Equity Research Associate at a Big Five Bank
5:45am: Wake up, eat four egg whites and muesli.
5:45am – 6:45am: Get ready for work, but during the hour I’ll also quickly scan the news and updates on companies I cover, as well as the market overall.
6:45am – 7:00am: Most days, you're walking to the office and a press release hits the tape and - whether it be a merger or financing, or some sort of strict issue that has happened with one of your underlying companies – you need to react quickly. So, you may think you are walking into a nice quiet day and suddenly, within 20 seconds, the whole day has turned on top of its head.
For me, the best part of the job is also the most stressful. That is usually when you roll into the office at 6:45-7:00 and there's breaking news that’s quickly becoming the center of attention for investors. If someone is buying a company and if it’s one you cover, then you're the center of attention for that day. It’s when you're the busiest because people are asking you for analysis and it’s nonstop.
“If that happens, you won’t even have time to eat - but that's also what makes it fun.”
7:00am - 12:00pm: What separates equity research from most other jobs, is that it is truly different every day. I recognize this has become very cliché, but for research specifically, it’s so variable and it can really be night and day comparing one day to the next. I can think of one recent example where my analyst was going away on a trip and I was running late to work, and then a press release hit the tape at 7 a.m. Our Monday morning conference call is at 7:30, so I had to jump in a uber to get to the office fast enough to digest it and provide comments so that investors could come in and hit the day running with the information that they need. People never want a recitation of the press release; rather they need a high level analysis from our group's perspective. So, I’m hailing a uber, reading the news release on my BlackBerry (yes, I still use a Blackberry) and I am getting one of the other associates to grab some quick figures for me from my model while I basically run into the morning meeting and bring everyone up to speed. Then, I spent the entire day modelling a $1.2B transaction that doubled the size of this company. It was very, very high pressure and intense, but that’s also what makes this job so enjoyable.
12:00pm - 6:00pm: The afternoon can be really quite dynamic. I spend a lot of the day on the phone with investors talking about their ideas and explaining our ideas. Sometimes, I don’t even have time to eat my lunch due to the mass amounts of clients. But then, on the bright side, we can also have quiet days. The market can be kind of dead, specifically during the summer. During the summer there’s not too too much going on – this is when you usually spend time doing longer-term projects. Over lunch I’ll keep tracking and reading on the market, or reviewing comps, because the learning never really stops.
This job is probably about 80% reactionary and 20% proactive. The proactive stuff is longer-term projects. You’re going to launch coverage of a new company, and it will take you a month to report and put it all together the way you want. These are the things you can do when you have a little bit of quiet time, when markets aren’t going crazy, investors aren’t calling, and there isn’t any news out.
But while there's an element of proactive work, it definitely is a highly reactionary job. You may get inbound requests from investors, looking at things like sensitivities or different valuation assumptions, and for that you must drop everything to fulfill that need.
6:00pm - 8:00 or 12:00pm: There are companies that don’t release earnings until 6:00 in the evening, and that means that you’ll probably be working past midnight. Even if there’s nothing substantial, you don’t get to take a break because your report must go out the next day. I would suggest that the more difficult part is that there is some element of repetition. Say, when you come to earnings season; once every quarter they’ll put out earnings report, and you have to kind of go through the motions there. In general, one quarter of earnings is not going to change your long-term forecasts for a company. There is going to be incremental information in a report that you must look at to determine whether your long-term forecast needs to change, but in general it doesn’t. Nevertheless, it’s a lot of work and it can run late.
The biggest difference between this and my previous role in accounting, is that the mornings are when you are the busiest. I roll into the office at around roughly 6:30 – 7:00 and you are will be so busy you can’t leave your desk until noon. In the afternoon, it tends to be relatively quiet. So, from lunch time onward - until 3:00 or 4:00 - you can work on that longer-term stuff. If all is quiet and there is nothing happening at night, I’ll try to leave at around 6:00 or so.
"But the devil is in the details. You could be walking out the door and then you get hit with a release that keeps you there until midnight - it can be pretty long days."
On a good day it’s 11-12 hours, and on a not-so-good day it’s maybe 15 or so. But what’s nice is that markets are closed on weekends. So, generally speaking, there isn't really a huge business case to spend a ton of time on weekends. If you don't mind being super busy from nine to five, and have work encompassing your life from Monday to Friday, you get rewarded in that it’s not a big deal if you want to go to a cottage on the weekend.
Why I Love Equity Research
Pinpointing any one aspect is difficult but I strongly believe that passion and effort are rewarded more in equity research than perhaps in other banking roles. When someone puts in extra effort it is instantly noticed and rewarded. And if you have the right attitude, people will notice that. You develop great relationships with CEO- and CFO-level executives, and you do get direct access to management. That’s a part of the job that a lot of people probably don’t really appreciate.
Best Advice to Incoming Associates
I’m a CA who transitioned to
equity research at a Big-5 Bank from a Big-4 Accounting firm. Personally, I’ve always
loved the equities market so I attribute my success to my passion for investing
and the markets. When I applied for my position, I sent the hiring manager 12 very
detailed equity reports I prepared, so during the pre-interview I felt like the
decision makers already knew that I had the technical skills to outperform the job
requirements. I felt like I just had to prove I was the right personality fit on
the team during our 3-step interview process.
"In my experience hiring for our group, I’d much rather have someone who’s passionate about investments and the markets than someone who just can build the world’s best model."
In my opinion, what separates great candidates from average candidates is one’s underlying passion for investing. I’ve interviewed new candidates, and if someone doesn't really light up about this stuff, it makes for a really long and tough day.
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