So you want a job in equity research?

One of the very common question experienced analysts get from young graduates goes like this

“I studied XYZ in University. Can I get a job in Equity Research if I complete CFA Level 1? I am very passionate about research.”

I surely can’t answer whether he will land a job after completing CFA Level 1. What I CAN tell is that if someone is truly passionate about a job he should give 300% effort on reaching his goals. He needs to show the recruiter that he seriously means business and the company has to be full of fools to not hire him.

How do you do that?

You work hard. Harder than you have ever worked. Read as many books on equity research and investing as you can. Do informational interviews with established analysts to understand what hiring companies look for. Find out the major skills required by looking at resumes (Linkedin profile would also work) of top-notch analysts and work on those skills. Get up to date on the stock market (read everything you get). Learn to master Excel and try to learn how to model a company (there are free youtube videos available). Try to value a listed company and come up with a buy/sell/hold recommendation.  Do anything and everything possible that will set you apart from all the other candidates.

Something like this can only be pulled if someone has a LOT of passion for the job. It is really hard to fake passion. If you are really passionate then SHOW IT.

The same strategy can be applied to almost any job in any sector. If you want to get a certain job, you need to be desperate enough to try everything possible. Simply formatting your résumé and emailing it out might not be enough.

Asif Khan, CFA

Asif Khan is presently a Research Analyst (Financial Sector) for Exotix which is a frontier market focused investment bank. He has more than 6 years of work experience as equity analyst in both buy and sell side roles across Asian frontier markets. Asif is a CFA Charterholder and has a dual major in Finance & Economics from North South University.

7 thoughts on “So you want a job in equity research?

  1. Hello Asif,

    Thanks for the post. It was really insightful. Interestingly, I fall into that category. I am currently a CFA Level 2 candidate, I work for an Insurance company but was redeployed to our investment subsidiary after passing CFA L1 exam. Unfortunately, I am in the Customer service unit whereas, I want to be an Analyst- preferably on the research side. However, I have some questions:

    1. Kindly recommend some equity research books I can read on.
    2. For an L2 candidate whose primary job function is not Financial Analysis and who rarely has time to even complete his primary duties, how do I go about conducting research, learn how to model companies etc, more so, when I still need time to study for L2 or do you suggest putting research practice off until after L2?
    3. Most analyst from my own part of the world seem to be filled with pride and some arrogance- sorry to say this. Even to get older CFA candidates or CFA holders to give me tips on how best to prepare and pass my L1 and even L2 CFA was difficult as many were unwilling to divulge useful information…I ask myself why? So how do you now carry out informational interviews with such people? It is even worse with those in my office- they see one as threat- no one has passed L2 yet.
    4. I want to be the best analyst of my time and in my region. I am fired up to achieve this but then, I have told myself that there is no alternative to passing the L2 CFA- what is the best strategy to bring this beast called lvl 2 to its kneels?

    Thanks.
    Ibikunle

    1. Hi Ibikunle,

      A lot of questions. I will try my best to answer you. Can you tell me where you are from?

      1. a. Confessions of a wall street analyst.
      b. Best practices for equity research analysts
      c. The investment checklist
      d. The manual of ideas

      2. For you to learn research the best bet is to read relevant books and read up on as many research reports as you can. Maybe you can start with a sector that is important in your country. E.g. if cement is listed in the stock market then try to find as many cement company research reports and read them. You can search in google for some free reports. If you have access to bloomberg terminal then its even better. I think you can do this even while prepping for CFA level 2 because certain chapters like equity valuation will be overlapping.

      3. If you can’t find a mentor in your country then keep on using the internet. Places like analystforum.com and wallstreetoasis.com are filled with experienced people who have given out tons of advice. Be sure to search the forum before asking a question because it is very likely that your questions have been addressed before.

      4. Level 2 is lengthy and somewhat complicated. Prepare as well as you can. That is the only solution. For specific tips, check out http://asifkhan.info/2014/01/31/my-foolproof-method-of-passing-the-beast-called-cfa/

        1. I trust this meets you well. How is it going, how are you and how is work?

          Please help me thank God. I sent an earlier under this topic- the guy from Nigeria. My MD suddenly called me to his office last Friday night and informed me that he wanted me moved to the equities desk effective 1st April. He said more so, with my L2 preparation and efforts towards attaining the charter, he wanted me to bring the heavy reading I currently engage in to bear on the desk.

          An alternative investment unit has been created and one of those that used to be on the equities desk has been moved there while the other staff will be going to Customer Service where I used to be. A new Staff who is currently an Investment Analyst will be joining us from ARM and I’ll be working with him.

          The current structure of where I work is such that there is no research unit yet. The traders/ Portfolio Mangers somewhat do some little bits of research (not detailed) hence, they rely more on 3rd party research and technical analyses (Bloomberg).

          Being a role I have never been before and something I will be doing for the first time, what are those qualities that I need to imbibe to be a good analyst/ trader/ Portfolio Manager? What do I need to do to improve my skills and perhaps there may be some books/ training you would recommend that I read/ attend? Anything, no advise would be too little. I actually want to be the best.

          Warm regards

          1. Being a good analyst takes a lot of time and dedication. And most importantly you need experience. Experience of making mistakes and learning from them. But obviously, there are ways to learn quicker. Here is a blog post on some good books to read. You might also want to read Investment Valuations by Aswath Damodaran and Valuation by Mckinsey.

  2. Hi Asif Bhai

    I’ve two questions.

    1. What Excel skills do I need to model a company? I can do things like DCF Analysis, Bond Valuation, WACC, Capital Budgeting and some statistics like Normal Distribution and Regression Analysis. Can you please tell me what additional skills I’ll need in Excel that’ll help in financial modelling?

    2. Also, I recently found an interest in Quantitative Finance and started learning R several months ago and completed some online courses at Coursera. Initially, I only learnt out of interest, but now since I see its applications in Finance and Statistics, I’m more curious. My question is, is R or any other language in Quantitative Finance used in Bangladesh yet?

    1. 1. I don’t think we need to have very advanced excel skills. Knowing keyboard shortcuts is a must though.

      2. I also have little idea about R or quantitative finance in general. Typical equity analysts dont really need it.

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