Has anyone here worked in Equity Research? What is it like? Is it a high stress environment? Is it bullshit? Is it long-hours? Do you make what you kill? Are you given a lot of freedom in your stock selections? Do you have to pick winners to survive? Can anyone give me some light on what life is like as an equity analyst...
No but I have worked in the hedge fund industry so I know how it works on both the buy and sell side. You spend all day crunching numbers, calling companies and traveling to attend conferences, road shows and management meetings looking for an edge Yes it's high stress, at the end of all the research you form an opinion and make a call that people will trade on. If you are wrong then you are going to hear it, assuming you still have a job. I wouldn't call it bullshit, if you are analytically minded you would enjoy it. Yes the hours can be long. You will probably have to travel alot, be up in the middle of the night to write notes when things happen in your universe, etc. Your bonus will certainly take into effect how right you have been....on the buyside some analysts will actually take positions but this depends on the firm and how senior you are. On the sell side you don't take positions in the stocks you cover. You can usually cover whatever you want, but most analysts work within a sector or niche...you want to know your sector and your companies inside and out so in most cases it benefits you to keep the universe fairly small. Yes, if you make a couple bad calls no clients will be interested in your research and you will be fired (sell side) and on the buy side you will most likely be canned for the first signifcant loss that a portfolio manager pins on you. You can get away with more bad calls on the sell side for sure, at the hedge fund I used to work for analysts got the boot all the time. That is what life is like.
Very Interesting... So when an analyst gets the boot do they usually have a hard time finding another job?
The first time I imagine that most prospective employers chalk it up to a bad bet that won't happen again or the analyst lies and says that he was fired because the portfolio manager took a bad position and needed someone to blame, enter analyst as scapegoat. If your screw up and get fired again then you have a problem. In most cases you arent just out there making calls on your own though, you will have a team or at least a boss who is checking your work and chiming in with their thoughts/ideas.
simple strategy- spend some money researching what is available out there- various reports- Greenlight uses one for shorts Psychology- Market Semiotics Various Macro research- Global Macro Investor GaveKal And read as many monthly letters from fund managers as you can get- some like Third Point are easy to find on their site... Once you can at least understand the points of view the various Market letters contain, and you can carry a thought and develop your own, and generate your own trades- you are more than ready to work on your own as a researcher.