12/7/07

Can any equity researchers in here tell me what exactly will I be expected to do if I land a job as an equity research analyst? And what computer skills and financial skills should I have? Please be as concrete as possible?

Comments (65)

12/8/07

I am an Associate in ER at a BB.

You will be expected to be able to analyze the financials of the firms in your team's coverage. You are expected to come up with tradeable ideas that are profitable for the desk and/or for institutional clients. You are not expected to acknowledge the existence of retail clients. Good writing skills are a must, since you publish analyses to the Street. You will write A LOT. You must also be very skilled in Excel (not just for financial models), as the job is extremely data-intensive.

You will also be expected to work from about 6 or 7 am until about 10 pm for an average day, just in case you were wondering about the hours.

Financial Modeling

12/8/07

I'd agree with the above comment. Although the hours really depend on what bank you work for and what group you're in. I'd say a typical day for me starts between 7 and 8 am and goes to between 7 and 9 pm; with the occasional project/report that keeps me there until midnight.

12/10/07

haha, those are garbage hours man.

I do 55-60 hours a week max and no weekends.

DO agree with the writing, but the amount of data analysis depends on desk. You're not sitting there opining over DCF's if you're a consumer analyst, compared to a say pharma analyst.

12/11/07

60 hours max? Man, what part of NY are you guys in? I can think of about 150 people that might want to join up.

12/11/07

Never mind, you're across the pond

12/10/07

Thanks for all the information from you guys. I am currently studying for CFA. If I do land a job as an equity research analyst, will I even have time to study for CFA at all?

12/11/07

first land the job and then see. CFA is hard and really depends on how intense your desk is - but it is very useful. I have learnt a shit load from my CFA studying.

12/12/07

bingo bango bongo. If I were in NYC, I'd jump off a bridge.

12/19/11

Make a course first. It's neccessary to become an equity research analyst...

12/19/11

This is helpful, thanks.

+1

12/19/11

Good info. I assume you're in the industry, random question I always wonder, why don't you get the Cert User star?

Most people do things to add days to their life. I do things to add life to my days.

Browse my blog as a WSO contributing author

12/19/11
A Posse Ad Esse:

Good info. I assume you're in the industry, random question I always wonder, why don't you get the Cert User star?

I am not interested in divulging the information to do that. You are correct, I do work in the industry though.

12/19/11

See, that's the only possible reason I could come up with. Good to know I was on the right track.

Most people do things to add days to their life. I do things to add life to my days.

Browse my blog as a WSO contributing author

12/19/11

I just want to clarify what he says only applies to research on the sell side. but kudos on the guide

Ray Finkle:

Hours: 40-80/week depending on earnings, roll outs, roadshows, marketing, etc...

Comp: 55-80 base for associates with 10-50% bonus

Prestige: No prestige in the firm you work for, more important is your analyst and if he has a marketable franchise. Working for a no name analyst at a BB is not as good as working for II rock star analyst at no-name shop.

Interviewing: Have a stock pitch ready (preferably in a sector/industry outside of the one you're interviewing in), be able to take a press release for earnings and sift through the fluff for important info and then writing a note on it, be able to build an iterative 3 statement model with a full comp table and DCF...

Exit Opps: B-school, HF, AM, IBD, Industry/sector you covered as management.

I think that covers it all, these questions are asked all the time. By all means please fill in where I may have missed something.

12/19/11
What-to-do-What-to-do:

I just want to clarify what he says only applies to research on the sell side. but kudos on the guide

I guess using words like Roll-Out, Marketing, and Roadshow (which could go either way) would have been a sign this is geared towards sell side research. Providing color on buy side research is very difficult as their are many intricacies that are firm specific.

12/19/11
Ray Finkle:
What-to-do-What-to-do:

I just want to clarify what he says only applies to research on the sell side. but kudos on the guide

I guess using words like Roll-Out, Marketing, and Roadshow (which could go either way) would have been a sign this is geared towards sell side research. Providing color on buy side research is very difficult as their are many intricacies that are firm specific.

i know i know i just dont want some newbs being confused.

