Industry Insiders: Research
Industry Insiders is live!
We are starting At Her Desk's new series with inside scoop on roles that fall in our own backyard of FINANCE.
For the next few weeks, we will highlight roles in Research, Trading, Investment Banking and Private Equity.
The concept of Industry Insiders came about as we struggled to accurately describe our friends' jobs. Chances are you have some investment banking buddies (those are the ones you rarely see!) or some former classmates whose titles are "____ analyst." What kind of analysts? Heck if you know! Even if you work in Finance and know about these roles/divisions, you still may be unsure what these jobs actually entail.
For each post in the series, we asked two experienced professionals in different roles to explain exactly what they do in layman's terms.
Let's kick things off in the Finance industry with RESEARCH.
RK (29 years old) and TB (30 years old) are two awesome, smart guys that work at global, large financial services firms in New York City. Both function in a research capacity across different asset classes (equity and fixed income). Thank you so much to RK and TB for taking the time to share insights on your respective roles!
Q: What is your official work title?
RK: Equity Analyst
TB: Credit Strategist
Q: How would you describe your job to a 15 year old?
RK: My job is to work with my team to write research reports about an industry. We try to understand the growth opportunities, the risk and if capital is being allocated efficiently. We also try to understand what are the biggest debates about the industry and what could go right vs. what could go wrong. Based on analysis and data, we produce a report outlining an outlook for the industry, our views on the biggest debates and our views on which companies are best or worst positioned.
TB: I analyze companies within my sector to help our bond traders and clients (asset managers, hedge funds, etc.) react to news, earnings, and other headlines that could impact those companies, and to what degree. I constantly weigh upside/downside scenarios and how to navigate them based on short and longer-term market conditions and company fundamentals.
Q: What are some things/projects you are responsible for?
RK: I’m responsible for building valuation models of companies, writing primers or forward looking research pieces, and driving collaboration with other teams to come up with new insights.
TB: I capture relevant information in my sector, including any mergers and acquisitions and debt issuance. I'll circulate trade ideas and provide commentary to make sure our team and clients know how to navigate these events. I also travel to meet with clients and sometimes lead internal teach-ins to keep everyone up to speed on my sector.
Q: Tell us about “the good, the bad, and the ugly” of your role.
The Good: Interaction with some of the smartest investors and most talented management teams from very early on in your career. In addition, your views can have an impact on how and industry evolves and how the companies think about their businesses.
The Bad: No matter how talented you are you never have all the answers and you will inevitably be wrong. This makes it even more important to write thoughtful research that is transparent about your views and assumptions as well as where you could be wrong.
The Ugly: Earnings season where companies report results for the quarter. For me that lasts about 2 weeks every quarter and it sometimes requires working 80+ hours a week!
The Good: When I have a contrarian view of how certain events will impact a company ends up being correct.
The Bad: When I have to spend time reading 100+ page documents to build my knowledge base, but with no practical application, or have to do tedious work like updating my models.
The Ugly: Probably when I miss a headline or something occurs that I'd thought was low probability. That can rattle you mentally and make you question other assumptions.
Q: What skills have you developed in your role?
RK: There are a variety of useful skills in this role including analytical skills, modeling, writing, communication, and how to create a process and timeline for getting big projects done.
TB: Communication skills and the process to honestly reason through a concept/idea from 0 to 100.
Q: What skills do you need to be successful in your role?
RK: Research is about providing insights and creating a process for generating, enhancing and communicating these insights to clients. You have to be very process oriented and be good at meeting deadlines. You have to be very intellectually curious and an effective communicator. You also have to be very good and working in a team and collaborating with others which is when some of the best insights are discovered.
TB: Definitely requires the hard work/attention to detail mentality. But more uniquely the ability to build conviction behind a thesis and run with it, know when you're just wrong, or temper your enthusiasm if the broad market or macro themes are going in the opposite direction.
Q: What do you enjoy most and least about your job?
RK: I like the people and the culture of the firm. We like to work hard and want to be the best but we also like to encourage people to have a life outside of work and to do what makes you happy. The toughest part of the job is there is constant pressure to produce content and because your job is market driven at times it can be unpredictable.
TB: It's fast-paced and there's always something to do/learn. I'm lucky to work with a lot of bright, intellectually honest people, so any time I can genuinely add value it feels great. There's also a lot of room to be creative and present data in unique ways which can be rewarding. But working at a big bank, there are always times when you spend a lot of effort into a project that stalls or for whatever reason doesn't materialize - that can be frustrating but it comes with the territory.
We hope this helps you get a better sense of what research roles are like in the Finance industry!