6 Free Financial Modeling Lessons...and More.

(Human, 10,349

Points)

on 6/4/12 at 7:38am

Curious as well

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I don't work in ER (still in

Rambo

(Baboon, 150

Points)

on 6/4/12 at 8:13am

I don't work in ER (still in college), but I think big banks may "outsource" their research in the future. I think there's going to be a lot of new financial services firms that's going to focus solely on ER.

It's sort of like how many companies today outsource their behind-the-scenes operations (e.g. HR, audit) to other specialized firms (e.g. Kelly Services). It cuts down costs and increases efficiency. Not saying ER is back office, but it's certainly not as front office as IBD or S&T.

Rambo what r u talking about

UnclePanda

(Senior Monkey, 68

Points)

on 6/4/12 at 8:28am

Rambo what r u talking about ER not being front office? ER is definately front office. Sure ER isnt the correct pathway if you decide to go into PE, IB or corporate advisory because it is not deals focused but nontheless, focusing on and understanding economics, finance and markets you can make a hell of a load of good coin in the future, say in 15-20 years, when the next bullmarket returns. Sure there are not many openings in ER at the moment but if you build a career in 20 years time when the next bull market comes, you are set considering the amount of baby boomers that have retired. It depends what you love and are interested in. PE isnt the end all and be all and I think plenty of jobs remain in PE, all you have to look at is efinancialcareers to see this point is true.

ER is going to be the best

IlliniProgrammer

(Almost Human, 9,244

Points)

on 6/4/12 at 9:30am

ER is going to be the best survivor in a terminally declining industry. Not unlike carriage interior manufacturers of the late 1800s. The actually carriagemakers went out of business, but the interior guys got contracts from the automakers and ultimately got bought out by them.

IBD makes the wooden carriage wheels and S&T makes the horses. But ER does something that creates value regardless of the market. It ultimately does the research that shows where the money should go. You could argue that it is back-officey, but it's a lot harder to make the argument that it doesn't create economic value than it is for S&T or IBD.

Work hard, play hard.

ER is close to being dead

spaceagecowboy

(Orangutan, 272

Points)

on 6/4/12 at 9:38am

ER is close to being dead bros.

spaceagecowboy: ER is close

wallstreetballa

(Gorilla, 673

Points)

on 6/4/12 at 11:09am

spaceagecowboy:

ER is close to being dead bros.

Please distinguish fact from opinion

IlliniProgrammer: ER is going

(Human, 10,349

Points)

on 6/4/12 at 11:11am

IlliniProgrammer:

This is an excellent observation. Any idea on what the shape of the role will be a few years down the line? I'm trying to get a feel for what the industry will look like to plan in that direction, so I figure why not spend a few minutes speculating...

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It will still be there as

Ricqles

(King Kong, 1,270

Points)

on 6/4/12 at 11:12am

It will still be there as long as there are buyside firms around. That being said...how much is going to be in the US is debatable.

As long as the

IlliniProgrammer

(Almost Human, 9,244

Points)

on 6/4/12 at 11:15am

As long as the companies/primary businesses are in the US, ER will be in the US.

With the discovery of shale gas and the US's control of the great lakes- the world's largest supply of fresh water- I suspect those businesses and thus ER will be in the US for the rest of our lifetimes.

Work hard, play hard.

1a. ER is front office. It is

Dank Nugs

(Baboon, 148

Points)

on 6/4/12 at 11:55am

1a. ER is front office. It is a client facing role. Any other suggestion is ludicrous. ER analysts don't simply sit behind a computer and type all day. They talk to C-level execs and portfolio managers for the largest asset managers (i.e. mutual funds, hedge funds) in the world. I'm not sure where the confusion comes from.

1b. ER is not dying but consolidating and rationalizing, yes. There are far too many analysts covering stocks and far too many boutiques. It's common to read something like "well-respected boutique" on this site but in reality, besides a handful of places like ISI Group, boutiques are homogeneous. With volumes down and commission growth minimal, the boutique S&T model will disappear and shops will close. BB's will still be able to stay afloat by capturing trading commissions and more soft dollars because of better corporate and analyst access. Note that I didn't say better analysts but BB's have bigger coffers and will always be able to support more analyst marketing, large conferences and non-deal roadshows which are the main sources of commissions. There's no reason that more than ~15 people should cover any one stock and sadly, a lot more firms and analysts will need to be thinned out before ER can be profitable again.

Dank Nugs: 1b. ER is not

(Human, 10,349

Points)

on 6/4/12 at 1:00pm

Dank Nugs:

This is the impression I've gotten lately as well. Where do you see the opportunity within ER? Where do you think the opportunity for people will be as the fat is trimmed in the industry?

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The buyside will exist, so ER

West Coast rainmaker

(Neanderthal, 2,092

Points)

on 6/4/12 at 3:07pm

The buyside will exist, so ER will exist. There are too many companies for funds to research every one in depth. Likewise, ER will be most in demand for unusual industries or industries undergoing considerable change.

Basic materials requires in depth knowledge of those markets, reserves (in the case of metals & mining), and established hedges.

Biotech, Pharma, and HC require a lot of industry expertise, to the extent that a science background is very useful. Is XYZ co's drug novel enough for a patent? What is the likelihood of FDA approval, given the results of past tests?

FIG is tough. Banks are rapidly changing, and all financial institutions are very complex. Due to often lackluster disclosure, you have to dig deeper than the 10k.

Real estate also operates according to its own set of valuation metrics. Same with O&G.

Unless you are a giant $20+ billion HF or massive mutual fund, you are unlikely to have sector specialists. And you do need specific knowledge here; I would not feel remotely confident valuing a startup biotech company, for instance.

