Equity Research is not supposed to bring in the money?

The highest paid business professor at my hacksaw makes over $800k/year. It’s a public university and all university compensation is published.

It is reasonable that professors in business, economics or finance would be paid more than professors in other fields, since a larger compensation package would be required to draw them away from industry jobs (or from just retiring). Furthermore, it is true that many of these professors have side jobs, perhaps as industry consultants or “expert witnesses” in litigation. Not only that, but students who become successful often maintain relationships with their old professors, giving the professors insider access to various business opportunities; this is true in finance but also in technology fields.

Do not forget the side benefits of professorship, particularly housing, zero interest loans, free tuition for their kids, access to university facilities, general prestige, and an endless stream of undergrads to hit on as can be seen in such documentaries as Innocent High.

The path to professorship of course, is difficult, requires a lifetime of effort, and does not guarantee success. However, once you have achieved professorship, it is hard to think of a better deal in terms of benefits and life balance.

That shouldn’t be too tough to grasp. The market justifies a certain number of analysts.

This. My friend is a professor in a technical discipline at a top university. It an awesome gig once you have tenure, although the pressure for research is high.

The professor I TAed for was pulling down $250-300k. And how do I know this? I was tasked with shredding some old documents of his; several of which were old tax forms.

At my hacksaw, business professors in general were pretty well paid. Marketing and finance seemed to pay particularly well. But once you start looking at professors of English, History or completely useless subjects like Women’s Studies, salaries drop down to around $70k.

Stiglitz?

Itera does make a point: If you pay analysts more, they will give better predictions. And even if they don’t, you can always tell your clients you pay them lots because of how great they are. No one wants to give money to a fund without great analysts.

In other news, many times the value of an analyst isn’t so much in successful price targets, but the appropriate analysis of risks. It’s generally more important what the risk-return ratio is on an individual asset and whether the risks lie to the upside or the downside.

That may well be where they add value. Plus, without paying people to look for it, how would you ever be able to find inside tradeable information??

Academia > Sell Side Research > Buy Side Research > Hedge Fund Manager

It a new world folks. Seeking Alpha and Zacks are where all the money’s going.

Not all equity research is the same. Covering Apple is much different than covering a stock with two other analysts. I remember when I was interviewing, I had a recent (this was like 4 years ago, can’t remember particulars) story of how an analyst found a patent filed by a small company no one else noticed. The patent was very valuable for some reason I can’t recall, and the stock went up XX% upon his report letting this info out. At any rate, that doesn’t happen often.

I used to like reading research to get a quick primer to the relevant factors to the industry and the company before reading the 10-K and all that other fun stuff. But most equity research I have access to now is garbage and not worth my time.

Come on people. Let’s use more than the brains in our rear sphincter to make an argument eh? The highest paid senior research analyst I guarantee is making like $5+ Million without blinking. yes even on sell side.

so there’s no point in comparing an avg joe research analyst vs “the Top Paid professor” right?

I don’t think anybody enters academia with the goal of making a lot of money, which makes the idea of comparing salaries as a way of determining credibility ridiculous.

^agreed.

Those who can, do. Those who can’t, teach.

Those who can neither do nor teach, teach management classes.

exactly. which brings me back to the point I made originally.

OP questioned how “useless” research analysts are and how they are paid to “give random results”, but if you want to make $$$money, you’re going to go for the research analyst job. who gives a crap about “random results”

He isn’t the highest paid professor, but the highest paid professor at my shitty hacksaw. The average finance professor at my shitty hacksaw is probably right around $200k (excluding adjunct).

I read in the Chronicle of Higher Education or (maybe it was a NY Times article citing it) that close to 75% of classes taught in universites these days are taught either by adjuncts or grad students.

Adjuncting is kinda fun if you have a separate source of income, but it sucks as a primary one.

^I looked into it once. But in TX, the pay really isn’t worth it. It’s $1000 per hour per semester. That is, if you teach a 3-hour course, you get paid $3000 (for the whole semester). That was at the fine institution of UTSA, so a lesser college (like Rice or Baylor) might pay less, since the rate is set by the university, not the state.

Might be nice as a resume booster or a way to “give back to the profession” or something. But I certainly wouldn’t do it for the money.

I can’t believe a Top 2 like UTSA would pay so little. I wonder what the closest comparable (Harvard) pays.

My local uni in Canada is $5,500 for a three credit finance course as an adjunct last I checked, might be a bit higher now.