Each and every time global surveys are carried out on the subject of financial careers, the post of equity research analyst consistently ranks as one of the most stressful and generally intense on the face of the Earth. And when you look at what these guys get up to on Wall Street, it’s not difficult to understand why. Succeeded only by investment bankers when it comes to the rather frenzied pace of work and the responsibilities shouldered day in and day out, equity research analyst positions are the kinds of posts where the big risks bring the biggest rewards imaginable, but only for those that are able to both handle the pressure and make the right moves.
Of course, it therefore comes as no surprise at all to learn that getting into the industry as an equity research analyst is no cakewalk either. That is, if you want to make your mark and perhaps your fortune as a competent and successful equity research analyst. It’s the kind of career path that’s incredibly difficult to break into in the first place, though once you have your foot in the door there’s no telling how far you can go. From part-time posts working for smaller banks and businesses to full-time careers in the heart of London’s financial district, hard work and dedication will always pay off for the right candidates…again, if you can get yourself through the door in the first place.
A Unique Screening Process
Unsurprisingly, the screening process carried out by those looking to hire an equity research analyst or any number thereof is rather different than that of any other job on Earth. In this instance, they’re not just interested in your background, your future ambitions, your qualifications or even your employment history – it’s more like a combination of dozens of character traits mixed with the ability to think and act independently and proactively. How can this be ascertained in a job interview? Through interview questions of course, which is why it’s crucial to be ready to be put to the test with a series of challenging questions and ‘what if’ scenarios.
Of course, each and every interview will be rather different to say the least, which makes predicting the questions you’ll be asked largely impossible…it all depends on where you’re applying and why. But in order to give you at least some idea of what to expect, what follows is a brief look at some of the actual questions that have been asked by those applying for investment research analyst jobs – just to outline the kinds of things they like to cover:
- If you work for Burger King, what would be better for business: a 5% spike in total volume sales resulting from the introduction of a new product, or a 5% price hike on current products across the board?
- If you were requested to analyze a technology brand you’ve never heard of before, how would you begin and what would you look at first…and why?
- When presented with the annual report for any given brand, what’s the first thing you look at and why in terms of analysis?
- If your grandmother was to ask you what constitutes financial research, how would you explain it?
- Why are you choosing the sell/buy side over the other? What’s your motivation?
- What makes you think you’re prepared for such a chaotic and stressful working life? How does your prior experience make you ready for what’s to come?
- When oil prices fall to new lows, what impact does this have on the global economy in general? In your opinion, does it constitute a good or a bad thing?
- Right now, what industries represent solid buys for new investors on the lookout for cheap yet safe stocks?
- Tell me about two poor choices you made in the past with regard to investment or investment advice given. What happened, why did it happen and what did you take away from the experience?
- Let’s talk about PE valuation – what is its weakness?
- If oil prices were to suddenly skyrocket tomorrow, how would it affect the UK economy?
- If there was one company that was looking to increase in-store sales and another focusing on increasing its overall physical size, which would represent the better investment in your opinion?
- A friend tells you they’ve been advised to sell a call on Apple stock – what kind of advice would you offer them?
Of course, the tricky thing here is how specific each question is and the fact that every last one is likely to change radically from one interview for the next.
Prepare for anything and expect the unexpected – it’s pretty much the lifestyle you’ll be living if you make it through the interview, anyway!