recently busted out of some SS research graduate scheme applications, and am desperately trying to gain some research experience. ER was the dream but i’ll take any experience i can, so i have had an idea: I live in London, the hedge fund capital of Europe (true story). I will select a couple of funds, calling them first to see if they are open to recent graduates for internships etc. I then research and compile an analysis of several stocks that are relevent to their strategy, and present it like a research note with my CV attatched. Would this be a waste of my time? If so how should i go about productively using the next 5 months to secure some relevant work experience? cliffs: Got no work experience, graduating from good university with econ degree. graduate application for IB failed, no graduate positions left to apply for, other than IT. dont wanna buss tables when i graduate.
MJbizzle- Yeah, it may help. I had to do it, as my [potential, now actual] boss requested it. It took AGES and in hindsight was a terrible job, but I did it. It was part of getting my first research internship, which in-turn led to my first research job. But it’s really, really tough to do this. My suggestions: -DO pick a stock that doesn’t require tons of specialized knowledge you don’t yet have. Biotech, Oil and Gas, insurance, banks, etc are more likely to highlight how little you DON’T know than what you do. A manufacturer or retailer you could probably do. -DO match your research style to the fund or company you’re applying to. If you’re applying to a long-only fund, don’t sell them a short idea or (even worse!) a “stock to avoid”. Similarly, no value fund is interested in a growth idea (usually). -DON’T pick a stock with tons of research on it. Small caps are way more fertile ground for what you’re doing. Firstly, they’re normally only in one or two lines of business and so will be easier to analyze. Second, they don’t have lots of coverage, which’ll mean that you might pique the interest of the person reading, if only because they don’t know the name and aren’t exhausted of hearing about it. -DON’T attempt any fancy analysis in excel. A minimum of charts or relevant tables is fine. Attempting to showoff pivot tables or build a model for earnings is probably likely to elicit a laugh from a lot of folks. Honestly, the BEST CASE SCENARIO that you can really do is come up with a company where you’ve basically: -explained the business -explained the mgmt -explained the drivers of profitability/stock price -identified the competitors and how they’re similar/different Attempting to write a report that shows off everything you’ve learned in the CFA curriculum, or some kind of EXPOSE THAT WILL BLOW THE LID, PANTS, AND LID-PANTS OFF THE READER are excellent ways to get your sample report not read or laughed at. Best of luck mate.
I like this idea and its a breath of fresh air compared to the others postings here.
and a nice reply by supersadface
agreed, great post supersadface
Years ago I did an in-depth report on the economic crash of Iceland. My current employers liked it so much that they hired me and posted the report on their website. And this was despite my 2.0 GPA 3-yr bachelors (ya college was a haze…literally…) Go for it my man!
Good advice everyone. Goschnizzle yo bizzle.
AllanC Wrote: ------------------------------------------------------- > Years ago I did an in-depth report on the economic > crash of Iceland. My current employers liked it so > much that they hired me and posted the report on > their website. And this was despite my 2.0 GPA > 3-yr bachelors (ya college was a > haze…literally…) > > Go for it my man! Year ago? Which economic crash are you talking about? Has Iceland had more than one?
-supersadface thank you for your response it was both extremely helpful and insightful, i really appreciate it. That gave me far more direction that i was expecting to gain from this thread, but having never been in the industry i just have a few questions if you wouldnt mind: how many pages would you recommend max/min and where could i find the basic structure for a reseach note? also would the financial times and some online research provide enough detailed information for the relevent stock i pick? -explained the mgmt -explained the drivers of profitability/stock price what specifically do you mean by this? looks like i’ve got some serious work ahead of me but im really looking forward to it, it should be a gigantic learning curve thanks again
Post your e-mail and I’ll get in touch with you and help answer your questions. I don’t like posting mine as it’s just my name and I must maintain MY SECRET IDENTITY. [flourishes cape, vanishes]
Great post supersadface. Also, another point to keep in mind when writing a research on a company is whether your target is a sell side firm or a buy side. I understand that you’re targeting hedge funds. The reports will focus on completely different items depending on the target. a hint for a buy side research would be to try incorporating Porter’s forces for your qualitative portion in the report. It’s easier said than done though!
Just wrote you an incredibly long e-mail MJB. Good luck - if you do this right, I think you might get great results snagging an internship or job. With that said, it will take probably 20-40 hours to “do it right” at least, so I hope you’re ready to spend some time at the library… Edit: Thx for compliments, other posters! Hopefully a couple of other ‘how do I get a research job?’ folks read this thread and take some initiative.
Supersadface, Can you please send me the one you just wrote to MJB as well at dhyun4 @ gmail.com? I would love to learn it as well. Thanks!
