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RESEARCH roles in Global Markets watch

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    My understanding is that this is a Front-Office role that is as hard to get into as trading (please correct me if I'm wrong).

    How mathematical are research roles in Global Markets (say equities research)?


    Are the hours/pay same to that of a trader / salesperson?


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    I don't think research counts as front office. More likely middle office.

    I think that one of the defining features of front office is contact with clients/those outside the bank. I doubt you'll be facing a client in research.
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    (Original post by LBC213)
    I don't think research counts as front office. More likely middle office.
    Wrong.
    (Original post by LBC213)
    I think that one of the defining features of front office is contact with clients/those outside the bank. I doubt you'll be facing a client in research.
    Wrong again. Traders are front office but there's often little if any client contact. Plenty of client exposure in Research these days, as clients often like to hear directly from the analysts how they derive their calls. In Equity Research, there's excellent exposure to the covered companies, with many analysts knowing the CEOs/Presidents of multinationals they cover at a personal level.
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    Oh ok, cheers, I stand corrected.
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    So research is front office? How mathematical is equities research?
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    (Original post by bryan)
    How mathematical is equities research?
    Fairly quantitative - models are extensively used to analyse balance sheets, cashflow etc, derive the fair value of stock and project future earnings. Economics is probably considered the most useful degree as it combines quantitative and qualitative skills obviously - research can mean writing lengthy documents, quickly.
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    i think options research is very mathematical aswell. Chassez, do researchers get to do trading at all? i heard they may do trading once a day, but its proprietary trading?

    PS, can people not answer questions unless they are totally sure it is the right answer (see Oleks thread).
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    (Original post by ba_ba1)
    Chassez, do researchers get to do trading at all? i heard they may do trading once a day, but its proprietary trading?
    I think they're often involved in a bit of prop - it depends on which bank, e.g. they may be allocated a small but sizeable position to play around with using their top pick ideas, to see who generates the best returns.

    I'd quite like to see a hybrid role, someone doing research, sales and trading (just for a few stock obviously or they'd be overloaded). People are increasingly combining research and sales, producing the documents and pitching directly to clients.
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    How would you get into a research role at a big IB? Is that one of the positions you can apply for a grad job?
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    (Original post by clueless101)
    How would you get into a research role at a big IB? Is that one of the positions you can apply for a grad job?
    yes
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    (Original post by Chassez)
    I think they're often involved in a bit of prop - it depends on which bank, e.g. they may be allocated a small but sizeable position to play around with using their top pick ideas, to see who generates the best returns.

    I'd quite like to see a hybrid role, someone doing research, sales and trading (just for a few stock obviously or they'd be overloaded). People are increasingly combining research and sales, producing the documents and pitching directly to clients.

    What about conflict of interests?
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    I don't see how being all three could be a conflict of interest any more than the current system. I'd be curious to find out.
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    People are increasingly combining research and sales, producing the documents and pitching directly to clients.
    Getting it "straight from the horses mouth" obviously gives your client something extra. So I can see why this would happen every so often.

    (Original post by Chassez)
    I'd quite like to see a hybrid role, someone doing research, sales and trading (just for a few stock obviously or they'd be overloaded).
    But I feel that this won't. The tighter the focus in research, the greater loss of perspective from across the sector, region or by market cap/against competitors.
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    (Original post by Chassez)
    I'd quite like to see a hybrid role, someone doing research, sales and trading (just for a few stock obviously or they'd be overloaded). People are increasingly combining research and sales, producing the documents and pitching directly to clients.
    While I think Ben has a point about the need for a trader to have breadth of knowledge, I'd love to see this happen to. I really liked the idea of trading, but I'm not sure I could cope without knowing the details, yet I don't want to devote so much time to so very few stocks just to produce reports on them.

    Not that I'm tempted by IB at all...
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    Of course there is conflict of interests. For example, a bank is dealing with an IPO/advising certain company and at the same time the researchers may produced very dodgy research about this company. They will not be able to say to the potential clients :"Oh do not buy these new shares as the company may be disappoitment", because he will hamper the success of the IPO and bring down the profit of the bank. This is all at the expense of the buyer but IMO the reputation of the bank is also at stake. It is the same as Enron(both advising and auditing the company:mad: ) scandal as well as the technology boom a few years ago when researchers overestimated the profitablity of these companies and banks made large profits from the public offerings and a lot of shareholders lost their money.
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    There is a "Chinese Wall" that prevents information from the corporate advisory services...

    (IBD with all the Capital Market activity included such as M&A, disposals, IPOs, debt issues, secondary offerings etc)

    ...from being picked up by those who are in open market activity (research, sales, trading) who operate under only what is publically (in the market) available information.

    ie. from Wall Street, when Bud Fox walks in Gordon's office and hears he plans to take over Teldar Paper, that would be a breach of the wall and is not allowed these days.


    The other "potential conflict" is that someone researches a particular security is takes a position (private or bank), then uses their research to make that position profitable. There are other simple safeguards against that.
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    (Original post by kyril)
    Of course there is conflict of interests. For example, a bank is dealing with an IPO/advising certain company and at the same time the researchers may produced very dodgy research about this company. They will not be able to say to the potential clients :"Oh do not buy these new shares as the company may be disappoitment", because he will hamper the success of the IPO and bring down the profit of the bank. This is all at the expense of the buyer but IMO the reputation of the bank is also at stake. It is the same as Enron(both advising and auditing the company:mad: ) scandal as well as the technology boom a few years ago when researchers overestimated the profitablity of these companies and banks made large profits from the public offerings and a lot of shareholders lost their money.
    This conflict of interest does not exist between trading, sales and research, it's between that division and the Capital Markets/Banking ones; there's no conflicts with a Trading/Sales/Research :tsr2: hybrid.
 
 
 
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