Most Important Books for Equity

Research: Stock Market Analysts

The more that you read, the more things you will know. The more that you learn, the
more places youll go.
Dr. Seuss, I Can Read With My Eyes Shut!

How true is that?
My personal experience says, maority o! experts in any !ield ha"e one common ha#it $
%eading.
&rom childhood till date, how ha"e you gathered knowledge a#out anything?
The answer "aries. &rom your own experiences to watching T', listening to radio, the
(nternet and ) ? *es, #ooks.
("e ac+uired most o! my memora#le lessons !rom reading #ooks.
Heres the picture o! ,some- my #ooks on in"estment.


My (n"estment .ooks

.y looking at the a#o"e #ooks youll get an idea/o! the kind o! #ooks (m going to
suggest.
( get emails0 !rom people who are looking !or o#s in e+uity research $ asking me a#out
the #est #ooks on e+uity research

Suggeste !ooks "reaing for equity research
an stock market analysts:

1. The (ntelligent (n"estor $ .y .enamin 2raham
3. 4ecurity 5nalysis $ .y .enamin 2raham and 6a"id 7.6odd
8. The (nterpretation o! &inancial 4tatements $ .y .enamin 2raham
9. The :ssays o! ;arren .u!!ett $ .y 7awrence 5. <unningham
=. >ne ?p on ;all 4treet $ .y @eter 7ynch
A. .eating the 4treet $ .y @eter 7ynch
B. 7earn to :arnC 5 .eginners 2uide to the .asics o! (n"esting and .usiness $ .y @eter
7ynch
D. .u!!ettology $ .y Mary .u!!ett and 6a"id <lark
E. .est @ractices !or :+uity %esearch 5nalysts $ .y Fames F. 'alentine
Best #ractices for Equity Research Analysts
This #ook is one o! the #est #ooks written so !ar speci!ically !or e+uity research analysts.
5ccording to the author, Fames 'alentine, there are some non0technical skills that e"ery
e+uity research analyst must ha"e.
The skills areC
4electing the optimal uni"erse o! stocks
Time management
(n!luencing skills, and
Managing in!ormation !low
%ead the pre"iew o! the #ookC Best #ractices for Equity Research Analysts.
5re these #ooks enough to #ecome stock marketG e+uity research analyst?
Ho.
(ts the starting point.
5part !rom the #ooks mentioned a#o"e, you need to read #ooks on #eha"ioral !inance.
>ne more important resource that you must read is/annual reports of companies.
Rea e$erything in annual reports.

%hat&s there for you in an annual report as a stock market" equity
research analyst'

%eading 5nnual %eport G IoJJi.com

:"erything. Everything a#out the company that youre researching on.
*oull understand companys #usiness model, !inancial position, operational e!!iciency,
competiti"e scenario, the people who manage the company ,i.e. companys
management-, companys !uture outlook, in"estor0!riendliness o! the company and lots
o! other things.
( read annual reports o! the company #e!ore in"esting. &or example, read my in"estment
analysis report o! <olgate @almoli"e here.

Books or the Internet for equity research analysts'

( pre!er using #ooks to the (nternet.
;hy?
&or a simple reason$my attention span is more when ( read #ooks ,physical not
e.ooks-.
>! course, ( read on the (nternet, #ut thats !or research and analysis purpose ) not !or
core reading.
My o#ser"ation is $ the #ooks are more in0depth and once you start reading a #ook,
youre more !ocused and less distracted.

(n short, i! you are wondering which #ooks to read as a stock marketGe+uity research
analyst, you should start with core in"estment #ooks and then read #ooks on #eha"ioral
!inance. 6ont !orget to read annual reports o! the company that youre analyJing. *ou
can read the #ooks in physical !ormat or in electronic !ormat as per your con"enience.
How a#out start reading a #ook in the a#o"e list !rom today? %ead only = pages, take
pleasure in reading, !orget e"erything while reading.
%hat Is Equity Research'