12/19/11

ray, you should make a buyside ER FAQ and see what comparisons exist

12/19/11

Cosign the OP.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

12/19/11

On Buyside research: don't ask comp at BB vs Boutique; I speak for a lot of people in saying I would rather be a buy side analyst at several boutique firms than I would at GSAM. The BB buyside firms are as follows:
Putnam, T. Rowe, Fido, Wellington, PIMCO, BlackRock, Janus, Vanguard.

12/19/11

what about mutual funds like franklin templeton & MFS?

12/19/11

I know someone who is a new associate and makes near 100 base. Is this for real?

He did join after 3 years of working in a different industry, but nothing in ER.

12/19/11
runthetown:

I know someone who is a new associate and makes near 100 base. Is this for real?

He did join after 3 years of working in a different industry, but nothing in ER.

Yes, this is absolutely possible. The majority of the Street, assuming you work for a BB or reputable MM/Boutique, pays associates in the $60-100K range for base. There are outliers depending on location, size of firm, your experience, how long you've been there, etc.

12/19/11

Ray, could you please share some insights on different BB's ER strength and current situation? Based on institutional investor, it seems that JPM, Barcap, and BAML are top 3 BB ER now. I heard that CS ER doesn;t have bonus this year. Nomura is expanding. GS and MS are ranked very bad (8th and 9th if I recall correctly) but MS hired a lot of senior analyst back to late 09 so they may come back this year.

I would also like to hear on your thoughts on culture and compensation at different BBs. I know GS is competitive while CS is quite laid back. Not too many ppl talk abt sell-side research here.

thx

12/19/11
foreverbxr:

Ray, could you please share some insights on different BB's ER strength and current situation? Based on institutional investor, it seems that JPM, Barcap, and BAML are top 3 BB ER now. I heard that CS ER doesn;t have bonus this year. Nomura is expanding. GS and MS are ranked very bad (8th and 9th if I recall correctly) but MS hired a lot of senior analyst back to late 09 so they may come back this year.

I would also like to hear on your thoughts on culture and compensation at different BBs. I know GS is competitive while CS is quite laid back. Not too many ppl talk abt sell-side research here.

thx

I think culture is different from firm to firm. I guess JP has the best culture in my opinion as they retained a lot of ex Bear guys. Barclays retained a lot of the Lehman people and they are the most stuck up culture. Goldman I have no clue but I would guess it is pretty intense. BofA got a great staff with Merrill but they are big deal chasers (Hank Blodget...). CS I think pays the best and it is supposed to be a great place to work. MMs like Stifel, KBW, RBC, Baird, and Blair all put out good stuff.. Stephens as well. Comp is pretty much the same across the street, it goes up with experience... I touched on that in my original post.

So I guess I would rank research like this:
1)DLJ
2)Bear Stearns
3)Lehman Brothers

So
CS
JPM
Barcap

12/19/11

Ray, thanks for your input. Your comments on CS is high but why they had zero bonus this year, according to deal breaker.

I know the old Bear and Merrill have good research but there were too many turnovers after 08. I recently read MS's ER handbook (all senior analyst's bio) and it seems that they recruited a lot of talents from JPM. What do u think about them? I heard that it's really bureaucratic there. As you said, JPM is probably is best sell-side research now and didn't really cut headcount. Other BBs laid off many ppl during the past two yrs, especially MS. Many ppl are saying that the sell-side business will shrink even more. What do u think?

12/19/11
foreverbxr:

Ray, thanks for your input. Your comments on CS is high but why they had zero bonus this year, according to deal breaker.

I know the old Bear and Merrill have good research but there were too many turnovers after 08. I recently read MS's ER handbook (all senior analyst's bio) and it seems that they recruited a lot of talents from JPM. What do u think about them? I heard that it's really bureaucratic there. As you said, JPM is probably is best sell-side research now and didn't really cut headcount. Other BBs laid off many ppl during the past two yrs, especially MS. Many ppl are saying that the sell-side business will shrink even more. What do u think?

