I am currently in a junior equity research role and I'd like to ask for some advice on how to remember the massive amount of data I am put through. in fact, altough you may instantly object: "oh boy, you only got 7-8 names and you got to remember only important stuff, the kind that moves the stock etc etc": I agree (and it may very well be that I am doing something deeply wrong) but unfortunately:
1) I (or to be more precise and true, my boss) have clients who can ask the most trivial details and we are expected to answer (boss says: "the junior is deep with the numbers, ask him" at which point you could picture me getting very pale). 2) I cover Media, Telecom and Publishers which have like 5 business units each (each with different strategic analysis, competitors, problems, stuff to know) with TLC having an unholy amount of data to be remembered. so 7 names are not THAT representative 3) to answer the classic question: "but to be a good pick, how many "random business input" do you need to have on this / that / that other one?" which requires additional supporting data. the mosaic theory does not come cheap in terms of required information 4) the usual Q/H/FY information (generally Q+Q / H / FY) plus some historical data for investors who are not familiar with the name on everything. I got to know gross/ EBITDA / EBIT margin / capex / rev growth, and it's better to know those for each division. 5) Sector stuff: all kinds of data here 6) guidance; target exec said X, but thought Y and managed to deliver Z 7) macro: I assume that if you are a good salesman, data here are not that important, but to comfortably move and to pick what you need to quantitaevely substantiate your thesis is, in my opinion, a big plus (at least I would think so if I were on the other side because I'd think the Analyst may not be a total corporate-access-tool)
honestly I am overwhelmed, thus seeking advice. how do you handle this much?
Remembering Financials (Originally Posted: 07/26/2014)
Designation wise I am responsible for Capital Goods industry, but given the boutique nature of my firm I have to work across the industries. I am able to understand business models while I am researching or making a pitch book.
However, many a times after 3 months of pitching a partner comes up and asks what were the margins for this company/industry and I've trouble remembering that.
How do you guys remember financials (key BS and PL line items). I am thinking about reading some mnemonics books, are they helpful?
I always try to compare them to one that I know. Let's say I'm covering retail and know that Sainsbury is generating 40 bn GBP revenues (number are random) and my partner ask me for let's say Morrisons, I try to remember that Morrison is doing c. 70% of sainsburry or something along those lines... Don't know if that helps
JJ
Did you ever find a solution/advice? Cause this is me
My advice is put yourself in position of client (investor) and think through all the questions you would ask. And then go and try to answer all of those questions.
Yes it will force you to know a massive amount of data. There is no shortcut to knowledge (none that will get you paid anyway). But doing it this way will let you systematically learn the needed info that is better than rote memorization.
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