Hello,
I've been fortunate to have made the transition from middle office in AM to front office where I would be covering Energy, Materials and Real Estate while coding (python, C#) some analytical tools for the team.
The team is Growth oriented largely looking at small-mid cap companies (seldom large cap) with roughly 6b in AUM.
The team consists of seasoned professionals (min 17 yrs. ~ max 30 yrs of combined sell side and buy side experience)
I've looked at some reading materials like Oil 101 and The Prize: The Epic Quest for Oil, Money and Power and have taken WSP courses on valuation and Oil & Gas modelling courses.
I'd like any advice, tips and/or insights to use as a guide to build my game plan to get up to speed as quickly as possible to, not match other members of the team, but at least not be a drag.
Any advice would very much be appreciated.
Thank you everyone in advance!
Best practices for equity research analysts by James Valentine was a great resource for me when I started
Thank you! I'll give the book a thorough read! I currently don't have our sell side contacts. Once I do and if we have Bernstein, I'll definitely remember to inquire about that. By the way, are 'black books' something that every sell side shop has or is it specific to Bernstein?
Bernstein specific but other firms will have similar primers. Mauboussin’s “Measuring the Moat” paper is a quicker read that you might find helpful
Also if you guys get Bernstein’s research their black books are pretty helpful getting up to speed on industries/sectors
The most important knowledge you need, even when covering sectors, is general market and investing knowledge.
Understand how investing and business cycles work and how they affect your sectors and industries.
Valuing your company through models is only a small part of investing. Often times, they are a bunch of bogus anyways.
What really matters is understanding the catalyst for growth and the narrative/thesis around your stock or investment.
All valuation tells you is the margin of safety of an investment without any investment horizon attached to it.
Happy to discuss more, in terms of books to read, markets knowledge, investing advice, and more...
Thank you for your response!
When it comes to general market and investing knowledge, other than learning and absorbing my PM's philosophy and being able to apply his lens to the market and investing, what would you say is the best way to accumulate such knowledge?
I am currently writing a code to regress a list of macro variables against sectors and securities in attempt to come up with a multi variate formulas. I'm hoping this exercise will help me better understand your second point.
One question I have is, hypothetically given that a sector approximately have 150~200 names (large, mid, small cap) what would prompt you to look at a stock more closely and conduct further research - and hence come up with a narrative/thesis for a particular stock?
By the way, let me know if you'd prefer a PM or a reply on this post?
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