ER Informationals
So I have a few equity research informational interviews scheduled for this week (I'm a 2nd year MBA). The informationals are with sell side analysts. What are questions I should be asking? This is what I have been thinking:
How do you conduct prioprietary research?
What type of research is required? Is it fundamental, top down etc?
What is the general career progression like at your bank and how long does it take before someone starts covering their own stocks? Will I be allowed to cover peripheral stocks in the sector that I join within a year?
To what extent do you attend road shows?
What are your thoughts on the questions above? What else should I be asking?
Also: What should I know about the research department at their bank? What sort of research should I be doing on that? Obviously what sectors they cover and how the department is structured. What else?
I would like the discussion to revolve around career-related issues as well as their bank. I would like to stay away from heavy-duty technical questions and details in their specific sector.
Thank you so much for any advice you can offer!
I know for buy-side ER it's really important to be humble. I'd ask him what his approach for learning from mistakes when he gets things wrong from time to time. It was a great end of interview question for me interviewing on the buy-side.
You should know general financial info like what is happening in Greece and where the S&P is trading. Try to get him talking about the markets - this is a best case scenario where it becomes a conversation about the markets and stocks. The whole point is to get your name on his radar screen so when you apply he will be like "sure, give that kid an interview".
You should have a stock pitch in your back pocket in case they ask you what stock you like - probably best to pitch something obscure (don't pitch something in his sector or he find flaws with your analysis). You could ask about what differentiates the Analyst's research from his competitors. You could ask how the buy side uses his research, and what is more important - relationships with the buy side or management. You could ask what is the difference between a good Associate and a great Associate, and how does an Associate become an Analyst. (you won't cover stocks in a year's time, I would not ask that question) You could ask how he works with the Sales department to amplify his calls., and how he works with his trader. Ask if he works with the bankers to win IPO or banking business. Ask him about some of his more important calls, and how he got to where he is today.
Just some ideas.
I wouldn't ask some of the questions you put forward above. For example:
All sell-side ER analysts are supposed to be doing bottom-up fundamental analysis. They have a stock universe and they need to know those companies inside and out. Asking him whether he does top-down research shows ignorance of the industry.
Asking when you'd start covering your own names also shows disloyalty and a misunderstanding of the industry. There are normally only one or two analysts per sector. Asking about covering your own names may put him on the defensive - you're essentially asking when you might be able to replace him. The peripheral names question isn't bad - but I guarantee it won't be for several years (forget a year).
Otherwise, I'd say that gamenumbers is right, in the sense that analysts love talking stocks - especially in their industry. I'd perhaps suggest bringing one to two stocks that you know are in his coverage universe (ideally his top picks) and ask him why he likes them, what he thinks of them, how he arrived at his conclusions etc. Pretend you care about his opinion - it'll stroke his ego and make him comfortable (as this is what he does all day, anyway).
If you know something about these names (especially if it's new to him), it's bonus points for you, but never say anything you're not 100% sure about. I cannot stress this enough. Assume he knows these stocks like that back of his hand, so don't be afraid to say "I don't know". Having an opinion is OK, but realize that he'll probably fight you on it if it doesn't agree with his, and he'll win - so don't get into an argument, just listen, nod your head, and smile.
Skip the questions you mentioned and ask questions about the presenters' backgrounds. Get them talking about themselves and go from there.
Definitely agree with this and what Sovjet said. Your suggested question in the original post are very weak. I would feel like you're wasting my time asking shit that can be easily found online.
You can ask him about a piece of research he's particularly proud of. What was the non-consensus call? How did you come up with the research to support your thesis?
I think most good analysts should have a handful of great calls per year that is often based on proprietary research.
My analyst has a few connections with comparable private company while a lot of our covered companies are pretty tight lipped so having access to an unbiased source is very valuable. Also, these contacts are very difficult to make so if the analyst already has them, it will save you lots of trouble!
Thanks all, this is huge help!
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