An honest day in the life of a sell-side equity analyst
6:00AM: Wake up, brush teeth, shower, make coffee.
6:30AM: Attempt to read the Wall Street Journal, but fail. Instead, I watch last night’s NBA highlights for an hour.
7:30AM: Head to the office while listening to a podcast about an investing nerd interviewing another investing nerd.
7:45AM: I see a giant line of people waiting to get breakfast from this flimsy food truck that sells watery coffee for $1.50 and stale donuts / bagels for $2.00. After a 15-minute wait, I order a sausage bagel with two eggs, because I eat like a champion. Knowing it’s a long day ahead, I get another large coffee.
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.
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 closes his door and gets down to serving clients.
9:30AM: Market opens. An equity sales person begs me to talk to a client, some old 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.
10:30AM: My MD 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.
11:00AM: Getting hungry, but another equity salesperson calls to ask if I can talk to her pod shop client. A pod shop is a multi-manager hedge fund where you have different teams (pods) investing money. It’s a very short-term investment style that aims to make money by having a variant view on quarterly earnings results. I fake a stomachache because I never want to debate with a pod shop person.
12:00PM: Lunch time! A coalition of lunch-getters is formed. We go to this Lebanese place near the 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.
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.
3:30PM: My MD finally comes to his senses that four companies are reporting tonight after he’s spent a full day on the phone with clients. He starts tripping out, not knowing my teammate and I have done the prep work. If we counted on him to be a good project manager, we would all be homeless.
The game plan: for the HOLD-rated company, my MD will not dial in to the conference call. The other three, my teammate and I will dial in before it starts and put my MD in the queue to ask management a question. We also do “call backs,” which are exclusive group or 1-on-1 calls with the company management where sell-side analysts ask questions. Callbacks usually become a giant schmoozing session.
We are now on hold for three earnings conference calls, big boss is in the question queue. We are locked and loaded.
4:15PM: Earnings are out. Two companies beat earnings and raised guidance (the good old "beat and raise") and we have them BUY-rated, so the big boss is victory lapping.
The third BUY-rated company is a disaster: stock is down 20%, but big boss doesn’t care because our firm is the lead bank underwriting their debt. A BUY-rating gives us management access and investment banking fees.
5:00PM: I listen to my company’s earnings calls and I start writing the notes.
7:00PM: Done with all the work, but management callbacks are going to run late (damn you, West Coast companies). I order dinner from my favorite Thai place where I have ordered dinner four days in a row. I 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 results were for one of my companies because he was hopping between four earnings calls. I know he will ask a super generic question on the callback. 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 OKs my notes and models. I submit for Supervisory Analyst approval. Of course, those SOBs reject the notes, citing that I cannot use provocative titles, so I have to reword and resubmit. 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 a morning call tomorrow.
11:30PM: We are all done for the day. My MD heads out, implying I can head out 10 minutes after. I walk home and crash in bed. Tomorrow, I need to come in at 6am for the morning call.
Dick Toad is a pseudonym. He has worked as a sell-side equity analyst and then as a research analyst in a long-short hedge fund. He’s now a full-time entrepreneur running a coaching business (dickthesellsider.com) alongside a collection of social media account aiming to demystify equity research.
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