Equity Research (Market Research vs Financial Analysis)

katie3000's picture
Rank: Monkey | 34

How much of equity research is "market research" and how much of it is "quantitative financial analysis?"

I ask because I have read several research reports from top-tier banks and many of them contain mostly market research.


Comments (6)

Aug 20, 2008

Adding to my post:

I ask because I consider myself as an expert when it comes to the Software industry, however:
-I do not know how to do financial statement analysis or financial modeling (but willing to learn).
-I graduated from a 2nd tier college about 1 year ago (undergrad)
-I am not strong in finance or accounting and did not major in anything quantitative
-I did a IT internship at a bank and a internship at IBM doing marketing

Can I still be hired as a Software Analyst with my software expertise and experience? I would like to get into a top-tier investment bank or a asset manager


Aug 20, 2008

as far as it seems there will be a lot of very qualified people chasing very few jobs this year, so you're going to have a tough time.

i'm graduating this year and would strongly consider ER but the recruiting situation is probably going to be historically bad.

Aug 21, 2008

equity and credit research are pretty fundamental. strategy, rates, and quant research are more market-based.

research is tough to get into because a lot of bbs view it as a cost center and aren't too eager to expand it. some boutiques, however, are really amping up research because they want to be less cyclical and differentiate themselves. they are also more likely to recruit regionally than exclusively from top tiers....and you'll probably learn just as much as you would at a bb.

Aug 21, 2008

Do you think it is easy to start at a Asset Management company like Black Rock, Blackstone, Legg, etc and move to a buldge bracket?

Aug 21, 2008

Yesman, while i agree that equity research is traditionally viewed as a cost center because it generates revenue indirectly. It is essential to understand what many funds give the banks business because of the research they provide.

Commission is made up of 2 parts - research & execution. Many funds pay the BBs simply because they have to pay them a certain amount for their research. This is also a reason why the bb's can charge higher rates because your paying for the research/coverage not just execution. As execution margins become thinner and thinner banks have to find a way to differentiate themselves and they do this by their research and coverage.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

Aug 23, 2008