Struggling To Find Good Stock Calls? 10 Tips To Find More Time by The Finance Professionals’ Post
“I have trouble coming up with good stock calls,” is one of the most common concerns I hear when starting a new one-on-one coaching assignment with an analyst.
There are dozens of skills required for great stock picking, but only one that burdens almost all analysts, regardless of experience level or geographic location: time management. To some, the concept of “time management” isn’t worthy of being “learned” because they assume it’s just a matter of using common sense…and that’s probably why time management is too often overlooked as a source of individual career advancement. If my hypothesis is right, we should coin a new buzzword to make this critically-important skill sound sexier; perhaps one of these:
- “Efficiency Re-engineering”
- “Prioritization Intensification”
- “Accelerated Productivity”
You’re sure to get points for buzzword bingo (or a similar game with a slightly different name) by using any of these new terms. Regardless of what you want to call it, I’ve seen analysts go from bottom quartile to top, simply because they focus more on how they use their time. I’ve assembled a list below that should be relatively simple to put into practice and can potentially add 10%-25% more time to your week… the equivalent of getting a part-time assistant (who wouldn’t want that).
Over the years and during times like the volatility that has swept the market year to date, the best hedge fund managers display their adaptability. Being able to move and change with the times is essential when it comes to investment management. AQR co-founder and CIO Cliff Asness joined Ben Johnson of Morningstar to discuss Read More
“For many analysts, the concept of “time management” is just following common sense, but it’s much more complex”
Top 10 Tips to Gain More Time for Equity Research Analysts
- Play Offense (rather than defense): Maximize “offense”-focused activities where proprietary insights are most likely to be found. Examples include:
a. Make outgoing phone calls to information sources who offer insights that improve forecast of critical factors
b. Participate in private or small group meetings with industry expert(s) or company management
c. Attend an industry conference where few financial analysts are in attendance
- Avoid Playing Defense: Stop or minimize “defensive”-focused activities such as those that may provide background but not alpha-generating insights. These include:
a. Listening to quarterly earnings conference calls (reading the transcript can be done in half the time as listening to the call)
b. Reading entire regulatory filings (use services that highlight the information that has changed from the prior filing)
c. Attending investor conferences where most of the presentations are company management restating publicly-known information
d. Going on site tours, especially when no senior management is present (if the tour doesn’t cover a potential critical factor, spend time elsewhere)
- Apply the 80/20 rule: As a general rule, 80% of alpha-generating insights come from 20% (or less), of the available information flow – focus on the sources that traditionally yield insights. Sounds like common sense, but this can only be achieved by proactively turning off as much of the 80% unproductive information flow (ask yourself, what can you turn off today?)
- Utilize a note-taking system that can be quickly searched and cross referenced (Microsoft OneNote and Evernote are the two best)
- Increase your reading speed – take a speed reading class
See full article here.
Best Practices for Equity Research Analysts – Description
A real-world guide to becoming a top-performing equity analyst
Praise for Best Practices for Equity Research Analysts:
“Jim Valentine has taken his decades of experience as a highly successful security analyst and written an effective and comprehensive guide to doing the job right. I only wish I had this book by my side throughout my career.” — Byron R. Wien, Vice Chairman, BlackstoneAdvisory Partners LP
“Given the fast pace and high-pressure nature of the markets, analysts don’t have the luxury to make mistakes. James J. Valentine’s Best Practices for Equity Research Analysts should be required reading for all new and experienced analysts, particularly those who were not lucky enough to be brought up in the business under a mentor. Valentine can be that mentor.” — Jami Rubin, Managing Director, Global Investment Research, Goldman Sachs
“Jim’s book is an excellent window into the world of securities research. Very few works cover the complete life cycle of an analyst and the necessary balance between theory and practice. This is one of them.” — Juan-Luis Perez, Global Director of Research, Morgan Stanley
“Valentine’s book doesn’t rehash the basics of finance but covers all the nonacademic topics in terms of how the analysts should manage their time, resources, data, and contacts in order to come up with the best stock picks. This book is required reading for beginning analysts and a must-read for all analysts who want to develop an edge.” — Carl Schweser, Founder of Schweser’s Study Program for the CFA Exam
“Best Practices for Equity Research Analysts is by far the best written and most comprehensive book that I have read on how to become a top-notch analyst. I shouldn’t be surprised; it was written by one of the best analysts that Wall Street has ever seen. Every securities firm should require their analysts to read this book.” — Eli Salzmann, Portfolio Manager
Most equity research analysts learn their trade on the job by apprenticing under a senior analyst. However, equity analysts who work for senior producers often have little time or incentive to train new hires, and those who do have the time may not have research skills worth emulating.
Now, Best Practices for Equity Research Analysts offers promising equity research analysts a practical curriculum for mastering their profession. James J. Valentine, a former Morgan Stanley analyst, explains everything today’s competitive analyst needs to know, providing practical training materials for buy and sell-side research analysis in the United States and globally.
Conveniently organized for use as a learning tool and everyday reference on the job, Best Practices for Equity Research Analysts covers the five primary areas of the equity research analyst’s role:
- Identifying and monitoring critical factors
- Creating and updating financial forecasts
- Deriving price targets or a range of targets
- Making stock recommendations
- Communicating stock ideas
Expanding upon material covered in undergraduate courses but written specifically to help you perform in the real world, this authoritative book gives you access to the wisdom and expertise of leading professionals in the field. You’ll learn best practices for setting up an information hub, influencing others, identifying the critical factors and information sources for better forecasting, creating a better set of financial forecast scenarios, improving valuation and stock-picking techniques, communicating your message effectively, making ethical decisions, and more.
Without Best Practices for Equity Research Analysts, you’re just treading water in the sink-or-swim world of the equity analyst.