CS did give bonuses. If it was >$50k it had a lockup/deferral period, I think you read the headline number; you got to dig through the fluff. I don't know much about MS, I don't think their research is very strong. They could have picked off the JPM guys who were displaced by the Bear people. Like I said before all the legacy firms are the best; i.e DLJ/CS, ML/BofA, LB/BC, BS/JPM.... Also Citi is alright....
The Sellside model is a failing value proposition. It is a cost structure, very few of the analysts can bring in what they make. Many top analysts fetch $1m plus a year (add in travel) and it is very doubtful they generate that much in commissions and votes... Beyond that the buyside has their own research and instead of it being geared to a wide audience and strategy (Like sell side research) it is geared towards their own strategy. I think 99% of the sell side wants to be on the buy side. Don't get caught up in the name of the firm you work for, in ER that does not matter.

12/19/11

sell side research at BB's just doesn't make sense. work at an independent firm

12/19/11
lifesgreatmystery:

sell side research at BB's just doesn't make sense. work at an independent firm

It just serves a different purpose, a lot of times it is more about bringing in banking deals instead of putting your balls out there.

Also Bernstein is a great pure research shop, don't know how I overlooked them.

12/19/11

Ray, how many names do you cover?
Thanks

12/19/11

How useful is getting an MBA? I interned in ER but ended up working in sales. I like my current job, but ER was much more interesting and since I come from a liberal arts background, I'm thinking that bschool is the only way for me to open up better options. Would it help to intern for free at night/weekends, or is an MBA the most efficient way to go?

Get busy living

12/19/11

FInkle,

This is good stuff. Only point of contention:

A large portion of my day is talking to buy-siders to get them up to speed on names/industries. If sell-side provided little analytical value, I don't not see why they would constantly call. Maybe the buy-side is in the process of increasing headcount to fill this responsibility, but what better place to meet that demand than from those sell-siders already doing it for them?

So even if the sell-side if dying (don't necessarily agree), it seems like we would be in a good spot to take advantage of it.

12/19/11
Steve Mallory:

FInkle,

This is good stuff. Only point of contention:

A large portion of my day is talking to buy-siders to get them up to speed on names/industries. If sell-side provided little analytical value, I don't not see why they would constantly call. Maybe the buy-side is in the process of increasing headcount to fill this responsibility, but what better place to meet that demand than from those sell-siders already doing it for them?

So even if the sell-side if dying (don't necessarily agree), it seems like we would be in a good spot to take advantage of it.

I agree 100%.

12/19/11
Ray Finkle:
Steve Mallory:

FInkle,

This is good stuff. Only point of contention:

A large portion of my day is talking to buy-siders to get them up to speed on names/industries. If sell-side provided little analytical value, I don't not see why they would constantly call. Maybe the buy-side is in the process of increasing headcount to fill this responsibility, but what better place to meet that demand than from those sell-siders already doing it for them?

So even if the sell-side if dying (don't necessarily agree), it seems like we would be in a good spot to take advantage of it.

I agree 100%.

Agreed as well. I think the other part of it is that our buy-side counterparts are generally covering an industry (e.g., tech) instead of a subsector within that vertical. So they're responsible for a broader list of names than we are, which allows us to be more knowledgeable, in general, than they are on the companies we cover.

12/19/11
ShawnDU2009:
Ray Finkle:
Steve Mallory:

FInkle,

This is good stuff. Only point of contention:

A large portion of my day is talking to buy-siders to get them up to speed on names/industries. If sell-side provided little analytical value, I don't not see why they would constantly call. Maybe the buy-side is in the process of increasing headcount to fill this responsibility, but what better place to meet that demand than from those sell-siders already doing it for them?

So even if the sell-side if dying (don't necessarily agree), it seems like we would be in a good spot to take advantage of it.

I agree 100%.