What is equity research

%hat is equity research
Equity research is what an equity research analyst does.
;ell, to start with, equity research is a stuy of equities or stocks for the purpose
of in$estments.
:+uities or common stock comprises a #ig chunk in any companys capital and
shareholders need to know whether to stay in"ested in the company or sale the shares
and come out.
5s an indi"idual, it is time consuming to do e+uity research $ that is to study the
company, its !inancial statements, products, management and take a decision a#out
in"estment.
:xactly !or the same reason there are people working in research companies whose o#
is to do e+uity research and recommend companies !or in"estment.
#urpose
@urpose o! e+uity analysis is to study companies, analyJe !inancials, and look at
+uantitati"e and +ualitati"e aspects mainly !or decisionC %hether to in$est or not.
Equity research process
:+uity research process comprises o! multiple steps.
1. :conomic 5nalysis
3. Inustry Analysis
8. <ompany 5nalysis
9. &inancial 4tatement 5nalysis
=. (inancial an )aluation Moeling
A. %eport writing
B. @resentation or recommendation
Skills require for equity research
1. :xcellent !inancial analysis and e+uity research skills
3. 2lo#al and #usiness analysis knowledge
8. @resentation and writing capa#ilities
9. <orrect udgment
Application
:+uity research is used in many areas. @rimarily, the research is used !or the !ollowing
purposesC
1. (n"estment e"aluation
3. (n Mutual (un industry
8. &or MK5 deals
9. &inancial @u#lications
=. <harita#le endowments
Equity research analyst *o!s an Salary
:+uity research analysts earn #ase salary plus #onuses.
%ead some #ooks like !est practices for equity research analysts pf.
+o, to Become a (inancial
Analyst'

&inancial 5nalyst

Financial Analyst is a person who per!orms !inancial analysis to understand the !inancial
health o! a company.
(n my pre"ious articles, +ege (un Analyst and #ri$ate Equity Analyst, we co"ered
the details a#out the pro!iles. &inancial 5nalysis co"ers funamental analysis, ratio
analysis, financial moeling and "aluation.
(inancial analyst *o!s
.roadly, !inancial analyst roles are re+uired in !ollowing areasC
1. .uy side !irms
3. 4ell side !irms
8. In$estment Banks
-o! escription for financial analyst
.uy side !irms are #asically di!!erent !unds, including mutual funs, where the !inancial
analyst studies di!!erent companies, per!orms research and analysis and gi"es
recommendations whether to in"est in the company or not !or the !und. This is in0house
research.
4ell side !irms are #asically research houses or #rokerage !irms. They co"er certain
companies and write detailed e+uity research reports and sell this research to the
clients. The main idea here is to sell research and generate #rokerage !rom clients
transactions.
(n (n"estment #anks, the !inancial analysts role is di!!erent. Here, he co"ers mainly (@>
,(nitial @u#lic >!!ering- process and MK5 ,Mergers and 5c+uisitions- deals. The analyst
plays acti"e role in all these deals.
+o, to !ecome a financial analyst
Skills for financial analyst *o!s

1. 4olid analytical skills
3. <uriosity and interest in analyJing, understanding companies in depth
8. 4olid !undamental "aluation skills ac+uired in #usiness school, or as a consultant
9. (nterest in understanding, analy.ing a company&s !usiness
=. <lear !inancial and +uantitati"e concepts
A. 5#ility to !uil financial moels
B. 4ectoral expertise in Telecom, Media, Technology, (nsurance, .anking, &ood K
.e"erage.
D. 4trong analytical and MS E/cel skills ,Macros, '07ookups and @i"ot Ta#les- with
strong communication skills
(inancial analyst salary
(n 7ondon, an e+uity research analyst pro!ile will gi"e you salary in the range o! 2.@
3L,LLL $ =L,LLL. (n ?4, !or the same pro!ile, you can earn M 8=,LLL0 DL,LLL.
(inancial analyst inter$ie, questions
There are many !inancial 0#1s where !resher and entry le"el openings are a"aila#le.
Howe"er, check the skills they want !or these roles. The selection process !or the
companies in"ol"e case #ased test, and two rounds o! inter"iews. My experience says, i!
you are really good in !undamental and analytical skills, you can gra# such roles.
4o, #rush up your !inancial knowledge and #e ready to !ecome a financial analyst.
2op 3 -o! +unting Methos

Fo# hunting methods

(t is hard to !ail, #ut it is worse ne"er to ha"e tried to succeed.
Theodore %oose"elt
(n my pre"ious post, 4 2ips for (ining +ope %hen 5ou Are -o!less, ( mentioned a
list o! tips !or !inding hope when you are o#less. (n this post, ( am gi"ing you top D o#
hunting methods to help you in your o# search.
( #elie"e when you are searching !or o#s, you need to ha"e an arsenal of ifferent
methos to !ind o#s.
Heres a list o! o# hunting methods that you can use when you are o#less or looking !or
a o# change.

