Archive for ‘Finance’

July 2, 2010

How to Become an Equity Analyst

These few days i was exploring more options for my Post-MBA career. I really want to take a job which will strengthen my hard skill and core values and that’s how an international student survives in oversea competative job market.

Let’s see what does an equity analyst do.

This job mainly consists of watching stocks and attempting to analyze how companies will do in the future by examining and extrapolating data from the market such as competitors products, new conditions that may be coming that would change the current balance of things, and past market trends. Once this is done, someone with an equity research job will decide if it is wise for his or herself or for his or her company to invest in the stock of that particular firm, and will write up a detailed report and recommendation. These people work tirelessly, often just spending twelve hours per day or more crunching numbers and watching stocks in the pursuit of big money. They are definitely monetarily rewarded for their work, however. Starting salaries range from a modest fifty to ninety thousand dollars per year ($50,000-90,000/year) and for more experienced or more successful equity research jobs, salary can reach in excess of one hundred and seventy five thousand dollars per year ($175,000/year).

An example from Andrew.

Andrew Black is an equity analyst in the global markets team at a bank, helping to sell investment ideas to clients. He specialises in researching UK utility companies, such as those who trade in gas and electricity.

What does your career as an equity analyst involve?

My task is to know as much as possible about electricity, gas and water companies so we can value how much they are worth. Our clients can’t be familiar with every stock in the market, so they look to us for detailed insight. By taking into account various factors, including our expectations for future profitability, we try and predict the price of stock. This information is used to advise clients whether they should buy, sell, or hold onto their stocks and shares.

How do you research a company?

We take information from company reports and announcements, talk to management, and consider the company’s strategy.We analyse how wider factors will affect the company and this allows us to build up a detailed picture of what to expect from the company in the future. There’s a lot of research involved, as well as the questioning of decisions and how these may affect a company. You need to really understand the industry and how it operates. In my field of utilities, the retail price of coal, gas and electricity will influence share prices.

Who are your clients?

Essentially, the bank trades in bonds, equities and derivatives (all are types of investment) on a global basis. Our clients tend to include pension funds, insurance and life assurance companies.

Do you talk to clients directly?

No, not at the moment, as I am not approved by the Financial Services Authority (FSA). For now, my advice is restricted to internal sales people who cover a wide range of stocks. Once I have gained further qualifications, which will enable me to achieve approved status with the FSA, I will be able to talk directly to clients.

Does your career as an equity analyst involve much travelling?

When I’m more experienced, I’ll probably spend a couple of days every few weeks visiting overseas clients. Currently, I focus on UK utilities, so I rarely leave the City.

What is an average day like?

I generally work 12-hour days, starting at 7.00am, which is when new company information is released. The first 20 minutes are spent catching up on overnight and morning news, preparing for a 7.20am meeting with the utility team. There is also a general research meeting and a broadcast to the sales force. The day is then spent calling clients and writing up my research. Information is continuous, so I juggle writing, research and attending meetings with keeping a watch out for company announcements.

What skills are important for your career as an equity analyst?

You need to be financially literate and have a definite interest in the business world. Confidence, good communication skills and creativity are also important. You’ll be expected to come up with original ideas. It’s also important to enjoy research and analysis.

Why did you choose this career as an equity analyst?

The job of an analyst matched my interest in business and skills in working with numbers. You have the opportunity to be creative, accept challenges early on and interact with customers. I like the fact that you’re not desk-bound and talk to a wide variety of people.

Andrew’s route to his career as an equity analyst

  • A levels.
  • Degree in Economics.
  • Equity analyst.

Andrew’s equity analyst tips

  • Work hard at school and try to select business studies, economics or finance-related subjects.
  • Read the Financial Times and track imaginary portfolios. It teaches you how the investment system works.
  • Be prepared for aptitude tests at interview stage. You’ll be competing against European counterparts, not just UK graduates.

Equity analyst related jobs

Salary of an equity analyst

  • Salaries for new investment analysts start from £30,000 to £35,000, with potential bonuses worth up to 20 per cent.
  • Salaries increase with experience.
  • For top investment analysts, the salary package could be worth £300,000 or more.

