By John C. Bird, Operations Analyst at Nuveen Asset Management and CFA Level II Candidate
Interested in pursuing one of the investment world’s most exciting careers? On September 21st, a group of professionals and students listened to Andrew Rem, CFA and Paul Dwyer, CFA talk about their experience as Equity Analysts. Over the course of lunch, our speakers shared with us their backgrounds, what they do on a daily basis, important lessons they’ve learned, and even some tips on breaking into this extremely sought-after career.
Our speakers: Andrew Rem, CFA and Portfolio Manager of Small Cap Value Fund at Nuveen Asset Management, and Paul Dwyer, CFA and Senior Research Analyst at Punch & Associates, did not start out life knowing they wanted to be Equity Analysts. Andrew spent some time in Retail management, while Paul did a stint in Investment Banking before finding their passion in Equity research and analysis. Both men have found they are value-oriented in their investment approach, and that they prefer small and (in Paul’s case) microcap companies when looking for investment opportunities. With Nuveen being part of TIAA, a multi-billion dollar financial services company, and Punch being a 15-person, employee-owned, RIA, with ~$1 billion under management, you could say Andrew and Paul work in opposite ends of the spectrum when it comes to firm size and organizational structure. However, Andrew and Paul cautioned their young listeners not to be picky when trying to break into the industry. “Just get a job with a firm, large or small, and develop your craft first. Once you are in the ecosystem, then you can worry about firm size, investment style, and the like.”
Tasks of an Equity Analyst
It presents a unique challenge when summarizing a “typical day” in the life of an Equity Analyst, because no two days are the same. However, our speakers were able to broadly summarize an analyst’s duties in the following categories:
- Research at the Office
- Includes reading, financial modelling, making / talking to industry contacts, Peer / Competitor reviews, Management calls
- Includes Industry / Investment conferences, field trips to companies, and Investor days
- Activities around Earnings Season
- Includes listening to Quarterly/Annual calls, updating models / forecasts, reporting on company given updated information
While all this might sound fun, it is important to remember that being an Equity Analyst is not a “9-5” job, and with little oversight from supervisors, one must be a self-starter, highly motivated, and interested in the work to succeed. The best Equity Analysts have a process.
Our speakers stressed the importance of having a repeatable Investment Process. “Focus on creating and then improving your process,” Paul encouraged the audience. “A good process will yield good results over time, while no process is no better than gambling.”
The speakers went on to describe the typical process in researching investments will often have the following steps:
Source -> Research -> Pitch -> Decide -> Monitor -> Close
Andrew recommended having an independent view and being skeptical of the “consensus” when analyzing and forming an opinion on an investment. “It’s only by doing something different, and zigging when the market zags, that one can expect to outperform over the long term.”
Food for Thought
Not surprisingly, given the exciting, intellectually stimulating, and often financially rewarding nature of the work, it is very competitive to break into and analyst positions don’t open up very frequently. Our speakers shared some of their recommendations on breaking in. These included:
- Study for and obtain your CFA Charter
- Be active in the stock market. Manage your own portfolio of investments and have a reason for why you own what you own.
- Get to know your local investment community. Be active in the CFA Society of MN and in your Investment Club on campus (if applicable)
- Demonstrate an interest and a passion for investing. This is a tough business and only a genuine love for the trade will get you through the tough stretches.
- Attach an Investment write-up to your resume and cover letter when you go to apply for an open role. Even if you are wrong about the investment, this will demonstrate you are thinking about your investment decisions and will help you stand out in an interview.
- Follow professional investors, read books and articles on investing, ask to shadow professional investors, and be persistent! The journey is part of the fun!
A special thanks to Andrew, Paul, and all the members of the CFA Society of Minnesota that make events like this one possible. Now it’s time to get out there and invest! Cheers! Be sure to check out upcoming Day in the Life events on our events calendar.