6. -o! sites
Fo# 4ites or Fo# .oards are the places where you can search or check the a"aila#le o#
openings.
%hy -o! Sites'
Fo# 4ites gi"e you an idea o! the o#s a"aila#le !or your pro!ile. &or example, i! you are
looking !or a .usiness 5nalyst pro!ile, you can go to Simply +ire site and type keyword
N.usiness 5nalyst and location NHew *ork and press N4earch 5ll Fo#s #utton and see
the o#s a"aila#le in your <ountry, 4tate or <ity.
<heck the result o! this here.
Here the list o! Fo# 4itesGFo# .oardC
Inee
Simply +ire
7areerBuiler
Monster
8ink9p
+oun

:. Employer&s ,e!site
The second method !or o#0hunting is/$isiting employer&s ,e!site an checking *o!
openings.
&or exampleC (! you are looking !or a .usiness 5nalyst o#, you should know the
companies that o!!er such o#s. *ou can list the companies and "isit their we#site
periodically to check the o#s a"aila#le.
>nce you check and shortlist the o# openings, you can !ill an online application !orm or
email your resume to the employer.

;. Social net,orking sites
Howadays, companies are using social networking sites to check the prospecti"e
candidates to !ill the o# "acancies.
4ocial networking sites like 8inkeIn, (ace!ook and 2,itter are immensely popular !or
this.
If you ha$e profile on 8inkeIn, (ace!ook or 2,itter, you can connect to Simply
+ire an see the contacts in your net,ork that can introuce or refer you to
these *o!s.
5nother popular site is 7raigslist, where you can !ind the o#s a"aila#le.

<. 1ffline net,orking
5ccording to one research, ALO o! o#s are ne"er ad"ertised and are !illed through
re!errals.
5ou nee to ha$e e/cellent net,orking skills. Don&t unerestimate the po,er of
offline net,orking.
*ou can networking with co0passengers when you are tra"elling, with delegates in a
con!erence that you are attending.
5nother way o! networking is meeting your !riends, their !riends, !amily !riends and
people in your community and tell them in speci!ic detail a#out the o# that you are
looking !or.
?se this method and see the results.

=. >e,spapers
Hewspapers are an excellent resource in o# hunting. %ead the news and you will know
the companies that are recruiting.
<heck the weekly edition o! o# supplement o! national newspapers. %ead here how to
make use o! this.
*ou can check online edition o! leading national newspapers. 4ee the o#s a"aila#le in
your city or town. (! you are looking !or industry speci!ic o# openings, check this.

4. 0nocking employer&s oor
(! you take initiati"e and ha"e right attitude, this strategy will work !or you.
( mysel! ha"e used this method e!!ecti"ely with great results.
+o, I i it'
&irst o! all, ( Jeroed down the companies that worked in my !unctional domain. Then (
made a list and "isited H% managers o! these companies with prior appointment. ( ga"e
my 30minute ele"ator pitch.
It ,orke.
H% managers called me !or an inter"iew. ( had three o!!ers and accepted the #est one.
This strategy works with small companies ha"ing =L03LL employees.
*ou too can use this strategy/study the company well, check whether its a ;(H0;(H
situation !or you and the company and prepare your ele"ator pitch.

?. Employment agencies
:mployment agencies or placement consultants work !or #ig companies on sourcing
assignments. These consultants work !or many companies at a time !or their
recruitment.
2he consultants are in touch ,ith companies an kno, *o! $acancies a$aila!le.
Their o# is to search the right candidate !or the o#. 4o, they use a num#er o! strategies
to !ill the "acancy. They use o# sites, social networking sites and other headhunting
techni+ues to check the right candidate.
*ou can approach these consultants o!!line or online and see the openings a"aila#le.

