the analyst programs are basically the same, and your exit options will be much broader. However, a huge number of guys go through the sell side analyst programs solely as a stepping stone to the buy-side--if you can go straight there, you may want to.

Yes, buy side might be a little less intense than sell-side, but make no mistake--as an analyst, no matter whether buy- or sell-side, you're going to be working your ass off.

Really, you need to compare the offers and decide yourself. If the buy-side offer is, e.g. more middle or back office vs a sell-side offer of a traditional 2-year analyst program, take the analyst program. Your exit ops will be much greater.

CFA level one can be done with some concerted studying, but don't take it lightly--the pass rate is only somewhere around 60% IIRC.

This is extremely helpful; thank you. I feel like I have a better understanding of how I should tier my opportunities. I am a bit more skeptical of my buy side opportunity after learning how rare it is to jump right into it from UG. I'll be sure to critically evaluate my potential role in that company. Looks like I'll hold off on committing to a particular side of the business until the details are in front of me.