Anyone here cover banks or insurance?
What's it like? Would you recommend it? I understand that these two are generally seen as some of the sectors most likely to pigeonhole you. Is that true? Is there an any advantage to this?
Any colour would be great
Covered insurance for 2 years as a jr.
If that's the seat that you have a chance to cover then do it, but it's relatively boring.
On the plus side when you want to lateral no one will doubt that you can learn a sector.
What did you move onto after covering insurance? If you're willing to share.
Why did you find it boring?
I enjoy research for the stock picking element of it and understanding businesses, insurance is arguably one of the most accounting heavy sectors and not having come from an industry background in the sector was challenging at times.
Also fwiw I haven't heard a good thing about any of the seniors on the sector but that's anecdotal.
I’ve been covering banks at various market cap levels for the past few years and I truly enjoy it. The pigeonhole point is fair but it’s also often exaggerated. There’s a chance that banks might pigeonhole you within financial services because of unique accounting and concepts. However, the financial services space is so vast that bank accounting and knowledge is transferable to other sub sectors such as credit cards, brokers and asset managers, payments, and maybe even insurance. Additionally, learning about banks gives you an edge vs. your peers because it gives you a macro view on the economy and also analyze companies that not a lot of people understand.
I would end this by saying that choosing the right analyst is probably the most important factor in your decision making process. Try to get your hands on their reports and understand the value add they offer to investors. This will give you a sense on whether you would enjoy the work or not.
It will pigeonhole you eventually if you let yourself be pigeonholed. If you keep up with more mainstream sectors, invest them intelligently in your PA and can speak to them, you’ll be fine. I would say your buy side opportunities will probably improve if you ask your firm if you can rotate into a non-financial or at least non-balance sheet sector after 2-3 years, but you can still get regular looks from the buyside in a bank/insurance seat if you hustle and work on your own time.
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