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Equity Research

Discussion in 'Business, Careers & Education' started by GreenFrog, May 17, 2012.

  1. GreenFrog

    GreenFrog Senior member

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    Does anyone here work an equity research associate or analyst on the buy side?

    I'm highly interested in making a move there down the line and would appreciate some discussion surrounding the topic.

    Currently in consulting which I think provides for a decent transition story that makes sense in terms of skills learned.

    Cheers.
     
  2. gettoasty

    gettoasty Senior member

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    Do you mean looking at mutual funds and portfolio options/allocations?

    CFA comes to mind and I work with one in my office. Sort of a slow moving job TBH with a lot of digging and calling regarding updates performance etc.

    I am sure you mean something else though in terms of the buy side, more hands on with a role in the decision process of "why should we buy 'x' in stead of 'y'"
     
    Last edited: May 17, 2012
  3. Beckwith

    Beckwith Senior member

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    Spent five years on the sell side working with II ranked analyst. Buyside is better than sell side, but much shorter leash with respect to getting it right. What information are you looking for?
     
  4. kasper007

    kasper007 Senior member

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    i have a few friends / ex-colleague working in the field. the line is often blurry between research and portfolio management and many funds (especially small / medium sized) don't have a dedicated research group. It's a fairly diverse universe with different philosophies (working at an activist HF will be very different that working with a global macro HF which will be very different than working at an asset management firm). you should have a clearer idea of what kind of fund you'd like to target too, a million kids wants to work on the buy-side so need a pretty credible story to differentiate yourself from the competition

    by consulting, i'm assuming you're at MBB. unless you exclusively focus on a particular industry and have a very in-depth knowledge of it, i don't think there's that much overlap between consulting and equity research skill set and while transitioning from consulting in not unheard of, it's definitely not the most common path. i'm assuming you're doing the CFA.
     
  5. cchen

    cchen Senior member

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    everyone i know who is in or has been in ER hates/hated it.

    analyst on the buy side is much better but you won't get any leeway for your own decisions until you prove yourself. maybe jump to PE/HF after 2-3 yrs in consulting then see how it goes.
     
  6. Beckwith

    Beckwith Senior member

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    I think the transition comes from the analytical ability of the consulting side. it is a very tedious job, but like consulting heavy use of excel will be a common thread between the two. The same reason Wall St. loves to enigeering students, problem solving ability can be molded to fit different needs within finance. I left the sell side because the work/pay ratio was really swinging towards the bank and it was time to move on.
     
  7. dah328

    dah328 Senior member

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    Equities in Dallas!
     
  8. kasper007

    kasper007 Senior member

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    i sorta agree in theory, but in practice, when you have had almost zero exposure to capital markets, valuation, investing, etc it's very hard to compete against someone who has. Especially for a buy-side position, you'll always be competing against folks who already had real finance experience and it's really hard to differentiate yourself

    I know it's not exactly the same, but i work in PE and while we always say that i'd be nice to hire more people with a consulting background, when it comes down to it, someone with and IB background can be fully productive and autonomous day one while a consultant will need a couple months to get up to speed. Yes the average consultant is very good with excel, but has never built a proper financial model.
     
  9. chogall

    chogall Senior member

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    PE is better for you. Besides, they do hire quite a bit of talent in operations for the portfolio companies.

    If you insisted in going to ER, sell-side is the better option. It offers you much better training.

    One thing about buy-side, most managers tries to hire for talent but their process only screens out good journalists.
     
  10. GreenFrog

    GreenFrog Senior member

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    meh.. I thought about PE but I don't know. I'm sick and tired of corporate politics and bullshit and I feel like PE would be rife with that. Not to say that ER wouldn't, but for my personality type, I think ER suits me better.

    Def. looking at the buy-side over the sell-side.
     
    Last edited: May 25, 2012
  11. Nereis

    Nereis Senior member

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    Corporate politics is all about how large the organisation is. If you're at a smaller house where everyone actually likes each other it shouldn't be an issue.
     
