Also, KK; A lot of analysts are “well connected”. They are covering these companies and speaking with C-level management/IR on a weekly or sometimes daily basis. In my opinion all the same info is out there for each analyst in the space, the difference is how unique your approach is to getting it: Channel checks, vertical supply lines, etc…
greengrape Wrote: ------------------------------------------------------- > > My senior research analyst deals with top > executives CEO and CFO’s of leading companies, > meets with industry insiders, discusses trades > with top hedge fund traders, wealth management > portfolio managers, gets interviewed on CNBC or > bloomberg, travels to meet with senior mgmt and > arranges meetings with private equity. Goes to > hockey or football games with clients or the > institutional sales guys for fun building > relationships. SS research isn’t “selling a piece > of paper”, it’s building relationships that can > make crazy money. A hedge fund who follows you can > cut you a check for $30k in a snap, and that’s on > top of trading commissions. It’s not hard to see > why SS research analysts can make multiple > millions a year, have a good work life balance, > hang with top execs and big money, and move > markets with an interview on bloomberg. And this > money is steady. In a bad economy, bankers get > laid off, consulting business dies off, traders > can lose it all, but ER analysts can still rake it > in. Please explain how that proves my post to be wrong. It all sounds nice and bling bling but at the end of the day you’re not directly involved in any transaction. Also, bear in mind, that what you describe is what top analysts do. And the bloomberg part ? Give me a break. You obviously are lucky to be working for a top guy if he ends up on bloomberg. Cool for you, bro. But it’s not the norm. Now I’m not saying it’s a crappy job, as it obviously isn’t, all I’m saying is that I just don’ t get the hype.
I think he’s a she Viceroy
Only a very small fraction of people doing ER add any actual value with their analysis on average over time; the rest are just spitting out noise as part of the massive sales machine that is Wall Street. If doing the latter appeals to you, great, but it doesn’t to me.
Mostly, that is.
While I agree with your overall point, I’d like to clarify. I meant “well connected” as a relative term to other analyst. As I’m sure you know, not all analyst (probably not even most) do channel checks regularly, speak with management more than once a quarter (if that), and have access to large investors. Let me give you a specific example. I was recently working on an update report for one of our top ideas for 2011. While I was writing it up, an analyst at another firm downgrades the stock. We read the note, disagreed with it, and then called management to talk about it. When asked about the downgrade, they said that the analyst who downgraded them never spoke with them to check his “assumptions.” Needless to say, stock has been up everyday since he downgraded it. Flux Capacitor Wrote: ------------------------------------------------------- > Also, KK; A lot of analysts are “well connected”. > They are covering these companies and speaking > with C-level management/IR on a weekly or > sometimes daily basis. In my opinion all the same > info is out there for each analyst in the space, > the difference is how unique your approach is to > getting it: Channel checks, vertical supply lines, > etc…
Agreed… My approach is similar, very mgmt intensive and always channel checking. If you are able to add value like that, or give an edge, and work at a very reputable/BB institution; coupled with determining price shifting catalysts then you should be a success.
Just out of curiosity - I’m not in ER and don’t know much about the industry so I can’t really judge - but for those that are in the industry, what value do you gain from meeting management? Technically, they aren’t allowed to tell you anything that isn’t public information, and from what I understand, they really just regurgitate the stuff that’s already disclosed in financials and such, in different words as a response to your question. Would be curious to hear some insight as to how this practice can influence your buy/sell/hold decision on a company.
Flux Capacitor Wrote: ------------------------------------------------------- > TheLegend and GreenGrape, get a hold of your > hubris. I work in ER as well but don’t over sell > the value proposition involved. In the 90s this > position was great due to lack of regulation; it > is still an awesome job but not the end all, or > 90% of our analyst and associates wouldn’t be > attempting to jump to buyside research. > > OP, Legend and GG are right; your experience is > hardly that of true equity research… Although > it is better than nothing IMO. > > One more comment, GreenGrape; just b/c your > analyst goes on Bloomie or CNBC doesn’t make him > badass… II speaks for itself, that is where you > really want to gain notoriety. I’m with Flux on this one. Sorry to pop your bubble but the glitter and glamour will fade fast. Personally, best thing I got out of ER was the opportunity to build a network, which recently landed me a job on the buy side. Good luck to those starting out. It’s a great place to learn and make a name for yourself.