Agreed as well. I think the other part of it is that our buy-side counterparts are generally covering an industry (e.g., tech) instead of a subsector within that vertical. So they're responsible for a broader list of names than we are, which allows us to be more knowledgeable, in general, than they are on the companies we cover.

While that is true the buyside analysts are not concerned with the immaterial which often times we know. Some of the things I know about these companies is pointless to 99% of investors but one probably has an interest.

12/19/11

The Investment Banking side pretty much needs sell-side reports when reviewing a deal/industry. So there is some value there.

12/19/11

Hey I am pretty new to this and I am wondering what skills are essential for an intern in ER. I know it will depend largely on the company/team/analyst, but what are some specific skills I should brush up on before summer. My skills are definitely more general at this time. I know how the financial statements relate, e.g. how depreciation will affect earnings and cash flow, etc. I'm pretty good with execl (i.e. pivot tables, formulas, vlookup) but I use the mouse and aparently thats frowned upon. And if I had to build a DCF model from scratch I'd be screwed right now. My interviews mentioned market surveys, so should I brush up on my stats.

I don't want to be the coffee fetching intern, so where/how can an intern add value. Just looking for some guidance from those of you with experience, thanks.

12/19/11
CLE:

Hey I am pretty new to this and I am wondering what skills are essential for an intern in ER. I know it will depend largely on the company/team/analyst, but what are some specific skills I should brush up on before summer. My skills are definitely more general at this time. I know how the financial statements relate, e.g. how depreciation will affect earnings and cash flow, etc. I'm pretty good with execl (i.e. pivot tables, formulas, vlookup) but I use the mouse and aparently thats frowned upon. And if I had to build a DCF model from scratch I'd be screwed right now. My interviews mentioned market surveys, so should I brush up on my stats.

I don't want to be the coffee fetching intern, so where/how can an intern add value. Just looking for some guidance from those of you with experience, thanks.

You will most likely not be building models, maybe updating and maintaining the comps and economic data. I would be surprised if you were the coffee fetcher, however during earnings you may have to do something along those lines.

Things I would stress; Be helpful, ask your analyst and associate what you can do to help them is there any ad-hoc project you can take ownership of? Be very attentive to detail, when updating models use the right font and color! If helping write a note make sure you read it over 10x before turning it in. Don't be the first one out, and be in before your analyst and associate; I think those go without saying but you never know. Try and be as entrepreneurial as possible, I would guess your time will be very independent. Don't bother your associate unless you have employed every feasible resource and still cannot figure it out. Don't be a know it all however have some ideas, you never know when they may use them (no joke).

I guess back to the model subject; some analysts are writers and some are model builders and all should be salesman. I feel a lot more analysts are modelers b/c they can set it up how they picture it. Although some analysts like for their associates to take ownership of the models, I guess it is case by case.

12/19/11
Ray Finkle:
CLE:

Hey I am pretty new to this and I am wondering what skills are essential for an intern in ER. I know it will depend largely on the company/team/analyst, but what are some specific skills I should brush up on before summer. My skills are definitely more general at this time. I know how the financial statements relate, e.g. how depreciation will affect earnings and cash flow, etc. I'm pretty good with execl (i.e. pivot tables, formulas, vlookup) but I use the mouse and aparently thats frowned upon. And if I had to build a DCF model from scratch I'd be screwed right now. My interviews mentioned market surveys, so should I brush up on my stats.

I don't want to be the coffee fetching intern, so where/how can an intern add value. Just looking for some guidance from those of you with experience, thanks.

You will most likely not be building models, maybe updating and maintaining the comps and economic data. I would be surprised if you were the coffee fetcher, however during earnings you may have to do something along those lines.

Things I would stress; Be helpful, ask your analyst and associate what you can do to help them is there any ad-hoc project you can take ownership of? Be very attentive to detail, when updating models use the right font and color! If helping write a note make sure you read it over 10x before turning it in. Don't be the first one out, and be in before your analyst and associate; I think those go without saying but you never know. Try and be as entrepreneurial as possible, I would guess your time will be very independent. Don't bother your associate unless you have employed every feasible resource and still cannot figure it out. Don't be a know it all however have some ideas, you never know when they may use them (no joke).

