Recently promoted to analyst from associate, but I feel lost and don’t know what I’m doing.
I’m a 32 year old late bloomer to the industry- some brief background to give perspective: grew up poor in one of the lowest socioeconomic areas in the Midwest; first generation college student; no guidance on what to do with my life in high school and due to mostly financial burdens of not being able to afford medical school & not wanting to be poor forever, ended up switching my major twice from biology -> music performance -> marketing research. I didn’t know what a bond or equity was until college (due to being so poor, there wasn’t investing money) and became interested as a gateway out of the mud. Ended up getting my MBA with a focus in finance and started working approximately 5 years ago as a broker after getting my 7&63 licenses, started realizing I didn’t want to be talking to people all day and networked& hustled into an opportunity into research and got my 86&87 licenses. I’ve passed lvl 1 of the CFA, working on lvl 2.
Over the past 2-3 years, I’ve been working as primarily as a research associate for a 2nd party research department at a large brokerage firm. The department is weird in the sense that they don’t create many revenue builds or DCF models, nor do they write the traditional sell-side or buy-side report. It’s more of a hybrid approach with portfolio management on the side. For the models and spreadsheets that are used though, I’ve built or written VBA macros to make lives easier and have become known as the Excel expert in the entire department. Earlier this year, knowing they took a chance on me and gave me the lowest salary on entrance, I asked for a raise and through some negotiations and threats of leaving, received a promotion to senior equity analyst…but I’m pretty sure it was due to wanting to retain my excel skills as I had not written much research prior. I’ve been assigned the Consumer Discretionary sector (which I’m stoked about) and asked to start covering restaurants and automobiles until I can take on a greater load. I’ve also been out on as a co-manager (it’s really like a mentorship) of our Small-Mid cap & International portfolios.
But I feel like I’ve got no clue what’s going on. I listen to earnings calls and hear about same store sales and 3-yr stacks but I don’t have the relative knowledge to know when a 20% 3 yr stack may be positive or negative for one company versus another. No clue on deciphering what’s most important to a company- their gross margins or reducing inventory. I’ll read and hear these reports and look at the performance in the market after earnings and have no clue why the market is going up/down and what the catalyst was for that company. I feel totally lost and full of impostor syndrome. I also feel like I’m stuck with this department or company forever since I wouldn’t know how to pitch myself to a buy-side or sell-side firm since my experience has come entirely from such a niche and unconventional department. I also feel like I need more modeling experience, but we never use them, so I’ll go on CapIQ and download models for my subindustries and just be overwhelmed with the data and option anxiety and have no idea where to start building my own after looking at them. Overall, I’m just feeling the pressure and I want to get better but I’m juggling so many different hats in my career, let alone my personal life, that I can’t seem to keep afloat. Then the personal doubt creeps in about my pedigree versus my Ivy League and target school colleagues and it causes even more stress.
If you were in this situation, or know of potential solutions to my worries, how would you proceed? Any feedback and ideas are welcome and much appreciated.
First and foremost, I want to congratulate you on making it this far. To do so is no small thing, especially given the numerous uphill battles you had to fight to arrive at where you're currently standing. I too was a late bloomer and deal with some pretty serious imposter syndrome, so what you're feeling is normal. I know the feeling of drowning in a new role with limited knowledge on what to do.
I am not, nor have I ever been in ER, but here is how I would approach the issue:
1. See if you can find a mentor and or equal to get a better grasp on how to approach your current role
2. Read through all the ER reports on not only the companies you're covering, but also on their competitors. Take auto for example. Get a feel for standard GMs and EBITDA margins, and for what quarterly production should look like. Is it cyclical, what are the drivers, how does it differ for EV vs ICE, etc. Do you have tools like CAP IQ that can help you quickly get up to speed with the financial analysis? What about Alpha Sense, where you can read through dozens of ER reports without paying for each individually?
3. Improve the relationship with your direct report. If you are feeling extremely lost, can you get additional feedback or guidance from your boss? Surely he or she knows what good looks like, and can perhaps offer general guidance as you get your feet wet in your new role.
These are the general three things I would focus on. Lastly, dont doubt yourself for your less than prestigious background. You're in the role and you earned your spot, so keep your head up and keep trying to get better. It may not be easy or quick, but if you keep working at it, you will improve faster than you can imagine.
This is good perspective. Fortunately, I have two very knowledgeable mentors and been given 6-9 months to get more acclimated with the role and space. I do have access to capiq, FactSet and some sell side research but it’s been difficult to understand how far and wide I need to go into certain things- what’s noise and what’s not. Maybe I just haven’t given it enough time, it’s been about 2 months…but I want to go above and beyond and to be slogging through it aimlessly this far has been mentally taxing.
On modelling - I also find downloadable models from Cap IQ / other websites overwhelming, there's just a lot of data you don't need.
I'd start practicing making models from a blank sheet of XLS. Only think about the numbers you need to calculate intrinsic share value (ie. DCF). Instead of adding random bells + whistles, focus on making it more accurate. This process will lead to you discovering concepts organically. Ie. trying to figure out how many shares will be outstanding in 5 years will inevitably end up in you understanding RSUs, options, share buybacks, etc.
I’m glad you said this, it weirdly provides me some relief about the complexity of the models.
Since no one in the department makes them (mostly cause we’re too busy managing lists and portfolios to do a traditional deep-dive), I’ve only had classes from YouTube and places like WSO and WallStreet Prep to learn from, but I thought maybe exploring those on capiq would give me some insight. It is a wealth of information, but didn’t really help me build from scratch. I’ll follow your suggestion and see how it goes. Thanks.
It appears that you have not gotten enough mentorship/guidance during the early stage of the research career before being ‘promoted’ to this role. First, you will need to develop a general research framework/approach to analyze an industry/sector. There’s a lot of guide on WSO on this. Second, you will need to understand the drivers of the sector/companies. Review 10–k and recent corporate decks of most representative companies in the sector and see what are the metrics they use and if you can generalize them to some extents, follow by reading transcripts and pay attention to what key questions analysts are asking over a few questions. Third, ideally you have access to a few sell side models and can speak to sell side equity analysts/senior associates to walk you through the ins and out of the industry and companies. Lastly, after having some basic understanding of the industry and companies, you can some out with some questions and speak with company IR to get their perspectives on key drivers, events, investor debate. Hope this helps. Good luck!
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