How to succeed in sell-side equity research according to 19 rising star analysts, from picking the right coverage sector to learning to program in Python
We asked the up-and-comers to give us their best career advice for those just starting out.
Here are some of the top insights, straight from the wunderkinds themselves.
Wall Street’s top equity-research analysts do much more than keep a pulse on the stock market and company-specific news to give clients an edge.
The bold calls on whether to buy, sell, or hold a certain stock come from professionals with a natural curiosity for the sectors they cover, an insatiable appetite to learn, and the ability to disseminate that information in a compelling way to their clients.
At least that’s what we learned from some of the top young sell-side equity-research analysts featured on Insider’s rising-stars list.
We spoke with all 19 finalists about what advice they’d give aspiring equity research analysts and what’s helped them find success at a relatively young age.
Take a look at some of the lessons and insights they’ve learned along the way.
“Equity research is all about being on top of things. The earlier you learn that in your role you have to prioritize, while still keeping an eye on the macro and what’s going on in other sectors, that helps you become more well-rounded.
“You have to be really passionate about the role, which is not very easy. It’s kind of like a lifestyle. You have to be passionate about the job, and it’s hard to do it really well if you aren’t treating it like a lifestyle.”
– Rajat Gupta, JPMorgan
Bank of America
Test and retest your assumptions
“Never allow yourself to get bored, and I think that one is a little bit straightforward in that being a research analyst requires you to be intellectually curious. But the way I approach my job is there’s always another angle to look at things. You can continually test and retest your assumptions.
“The second thing, and this has been really beneficial in my career, is don’t be afraid to overask. And I say that from an operational perspective, whether it’s asking questions to corporate or asking questions to your boss or your team members to better understand your sector or stocks or maybe just the market in general. And then you can extend that into the career side of things, which is asking for more responsibility, more coverage.
“The third one that I would say is having a next month, next year, and next three- to five-year plan. And that is something that I am very disciplined on in terms of being anticipatory and forward-thinking about how I want my career to play out.”
– Aileen Smith, Bank of America
Robert Majek
Learn to program
“Don’t be afraid to specialize. Firms are shifting from wanting general to more specialized analysts, so pick a sector and go deep.
“I recommend researchers also learn to program, specifically in Python. Gathering alternate data is becoming a key differentiator, and you’ll stand out if you know Python and can run a script to scrape the web and collect information. I’ve talked to a few other colleagues of mine who cover consumer, retail, and other sectors, and they’ve all said that when hiring new associates, that’s a skill that will make your résumé pop off a bit.”
– Robert Majek, Raymond James
It’s OK to be wrong sometimes
Morgan Stanley
“Don’t be afraid to be wrong. What I always tell undergrad students who are looking to come into the industry, since it’s always a buy-side versus sell-side conversation with a lot of them, is that on the buy side, you can be wrong and you lose a lot of money. But on the sell side, when you’re wrong, thousands of people know you’re wrong.
“So you have to be humble. Sometimes, you have to admit when you’re wrong. But if you don’t take risks, and you don’t take chances, you’re ultimately not going to get recognized. You don’t make a name for yourself by being in line with the consensus on everything.
“For those who are just starting out, I would say: Always, always, ask for more. Be intellectually curious, but make sure you’re really pushing yourself early on.”
– Lauren Schenk, Morgan Stanley
Find your audience
JPMorgan
“Focus on client service. The way I think about equity research is that it falls into two large buckets: research-creation and then dissemination and distribution. On the reading side, you have to understand what you’re covering. But for dissemination, it’s a lot of phone calls, emails, and going out on the road. And if you do that distribution correctly, you get feedback that helps your research.
“It’s a nice, virtuous cycle that has a client-service component, and that sets apart the best analysts. You can’t sit in an ivory tower and just think of the most incredible analyses — if you can’t find and create your audience, no one will be able to appreciate the analyses you’ve done.”
– Judah Sokel, JPMorgan
Find your niche
Macquarie
“Just because it’s not what’s been done doesn’t mean it’s not what you should do. If you look at traditional leisure coverage, it doesn’t necessarily look so much like my coverage, or I should say my coverage doesn’t really look so much like traditional leisure coverage.
“When I think about how I first made the push to get some kind of lead coverage, I was pushing to cover something that was not a flagship type of product per se. Look for areas where you can have an impact, even if you think that that particular area isn’t so crucial to people, because you can find a way of standing out just because no one else is really looking there.”
– Paul Golding, Macquarie
Don’t hesitate to ask questions
Emily Chieng
“I think sometimes, particularly as a young analyst, we get a little hesitant around asking what may seem like silly questions, but at the end of the day, it’s less silly and maybe something that isn’t even broadly considered by other analysts.
“Even as I’ve progressed, just staying curious and continuing to ask questions because you never know, there might be a bit more of an unexpected answer than you’d expect. And so just never being afraid to ask what may seem seemingly obvious.”
– Emily Chieng, Goldman Sachs
Network, network, network
Oppenheimer
“Have as many conversations with people in this industry as you can. And that doesn’t necessarily mean intern at as many places as possible, but just have as many conversations as you can. I think if I had done that, I would have found my own route to equity research a little bit faster and would have been able to enjoy being in this role a lot longer.
“There’s so many jobs in finance that I wasn’t even aware of when I was a student that I’d just encourage that vast exploration. Demonstrating that intellectual curiosity is what really shines in equity research.”