I guess back to the model subject; some analysts are writers and some are model builders and all should be salesman. I feel a lot more analysts are modelers b/c they can set it up how they picture it. Although some analysts like for their associates to take ownership of the models, I guess it is case by case.

Pay attention because you could become valuable very quickly: I had some of my work included in reports just weeks into an internship for example. It's pretty gratifying work, especially if you get a sector you're actually interested in.

Get busy living

12/19/11

To piggyback on the "talking to buyside folks," at my firm the senior analysts each cover multiple sectors with many subsectors and industries within them, plus their other responsibilities. We often rely on sell-side research to get up to speed on the specific subsector and the company's peer group. It's not practical for any but the largest buyside shops to have the kind of granular research coverage that bank ER does, where a single analyst and his junior staff can cover just semiconductors, for example.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.

12/19/11
Kenny_Powers_CFA:

To piggyback on the "talking to buyside folks," at my firm the senior analysts each cover multiple sectors with many subsectors and industries within them, plus their other responsibilities. We often rely on sell-side research to get up to speed on the specific subsector and the company's peer group. It's not practical for any but the largest buyside shops to have the kind of granular research coverage that bank ER does, where a single analyst and his junior staff can cover just semiconductors, for example.

Reason 1000000000 why the buyside is better; knowing 15 companies, to the immaterial, your whole career...

12/19/11

Ray,

This is a great thread. What is the compensation like for a BB sell side research associate (working for a top analyst) who moves to a top buyside shop after a few years of work? Sorry if this is a tough question to answer, but I am really curious to know. I have heard numbers, but they have varied pretty significantly.

Thanks,
Aces

12/19/11
Aces High:

Ray,

This is a great thread. What is the compensation like for a BB sell side research associate (working for a top analyst) who moves to a top buyside shop after a few years of work? Sorry if this is a tough question to answer, but I am really curious to know. I have heard numbers, but they have varied pretty significantly.

Thanks,
Aces

Depends, would you be an analyst/jr analyst/associate on the buyside? I'm guessing (base) $200-$250K/$125-$190K/$60-$90K....

Upon that; I think the fact you come from a BB will have little bearing on you salary but working for a top analyst (II rated, I presume) will probably have a little bump b/c the skill set you picked up under the SS analyst is top notch.

12/19/11
Ray Finkle:
Aces High:

Ray,

This is a great thread. What is the compensation like for a BB sell side research associate (working for a top analyst) who moves to a top buyside shop after a few years of work? Sorry if this is a tough question to answer, but I am really curious to know. I have heard numbers, but they have varied pretty significantly.

Thanks,
Aces

Depends, would you be an analyst/jr analyst/associate on the buyside? I'm guessing (base) $200-$250K/$125-$190K/$60-$90K....

Upon that; I think the fact you come from a BB will have little bearing on you salary but working for a top analyst (II rated, I presume) will probably have a little bump b/c the skill set you picked up under the SS analyst is top notch.

The base are around the ballpark. My personal belief based on my experience is that comps at top traditional AM are around the same as SS research, with a much bigger range (non-top traditional AM pays worse, and sometimes a lot worse than SS).

The biggest perk is that my job is literally 8 to 6 most of the time, earning season or not, because there is no rush to be the first to push out a report like a SS analyst would have to do. It is almost more interesting because we research for a purpose, at PM's request most of the time, as opposed to volume.

