If you could cover any sector, what would it be and why?
If you could start over and cover any sector from the start which would it be and why?
Is there a reasonable argument that any one sector particularly positions you well for eventual generalist investment positions?
Bonus: where do you see consumer discretionary fitting into this conversation? I'm considering a position covering this sector and am looking to weigh other perspectives here.
I worked in the automotive industry previously, but dropped back into core finance roles afterwards (this was during the financial crisis). My passion and most hobbies revolve around cars, trucks, ATVs, garages and even motorcycles. When I work on subjects I have a real interest in, it doesn't necessarily feel like work. Also, this industry is undergoing a lot of change and innovation so there is always movement, a change in customer behavior (more green/efficiency), legal framework (AI), and technology.
Space / Military must be so interesting if you have really good relationships and can get enough access to confidential materials. I'm not in ER so I don't know how it works like if you can sign a NDA and then get to view R&D or if it is more mundane maybe someone can comment on this point?
tech/healthcare because of possibility of rapid growth and constant developments in both the sectors. I also find both the sectors really interesting so that would make it more interesting to cover tech/healthcare
Hey ffffml , I work in Healthcare Technology and cover my industry well from an IT PoV. How would a finance professional go about "covering" the healthcare sector? I'd love to do it, I just don't know a framework or the resources for doing so.
I’m not quite sure if I understand your question. But someone at a fund covering the healthcare sector would probably follow the healthcare sector and then try and look for investment opportunities, either undervalued or overvalued companies. From what I understand, finding such companies is usually either from following the healthcare industry, understanding the industry and then running screeners to get a list of potential businesses that you might invest in. After that you wither the list down to one company and then thoroughly research the business, its consumers, competition, etc. then look at its financials. Thats what people covering sectors do I guess. Is this what you were looking for? Sorry if I misunderstood your question
I cover Industrials currently and I like it because it's so broad. You get exposure to just about every end market you could think of.
On consumer discretionary.
The internet group is where it's at. AMZN, BKNG and all of the native ecommerce companies.
If you are considering media that will also stay relevant although we have a transition period for the next couple of years for the legacy players as they catch up to NFLX.
Note that media is moving to the new communications sector in september.
The other stuff is kind of nichey. Autos, various forms of legacy retail, homebuilders.
IMO if you want to be a generalist moving forward you have to understand the role that technology will play in the economy. You want to cover an industry that gives you some decent exposure to tech.
O&G, Luxury, Automotive, Agric
Might be a Buzzkill for everyone and get monkeyshit for it but I think both the Energy and Utilities are the most fascinating groups.
You must be really fun at parties
People who say that are the ones themselves hanging out in the corner next to the wall.
Jokes on you i haven't been to a party in years!
Maybe if you explain why, you can get a banana. Because I don't really see the fascinating part of those groups.
Since i've been in trading I find fascinating the full spectrum of commodity products most importantly crude, LNG, NG, Power contracts etc and how companies use them. That and learning the complex route from product A to something as simple as flicking switch on to light up your room is still incredible to me. Nobody sits and thinks how intricate the system is and even though it's a little outdated/inefficient it affects everyone in the world.
If you cover Amazon on the sell side, you are pretty much a generalist because of how Amazon encroaches so many industries nowadays. So that's a thought.
In general, you want to pick a sector where info / data flow is relatively poorer (eg. Internet companies are notorious for providing almost no KPIs in their filings - if you can demonstrate you know how to triangulate different data sources to come up with a differentiated view based on your sell-side coverage exp, it's good for your investing career).
If you are growth-minded, cover TMT (hard to cover pharma / biotech without technical degree).
If you are value-minded, it's hard to say because a lot of sectors are going through seismic changes to be interesting. I would just avoid covering an industry that is in secular decline (eg. coal, yellow-page publishing, DVD rental, etc.)
Tech / O&G
Financial Institutions!
I also agree with financial institutions for research. Currently covering the sector, so interesting and increasingly more with these new trends of fintech and all
How Did You Figure Out What Sector You Wanted To Cover? (Originally Posted: 11/01/2016)
Hello all,
I am a lurker on this forum for quite some time. I am thankful for all the information that has been provided on this forum and would appreciate if any experienced professionals could answer this question.
How did you find out what sector you wanted to focus on? There are so many options, I want to cover each one just so I can learn as much as possible, but obviously that is not a good decision.
Preferences come naturally but understanding which industries you like the most takes time, as you have to get your own hands on them.
However, if you join the firm (say, a BB) as a junior, you rarely get to cover the industries you like. It is mostly a result of different business needs & tiny research teams. On the other hand, if you join the firm with previous experience in a specific industry, you will obviously be placed to cover that industry.
All in all, be satisfied if you get a job in ER after all.
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