Buy Side Interview: Answering No to do you Invest
If asked the question do you invest in the market, would you find something wrong with someone who answered no? This is for a buy-side research analyst interview as well.
I can see it being a bad idea for hedge funds but to me it is a stupid question. Most people who work at banks are are restricted from investing in certain securities and there is a huge risk to being around confidential information all the time. Not to mention that as a new analyst your only real industry knowledge is the industry you cover and that is usually the industry that you are banned from investing in. Then there is the whole...time issue. What kind of analyst in IBD has time to research stocks and invest? Throw that shit in a mutual fund and get some sleep.
However, I would answer this by saying that I keep up with the markets and try to do some research to develop theses on my downtime but I don't act on them because of strict compliance rules. This shows that you're interested in the markets, and can develop a thesis. Just make sure you have a stock pitch or two ready if they ask.
+1 @"Will Hunting". Couldn't have said it better.
Unless you are truly restricted from owning any stock I'd see it as a very big negative if you said no since it shows lack of interest.
Saying you follow the markets is like saying you breathe. Kind of stupid. Give me well thought out stock pitches and it's all irrelevant though.
@"Will Hunting" +1 Thanks for the response. That is very well put. I am currently working on my stock pitches right now.
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Floppity,
Would you suggest mentioning stock pitches immediately after saying no? Reason I ask if I feel like some interviewers may ask whether I invest but not necessarily ask for me to pitch a stock.
I use to invest but do not anymore. Should I even go into the detail of why I do not invest anymore? I feel like that is getting to deep into the question and may leave me vulnerable.
If they live overseas, as I do, they may well be in a double-bind that is increasingly becoming a problem for Americans: they can't open accounts with the firms they work for because onerous IRS regulations prevent their firms from accepting accounts from American citizens, and they can't open accounts with other brokers/banks because their company won't allow employees to have accounts anywhere else.
I like staying out of trouble so all my savings sits as cash in the bank or in CDs. Not much of a return, and it won't serve me very well in my later years if I never change jobs, but it's 100% legal.
So there are people who don't invest in the market. If you're on the interviewer side, OP, keep such people in mind.
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