ER is booming in Asia and is not as saturated as it is here in the US.
mar350 Wrote: ------------------------------------------------------- > Flux Capacitor Wrote: > -------------------------------------------------- > ----- > > Zelman, Rochdale, MW Co, Wofe Trahan, etc… > All > > of those analysts were top ranked and now > operate > > under their own umbrella… > > > do these guys have training programs or do they > snipe from other shops? so i’m guessing no training. apparently our bank doesn’t do training, either, and prefers to snipe (which is surprising considering our size). where does one get trained nowadays?
mar350 Wrote: ------------------------------------------------------- > mar350 Wrote: > -------------------------------------------------- > ----- > > Flux Capacitor Wrote: > > > -------------------------------------------------- > > > ----- > > > Zelman, Rochdale, MW Co, Wofe Trahan, etc… > > All > > > of those analysts were top ranked and now > > operate > > > under their own umbrella… > > > > > > do these guys have training programs or do they > > snipe from other shops? > > so i’m guessing no training. apparently our bank > doesn’t do training, either, and prefers to snipe > (which is surprising considering our size). where > does one get trained nowadays? They are very very small, offer little to none market making, and generally don’t have an IB or means to capital raising; that being said they don’t have the means to implement a “formal” training program. I promise you though, working for a rockstar analyst is a training program within itself. Look at it like this. The rockstar analyst I work for was once an associate for another rockstar analyst. That analyst was once an associate for another rockstar analyst… It is really a neat concept that you don’t see in many businesses anymore.
king_kong Wrote: ------------------------------------------------------- > Just out of curiosity - I’m not in ER and don’t > know much about the industry so I can’t really > judge - but for those that are in the industry, > what value do you gain from meeting management? > Technically, they aren’t allowed to tell you > anything that isn’t public information, and from > what I understand, they really just regurgitate > the stuff that’s already disclosed in financials > and such, in different words as a response to your > question. Would be curious to hear some insight as > to how this practice can influence your > buy/sell/hold decision on a company. Find a research report where the ER Analyst wrote about meeting with management and takeaways. You’d be surprised. One criticism of ER, and even asset mgmt for that matter, is that if you tweak just a few assumptions here and there, you can get radically different results. If you can get any hints from mgmt at all about the directions of assumptions for your model, you can be more accurate. Not just mgmt, even vendors, clients, and competitors.
SuperiorReturn Wrote: ------------------------------------------------------- > i like how a bunch of people who would probably > give their left nut (including the girl above me > cause she’s from Kazakhstan) to be in ER are > bashing the position. > Y u guys so mad? lol I agree. You can easily tell also, because while the pansies are saying how ER is “not special” “just selling pieces of paper”, they give it away from their posts that they have no clue what ER is about. And then you have OP, claiming that he’s “been involved in ER space” for 9 months, while full-time student at some poorly ranked business school, looking at 2 companies. yea. I’m sure that’s the same… He probably applied to every ER job opening on the planet, thinking his “ER experience” would get him a job. Got shot down everywhere, and is now claiming it’s not so interesting anyway.
Quant jock has been involved in the space of ER
My ideal role is in PWM as a PM running discretionary portfolios. There are two things I crave most in my career; intellectual stimulation and lots of interpersonal interaction. I am fairly extroverted and I enjoy communicating with people so I know that being a spreadsheet monkey isn’t a good long term fit for me. I am just desperate for an opportunity to move in that direction and I don’t know where to start.
Flux Capacitor Wrote: ------------------------------------------------------- > Agreed… My approach is similar, very mgmt > intensive and always channel checking. If you are > able to add value like that, or give an edge, and > work at a very reputable/BB institution; coupled > with determining price shifting catalysts then you > should be a success. Why would you be interested in what management has to say when theyre most likely to misrepresent everything in the most positive light possible. Maybe it’s just the contrarian in me or the way I grew up but I am naturally reluctant to believe anything management or most analysts have to say.
It’s not that simple. You can’t just say that because management is faced with a conflict-of-interest, then I won’t listen to them. Look at their track record. Also, often no one has more information than management. So, you either use their number or you make one up. Naturally, I’m reluctant to make numbers up.
KarateBoy Wrote: ------------------------------------------------------- > It’s not that simple. > > You can’t just say that because management is > faced with a conflict-of-interest, then I won’t > listen to them. Look at their track record. > > Also, often no one has more information than > management. So, you either use their number or you > make one up. Naturally, I’m reluctant to make > numbers up. I understand that but I’d naturally be inclined to take what they say with a grain of salt. I’d also be worried about being seen as a cheerleader for a stock due to my relationship with management.
bodhisattva Wrote: ------------------------------------------------------- > My ideal role is in PWM as a PM running > discretionary portfolios. There are two things I > crave most in my career; intellectual stimulation > and lots of interpersonal interaction. I am > fairly extroverted and I enjoy communicating with > people so I know that being a spreadsheet monkey > isn’t a good long term fit for me. > > I am just desperate for an opportunity to move in > that direction and I don’t know where to start. What do you do now? Maybe I can give you some pointers.