Creating an equity research firm

Dear all,

i am from Vietnam where the marketcap is now USD 40-50 billion. There are thousand of foreign investors both institutions and individuals. However, there are a few brokerage houses that can provide security information for those investors (the information such as financial statements of listed companies, industries, macroeconomic,…etc.). Therefore, i am thinking about establishing an “semi” equity research firm which specializes in: (i) gathering information, (ii) processing information; and (iii) analyzing the information for recommending investment actions if requested.

I have more than 5 years of experience in stock investment and i also consecutively passed all three levels of the CFA exams. I would like all of you to answer my following questions:

  1. How can i start? How can i develop marketing plan for my financial information gathering and processing services to those foreign investors that i have never met them before?

  2. should i focus only on fundamental information (financial statements, regulatory filings, interest rates, …etc.) or on both fundamental information and information for technical analysis?

  3. other aspects to be taken under consideration.

please help me,


Firstly, do you have enough CAPITAL to start your own firm?

And a financial firm by no means “just financial”. You will need “lawyers” to deal with the regulatory/compliance stuff. Accountants to balance your books, HR ladies to hire/fire people etc.

It will be very hard to start on your own. Your best bet would be to start off as a partnership. You can pool in your expertise & resources.

  1. You will have to rely on networking to get clients. Use your existing sources to leverage your marketing efforts. And I don’t think you will be able to acquire foreign clients directly. First, you will have to make a name for yourself in the local market. Once the locals know and envy you, foreigners will come in very easily.

  2. That’s your own decision but it is not a “mutually exclusive” problem. You can provide both fundamental/technical analysis. But from what I have read on the “internet”, most frontier investors are very fundamentally focused than technically focused.

Disclaimer: That’s just my opinion. I am not an expert.

Thank you very much for your comment.

i would like to clarify more as follows:

up to now, there are 2,335 institutional investors and 14,595 individual investors directly investing in Vietnamese stock markets. I have done a small research and found out that those investors’ ability/channel to access fundamental informations of interested companies is limited due to: (i) lack of understanding of the Vietnamese accounting standards (VAS) and of course of the differences between VAS and GAAP/IAS; (ii) most companies only issue financial statements and other regulatory filings in Vietnamese. I do not know any of those investors but i know that they really need fundamental information as input for their valuation. Therefore, i will (i) gather information/data (ii) adjuste the data/information; (iii) interpet the adjusted data/information; (iv) comment on the valuation models.

I have decided to start my own business in 2015.

if you have any comments or ideas on how to attract investors’ attention, you are highly appreciated.


Here is my advice. Your business should exist before you try to start it. You should be working on the side selling research and doing work for potential clients. If you don’t have the relationships, then you’re not going to make this work. No one will buy your research cold turkey because you throw out a shingle on the interweb. If you don’t have the relationships to sell this stuff, you’re going to fail. Build those relationships.

What’s your track record? Industry reputation? If you can’t answer those you’re going to fail.

Honestly I like the idea of what you’re trying to do but it’s going to be a massive exercise in hustle, sales and networking. And you’re going to have to be damn good, like 1% good, if you’re going to make this work. You need to start by doing some occassional modeling or research for firms and build that into ongoing relationships.

And don’t listen to that Finkid. He has no idea what he’s talking about.

Thank you very much for your helpful comments and advice.

I. At the moment, i am developing my own general framework for data/information gathering based on CFA framework for equity valuation as follows:

1. Understanding business

Information required:

  • Company history of developement, goods and services it provides

  • industry information: Supply and demand analysis

  • Company’management track record

  • Company’s insider ownership and changes in insider ownership

  • Stated or implied competive strategies

  • management’s forecasts on next - two- or - three year performance and assumptions

2. Fiancial analysis and forecasting

information required:

  • Audited financial statements, quarterly unaudited financial statements

  • Detailed cost strutures and changes in cost structure

  • Management discussion and analysis

  • industry and macroeconomy/ historical yield curve

3. Selecting appropriate valuation model

based on my knowledge of the company and purposes of investment, i will comment on which is the most appropriate valuation model to be applied.

4. Risk alerts

II. i am also developing my own website (before my business starts), on the website, i will post things such as:

  1. My approach to data/information gathering for fundamental and long-term investment

  2. My research reports

  3. My ad-hoc analysis about the economy and the general stock market

The website allows viewers to comment and if they are interested in my service, i am ready to supply.

III. About my track record

i have been individual investors for a few years now. My performance in general has outperformed the market. However, it is misleading to compare my performance and the market because i only focus on small number of stocks (usually less than 5). Furthermore, i have never shared my performance with anyone because most of my friends believe that investing in Vietnam is like gamebling. Some Vietnamese investors i know never hold stocks for more than six months. Therefore, fundamental analysis seems to be not enough and not really convincing. I do not add to my service such thing as crazy technical analysis. So there is a big gap between me and other people i know. This is why i have decided to provide research reports to foreign investors with the hope that they are long-term investors and they are fundamentally knowledgeable.

However, i know that research reports can not be sold by analyst who has no reputation and no track record at all like me. So, my first step is to provide fundamental information as input in the valuation process. I hope that this first step help me network/build my relations as well as trust. After i have enough reputation and relations, i will proceed to the next steps, providing full equity research report.

There are anything wrong with my approach?

Your comment is highly appreciated.


Dear Geo, can you give me some comment on my previous post?

and others are welcome


Nothing wrong with your operational model from what I can see, but I’m not a research guy (I do some freelance research however). If you want to develop a business plan here though your sales strategy needs to be the key aspect. You should be focusing on doing some research work or consulting with potential clients today. Just little ad hoc things to build relationships. Alternatively, you could work for free for a bit and give some research away to show your quality level. Perhaps give some free talks on the Vietnamese economy at industry or local CFA society events. You need to have a name before people will buy your opinion. In terms of the fundamental data business, this is what CapitalIQ and such products are for. Not sure they cover your local market. If not, I’m not sure there is a big enough market to sustain this but I really don’t know. Research you need to do. Niche data providers do exist, I know a guy that runs a niche data shop that provides oil and gas info. I’m not sure if you’re a local in Vietnam or an expat, but your English is actually not bad for a foreigner so I give you points in that category. What your trying to do here is a marathon, not a sprint. I do wish you luck though, great to see someone starting their own gig

Hi Vietnamestock,

I found your post really interesting and I would like to offer you a partnership. My company is doing the same thing is a range of countries and we’ve been considering to enter the Vietnamese market for a while.

Why don’t you send me your email and I will send you some more information about us? Needless to say, if you decide to enter into any agreement with us, you will be in control of everything happening in Vietnam, we would be just providing you with technical support, sales processes and help you to acquire more business.

So please send me your email and I will give you more information.

Thank you.

Hi vietnamstocks,

Are you still thinking of creating an equity research firm? Let me know fi you need any advice.

Good luck!

Hi Indepthresearch,

I am really sorry for my late reply. The fact is that i am focusing on gathering financial data from listed companies. Before i delve into my research. I must have my own database i can fully understand and can explain it to my potential client.

My email address is

I will issue my own reports in the next two months. I strongly believe that success can be assure if (i) i can incoporate my local knowledge with generally accepted valuation methodology and (ii) i have the right approach to my segmented client.

I am looking forward to receive your reply soon.