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Equity Research: Like the Job, But NOT a Fan of the Culture
 

born2bebusiness's picture
O
 
Points)
 on 5/12/12 at 1:05pm
antisocial.jpg

I started an equity research summer internship at a bulge bracket firm in New York a few weeks ago. Although the work can be tedious at times, I have no complaints about the work itself. Being mentored directly by an experienced analyst is a real blessing. There is also quite a bit of modelling work. Overall from a career standpoint I am happy to be there and I'm learning lots.

However, the one thing I cannot stand about the past few weeks being here is the work culture. The research department analyst are all in relatively close proximity to each other but they basically stick to themselves, only talking to their own associates every once in a while. When people come in, or leave they rarely say hi or bye to anyone.

For the summer I'm fine with putting my head down and working hard. I came here to gain skills and build my resume, not to socialize. But at the same time this experience has got me thinking about whether I want to enter this industry for my career. I understand everyone is busy, and research likely attracts more introverted types, but still.

From your experience are all equity research offices anti-social? Is the work culture as a buy-side analyst similar?

In terms of the job description, I really like equity research. But I don't look forward to spending 60 hours a week isolated from human contact my whole life.

golfer23's picture

I think it varies, but the

ER
 
Points)
 on 5/12/12 at 9:52am

I think it varies, but the truth is that ER guys are paid to generate value-added insight on both the sell-side and the buy-side. That work is done alone.

I'm an extroverted guy in my personal life, and i felt the same exact way during my internship -- questioning whether that was really the best route. But from my experience, if you really enjoy analyzing companies and looking at stocks, there's not a better job for you. In a full-time job, you'll get more comfortable with the people around you, and find that you actually like being siloed during the day and reading and learning, and interacting with your team talking about the ideas.

On the buy-side, there is interaction of course, but most of the time it is in targeted pockets of time.

One aspect too that might be different is being at a BB -- I didn't go that route, so I don't know of the culture as well. But from what I've seen it just takes a little bit to get used to. Keep plugging and really give it your best effort. If you ultimately decide it's not for you, that's okay. But know that it does take some adjustment.

Anacott_CEO's picture

^ To echo what golfer said, I

CF
(King Kong, 1,260
 
Points)
 on 5/12/12 at 10:20am

^ To echo what golfer said, I also think that if it were a smaller shop, culture would be better and there would be more interaction. You will probably have to test those waters to see for yourself which you like better. Or, you could try to initiate the interaction at your current gig. If they reciprocate, great. If not, fuck em, just out work them for the summer.

FlakieBear's picture

The culture at your ER group

(Gorilla, 502
 
Points)
 on 5/12/12 at 12:00pm

The culture at your ER group might have a different dynamic from another bank/ ER group's culture. I am not sure why you are judging an industry because f the "limited" time you spent at one bank.

Power and Money do not change men; they only unmask them

BlackHat's picture

Totally agree that research

HF
 
Points)
 on 5/12/12 at 12:35pm

Totally agree that research is an independent thing, and ER attracts introverts. That's what I love about it though. But that's just me. Once you get to the buy side things turn a lot more into a discussion, and there's lots of people you have to explain your work to. It's the same in sell side ER in many ways though because gathering information requires talking to industry experts, management, etc. So it's not all bad, but you definitely have to be able to tolerate a decent amount of solo work throughout the work week.

I hate victims who respect their executioners

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BlackHat's picture

.

HF
 
Points)
 on 5/12/12 at 12:36pm

.

I hate victims who respect their executioners

Follow BH & Co. on Twitter: @DumbLuckCapital
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Banker88's picture

Am I the only one who thinks

IB
(King Kong, 1,654
 
Points)
 on 5/12/12 at 1:30pm

Am I the only one who thinks sell-side equity research is a crock of shit? All stocks somehow have a buy or hold rating with retarded price targets. Besides initiating pieces to learn about the industry, I feel that those reports do not add any "value".

In reply to Banker88
EfferCore's picture

Banker88: Am I the only one

(Monkey, 60
 
Points)
 on 5/12/12 at 1:49pm
Banker88:

Am I the only one who thinks sell-side equity research is a crock of shit? All stocks somehow have a buy or hold rating with retarded price targets. Besides initiating pieces to learn about the industry, I feel that those reports do not add any "value".

Research reports are the tip of the iceberg. For various reasons (relations with mgmt, banking deals, the sales-research dynamic, etc.) what is said in an earnings note or an update report is often kept pretty vague. The value-add is what is said on the phone.

Also, anyone who thinks "buy/hold" is the value that research provides doesn't understand the industry. A good sell-side analyst is many things and stock-picking is the least valued attribute. Being in the flow of information (both on the industry and the investor side), identifying multi-year shifts and themes, being a gatherer of buy-side consensus, providing a point of view that hasn't been picked up by consensus, are all valued more by the buy-side than a buy/hold/sell call.

In reply to Banker88
BiotechBanker's picture

Banker88: Am I the only one

(Monkey, 51
 
Points)
 on 5/12/12 at 1:56pm
Banker88:

Am I the only one who thinks sell-side equity research is a crock of shit? All stocks somehow have a buy or hold rating with retarded price targets. Besides initiating pieces to learn about the industry, I feel that those reports do not add any "value".