Career as an equity analyst

  • Many analysts are recruited straight from university. Generally, employers will accept any degree subject, but maths, politics or economics are advantageous.
  • Previous business experience is attractive to employers. A professional qualification, such as in accountancy, may also be useful. Many analysts do a summer internship in their second and final years at university, which is an excellent route into the industry.
  • Most jobs are based in London, although analysts work in all major investment centres, including Europe, Asia and America.

    Prepare to Become an Equity Analyst

  1. Step 1

    Take stock of your talents and traits before deciding to become an equity analyst to make sure you have what it takes: a gift for mathematical analysis and number crunching, proficiency with computers, above-average writing skills and high standards of personal integrity.

  2. Step 2

    Prepare academically by getting a bachelor’s degree in business administration, accounting, statistics or finance, with course work to support a knowledge of accounting policies and procedures, corporate cashflow and financial reporting.

  3. Step 3

    Strengthen your credentials by earning an MBA or certification as a Chartered Financial Analyst (CFA), which is granted by the Association of Investment Management and Research. This certification is based on a series of essay exams taken over a 3-year period, in addition to a bachelor’s degree and 3 years of practical experience in the field.

  4. Get a Job as an Equity Analyst

  5. Step 1

    Get your foot in the door while still in college by seeking a summer internship working with an equity analyst department in a securities firm, mutual fund, bank or pension fund. Find opportunities through your college internship program or career office.

  6. Step 2

    Apply for equity analyst jobs and get face-to-face experience with companies by attending hiring and interview visits to your campus by securities, bank, mutual fund and pension fund companies.

  7. Step 3

    Market your professional writing skills in your resume, cover letter and an appropriate writing sample enclosure or attachment. If a dozen applicants all have similar academic preparation, your writing talent could give you an edge for an equity analyst job.

  8. Step 4

    Read the “Wall Street Journal” and “Barron’s” regularly to familiarize yourself with the equity industry and with industry report writing styles. These are also great resources to watch for job listings.

  9. Step 5

    Apply to become an equity analyst through listings you locate at an online job listing service such as (see Resources below).

June 21, 2010

Chinese students want to know: How do i get rich?

A good article written by a professor in Wharton Business school.

Take a look and think seriously about what you want to achieve.

A business school professor asks himself what he hath wrought.

In February, three Wharton faculty colleagues and I had the pleasure of dining with 19 visiting students from one of China’s most prestigious universities. The students were young. They were charming. They were very intelligent. And they were very, very goal-directed.

My colleagues and I had each prepared brief opening remarks, but the students were having none of it. They had elected a delegation leader, and the delegation leader, as quickly as possible, got to the question the students all wanted to address: What are the implications of the current financial and economic crisis?

A colleague in the accounting department gave them a careful, scholarly, even-handed explanation of how firms’ decisions on the repricing of assets in their portfolio could perhaps have been used, perhaps unintentionally, to create false expectations in the marketplace, and could have been done in a way undetectable to auditors, leading to over-investment in toxic subprime assets.

No, that’s not what the students wanted to discuss. With much less tact, I explained that, indeed, mispricing of assets at an inflated price could have been deliberately used to create the illusion of value, and this could then have been used to create the very real rewards of wealth for the financial engineering wizards responsible for the scheme.

This got us much closer to the questions that the visiting students wanted to address. Their first round of questions were basically, How can I get that job? How can I get a high-paying job in investment banking now?

My colleagues and I attempted to convince them that those jobs simply will not exist again, at historical levels of compensation, in the months or years before these students’ graduation.

This led to a second round of questions, like, What can I do while working as a desk drone in an audit firm in China to ensure that I can get into Wharton, Harvard or Stanford, and get a job in investment banking later? The students were patient. They did not need a job with a $10 million bonus now, as long as the prospect of receiving it later would still arise.

