Quite an eye-opener to be part of the Equity Research team

Emil shares his thoughts and experiences as intern at the equity research team - see what surprised him the most about a researcher's role and tasks.

By Emil Sjölander, Summer Intern at Equity Research Sweden.

Peeking inside the glass buildings that constitutes the ’real’ business world, it is, from a student’s perspective, beyond fascinating. Stepping in to this captivating world of finance, always signifies a break from what you’ve learned from mumbling lecturers and brick-sized theoretical pieces. Theories which assume things such as “perfect markets” or “homo economicus”. That is, however, where we start by default.

My own rebellion way into finance

My own journey into the world of finance began perhaps as a rebellion against these, in my mind, old and outdated theories. I thought it was preposterous that stocks followed “random walks” or that markets were perfectly calibrated. How could they be? Some people were undoubtedly making lots of money of them. So, I started investing in stocks, on a naive quest to prove both the lecturers and ‘their’ markets wrong. And after some initial success I inevitably began to lose!

Perhaps it wasn’t as simple as I thought. In search of guidance I joined the student association “Stockholm Student Investment Fund“, where I got in contact with some of the methods used for valuation of companies – something I hadn’t tried before. But it wasn’t until I attended a guest presentation by Nordea, where they analysed the hottest stock in Sweden at the time, that I understood the rigor and depth of analysis that was required for beating the market.

Working with the professionals

It was a joyous moment when I got the offer to intern at Nordea Equity Research. Finally, I would be able to watch and learn from the people that conducted these complex valuation methods and find out how to properly value a company.

It was quite surprising on my first day of work to watch a senior colleague in the seat beside me speak on telephone the entire day, apparently trying to find out how a set of construction sites were developing. The pattern recurred; many of the senior analysts spent a large amount of their days speaking in their phones or travelling to different locations.

Journalists or Researchers?

Again, I realized that things were not as I had thought. However, I was by now, more or less used to this profession surprising me …! The equity research team was not located in a room with the scratching sounds of note-taking or click-clacks from keyboards. Instead it was a highly social group of people constantly looking for that missing piece of information in their analysis. It appeared to me more like a newsroom at a newspaper than a bank – except for the suits, and the four to six screens per researcher, and the complex tools and models used.

Still, the newsroom analogy does, to some extent, ‘work’. In many ways – and roughly speaking – equity research is a provider of insights of the inner workings of companies. One major difference though, is the fact that researchers analyse the companies to the core, studying and analysing companies strengths and weaknesses in ‘deep depth’.

Nevertheless, imagine a reliable newspaper which for instance provides multi-faceted insights into political events of a country, and the information somewhat impacts the outcome of e.g. an election – whereas in banking, an excellent financial researcher brings valuable insights about the development and events in macro economics, equities, currencies, oil prices etc. to customers and investors.

The professional researchers’ comprehensive coverage and analysis can provide extraordinary value to investors. But, in an ever-changing world, no one can make estimates that are 100% accurate in every single case – that’s impossible. Should your analysis be somewhat off, the implications may be a less happy client, and in worst case profit loss and injured credibility.

It is with these factors in mind that Nordea’s equity researchers carefully lend their analysis and in-depth reports. That said, Nordea’s researcher clearly are very passionate about their work, and it’s been a great experience to work with such dedicated and highly professional experts. And then it surely has been an eye-opener for me – in many aspects of finance.

Last week, Emil’s colleague Karl, wrote the article “Not just number crunching – far from it“, where he gives an honest view on their main project for the summer, and how it was much more nuanced than he expected.

And have a look at the three summer interns’ first joined blog, “Rewarding times as Equity Research interns“.

Next up is an article by Sara Stegare where she explains the challenges and opportunities that an Intern face at Nordea.

… and you could be one of our next interns!

Do you have an interest for financial markets and investment banking? We are now looking for interns during spring and summer 2019 in Stockholm. Don’t hesitate, deadline is closing in – apply now.

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