Advice for Equity Research Associates - Part I

Thank you all on Instagram who contributed to the career tips. Before I dive in, one point to make: The sell-side research profession entails a lot of figuring things out on your own. As much as I (and many others) suggest finding a good senior analyst as a mentor, most of them are terrible managers, because Wall Street rewards producers, not good managers.

I hope these tips can help you manage and grow a career in sell-side research. As always, please send me your additions / feedbacks.

General Advice

• Pass Series Exams ASAP: You cannot add value until you pass your exams. After passing, 1) your name shows up on research reports 2) you can talk to “external parties”1 3) you can build brand for yourself.

• Triple-check your work: Build a reputation by having strong attention to details. That way, your senior analyst will give you more responsibilities.

• Be super organized: Use folders in Outlook, OneNote tabs, etc.

• Find ways to add value: Any work you can take away from your senior analyst frees up his/her time to serve more clients.

• Don’t make it up, if you don’t know the answer. Say “I will get back to you,” and actually go find the answer and get back to them.

• Understand things on a first principles basis: Don’t use jargons to fool yourself and your clients. Your clients will call you out: “what do you really mean by that (jargon)?”

• This job is what you make of it: If you want to become a senior Wall Street analyst or exit to other high-caliber roles (eg. buy-side), hold yourself to high standards and put in the work. If you don’t work hard, don’t wonder why you don’t progress like your peers.

• Even if you hate your covered sector, outsiders value an industry expert’s knowledge. Become an expert in your sector while exploring a move that suits your long-term interest.

• Trust yourself: Don’t let your VP / senior analyst bully you, they are not always right.

• Write things down: Most of us don’t have super-human memories.

• Constantly refine your workflow: Time your core tasks and think about ways to automate. Small process improvements add up. So much time is wasted on this job because of disorganized bosses, information asymmetry and pain-in-ass Supervisory Analysts, control what you can control.

• Learn to skim: There are many free / paid resources on how to read.

• Learn one Excel shortcut a day

• Be visible: cc your team on deliverables / updates on side projects

Single name / industry knowledge:

• Keep a diary of news / event on the covered companies: What did the news mean for the company and its financial outlook? How did the stock react? How does it impact the other businesses in the value chain (“read-thru”)?

• Read company / industry-related books: For oil and gas, for example, The Prize by Daniel Yergin and Rockefeller by Ron Chernow.

• Know every detail: You never know what information a client is looking for on your covered company. That client could be a return customer because you added value.

• Pay attention to the change in guidance or any incremental data point given between quarterly earnings, clients value that

• Know the bull / bear thesis: super easy, given you can be talking to a bull and a bear of a stock from the buy-side on the same day

• If your analyst runs a “generalist model,”2 be a specialist secretly: Clients value your depth of knowledge on names they are researching, not the number of names. It’s good for your brand building (and for a buy-side move if that’s your direction). Secretly follow fewer names and know them very well. It’s easier to “scale out” your knowledge to other subsectors later.

Financial Modeling

• Document modeling assumptions: It will help you the next time you work on the model and during your client call.

• Save before running an Excel macro: There is no undo after a macro run.

• Don’t assume an inherited model is free of errors.

Writing

• Conclusion up front

• Conform to your analyst’s writing style

• Be concise (but expect to be overwritten by your wordy senior analyst)

• Repurpose previous reports and exhibits

• Unlearn all the creative writing skills: We are trying to communicate views to institutional clients, not trying to win the Pulitzer Prize.

“System” knowledge:

So much of this profession is about knowing how your senior analyst and the team (“the system”) function day-to-day. If you master this, you will become very entrenched, and that helps your security.

• Take your FIRST compliance trainings seriously: You need to comply with the regulations anyways.

• When you are speaking with external parties, your senior analyst’s view and stock ratings are what you need to be messaging (the “house view.”)

• This is a highly regulated industry: Always ask your teammates / senior analyst if you are unsure about how to proceed.

• Document where things are stored on the shared drive: you will look like a hero during fire drills.

Great Paid / Free Tools

• AlphaSense / BamSEC

• OneNote / Evernote

• Bulk File Renaming Tool

Previously published:

• Network (In)to The Sell-side
• Deciding on your next sell-side research job
• Breaking Into the Buy-side
• What doesn't work in buy-side job search