Getting a job in equity research
If you're looking to pursuing a college degree or already have one and looking to study further, you must be a highly curious person. Equity research is a sector in finance that rewards curiosity and it entails a lot more than just pure finance and accounting skills. If this is the first time that you hear the phrase equity research, then I want to state here that it is a field that typically pays in the six figures even in the entry level.
Equity research is a perfect way to launch your career in finance and also prepare you for an MBA from a top 10 b-school. There are plenty of exit opportunities available after a successful stint in equity research with opaque industries such as private equity and hedge funds being some of the money-spinning options.
You start off as a generalist in equity research and then move into industry-specific groups, i.e. oil & gas or bank and financial institution stocks. There is then a whole new skill set that you will need based on the specific industry. For instance, oil stocks of companies that are mainly upstream (exploration and production) rely more on net asset value rather than the commonly used DCF (discounted cash flow). In this case, production, reserves, and prices are some of the most important values that you will have to consider.
In the case of oil & gas, there will be a specific modeling test that can often be as long as 6 hours. This is a similar format in most equity research interviews. DCF and other Excel skills will help push you to the top of the pile when it comes to landing a position. The best way to build up your skill set is to sign up for courses on reputed websites such as Mergers & Inquisitions, etc. Keep in mind, that they give away a ton of free material. But from experience, I can easily say that it would be better to sign up for a few courses. Even if you spend a $1000, it is well worth it when taking into consideration that equity research salaries routinely run into the high $100k even at the entry level. Furthermore, it will play a big role in landing a higher salary and that $10K raise!
The best way to make use of this paid material is to prepare in advance of an industry-specific interview especially if you were in a generalist position previously. This is obviously going to be the case for you recent college graduates with little to no experience in specific industries.
To advance in equity research, it is essential to building a good track record of being right with your stock picks. Mad Money's Jim Cramer was able to break into Wall Street through his success trading stocks in his account. It does help to be active in the markets and use your funds to show your passion for investing. Reading content on the website such as Seeking Alpha and even up and coming ones like Market Consensus will develop some of the technical skills and keep you in the know. There are also several of the big names such as Bloomberg/Reuters and CNBC to turn to.
That being said, if you've used our advice on the SAT, GRE and managed to ace them and also done your research on schools, you will be more than prepared to take on an equity research position and perform well.