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It can be a bit tough to recommend Wall Street as a career choice for new graduates these days. But there’s one job there that I think is the perfect first (or, for me, third) job out of school: sellside research. Here’s why:
To be a successful research analyst, you have to analyse, write, present and be able to interact with really smart people. You have to make and defend your case. It’s great training for future jobs.
You have to make lots of decisions based on imperfect information. By no means do you ever have all the information needed to make a stock recommendation. But you do have (mostly) the same information as your competitors, and your job is to pull together that information in a coherent way. And then based on that, you have to determine if the stock of the company is a Buy or a Sell. (Forget about Hold’s; they translate into “I have nothing to say.”)
And the pertinent information can change often. A company reports earnings, you learn something from a supplier survey, or the stock price goes up a lot. Just because a stock was a Sell yesterday doesn’t mean that it is today. And so you have to keep incorporating new information rapidly and, from there, reaffirm or change your recommendations. If you’re going to be successful, you learn to do it quickly and unemotionally.
And you do all of this in public. There is nowhere to hide, so those lessons are learned pretty quickly. (And since people love to point out your mistakes, you get lots of help on this.)
To be successful, you have to get very comfortable having a different view than the (generally pretty smart) consensus. The non-consensus calls are the great ones.
You have to be a self-starter.
To be successful, you learn to cut out the low-value work. (Honestly, who cares that a company you follow reported earnings exactly in line with expectations?) Instead you have to focus on analysing the things that can make a big difference to the stock.
Winning and losing are pretty clear cut. Did the stocks you recommend go up? Did the ones you said to sell go down? Did clients “vote” for you?
And, since success is pretty clear, corporate politics tend to be pretty tame, at least on a Wall-Street-adjusted basis.
While “teamwork” seems to be is listed in the dictionary next to “mum” and “apple pie,” there is a lot also to be learned by taking on significant personal responsibility. If you’re a junior person on a big team, the drivers of success can get pretty muddy. As a research analyst, it’s a lot of you.
And, finally, unlike other Wall Street jobs, the job has some flexibility, even though you work like a dog. I never had a client complain that I wrote a research report from home on a Sunday night rather than from the office on a Thursday afternoon.