A (Bad) Day In the Life of An Equity Research Associate
Me During Earnings Season
During my sell-side days, I lived in Manhattan and my apartment was 3 blocks away from the office.
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6:00am – Wake up, brush teeth, shower, make coffee.
6:30am – Attempt to read Wall Street Journal, but fail. Instead I watch last night’s NBA highlights for an hour.
7:30am – Head to office while listening to podcast about an investing nerd interviewing another investing nerd
7:45am – I observe a giant line of people waiting to get breakfast from this flimsy food truck, owned by this gentleman who sells watery coffee for $1.50 and stale donuts / bagels for $2.00. After a 15-min wait, I get my turn and order “The Usual” – breakfast sausage on a (bagel) roll with two eggs, cuz I eat like a champion.
I also get another large coffee, knowing it's a long day ahead with FOUR of our companies report earnings after market close.
8:00am – Enter the office. My MD (Managing Director, the Senior Analyst) doesn’t come in until 9am. I check my email and then talk to a buddy who covers retail. He is a "closet buy-sider", so every conversation with him ends up being an hour long because I enjoy talking to him about stocks.
9:00am – My analyst walks into the office. He is a good guy. He small talks with me briefly, but his office phone rings. He has to close his door and get down to serve clients.
9:30am – Market opens. Equity sales person begs me to talk to a client, some old dude Portfolio Manager from a Midwest state pension fund who barely trades and is of course asking about the attractiveness of legacy tech companies as investments. I agree to babysit him for an hour, and at least he is long-term oriented.
10:30am – My MD is off the phone and calls me into his office to brainstorm a deep dive note. Of course, I already know this note is going to be a waste of time and no client will read it. But mindlessly writing the note is less exhausting than convincing him that his idea is stupid. I prefer him to find out through the lack of client readership and call requests.
I tell him I will put together an outline for his review. He doesn’t even correct my outline, cuz by now I know pretty well what he wants.
11:00am – Getting hungry, but another equity salesperson calls to ask if I can talk to her pod shop client. I fake a stomach ache, cuz I never want to debate with a pod shop person.
Instead, I go upstairs to hang out with my research buddies who cover financials and try to line up a group of slackers to get lunch together. Turns out everyone else has real work to do, so I go back to my cube to research fantasy football lineup.
12:00pm – Lunch time! A coalition of lunch-getter is formed: my teammate, two from the Media team, and two from the Insurance team. We go to this Lebanese place near office. I get my chicken shawarma with extra chicken and extra garlic sauce. Bad, food coma-inducing move on an earnings day, but life is short.
12:30pm – Finish the food in the office kitchen. Time to do some real work after some calls and goofing around.
1:00pm – I start “prepping the earnings.” I will be responsible for two companies tonight. I copy last quarter’s notes into a new template and highlight the numbers to be updated when the actuals come out.
3:00pm – Done with the prep. The actual work takes me half an hour. The rest of time I go to vending machine like 5 times.
3:30pm – My MD finally comes to his senses that four companies are reporting tonight after a full day on the phone with clients and his channel check contacts. He starts tripping out, without knowing my teammate and I have done the prep work (If we count on the him to be a good project manager, we will all be homeless.)
The game plan is: For the HOLD-rated company, my MD will not dial in to congratulate the management on a great quarter. The other three, my teammate and I have to dial into the conference call before it starts and press star-1 to put my MD in queue so he can ask management a question.
We also have to do “call backs” which are exclusive group or 1-on-1 calls with the company management for sell-side analyst to ask more questions. But callbacks usually become a giant schmoozing session so it’s a 15-minute to an hour of wasted time for the junior sell-siders like me.
We are now on hold for three earnings conference calls, big boss is in the question queue. We are lock and loaded.
4:15pm – Earnings are out. Two companies beat earnings and raise guidance (the good ol' "beat and raise") and we are BUY-rated, so the big boss is victory lapping.
The third BUY-rated company sht the bed, stock is down 20%, but big boss doesn’t seem to care, because we are the lead-left banker. BUY-rating for management access and investment banking fees.
5:00pm – I listen to my company’s earnings calls, which drop in informational value rapidly after the third analyst question. So I start writing the notes, I just regurgitate the positives said on the conference call and make sure the answer to my analyst’s question is included in the note. Easy peasy.
Then I update the models with actual results and goal-seek (oh yes, the secret weapon) my forecast to match the top end of company’s guidance (since we are BUY-rated).
7:00pm – Done with all the work, but management callbacks are going to be very late (damn you, west coast companies), so this shapes out to be a midnight day. I order dinner from my favorite Thai place for four days in a row, so at this point it really just comes down to some permutation of Pad Thai, Pad See Ew or Pad Kee Mao (some sort of Pad basically). Also need my Thai iced tea and deep fried Crab Rangoon. Yes, I stress eat. Don’t judge.
9:00pm – My MD barely knew what the quarter result for one of my companies because he was hopping between four earnings calls. I knew he will ask a super generic question on the callback. As always, I was right – he asked “so what inning are we in for 5G?” a question you can even ask a farm equipment company.
10:00pm – My MD ok’s my notes and models. I submit for Supervisory Analyst approval. Of course, those SOBs reject the notes, citing that I cannot use provocative note titles, so I had to reword and resubmit.
There is a long queue for notes approval because it’s earnings season. I walk around to annoy the oil and gas research guys who have 20 companies reporting at once. I feel a little better relatively.
11:00pm – Notes are approved. I hang around for a bit to spiritually support my teammate as he is writing the script for my MD to go on morning call tomorrow to explain the 20% blow up of our BUY-rated name.
11:30pm – We are all done for the day. My MD heads out, implying I can head out 10 minutes after, so that I don’t run into him in the elevator. I walk home and crash in bed. Tomorrow I need to come in at 6am for the morning call.
Thanks for reading. I will talk to you next time.
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