The other thing is job security. Investment professionals at traditional AM very rarely get laid off, unless you are the portfolio manager/APM of a fund that got shut down or something. Continuity is very very much valued by our clients. In most of the fund publication sent out, they usually put stats like (average years of service of investment professional in charge of the fund, years with the same team blah blah blah) on them. It is also too lean a group to be able to cut much cost from laying off. My firm has between 400-1B AUM and we only have around 100 investment professionals, which includes PMs, analysts, jr analysts, associates, risk guys. You just dont save that much money laying off your bread and butter guys to justify the opportunity costs. A lot of people around here have been working at my firm for 15, 20 years... I guess you could say one disadvantage is a lot of your coworkers are old guys haha

A lot of people have the misconception that SS analysts want to move the the BS because of comps. I think the job security/lifestyle while being paid a similar amount, with the chance to live in a slightly lower cost of living city, is the main perk here.

12/19/11
Ray Finkle:

Upon that; I think the fact you come from a BB will have little bearing on you salary but working for a top analyst (II rated, I presume) will probably have a little bump b/c the skill set you picked up under the SS analyst is top notch.

This must be a US thing. In Europe many buy side firms specifically require that you have gone through a bulge bracket's graduate training programme, and don't give a shit about who was your lead analyst.

I find this perfectly rational, since on the one hand 5 months (July-November) of intensive research training does make a difference, and the differences in quality among most analysts leading a BB sector is minimal.

Analyst rankings measure who is more "popular" with the buy-side, and this may not have to do with the research quality. It does have a lot to do with how knowledgeable the analyst is, but unfortunately there is no brain transfusion in the 2 years you spend with him.

For example, my lead analyst has always been ranked top 3 by Extel and ii for the last few years, but he is a busy and keeps-to-his-own kind of guy and does not dedicate me as much "teaching time" as some of my colleagues get. Plus let's be honest, in a couple of years you just learn the basics anyway.

12/19/11

What is the motivation of being Research Analyst/ research assistant (sell-side)?
What are attractive about this job?
other than financial rewards, is there genuine satisfaction behind?

I read a lot discussion about the job, the life, but little about why choosing Equity Research as career.
Please kindly share some opinion. truly appreciate!

12/19/11
susanchang:

What is the motivation of being Research Analyst/ research assistant (sell-side)?
What are attractive about this job?
other than financial rewards, is there genuine satisfaction behind?

I read a lot discussion about the job, the life, but little about why choosing Equity Research as career.
Please kindly share some opinion. truly appreciate!

For great justice.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.

12/19/11
susanchang:

What is the motivation of being Research Analyst/ research assistant (sell-side)?
What are attractive about this job?
other than financial rewards, is there genuine satisfaction behind?

I read a lot discussion about the job, the life, but little about why choosing Equity Research as career.
Please kindly share some opinion. truly appreciate!

I'll tell you why I like the job. 1) For the most part, every day is different and keeps you on your toes. 2) You're very involved in whats going on with the markets, the economy, etc. 3) There's a big sales aspect to it, so if you like sales its a great way to have a sales component to your job without having to pick up the phone and ask people for money all day long. 4) This may not be appealing to everyone, but there's a lot less risk than a buyside gig. You're not being judged on your P&L or your returns, you're judged on how much the sales force and the buyside accounts like you. You don't always have to be right, you just have to have an opinion and be a good source of information. 5) It's very interactive. Even at the junior level you're talking to sales and your companies and some accounts frequently. It steps up your learning curve as you dont want to sound like an idiot and breaks up the day from sitting in a cube by yourself all day working in excel.

12/19/11
Ray Finkle:

Hours: 40-80/week depending on earnings, roll outs, roadshows, marketing, etc...

Comp: 55-80 base for associates with 10-50% bonus

Prestige: No prestige in the firm you work for, more important is your analyst and if he has a marketable franchise. Working for a no name analyst at a BB is not as good as working for II rock star analyst at no-name shop.

Interviewing: Have a stock pitch ready (preferably in a sector/industry outside of the one you're interviewing in), be able to take a press release for earnings and sift through the fluff for important info and then writing a note on it, be able to build an iterative 3 statement model with a full comp table and DCF...

Exit Opps: B-school, HF, AM, IBD, Industry/sector you covered as management.

I think that covers it all, these questions are asked all the time. By all means please fill in where I may have missed something.

