Equity Research from Manager Research

Looking for advice - trying to make a move into Equity Research from Manager Research, where I’ve been for about 3 years. Late 20’s - CFA Level 3 candidate - am I too late? How do I even start?

No, you are not too late. I highly recommend reading the articles in my signature - think you will find them informative for a potential transition to equity research.

Not to late at all. I transitioned in my early-30’s from manager research. I can’t imagine going back to manager research now. Yuck.

Step 1 - pass Level 3.

Step 2 - Use either “Wall St. Prep” or “Breaking into Wall Street” financial modeling courses. That will give you the tools to at least be able to model a stock out. Model some out and then listen to what those companies management teams say. Form some kind of opinion on the stock and write up a quick report on each (doesn’t have to be long). Start a blog with this stuff if you like. It’s not going to be very good, trust me, but it’s something and shows you are really interested in the space.

Step 3 - Network if you can, with other people in equity research to ask what they look for when hiring new, low-level analysts. Don’t ask them for a job, just info. Soak in all their knowledge. Then apply to every low-level equity research position available. Expect entry-level roles and salaries (I took a pay cut but it was well worth it in the end). At those interviews don’t f*ck up, and bring your models/research to show them you really want to do this and aren’t just in it for the $$$.

Step 4 - Steal Underpants.

Step 5 -

Step 6 - Profit.

What is Manager Research?

Wel… I know someone who went from IT to Equity Research after around 5 years, so I don’t know if it is too late. He is pretty exceptional though, so it’s hard to generalize from that.

Manager Research I think is fund of funds sort of thing. Otherwise known as having people kiss your @ until you allocate capital to their fund.

Probably works for an RIA and is tasked with finding active managers to allocate client’s capital to.

It’s not a bogus job IMO, but not one where I believe skill plays as much a factor as pure luck. That’s why I got out of it at least.

Nailed it - definitely feel frustrated with some of the ambiguity that comes with manager research - but wonder if the story is largely the same with equity research?

Not really the same ambiguity. First you are taking one level of ambiguity out of it by not picking managers, you’re picking company management teams. Second, because you are looking directly at financials you can tell if something is cheap or not. That is, if a stock is down it may be cheap, if a manager underperforms you don’t get him any cheaper, right?