Face that is SuperSad, If you’re willing, I’d like to read the suggestions also. No problem if not. Thanks Noll87@hotmail.com
Alright, seeing as there seems to be some interest in this, I’ll clean up what I e-mailed MJBizzle and post it here. It’ll be a little easier than sending this to y’all. Give me a few hours, maybe a day or two, and check back here.
Thanks. Yeah, it’s a better idea as more people have a chance to read it as well.
OK, post below contains a cleaned up version of what I sent MJBizzle. A couple of caveats: -This post is really long. You may not even want to bother. -This is not a guide on how to write a perfect stock writeup. It a guide on how to write an ACCEPTABLE writeup, assuming you have no formal training. -You will need to spend a lot of time to do this right - most of my first reports took me 1-2 weeks, because I had no idea what I was doing. -You may do all this stuff and still fail to land a job. Sorry :((( Lastly: If, during this writeup/research process, you find yourself thinking, “Gee, I don’t like doing this much”, I encourage you to think long and hard about if you’re seriously interested in equity research. It’ll get harder, not easier, if you land a gig somewhere. On the other hand, if you enjoy the work (as I genuinely do) you may decide that you should definitely throw yourself into trying to find a research position.
Q: How many pgs max/min? A: Minimum 5 pgs probably, not including exhibits (appendices / articles / tables / spreadsheets/ pictures of yourself). Single spaced text, one line between paragraphs and headings for ‘white space’. Don’t overwhelm the reader with lots of txt in huge blocks. Maximum: 10 pgs is pretty long; should be able to cover a lot without going past that. Writing style should be short. Full sentences -> not required. Portfolio mgrs read 100’s of reports yrly; dense and punchy writing more likely to get read completely. Q: Where could I find the basic structure for a reseach note? A: Sell-side notes: Library or check w/ broker website you use for personal trades. Download and read LOTS of these, they are a good starting point towards understanding how things are written/presented. Buy-side notes: Much harder to find. Try a friend in the business, ask for a really old writeup on a trade they’ve completed yrs ago and don’t mind showing you. Rarely (but sometimes) you’ll find famous pieces of buy-side analysis written up online or in magazines targeted to the profession. Q: Would [newspapers of choice] and online research provide enough detailed information for my research? A: No. First resource: annual/quarterly filings of target company. Maybe a few competitors or comparables. FIRST AND FOREMOST, try to make a “cliffs notes” version of the annual report. Then you can go to alternate sources: newspaper articles, trade journals, academic white papers, economic data, interviewing employees, sell-side brokers who cover the stock, etc. If you were a ‘real’ analyst, you’d probably do interviews with mgmt, if your research got to that stage. You don’t have to do that, but a trip or two to the library - at a minimum –will be required. Q: What specifically do you mean by "explained the mgmt”? A: Some businesses are so damn good, you could put a cheese sandwich in charge and get good results - but for most, mgmt matters. You should know and possibly include in your writeup: -Who is on the board/mgmt? -How much are they paid? Is this a lot or a little vs. peer companies? -compensation forms (options? cash? perks?) -related party transactions? Q: What do you mean by “explained the drivers of profitability/stock price?” What are big factors that influence earnings or future earnings, (which will drive the stock price)? Try to think logically, even if you’re not sure yet: Starbucks: coffee prices, retail traffic, same-store sales McDonalds: same store sales, beef, dairy, veg prices Homebuilder: interest rates, availability of credit, home supply, consumer sentiment/unemployment/wage rate, etc. Porter’s five forces: definitely keep in mind and work into your writeup if appropriate. So, if you’re not sure where to start: -Once a week, run screens on Bloomberg or discount broker website. -Trim variables to get 100 or so candidates -Look at company websites and newspaper articles to quickly decide whether or not you understand them. Discard stocks that are too complex – no shame in that. Narrow down list to one to three names of companies that seem interesting/understandable. -For companies you decide on, download at least 5 yrs - maybe 10 - worth of annuals. Read at least the last two cover-to-cover, but print out the financial pages (big three financial stmts) for all five or ten yrs. -Use financial stmts to understand how ratios/profitability have shifted over time. If you want to use all the fancy ratios the CFA taught us (not in your report, but just for kicks as you read), now’s the time. -Start writing your “cliffs notes” annual report. Start with the easy stuff that doesn’t require judgement: what TargetCo. does, how they do it, who’s in charge. Then dig into financial stuff worth mentioning. -Go back and add RELEVANT FINANCIAL METRICS and RELEVANT EXHIBITS ONLY. Resist the urge to show everything you’ve ever learned in your CFA coursework, or every picture of the CEO/factory/product you have ever found. Do this whole process like 20 times, taking it seriously every time. On the 21st try, you may have something not horrible that you can put your name to and mail somewhere with a “PLEASE, DEAR GOD, HIRE ME” note. Hey, it worked for me. Good luck.