  12. GreenFrog

    GreenFrog Senior member

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    True, about the politics. The company I work for is just a shark tank and also has its own breed of corporate politics.. It's extremely draining for an introvert like myself :(

    I think the nature of ER fits my personality a lot better and I just love the appeal of working under an II analyst and seeing his/her reports being published and having an effect on a stock's movement. That's fucking cool. I'd like to be a part of that because I genuinely feel that would be satisfying in terms of my wanting to have an impact on something.

    The hours aren't as bad, I presume? Yes, I like that the pay in ER is quite decent, but I don't want to sacrifice my work-life balance for a fat paycheck, a la investment banking. Currently, I'm putting in around 60ish hours or so and it's not bad at all. Although I do travel every week and that's starting to suck ass. The perks, upgrades to first class, room service.. meh. All that stuff stopped being cool once I started stressing out on Sundays about doing laundry, folding my shirts so they don't get wrinkled, and packing my bags to leave home.

    Was originally in Boston for my first job, but I took a relocation opportunity so I'm in Dallas now for at least a year. After that, I'd definitely like to live in NYC or maybe even in California. I don't see myself sticking around in Dallas for more than a year.

    Incidentally, my best friend's older brother is a BSD on Wall Street and my sister just recently got a job with a lady whose husband is one of the original founding partners of TPG. So I think I have some decent exposure to potential contacts but that's for later, I guess (gosh, I hate thinking like this -- feels like I'm objectifying relationships).

    As for buy-side vs. sell-side, I guess I'm being a sucker for wanting to be on the buy-side because, well, it's cooler, I guess. But what is the real difference between what an ER associate would be doing in a sell-side shop vs the buy-side?
     
    1 person likes this.
  13. gettoasty

    gettoasty Senior member

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    Not much to add, good stuff being said. As far as corporate politics, IMO it really depends on the employer / boss and your colleagues. I work in a small 7 person firm and being an introvert myself, I can really careless about the gossiping, joking around that happens daily. It puts a bad mark on myself though as management thinks I am too quiet and they're always wondering what the hell am I thinking. I only communicate during projects, internal meetings and ask questions for clarification purposes. I am not a fan of divulging my personal life details and become a buddy buddies with my coworkers. It is like any relationships and I think sometimes there needs to be a line drawn.

    In other words, I like to keep things professional at work whereas the atmosphere is more relaxed.

    Can anyone confirm the CFA as mentioned earlier? Or can GreenFrog jump into PE, ER after consulting.
     
    Last edited: May 26, 2012
  14. RashidD

    RashidD Member

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    I work for a firm which specialises in equity research outsourcing. It's probably the most interesting job I can think of the finance/ management field, other than consulting - which ironically is something i would look at getting into in the future. Since I'm into outsourcing, I've sampled working for both the buy-side and the sell-side. Basically what I've found is that I prefer the sell-side as financial modelling can become a bit of a chore once you've done so much of it.
     
  15. GreenFrog

    GreenFrog Senior member

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    Good to hear.

    Consulting is a tough gig with the travel. I don't know how old you are or if you're married, but if you really want to do consulting, I suggest you do it sooner than later when you're younger and can take a 'hit' to your social life.

    For your models, do you guys use templates? What kind of models do you use? DCF?

    Frankly, I suck ass at excel and I need to learn modeling skills. Sadly, we don't model much at all and my current project requires zero modeling work. I might have to take some wall street prep classes or something.

    Also not looking forward to having to take the CFA.. that in conjunction with the [new] GMAT..:shudders:
     
    Last edited: May 26, 2012
  16. GreenFrog

    GreenFrog Senior member

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    Yeah.. I hear you about keeping your professional life strictly separate from your personal life.. but the business world thrives on extroversion. You gotta at least act the part to get ahead.

    I put on a face of being more outgoing with my colleagues than I truly am and it drains me so much.

    The worst is my current project model where I'm at the client site in a cramped conference room with my manager, the VP, and EVP. I'm the ONLY junior guy and these guys are way older than me. I can't relate to shit in terms of what they talk about because of the vast generational difference. The toughest part, though, is being in the conference room with them all the time. I'm essentially 'on' all the time, as opposed to when I was still in Boston, working in a cube. I'd be able to surf the web sometimes or walk to other cubes and shoot the shit with other analysts. But here, I refrain from using my cell phone, I don't browse the web, etc. All for 'optics,' as my manager likes to call it. It's extremely stressful because you have to be wary of what's on your screen when your EVP walks into the conference room. Naturally, as the junior guy, I get the shittiest spot at the table where everyone can see what I'm doing. LOL.