40 hour weeks is a gross underestimate for sell side. it is around 60 hour weeks minimum at the sell side.

7-8 AM morning calls to fight for sales' attention, gather all the overnight data. digesting all the news after 5pm for all those preannouncements pukes.

16+ hour days during earnings season is very typical where you will have to help cranking out research reports (which no buy side really reads) by the next day. say, updating/cranking out one company takes 3-4 hours, that easily adds 6 hours to your day when two companies reports at the same time. if you are lucky, you will have 4-5 companies reporting at the same day.

and during non-earnings season (two months per quarter), you will be busy building relationships with covered companies, going to all those stupid ass industry specific conferences, talking to various leads for 'channel checks', and worse hosting bus tours, company visits or conference events.

and depends on industry, dcf is not used much. or should i say useless. most of the time your senior guy will pick a stock price and you will have to manipulate dcf to that number. who the fuck can predict 10 quarters let along 10 years.

havent heard too much movement between ER and ibd except on the top end.

12/19/11
vitaminc:
Ray Finkle:

Hours: 40-80/week depending on earnings, roll outs, roadshows, marketing, etc...

Comp: 55-80 base for associates with 10-50% bonus

Prestige: No prestige in the firm you work for, more important is your analyst and if he has a marketable franchise. Working for a no name analyst at a BB is not as good as working for II rock star analyst at no-name shop.

Interviewing: Have a stock pitch ready (preferably in a sector/industry outside of the one you're interviewing in), be able to take a press release for earnings and sift through the fluff for important info and then writing a note on it, be able to build an iterative 3 statement model with a full comp table and DCF...

Exit Opps: B-school, HF, AM, IBD, Industry/sector you covered as management.

I think that covers it all, these questions are asked all the time. By all means please fill in where I may have missed something.

40 hour weeks is a gross underestimate for sell side. it is around 60 hour weeks minimum at the sell side.

7-8 AM morning calls to fight for sales' attention, gather all the overnight data. digesting all the news after 5pm for all those preannouncements pukes.

16+ hour days during earnings season is very typical where you will have to help cranking out research reports (which no buy side really reads) by the next day. say, updating/cranking out one company takes 3-4 hours, that easily adds 6 hours to your day when two companies reports at the same time. if you are lucky, you will have 4-5 companies reporting at the same day.

and during non-earnings season (two months per quarter), you will be busy building relationships with covered companies, going to all those stupid ass industry specific conferences, talking to various leads for 'channel checks', and worse hosting bus tours, company visits or conference events.

and depends on industry, dcf is not used much. or should i say useless. most of the time your senior guy will pick a stock price and you will have to manipulate dcf to that number. who the fuck can predict 10 quarters let along 10 years.

havent heard too much movement between ER and ibd except on the top end.

Were you trying to refute the 40-80 hours by placing your guesstimate within the realm of my average/median?

DCF is useless but you should still be able to build a model with one, I know a few analysts use them, the buyside is pretty unconcerned with the price target anyways. They are looking more for catalysts. Totally agree about predicting 10 years in advance, some kid sent me his initiation with a 10 yr projection- I laughed. Predicting more than 2 years is futile.

12/19/11

40 hours is definitely low end but there are some weeks where I work 50 and I'm twiddling my thumbs half of the time. And I'm on a 2 man team. I can't imagine what some of these 3-5 man teams are doing all day during slow periods. Also, I agree that earnings recap notes are worthless. Unless something major happens, they're not read and 80% is just reporting. I feel sorry for associates at banks that write up marathon recaps, like Jefferies for example.

12/19/11

No disrespect. Just pointing out 40 hour weeks is a gross underestimate. Sometimes between morning calls and aftermarket hours, you just have to sit through the whole market hour on youporn, SEC style.

Earnings seasons report marathon is not fun but necessary.

3 men teams are usually structured such that the analyst goes on road trip all the time with maybe an associate, and remote control office team to shape research reports to their liking. Haven't heard too many groups that do 3+ men research team on one specific industries; that's way too much.