Yeah I agree with Banker88. When I read ER reports, I only look at the management commentary and the description on specific sides of the business which analysts believe will do well or not. PTs are absurd, there is truly no way to determine good PTs (depends on the industry, my industry is just all over the place). When they draw out graphs on price charts, or give earnings estimates, I tend to ignore it all.

My suggestion - do ER for a couple years then switch into a role with the particular industry you have been covering (or better yet, the companies you have been covering). Companies drool over guys with ER experience for Corp Strategy or M&A groups (hell, IBanking coverage enjoys ER as well, but you need to be more extroverted for that).

ER brings a lot of added value to the resume, but the introverted lifestyle is something you need to accept if you want to do research.

"Live as if you were to die tomorrow, learn as if you were to live forever."

Gate_Crasher's picture

The Research Department is a

IB
 
Points)
 on 5/12/12 at 2:18pm

The Research Department is a Cost - Center.

WSOusername's picture

I was just curious as to what

 
Points)
 on 5/12/12 at 2:47pm

I was just curious as to what your guys opinion is on adding "being anti-social" to my interests section if i planned on applying for many ER positions in the coming weeks

GBS

Maximus Decimus Meridius's picture

I think it totally depends on

ST
(Gorilla, 653
 
Points)
 on 5/12/12 at 3:23pm

I think it totally depends on the bank and the group. The different groups of ER are pretty isolated from each other and people tend to gravitate towards people alike so each has his own culture. I only know of two people who did internships in HR, and one of them was like you described but the other one was in a group where they all went out to dinner and drinks at least once a week, he got inveited to the VPs birthday party 2 weeks into the job with all the wives, and they all were close friends and hung outside the office a lot. In the downtime they had they played cricket in the office corridor. I know that's not the norm, but my point is you might want to consider to try to find a group where you fit in better on a personal level.

gamenumbers's picture

As a research associate, you

IB
(Gorilla, 691
 
Points)
 on 5/12/12 at 3:46pm

As a research associate, you have to be really hush hush all the time regarding what you are working on and so forth. It kind of breeds a culture where people really only talk to other associates within their own team (teams are usually 3/4/5 people) or sector (which at my Bb typically include 3/4/5 teams).

Kind of agree with the introvert thing, but please be mindful that an Analyst position is a serious sales type job. As you rise in the ranks in ER you will be spending an inordinate amount of time with clients, pitching ideas to them and sales, and (hopefully) lots of television / media appearances as well. Introverts can sometimes have trouble making that transition to more senior roles. But definitely agree ER does attract a more thoughtful, introverted type of person.

NewGuy's picture

born2bebusiness: Is the work

HF
 
Points)
 on 5/12/12 at 4:45pm
born2bebusiness:

Is the work culture as a buy-side analyst similar?

At my preftigious fund, yes. But I prefere it that way brother.

born2bebusiness's picture

I guess it has it's pros and

O
 
Points)
 on 5/12/12 at 6:58pm

I guess it has it's pros and cons. For one, I've noticed my analyst has A LOT of autonomy over her work. She can work at home if she wants to for a day, and leave earlier some days etc. Also, in some ways it's nice that she can just do her work without being constantly pestered. At the same time a little more connection with other co-workers would be nice.

And in response to FlakieBear, didn't mean to stereotype the entire industry because it's true I have only been at one firm - it is more me trying to understand whether this is typical.

In reply to EfferCore
ERAnalyst56's picture

EfferCore: Banker88: Am I

O
(Chimp, 14
 
Points)
 on 5/14/12 at 10:05am
EfferCore:
Banker88:

Am I the only one who thinks sell-side equity research is a crock of shit? All stocks somehow have a buy or hold rating with retarded price targets. Besides initiating pieces to learn about the industry, I feel that those reports do not add any "value".

Research reports are the tip of the iceberg. For various reasons (relations with mgmt, banking deals, the sales-research dynamic, etc.) what is said in an earnings note or an update report is often kept pretty vague. The value-add is what is said on the phone.

Also, anyone who thinks "buy/hold" is the value that research provides doesn't understand the industry. A good sell-side analyst is many things and stock-picking is the least valued attribute. Being in the flow of information (both on the industry and the investor side), identifying multi-year shifts and themes, being a gatherer of buy-side consensus, providing a point of view that hasn't been picked up by consensus, are all valued more by the buy-side than a buy/hold/sell call.

Absolutely right. I wish more people + the media would understand this, but I guess its much more fun to say OMG ANALYST HAS BUY RATING AND STOCK FALLS BLOODY MURDER than in is to actually understand what sell-side research really is and the value it provides.

roar19's picture

Keep in mind too that this a

ER
(Baboon, 108
 
Points)
 on 5/14/12 at 7:34pm

Smokey, this is not 'Nam, this is bowling. There are rules.

IamObama's picture

How did you start a summer

ER
(Gorilla, 627
 
Points)
 on 5/16/12 at 10:06am

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