Is ER as 'intellectually stimulating' as it's made out to be?
Sorry for the clickbait-y title, but wanted to ask what of work do ER juniors (associates with 0-3 years worth of experience) actually do? (I did an ER internship in my home country at a small bank and they didn't let me touch models so yeah, that's why the question).
Thanks.
Hell no
At times it can be yes. But most of the time at the junior level probably not.
Yeah this tbh.
Also highly depends on your analyst. There are some people who literally survive off maintenance work and half baked pieces (although I imagine some of that has been culled in recent layoffs). Whereas there are some analysts constantly putting out really thought provoking, interesting stuff. If you're a junior on such a team, you obviously get exposed to that work. Heck 3 years in you're probably leading/shadow point on at least part of the overall coverage/contributing your own ideas.
However this is just the "research" part of Equity research which misleadingly isn't all you do. There are client requests, marketing (yes, juniors do this too), earnings which can sometimes feel brain-dead.
Since when was ER ever 'made out to be' intellectually stimulating? Lol. Slapping on buy recs onto 80% of comps, dancing on fine lines to avoid pissing off management, putting tgt stupid marketing, writeups and client requests is intellectually stimulating? Most of the time it's a marketing/ sales job.
I think it's pretty commonly understood that HF, as a whole, is much more stimulating and original than ER.
That’s just tech. Analysts in other sectors actually conduct interesting fundamental research.
Yeah and no. You learn more about how to mosaic public info together vs IB and understand stuff in context of equity market expectations. That said, dont get nearly as much knowledge of credit mkts, financing. Imo you get what you put in ER. Youre constantly speaking with HF, IR, sometimes CEOs. Thats pretty invaluable exposure at a junior level if you ask the right questions. If you view yourself as note and model jockey, you prob wont get as much out of it.
What ER juniors do:
Is it intellectually stimulating? Yes, if you put in the work and are proactive on seeking out the knowledge and skills aligned with your investment philosophy. And you are paid to receive that knowledge from your reading, your Analyst, buy-side clients, your ER colleagues covering other sectors and your comrades working for the other analysts covering your sector.
Will you become a great investor just by doing the job? Hell no. We have seen sell-side analyst slapping 20x REVENUE (not earnings, revenue) as exit multiple and can't get to the current stock price but they will still call the stock a buy. But the lack of intellectual honesty in the profession is at this point widely known by ALL participants within the capital markets ecosystem.
more than working in a factory I guess
It is. I’m not that proactive about staying late to learn more about the companies, blah, blah, blah. But I have to know whats going on because I need to write reports and put at least a little opinion in it, send over question lists, hop on calls. I NEED to know what’s going on. My senior analysts always asks me - how much did the stock move on earnings?? Why is this stock down? Etcetera
My boss is a total douche too but the work is pretty interesting. Not to mention you get to meet really awesome CEOs, CFOs and network with them. If you catch them on the side at conferences (smaller companies), they love chatting, especially if you went to their alma matter
This is 100% how I feel about this job as well lol. Down to the interactions with my boss/boss being a douche.
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