– Kristen Owen, Oppenheimer
Take ownership of your work
Stephen Glagola of Cowen. Cowen
“I listen to feedback from my clients on the calls I’m making, and pushback, and I try to apply a healthy dose of self-criticism to what I’m doing to make sure I’m being as objective as possible.
“In terms of rising within a team, I think it’s simple things that we all know: taking ownership over the work you’re doing. Early on in your career, you’re not going to really be the vocal leader. That’s probably something that at more senior positions is going to be — so it’s arriving early at the office, being the last to leave those. Those simple things, I think, are important when asking for more responsibility.”
– Stephen Glagola, Cowen
Always be willing to learn
Evan Seigerman
“Early on, there were times when I was a new associate, and I was frustrated, tired, and didn’t get it and just wanted to give up, but I kept pushing through, kept learning, and kept trying to gain mastery of the sector and the industry. And it was through that tenacity that I was able to get to where I am today in my career.
“With that said, it’s also really important, as someone who doesn’t have a science background but covers biotech stocks, to know what I do not know and know when I need to go find an answer. I think you gain the most credibility from your clients and companies if you say ‘I don’t know the answer, but I know I can find the answer for you’ versus making something up that is not correct. That is how you build credibility.
“In this business, your name and your reputation are everything. That is the most valuable thing, so you want to be credible with all the constituents that you interact with.”
–Evan Seigerman, Credit Suisse
It’s all about attention to detail
Keefe, Bruyette & Woods
“Having an attention to detail in everything you do generally pays dividends, and I think people recognize the quality of work. That’s one of the ways that I’ve conducted myself throughout my career: I’ve never done anything quick and easy. I’ve always been extremely thorough about every task that I’ve performed.
“You have to be willing and ready to take advantage of opportunities that are presented to you, but it’s the hard work that you’ve done before that, the attention to detail that you’ve had, and the level of work you’ve completed before that’s going to allow you to have a chance to take those opportunities.”
– Kyle Voigt, Keefe, Bruyette & Woods
Pick a sector you have an interest in
UBS
“If you’re interested in equity research, you have to join a sector you care to learn about. … I really enjoy researching software, and I think that drive to understand the companies and wanting to understand the technology is super important.
“Early on, when you’re just starting in equity research, I found I added a lot of value in being super detail-oriented and being proactive in digging for answers to questions I could tell clients had.”
– Taylor McGinnis, UBS
Know your stocks
Stifel
“If you’re thinking about whether equity research could be a good fit for you, ask yourself how much do you like school and if you really like reading and writing, and going to classes.
“When I talk to someone for an informational interview or even a real job interview, if they have a couple of stocks or a couple of companies that they’ve really followed, and that they’re interested in and passionate about, I think that sends a message.
“If you’re following some companies in your free time already, it strikes people that you’re really passionate because I think the equity-research profession is a little bit of a hobbyist profession. The people who do this stuff love it. They follow markets and stocks and read all the time, so if you can kind of convey that in your own approach, and your attitude aligns with that, I think that’s a strong message.”
– Paul Matteis, Stifel
Keep an open mind
Goldman Sachs
“My pivot from consumer into TMT is something that I still describe today as one of my most fortunate failures, or one of my favorite failures. I think it’s important for people to keep an open mind, especially early in their career.
“One thing our head of Americas equity research always says is that we all have to develop our own brands, and we all have to decide what we’re doing that’s different from everyone else and what we’re going to be the best at.”
– Michael Ng, Goldman Sachs
Be humble and respectful
Citi
“The most important thing to have is humility and not be afraid to learn from your mistakes.
“Don’t be afraid to speak up if you have something insightful to say, but at the same time, when you’re breaking into the industry, respect the folks you’re working for and try to see if there are things you can learn from them and their processes.
“But don’t be afraid to add your own spin to things and develop your brand, which people are going to come to know you for.”
–Tyler Radke, Citi
Communicate and collaborate
UBS
“To be good at this job, you need to be really curious because it’s a lot of hours that you’re going to dig into a topic or theme.
“It’s very important to have good communication skills. Work on that to build relationships with investors but also with your own team. … Make sure you’re collaborating with other teams. I think that’s what really elevates you within your department.”
–Aga Zmigrodzka, UBS
Stay curious
Ben Chaiken
“Whether you are on the sell side or buy side, probably the most important thing is to have no loose ends around your assumptions, so having every single assumption backed up by a rational thought process. Curiosity and a passion for investing will make it feel such that having that mentality of no loose ends is not a hassle but something that you want to do.
“If you have a passion for the product and a passion for investing, and you also let your curiosity blossom, then it will make you a better stock picker because you want to get the answer right. When you’re genuinely curious, you are going to dig a little bit deeper versus just trying to check the box.”
–Ben Chaiken, Credit Suisse
Learn something every day
Cowen
“I think it’s important to be constantly learning. There’s a lot of information out there in the biotech space, so constantly being aware of it means you can never learn enough. I’ve been at this job for five years, and I feel like I’m still learning every day, so that’s how I set the benchmark for my career. I want to be in a position where I can constantly be learning, and I think that’s really something that the equity-research career has afforded me.
“Find your niche, look at the market, and see how you can be differentiated, and really try to focus on that because finding where you are best and how that overlaps with an unmet need in the investment community is perfect.”
–Joe Thome, Cowen
Keep your options open when you start out
Deutsche Bank
“No matter what firm you’re going to, you want to try to cover something you genuinely have some interest in.
“You should definitely consider multiple paths in the beginning because not everyone finds their calling initially. And I certainly didn’t. I think it’s always important to kind of keep that open mind.”