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I then suggested that perhaps they might work for companies that made things. Actual things. With a burgeoning middle class that would soon be larger than the entire population of the U.S. or Western Europe, surely there was going to be a huge domestic market for things in China. The students could pursue careers with companies that were working to develop and to sell appliances fit for a Chinese home, or mass-market, branded consumer package goods for the new middle class Chinese consumer.

This was met with stares from the students. Another colleague from the management department suggested that Chinese retailing and distribution offered two other growth opportunities for a bold young entrepreneur. Again, we got mostly stares.

I then explained that there are really only three ways for an individual to earn tens of millions of dollars a year:

–Create a company that creates real wealth and keep a piece of the company. Bill Gates did that at Microsoft (nasdaq: MSFTnews people ), and he is, probably, still one of the five wealthiest men in America. Vanderbilt (railroads and shipping), Carnegie (U.S. Steel (nyse: Xnews people )) and Rockefeller (Standard Oil) did it, too. These men played hardball, seeking to crush commercial competitors, but they did successfully transform America and the world.

–Facilitate the creation of real wealth by others and keep a piece of each transaction. J. P. Morgan convinced European investors that they would earn far more investing in the fastest-growing industries in the United States than they would investing in their more developed, more mature and more slowly growing domestic markets. He directed the capital that led to the industrialization of the United States. American industrialists got rich. European investors got rich. America was transformed, and his share of each transaction ensured that Morgan became wealthy as well.

Venture capitalists, early round investors in new companies and firms that underwrite their initial public offerings all facilitate the creation of new companies and the creation of jobs and wealth, and profit from it. Early investors in Microsoft,Google (nasdaq: GOOGnews people ), Oracle (nasdaq: ORCLnews people ) and Apple (nasdaq: AAPLnews people ) all profited quite handsomely from it.

This used to be the principal function of Wall Street firms other than those principally in retail brokerage. But it produces individual Wall Street executive wealth only slowly, and only when Wall Street produces increases in national wealth. Patient men like Warren Buffett still facilitate wealth creation, and Buffett may be richer even than Gates.

–Steal it. Stealing money is much more reliable than earning it. You can steal wealth slowly, the old-fashioned way, buried within the operations of trading for the house account. Or you can steal it quickly, by using obscure and poorly understood financial artifacts to produce the illusion of wealth creation. Then you take a piece of the illusionary wealth, as personal cash, now. Then you exit and duck for cover before the entire game blows up. Better yet, you can sell your private equity firm to naïve investors for one final twist of the knife into the carcass of your nation. (Deliberate fraud, like those allegedly committed by Bernie Madoff or Robert Allen Stanford, is too crude to be of interest to young financial engineers, and too likely to result in extreme punishment.)

I then suggested that if students were not interested in earning their money through entrepreneurship (too risky), then investment banking in China offered the next best alternative for personal wealth creation. Facilitating investment in, and growth of, companies catering to the wants, needs, cravings and longings of China’s growing middle class, offers Chinese investment bankers a path toward personal wealth by creating national wealth, much as J. P. Morgan did for America.

The students, though, were uninterested in banking in China. After the students left, it took my colleagues and me a couple of hours to figure out why this was so. I-banking in China is about improving China. The students saw i-banking in America as being about improving their own personal wealth, first and foremost; if the client could be assisted without too much personal inconvenience then and only then did they see American i-banking as also being about value creation.

I asked myself, What have we done? When I thought that the craze for private equity careers and investment banking careers among the brightest Western students was the fault of Western business schools, I felt both shame (for perhaps having contributed to this) and fear (for how we as a nation could possibly compete with foreign nations where the best and brightest young students sought real careers).

Perhaps the fear was unwarranted. Perhaps the best and the brightest students of other nations also wish to transform their homelands from economic dragons into paper tigers, following the Western model. Interestingly, our own students are indeed learning to manage, learning to market, learning operations and production planning and logistics; they are working hard to get ready for a world of things. Perhaps America doesn’t have as much to fear from foreign competition as we thought.

Eric K. Clemons is a professor in the Information Strategy and Economics Group at the Wharton School of the University of Pennsylvania.