12/19/11

How many stocks does the average team cover?

12/19/11
bulgebanker:

How many stocks does the average team cover?

Dependent on size of the firm, volume of trade generated, etc.

There are 2 men teams covering 8 stocks in some BB and there are solo analyst covering 20.

Most of the time its staying below 20 for depth and earnings season sanity.

12/19/11

Id say 15-20 is about the right size for a two man team.

12/19/11

A few more Q's:

  1. How much modelling is involved in ER?
  2. How hard is it to make the switch from ER-> IBD?
  3. Pay is 55-80 base for associate...I get confused with ER because Associate comes before analyst? Is this correct?
  4. How does pay progress from there with a BB?
  5. How difficuly would it be to break in as a qualified accountant with CFA?
12/19/11
Maherj1:

A few more Q's:

  1. How much modelling is involved in ER?
  2. How hard is it to make the switch from ER-> IBD?
  3. Pay is 55-80 base for associate...I get confused with ER because Associate comes before analyst? Is this correct?
  4. How does pay progress from there with a BB?
  5. How difficuly would it be to break in as a qualified accountant with CFA?

1.There is a bit of modeling involved. Mostly around earnings season when you are updating and forecasting. You will also build models from scratch for initiations. In addition, sometimes clients call and request projects that require some unique modeling. I would think it is not as intensive as IB. Tons of writing.

2.I'm not entirely sure. I think its more common to go from IBD-->ER. That being said, I don't think it is impossible to go ER--> IBD given you get your feet wet with the modeling.

  1. Associate comes before analyst. Base is within that range and sometimes much higher on the upper end for BBs.
  2. Depends on your analyst's pay most likely. That is a function of how much volume your stocks trade on your trading desk, sales votes, NDRs, marketing trips, how much the buyside pays your firm etc...

Also depends on your education, experience and how good of an associate you are...I've heard of some post MBA associates with 5 years of experience making 150-180k after bonus.

  1. In my opinion you are set. Like any other position in the business you will probably need to network to get your foot in the door. CFA's great for ER.
12/19/11

my thoughts:

1) having a BB name on your resume in ER does carry significant weight, especially when you are looking to switch jobs. If you want to make Analyst one day, it's probably going to be helpful to have a bb on the resume. but i suppose everybody around wso wants to work on the buy-side.

2) sellside boutiques do indeed have II ranked Analysts, but it general the whole deal with the boutiques is that those Analysts usually focus on research rather than vote-getting. A serious II ranked contender needs to know everybody in the buy side world, and to get to that point, you have to seriously ramp up the travel (and you usually have to get an extra associate on the team to help write / model in your absence). boutiques don't want to deal with the extra cost and hassle.

3) BBs have huge sales forces that act as a megaphone for an Analyst's research, and trading floors to generate revenue off of it. At a BB, when an Analyst makes a big call, every sales guy in the firm is going to be talking to everybody they know on the buyside, and that's in the us, europe, and in asia. It's a serious perk for being an analyst at a BB, which leads me to my final point

4) being an II ranked guy at a boutique means you are loving life, IMO. because it means that the boutique probably paid you an absolutely huge guarantee in order to get you to come there. And they probably brought the whole team there, so no changes to anything. But look, those roles are few and far between.

oh, and i would def like to work for an ii ranked analyst at a boutique vs some unknown at a bulge.

12/19/11

Do most teams carry two or three analysts (incl. senior)? If three, how many stocks should that team ideally cover relative to a team with just 2 analysts?

Also, is it uncommon to see some senior analysts working along (ie: no junior/associate)

Thanks.

12/19/11

Rule of thumb 6-8 stocks per person on the team. It is somewhat unusual to see a senior analyst with no junior - usually happens with younger guys who cover a subsegment within a larger team or a very small marginal industry

12/19/11

.

12/19/11
12/19/11
12/19/11
12/19/11
Add a Comment