Equity Research

[GreenFrog]

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.

 

[gettoasty]

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'"

 

[Beckwith]

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?

 

[kasper007]

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.

 

[cchen]

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.

 

[Beckwith]

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.

 

[dah328]

Equities in Dallas!

 

[kasper007]



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.

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.

 

[chogall]

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.

 

[GreenFrog]

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.

 

[Nereis]

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.

 

[GreenFrog]

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 ******* 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?

 

[gettoasty]

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.

 

[RashidD]

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.

 

[GreenFrog]



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. 

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: