S&T back office to buy-side equity research - what does it take?

AF -

Here’s where I’m at:

  • I come from a very non-target school, where I did undergrad in Finance;
  • found work at a major i-bank, working back-office (mostly trade settlements) for their agency trading desks, and did that for 4 years until I resigned;
  • Been away from the corporate world for ~9 months helping my father (who was laid off) get started in the franchise business world;
  • Passed CFA Level I and II exams;
  • DO NOT have an investment portfolio, blog, current understanding of the markets that I can speak to intelligently in an interview, but I want to change that ASAP
  • I’m currently 27 years old.

So I left the corporate world to help my old man and do some soul searching in regards to what I wanted to be when I grow up, at one point thinking I was going to walk away from the world of finance all together. But, 9 months later I still feel like I want to pursue equity research (I think maybe I read too much Buffett while in college).

I’m not really that entrepreneurial so every time I sit down at the computer to try and do my own research, it feels overwhelming and I don’t get very far. I think I’d do better in a corporate setting, working under the tutelage of an experienced mentor and working with colleagues, in an entry level research position.

I have a ton of down time at the moment since I’m effectively unemployed, and if I’m going back to the corporate world (or at least attempting to), I want to give it a go at research.

What’s my game plan?

Appreciate your feedback.

get a job at home depot. once employed at home depot use the employee discount to buy the most expensive hacksaw they have…then go to town on your ba*lsack

so 4 years in back office + 9 mon of soul searching and you want to break into Buyside Equity Research?

let’s just say your odds are not very good.

Ouch. Maybe try to return to back office and rise through the ranks? Back office VPs and heads of departments still earn decent money and actually have lives outside work.

lmao that’s what I thought.

Itera - I know my odds are not good, otherwise I wouldn’t be on this site and others looking for input.

It’s not impossible though. Anyone want to give some specific actionable advice, or give relevant personal experience that may help?

AfricaFarmer - True, I’ve thought a lot about having a life outside of work and going back to the back office. But before I do that I’ll probably leave finance all together, get into the business world via the franchise model, picking up struggling businesses where I see a path to improve (though not exactly conducive to life outside of work). Back office roles are dwindling in the NYC area where I live; in fact, I recently learned my former group was laid off soon after my departure.

“I’m not really that entrepreneurial so every time I sit down at the computer to try and do my own research, it feels overwhelming and I don’t get very far. I think I’d do better in a corporate setting, working under the tutelage of an experienced mentor and working with colleagues, in an entry level research position.”

Buddy, you’re not going to get anywhere with this attitude. If you said this to an interviewer, your interview would be over in T minus 2 minutes.

Find the willpower, or make plans for another career route. Set yourself a deadline as you’re not young anymore and this labour market is so oversupplied that no one is really looking to take on a pupil when there are trained people out there.

Network, more school, or change paths. There’s no magic strategy - but if you believe in yourself, and you ask yourself hard questions and can make the sacrifice with no guaranteed payoff - put in the effort and see where the chips land.

mk17 - No argument there, if I said that to an interviewer I’d be toast. I wouldn’t say that to an interviewer; in fact I don’t think I’m ready for an interview yet. I need to build the skillset and confidence to be able to go into an interview and stand out.

I have found that in my past, after proper training, I generally tend to excel in whatever I’m doing. Without the proper training, I tend not to make it that far. So perhaps I’m not a self-starter or an entrepreneur, but is that what makes a good research analyst?

On taking on a pupil - You mentioned no one wants to take on a pupil. This is probably my biggest concern. What I’m really looking for is a mentor to take me through the years of experience they have analyzing stocks and thinking about the capital markets. It’s so much harder to do it on your own, and leveraging someone else’s experience seems like a MUCH better path. If you take a look at all the popular investors, all had great mentors. Many of them were also self-starters and had an entrepreneurial spirit too… I know, I know.

On school - I don’t have the funds to go back to school, and I can’t see myself taking on loans to do so.

Guess 9 months of soul searching wasn’t enough. I appreciate all the feedback, even the bit about the hacksaw. And I’d appreciate even more candid thoughts. Everything helps, or maybe it doesn’t - not sure yet.

stop thinking about everything in terms of yoursel. I’m looking for a mentor, I’m leveraging someone else’s exp.

think about this: why would someone who would be a great mentor in investing take their time to do that for you AND pay you a salary? If that person was looking for a young person to mentor, they will most likely go for a fresh grad graduating from a top school with great internships or accomplishments right? why would they choose you with 4 year back office, 9 months soul searching + no-name school?

One option you got is to pay for it, excel modeling training courses, learn things with the CFA program, pay for memberships to CFA societies, pay for WSJ and read it religiously

either way, it’s goign to be a long and difficult journey, and you’re gonna make lots of sacrifices. if you’re not a “self -starter” as you say, then I suggest you give up, because there’s a ton of self go-get-it attitude needed here. and to answer your question, being a self-starter is CRITICAL to being a good research analyst. so you also failed there too

LOL i love this guy Itera - dude, you make the greatest points and they’re straight from the gut! And I must say I appreciate you entertaining this conversation with me despite the fact that it’s probably clear I have no chance of getting into research. That might be part of the allure to me, the fact that it’s so elusive. One thing you have to remember, I gave up a good (back office) salary to take a shot at franchise ownership with my pop, and I’m taking a 50% stake in an existing business where I expect to not make my initial investment back for at least 2-3 years. Why? Because I was bored at work and wasn’t stimulated by it.

It’s not about the money. And I’m not afraid to be broke. Or to fail. I have no mortgage and no kids. If all else fails I have no problem working 3 jobs to survive. I’ve done it before when putting myself through undergrad. I don’t care about prestige or what others think. People think I’m crazy for quitting my job - I don’t care. Maybe this is a terrible attitude to have, but nothing can change that. Trust me, I’ve tried. But that might also be why I give it a go at these left field ideas that I’m likely ill-suited for.

Itera said: think about this: why would someone who would be a great mentor in investing take their time to do that for you AND pay you a salary?

My response: I’m not looking for anyone to hire me. Not just yet. I’m looking for a mentor. A lot of successful, intellectual types love to give back, in several shapes and forms, and I guess I had this idea that I can find someone to take me on as their charity case. Maybe an hour a week, or two weeks, or an hour a month. Just start with a ticker, or an industry, and work forward from there. My proposal would be, you give me your time and access to your brain and in return, I owe you a debt of gratitude and a favor at some point. But no sexual favors, my girl, God bless her heart, would not tolerate that… Thing is, I’d have to convince someone to do this, and would have to network quite a bit, which I’ve done and continue to do, and actually I have someone in mind (head of research at a hedge fund) but I’m carefully trying to put together my proposal for the best chance of him accepting the proposal. Any wannabe mentors out there, let me know! I can promise to be a top-notch student, but that’s all I can promise.

And I’ve already started to plan my days to come to try and get familiar with the markets again, free stuff at first like library books and WSJ, online resources, and free NYSSA events. I will eventually have to pay (unfortunately) for some modeling classes as well, though not excited about the expenditure.

I agree Itera! It’s a long and difficult journey, and an uncertain one. Success is not guaranteed at all. In fact, in my case, failure is probably the higher probability. I realize this, and it sucks, but I can’t change that. And I’m hoenst with myself I’m likely not a self-starter, no. That might crush me in the end if you’re right Itera. I don’t really know.

What a wonderful thread this has been for me. I hope you guys are at least entertained by my predicament and continue to contribute on this thread with your thoughts!

MS Fin or MBA out of the picture for sure? Might be worth the investment given your situation and background

That’s a great question. Nothing is really out of the picture, but the financial commitment makes it difficult for me.

