Geo, you’re killing it with your past few threads. I agree 100% with what you said.
Let’s not forget that conference calls are all one big circle jerk with slow pitch questions. Short sellers are prohibitted from speaking (in many cases). It’s all financial theater with ER getting a first look at financials to win IB dollars (ie the revenue center). ER is a cost center.
Bro mentioned he was asking questions to support his short thesis and was thrown off mid call.
If you are genuinely interested in ER, you should be 100% aiming for buyside in my opinion. The hours are better and it’s more interesting. Sell side research analysts are generally restricted in giving overly honest opinions - at least publicly. Certainly sellside buy/sell/hold recommendations are as good as useless. On the buyside you potentially get to influence where real money is invested. Sellside is more about marketing and generating trade commisions.
What about the long term focus of ER? I cant imagine that people stick in that role for years. With that, I would think ER would be a better transition to working as a portfolio manager, no?
With FP&A, isnt one limited to your annual raise, stock options, etc?
My understanding is that the potential is greater for making more money in ER because it opens more doors 10 years down the road.
Please provide insight as to why that is wrong.
Its not wrong, per se. ER is a path towards being a PM. You’ve got more upside, yes, but much less chance of hitting that upside. Just look at the ratio of PMs to ER analysts. On the FP&A side, there are promotions and advancements available. Corporate development is one option. Or just regular ladder advancement: Director, FP&A, then, VP, Finance, then CFO. Few will be CFOs of course, as that’s a pretty elite group much like PMs. But those intermediate steps still have potential for $200k paydays. Again, if FP&A is boing to you, don’t do it. If you love ER stuff, then go do it. Your success is doing to be dependant on your passion for your work than what the typical career path is for that line of work.
Thanks Geo
LOL
telling OP to go to the Treasury dept of a company (back office) over SS equity research (front office). That’s a good one
^ I told him to go where the work is what he enjoys. But like a typical ER guy, you see what you want to see. I said both paths are viable. I may not be as financial successful as you Itera, but I’m considerably more successful than most ER guys. The top performers in ER have the chance to make the jump but its extremely competitive. If you’ve got the passion, then by all means. But you’re likely better off in treasury just as an average. And corporate treasury as back office? Hmm… Seems like this is one time you’ve got no idea what you’re talking about. A job primarily trading currencies, negotiating lending terms, directly investing, building portfolios, allocating pension funds and managing investor relations (explaining basics to ER kids and selling the firms securities to actual sophisticated folks) is back office? I was responsible for setting allocations and executing trades on a portfolio of over a billion in my last treasury stint. 100% at my discretion within the IPS (which I developed with the Board). Back office yup.
I don’t think Itera understands wgat a treasury function consists of in a major bank. These are part of capital markets groups from what I’ve seen which is front office.
I wasn’t in a bank, I was corporate. I wasn’t doing compliance or accounting stuff. All portfolio management and trading. Small shop so I did nearly everything. I’d agree to some extent with a bank, though much of the execution is done by their capital markets teams so a treasury position there would be more back office like. Like if Royal Bank needs to issue some bonds, they call up their DCM team to actually do the deal. Same with equities.
Geo- thanks for dropping this wisdom. Definitely good to finally see another perspective.
How probable is it for someone from corporate FP&A/treasury to exit to an investment role covering their industry? I’m getting to an age where sell-side research just does not seem viable in terms of hours/effort exerted vs. comp. However, buyside research is the end goal.
Working at a leading financial data firm now covering a particular industry with exposure to IR for my coverage space FWIW.
Not sure what bank calls your division treasury. Treasury from the 6 companies I’ve worked for was never a front office role, managing funds on hand for temporary investing until the front office needs it, trade execution and clearing, making sure the bank has liquidity when needed. I still don’t call that front office. maybe your bank is just weird and called your group that name for some odd reason.
Can you read itera? Geo said not a bank, twice!
i meant bank generically; as in firm or company. not sure why thats critical anyway
It’s highly critical. Corporate treasury has nothing to do with bank or fund treasury.