Thanks for the excellent

Points)

on 6/4/12 at 5:04pm

Thanks for the excellent insight guys.
Would have given SB to you all if I had them.
I'll reply to a few posts separately.

However, the general consensus I have been getting from these comments is that ER is FO despite what some say. And that in a bad market it is the most important division because it reveals where money should/shouldn't be which can save millions if not billions. Yes?

Secondly, a few people stated that it will be going through a massive shuffle in the foreseeable future, is it possible for anyone to put a timeline on this? When it will return to the strength it once was or whether it will at all return to that?

"All things are difficult before they are easy"
- Thomas Fuller

Rambo: I don't work in ER

Points)

on 6/4/12 at 5:06pm

Rambo:

I get the impression that this could be a good thing? Correct me if im wrong, but it sounds like they will become more independent and maybe more relied upon?

"All things are difficult before they are easy"
- Thomas Fuller

spaceagecowboy: ER is close

Points)

on 6/4/12 at 5:07pm

spaceagecowboy:

ER is close to being dead bros.

Explain please :o

"All things are difficult before they are easy"
- Thomas Fuller

Dank Nugs: 1b. ER is not

Points)

on 6/4/12 at 5:15pm

"All things are difficult before they are easy"
- Thomas Fuller

Good luck convincing your

IamObama

(Gorilla, 621

Points)

on 6/4/12 at 9:10pm

IamObama: Good luck

Points)

on 6/4/12 at 9:25pm

"All things are difficult before they are easy"
- Thomas Fuller

West Coast rainmaker: The

energyanalyst

(Orangutan, 307

Points)

on 6/4/12 at 9:34pm

-1

Research is where a lot of

ILOVENYGUY

(Orangutan, 343

Points)

on 6/4/12 at 10:33pm

Kudos to westcoast and nugs,

EfferCore

(Monkey, 57

Points)

on 6/4/12 at 11:04pm

u always r gonna need ER

swagon

(Neanderthal, 2,973

Points)

on 6/5/12 at 1:58am

-2

swagon: u always r gonna need

Points)

on 6/5/12 at 3:35am

"All things are difficult before they are easy"
- Thomas Fuller

-1

burnsy: swagon: u always r

HumPiranha88

(Baboon, 129

Points)

on 6/5/12 at 3:46am

-1

HumPiranha88: burnsy: swa

Points)

on 6/5/12 at 4:10am

"All things are difficult before they are easy"
- Thomas Fuller

-1

I am currently doing trading

brownianweiner

(Chimp, 14

Points)

on 6/5/12 at 8:05am

There will be always be room

Ben Shalom Bernanke

(King Kong, 1,425

Points)

on 6/5/12 at 9:10am

burnsy: HumPiranha88: bur

TonyPerkis

(King Kong, 1,578

Points)

on 6/5/12 at 9:12am

I eat success for breakfast...with skim milk

Ben Shalom Bernanke: There

energyanalyst

(Orangutan, 307

Points)

on 6/5/12 at 11:03am

I don't think so. I think

mal228

(Chimp, 3

Points)

on 6/5/12 at 12:23pm

-1

mal228: But i still think

andyinsandiego

(Orangutan, 333

Points)

on 6/5/12 at 1:32pm

andyinsandiego: mal228: Bu

See my Monday Morning Brainteasers

(Human, 10,349

Points)

on 6/5/12 at 1:43pm

YOU JUST GOT TROLLED
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There are gonna be 50,000

Tommy Too-toned

(Gorilla, 505

Points)

on 6/5/12 at 4:25pm

It's a cost center. They

Gate_Crasher

(Senior Baboon, 187

Points)

on 6/5/12 at 5:05pm

I dont think some sectors

energyanalyst

(Orangutan, 307

Points)

on 6/5/12 at 5:18pm

Ben Shalom Bernanke: There

Bill Brasky77

(Chimp, 6

Points)

on 6/5/12 at 8:07pm

-Brasky Out

Bill Brasky77: Ben Shalom

Ben Shalom Bernanke

(King Kong, 1,425

Points)

on 6/5/12 at 8:27pm

The people who think that ER

slowdive

(Senior Baboon, 227

Points)

on 6/5/12 at 8:37pm

Ben Shalom Bernanke: Bill

Bill Brasky77

(Chimp, 6

Points)

on 6/5/12 at 9:03pm

-Brasky Out

I think ER industry will be

D0PA

(Chimp, 10

Points)

on 6/6/12 at 12:09pm

Tommy Too-toned: There are

wallstreetballa

(Gorilla, 673

Points)

on 6/6/12 at 1:09pm

I recently read an article on

wallstasks

(Senior Baboon, 197

Points)

on 6/6/12 at 7:24pm

I am surprised that many of

roar19

(Baboon, 108

Points)

on 6/6/12 at 7:44pm

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

Also, like some have said, ER

roar19

(Baboon, 108

Points)

on 6/6/12 at 7:45pm

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

wallstreetballa: Tommy

Tommy Too-toned

(Gorilla, 505

Points)

on 6/7/12 at 9:21pm

Maybe this was already said

sk8247365

(Gorilla, 525

Points)

on 6/7/12 at 10:33pm

I also hear some finance old

R0bin

(Orangutan, 292

Points)

on 6/18/12 at 3:30pm

Baby you're the perfect shape, baby you're the perfect weight. Treat me like my birthday, I want it this way and I want it that way. It makes a man feel good baby.

swagon: u always r gonna need

Buddyfox

(Senior Orangutan, 499

Points)

on 6/18/12 at 3:48pm

Buddyfox: swagon: u always