Also, I’d probably want to get into a top program, which is not guaranteed as I probably don’t have the ideal resume/profile for those highly competitive MBA programs.

But it’s definitely an idea. A good way to get the structure and mentor relationship with professors that I want, and afterwards should put me on some type of platform for job placement via career center.

I just can’t shake the fact that it’s an expensive gamble, especially if I’m not attending a top university.

These threads bring out the best of Itera.

I, for one, respect the honesty.

Do you have a choice?

Quite honestly this would appear to be your only option (you don’t seem to want to consider an MBA or MS). This requires a lot of dedication and if you cannot handle that then you’re not going to stand a chance. There are just too many others out there who are willing to put in the hard graft required to even stand the slightest chance of getting an interview.

If you don’t have the passion for a career in this area to teach yourself, put in a significant amount of hours of your free time reading, writing your own research etc. and show at least some form of initiative, then nobody is going to take you seriously about this. There are just too many others out there that have this and will make you look lazy in comparison.

Plumbing is a possible six figure job with huge upside if you start your own shop. The risk adjusted return to you to pursue being a plumber is much higher than your long shot odds at FO work. Also, you don’t become a self starter. You’re either a winner or you’re not. There are lots of jobs out there for non-self starters but FO finance isn’t one of them.

I agree. seriously. take up plumbing. your chances of getting farther and making more are MUCH higher

What itera said above…I agree 100%. Usually Itera is correct. It’s just that he is too much of a realist and come out as a pessimist.

My opinion is that if you’re (OP) neither entrepreneurial nor go getter style how are you going to be an equity analyst? I am by no means in FO but isn’t FO in finance all about being out in front of people in most cases? Don’t you have to be the go getter, self starter, relentless type?

You really need to think about what can YOU give to the mentor. Why would he choose you among thousands of people and of those hundreds he may already know. You gotta have something the Mentor desire. It’s a business transaction in my opinion.

Thanks for your comments. I do appreciate all the feedback.

I realize I probably should have framed this question differently. I think people in the industry become defensive when someone says I want a research role when many folks have worked tirelessly to build the credentials to get those positions. What if I said, I’m 27 with no investment research experience, passed CFA L1 and L2, own a small business, and would like your opinion on the steps I need to take to become a better stock picker. I want to take this up as a serious hobby, and manage my IRA/stock portfolio actively in the years to come. If I’m good at it, I may want to pursue it professionally, but right now I just want to know how I could slowly start to educate myself with practical hands-on knowledge. How might you respond then?

capaldij - I also agree self-learning is my best option along with networking, but eventually, I’m going to need a mentor to tell me where I’m wrong and where I’m on the right path, that’s what I’m saying. Do you not agree? Also the point about having the passion/energy to get it is a valid one, and what I’m saying is, I think I have the will, just looking for a blueprint to follow. infinity - I appreciate the real talk, and I too agree with Itera. There is a long uphill battle for me if I want to pursue it, and I realize my chances of success are close to nil, especially if I don’t change things quickly. I think to be a good equity analyst you have to have the right training and skillset, and then have immense curiosity to turnover rock after rock, and also dexterity to do the hours of research without letting up. But to me, without the right training and skillset, you’re floating uphill with no paddle. A mentor may not want to give me his time, unless of course he’s someone who knows me well (through years of networking) and takes me on a charity case of sorts. Itera / geo - I know plumbers, I’ve given this some thought, seriously. I think learning a trade with steady demand and the potential to own your own business is a great prospect. Coupled with a secure job with great retirement benefits like NYPD/ FDNY and I think that beats any OPS/back-office gig in finance. I grew up around blue collar folks just like that, and most of my friends and family are either in these sort of professions, or small business owners. I think about this route quite a bit, and I think you all are onto something with this idea. Thanks again for your thoughts. If you have more to add I’d be happy to hear it!

I know someone that quit back office operations to become a fireman. Never looked back.