Didn’t you just say that you didn’t work in treasury in a previous thread?
I honestly have to disagree with your opinions about exit opportunities out of FP&A, particularly corporate development which is really not a common exit opportunity at all for FP&A people. I am assuming you are in Calgary, and out of all the people I know who have made it into corporate development roles at firms like Total S.A., Agrium etc., they have all come from either banking or in select cases ER backgrounds. I am not saying it’s not a possibility out of FP&A, but generally FP&A does not nearly have as broad of an exit opportunity set as a comparable role on the sell-side whether it be banking or ER.
My first job was in emerging markets sell-side ER, and from that role I was able to move into investment banking and now most recently a corporate development role at a national oil company. There is no doubt in my mind that I would not have had nearly as much versatility thus far had I not started in ER.
So I’m going to say anyone would be wise to take a role on the sell-side with a preference toward ER or banking to maximize their career flexibility, since moving from an FP&A role to the sell-side is going to be tough regardless or what market you are in, CFA or no CFA…
Didn’t you just say that you didn’t work in treasury in a previous thread?
I honestly have to disagree with your opinions about exit opportunities out of FP&A, particularly corporate development which is really not a common exit opportunity at all for FP&A people. I am assuming you are in Calgary, and out of all the people I know who have made it into corporate development roles at firms like Total S.A., Agrium etc., they have all come from either banking or in select cases ER backgrounds. I am not saying it’s not a possibility out of FP&A, but generally FP&A does not nearly have as broad of an exit opportunity set as a comparable role on the sell-side whether it be banking or ER.
My first job was in emerging markets sell-side ER, and from that role I was able to move into investment banking and now most recently a corporate development role at a national oil company. There is no doubt in my mind that I would not have had nearly as much versatility thus far had I not started in ER.
So I’m going to say anyone would be wise to take a role on the sell-side with a preference toward ER or banking to maximize their career flexibility, since moving from an FP&A role to the sell-side is going to be tough regardless or what market you are in, CFA or no CFA…
^ Funny, I had an offer from Agrium in corporate development, but that was out of treasury, not FP&A directly. Wasn’t my cup of tea, too much travel. Anyway, I’m not in treasury anymore. I do some really unique work, not really a traditional role. I still think, like I said earlier in this thread, that ER is good work. Its just not the be all, end all. I think your IB experience is much more valuable and flexible, especially in corporate development. At the end of the day, like I said, OP should do what he is passionate about. You’ll find the greatest success when you’re passionate about what you’re doing. Struggling through ER won’t get him anywhere.
can one of you give me a name of a very good SS ER analyst and what companies he/she covers.i want to read some of their reseatch reports.
you can pm me if you dont want to post the name here.
thanks
On related matters, could someone give me the exact location of ElDorado… You can pm me if you dont want to post the coordinates here. Thanks Jokes aside: Bloomberg gives you analyst returns. Then there’s also Tipranks and Stocktwits.
I can’t help you directly with your request but I would say that a very good SS ER analyst won’t necessarily produce brilliant reports because most are heavily constrained in what they can publish. In my experience the top SS ER analysts will know their sector and companies inside out and be able to share that knowledge with clients mostly over the phone and in meetings. They will also email their in-house models and unpublished comments to top clients which would contain information that doesn’t go in the public report.
So don’t expect to see a detailed note with a sell recommendation on a major company with a target price 50% below the market price for example. Sure some boutiques do that, but the major brokers won’t due to relationships with the corporates. Chinese walls are only so thick.
Also, picking up on the previous poster’s comment. Yes you can look up analysts’ track records on Bloomberg but I would caution against ascribing them too much value. The price targets issued by SS ER are generally of little use and the rule of thumb for calculating them is usually ‘today’s price plus a bit’ for buy recommendations and ‘today’s price minus a bit’ for sell recommendations. No serious BS analyst pays any attention to them and in my opinion they are not a useful barometer of the quality of the SS analyst who nominally produces them.