June 21, 2010

Is Enterpreneurship for everyone

I’ve put being an entrepreneur as my long-term goal in my essays to MBA. In fact I’m very seriously about it. However to be a successful entrepreneur, I believe I need to develop a few key personalities, which are learned and concluded by my own experience and observation.

1. be open-minded. You need be very sensitive about opportunities around. Therefore you need to open-minded, be willing to talk to any persons and eager to learn through their experiences.  Don’t take yourself too serious, be humble and admit that everyone you encounter have the wisdom and experience you don’t have and may bring opportunities to you.

2. be a good team player and learn to develop leadership. Every entrepreneur starts from scratch and being a good team player is essential to intrigue other’s interest to work with you. Furthermore, develope the leadership skill as soon as possible.  You’re supposed to lead the team and drive the growth. You introduce the vision and of course you need to pursue others to believe in it even though your goal some time sounds crazy.

3. Develop your interest and hobby.  Most successful entrepreneurs find their interest at early stage of their life. If you don’t have and just hope to make money out of your entrepreneurial activities, you may not go too far on this path.

I don’t think i am a perfect person to be an entrepreneur or not even close.  But what drives me is the curiosity. I want to know what’s the entrepreneur experience? I want to test my ability and see how far i can reach.  The more experience i gain, the better i learn more about myself.

On the other hand, just curiosity isn’t enough. Persistency plays key role while running the business. The most risky things that an entrepreneur may encounter is not knowing how to balance curiosity and persistency(Same applys to every person). They change subjects from times to time because of curiosity. While in fact only persistency and great effort will lead to the day when people see the brilliant result.  Well, according to this theory, I may lose points to my goal. However i have built the awareness and what i have to do is to grow myself.

Finally, you’re not alone. You have a team and you need to count on them.  Your team member could be your schoolmate, your colleagues and clients or even any persons you encountered during your life and developed the relationship.

Next Topic.  To do what? Come up your business plan.

I can’t see why should anyone who with chinese background leave the country and want to set up their own business oversea. Leaving 1.5 billion people market behind is stupid decision. However to gain oversea experience is good approach to facilitate future business development in China.


1.  金融方向:中国懂金融的人太少,而金融确实国家的命脉。所有资源都打上了金钱的符合,这是看不见硝烟的战场。Finance Engineering是一个方向,这是集合数学,金融和计算机的交叉学科,国内很少看到,国外也不是所有学校都有。这是一个小圈子,但世界永远都是一小部分人统治大部分人。使用数学模型来分析金融市场是必须的,不然怎么指导操作呢?买卖不是拍脑袋的。如果进入这个行业,将来可以尝试拥有自觉的Fund来投资。中国不缺懂数学和编程的学生。

2. 老本行,电信行业:这个门槛太高了,没有大资金的投入,没有技术积累,很难成气候。但可以be open-minded

3. 互联网:其实和电信行业一脉相承,并越来越融合在一起。有新的idea往往就有机会。

4. 区域性机会: 国外,国内不同地区的局部机会。

May 6, 2010

Economic crisis deepen?

Had some chit chat with colleagues during lunch and we had some arguments on the economic crisis. I feel optimistic while the other feel very pessimistic. They argued that in china the real estate and stock market will crash while RMB value will be decreased. The best way for us to do is to keep US dollar. They claimed US will be the ultimate winner in this crisis while Europe and emerging markets will hurt badly. I joked about why not all of us immigrate to US and be part of its free lunch. They answered “why not? if you have the way”.

Is the economic crisis so serious? Greece of course is under big trouble while Europe certainly cann’t get rid of it. Besides, the highest unemployment rate in Spain and Portugal can be the last straw to crash Europe economic. Now the investors are very afraid of Euro and the cash return back to US for US public debt. Will the same happen to China? I’ve lost almost 20% of my investment in stock market and it seems the downturn cann’t be recovered recently. Shall i sell all of my rest to keep the cash for safety? Shall i start to exchange to US dollar now since i’m planning to have my MBA in NA next year. My finacial situtation will be deteriorated seriouly if above happen.

Here is related article to read. I admire the author very much for his accurate analysis(in chinese).

Wen guoqing

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