Feeling incompetent about the technicals? (not about interviews)
The more I learned about the industry, the more I feel incompetent. I learned how to build DCFs and analyze ratios from my finance class. I have done very well in finance and accounting classes so far. I'm the top student in all of them, and I go to a semi-target. But when I think about actually doing work, I am not as confident.
For example, how exactly do equity researcher determine the buy/neutral/sell rating and target price? P/E and EV/EBITDA are historical figures. Finding the industry averages is extremely subjective.
I tried to forecast stock prices, but I got wrong a lot of time. I thought Alcoa would have a positive quarter and I thought Citigroup would be a good buy.
Do people feel the same too, or is it just me?
Thanks.
Don't worry about it. Equity research guys spend hours and hours every day analyzing their industry and the companies they cover. They know more about the industry than you can imagine. Without spending all day, every day covering a company/industry like they do, you cannot expect to comprehend and analyze it like they do.
What exactly are you trippin about? Are you interviewing for ECM positions? If not, you probably don't need to know jack about stock valuation...
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