    But I still have a pretty good relationship with all of them. I'm a great listener and can ask intelligent questions to keep conversations going and that really helps them to trust me. My manager said I'm an extremely trustworthy person and that it's a valuable skill to have in the business world :)

    He and I have a pretty good working relationship because we talk more than just business. I ask him about his wife, talk about politics, and yes, even religion. We debate and argue sometimes but in a friendly way. It's interesting because we're always on opposing spectrums so it's cool to hear his perspectives.

    Blah blah blah, I digress.

    Gettoasty, I guess what I'm trying to say is that you should try harder to relate to your colleagues. I find it extremely ironic that I, of all people, am telling you this, because it's something I struggle with as well, but I'm getting better.
     
    Last edited: May 26, 2012
  17. gettoasty

    gettoasty Senior member

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    I understand what you're saying and I do at the same level as you in building the relationship with all my colleagues. As you said though it can be draining on oneself, and my personal belief is I rather be totally straight forward and blunt, than put on a good face for you. This is something my coworkers know very well it seems as they know I do no bullshit.

    Call it personal belief or personal values and virtues, but I hate being "fake"
    I already know and have been told already by colleagues, friends and family that it maybe my biggest obstacle when in the business world for me. Essentially just speak up more, not even about business related things but be more extrovert

    I just want to do what makes me happy in the end, and hopefully others can see the value in that as it will definitely put me in a better position mentally. I don't want to be disgruntled down the line in my positions at work.

    And yeah, so CFA is definitely something you will need. Why GMAT? Considering MBA in conjunction with a CFA? I hear that maybe redundant.
     
    Last edited: May 26, 2012
  18. GreenFrog

    GreenFrog Senior member

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    Yeah, I hear you. I respect that. I guess it is being fake, but in my mind.. it's just something you gotta do to succeed. In the end, I know the corporate world is not for me, unless I undergo some fundamental personality changes lol. It's mentally taxing and doesn't necessarily lead to happiness.

    For me, it's just a means to an end. I'm not sure what that end is quite yet, but it's a start. I definitely want to own some income generating properties, whatever those may be.

    I'm definitely going to get an MBA in about 3-4 years. It's definitely one of those things where I can easily see it being a huge disadvantage in the future by not having one. I have one older colleague at my firm who won't get promoted past VP because he never got his MBA. Granted, he's like 55, but still. He's been stuck in a VP position for YEARS. It's a good spot, but that's about as high as it gets for him.
     
  19. RashidD

    RashidD Member

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    We use some standardised in-house templates as well as templates which are made by clients. Many of them do have DCF and Peer Comps tables. I've never done scatter charts and any form of technical analysis looking at price fluctuations though.

    I can tell you life as an outsourced analyst is not great either, but I guess it depends on the clients you get. I've worked a three month project which was for one of the largest data providers who was serving an investment bank shifting to their platform. Basically we did the model conversions for them... It was hell. Some days 18 hours, with 15-16 hours being average. Start around 9 and end around 11/ midnight. Everyday almost... Lol, not my idea of a good life.

    For excel, it's basically practice... Have a look at some functions like IF, IF(ISERROR, Nested IFs (So like an IF function inside an IF function), ISBLANK and AND functions are useful and can be used inside IF functions too. Also ROUND, VLOOKUP and HLOOKUP.
    The stuff isn't hard and there are some youtube videos which you can watch to help you learn. Feel free to PM if you need any help. I'm no expert, but I can try to help :)

    CFA is tough, especially with a tough day job :p I'm trying to sit Level I in December hopefully.
     
  20. otc

    otc Senior member

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    CFA's a bitch. My friend is taking level 2 next week and has been studying his ass off for a LONG time.

    MBAs are certainly easier, although there is a huge opportunity (and pure cash) cost.

    Although usually when I read analyst reports, the more senior people all have CFA after their name.
     
    Last edited: May 28, 2012

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