3. %ork for yourself
(! nothing works, then you can polish your enterprising skills.
&irst, check what product or ser"ice your community needs. <heck the competition, your
knowledge and skills and o! course your passion in that !ield #e!ore you start something.
>nce you complete this exercise, start "olunteering !irst and then slowly charge !or your
ser"ice. 4ee the !eed#ack o! your clients and tweak your productGser"ice accordingly.
2here are a num!er of ,ays to !e useful. 7heck ho, you can !e useful an esign
your prouct"ser$ice !ase on this $alue proposition.
Senior Business Analyst
IND2013Mar1785
Senior Business Analyst
MBA (F) from ier 2 !olle"es
2 # 3 years
Job Description
$a%e stron" &no'le("e of %aluation )rin!i)les an( finan!e* Stron"
Finan!ial mo(ellin" s&ills
$a%e e+)erien!e in M,A or resear!-
$a%e &no'le("e of resear!- (ata.ases li&e Bloom.er"/ Fa!tset/
et!0
$a%e a soun( "ras) of MS 1+!el* a natural interest in 'or&in" an(
learnin" to use it to an a(%an!e( le%el
$a%e stron" inter)ersonal s&ills
$a%e an eye for (etail an( .e a.le to 'or& un(er )ressure
$a%e e+!ellent 'ritten an( s)o&en 1n"lis- s&ills/ an( .e a.le to
(is!uss an( reason !om)le+ te!-ni!al issues
Skill Set Required
A.ility to i(entify an( sol%e issues effe!ti%ely on time
2oo( MS 3ffi!e S&ills
4an(i(ate 'ill .e 'or&in" 'it- !lients in t-e 3il an( 2as in(ustry
(fo!us 5)stream)
6no'le("e of (ata.ase tools 7 3neSour!e/ I4IS/ Finan!e 8ournal/
$oo%ers/ Fa!ti%a/ Dialo" 9ro
A.ility to analy:e an( synt-esi:e t-e a%aila.le (ata an( .rin" out
%alue#a((e( insi"-ts to t-e !lients
A.ility to )lan an( e+e!ute )ro;e!ts effe!ti%ely an( effi!iently on
time
A.ility to ensure t-at tas&s 'it-in areas of res)onsi.ility are
!om)lete( in a timely manner
4-allen"in" !urrent t-in&in" .y im)lementin" ne' 'ays of 'or&in"
A.ility to )ra!ti!e attenti%e an( a!ti%e listenin" s&ills
A.ility to i(entify )ro a!ti%ely 'ays to !ontri.ute to firms "oals ,
mission
A.ility to !om)lete tas& a!!urately
1+!ellent !ommuni!ation s&ills
2oo( inter)ersonal s&ills
Education and Experience
MBA (F) from ier 2 !olle"es 'it- 2#3 years of )rior e+)erien!e in
finan!ial resear!-
Compensation
o .e (e!i(e( on a !ase#.y#!ase .asis/ )e""e( 'it- t-e .est in t-e
in(ustry
Senior Business Analyst
IND2013Mar1773
In%estment <esear!- (1=uity <esear!-)
Ba!-elor>s?Masters (e"ree 'it- a ma;or in e!onomi!s/ a!!ountin"
or from a re)ute( institute
3#5 years e+)erien!e in t-e similar )rofile
Job description
$istori!al mo(el .uil(in" an( (e%elo)in" fore!asts
De%elo)in" !om)any>s o)eratin" metri!s in !on;un!tion 'it- t-eir
rele%an!e in (ifferent se!tors? !om)anies
1+tensi%e !om)any %aluation in%ol%in" a))roa!-es su!- as D4F/
S39/
ra(in" an( transa!tion multi)les/ 1@A et!
1+tensi%e re)ort#'ritin" in!lu(in" !om)any )rofiles/ earnin" notes/
=uarterly u)(ates/ initiatin" !o%era"e re)orts/ se!tor re)orts/
ne'sletters te!-nolo"y )rimers/ Flas- notes/ -eme#.ase( re)orts
et!
Aistenin" to an( summari:in" in%estment !onferen!e !alls an(
!on(u!tin" mana"ement inter%ie's '-en re=uire(
4olle!tin" finan!ial (ata usin" on#line an( ot-er (ata sour!es su!-
as Bloom.er" an( <euters
4oor(inatin" an( maintainin" (ata.ases
4on(u!tin" !-annel !-e!&s to su))lement )rimary mar&et resear!-
$an(lin" a(-o! resear!- re=uests as )er !lient re=uirements
Skill Set Required
Finan!ial Mo(elin" 7 s)e!ifi! to 1=uity or 4re(it resear!-
Stron" A!!ountin" an( finan!ial s&ills
A(%an!e( MS 3ffi!e (1+!el/ Bor(/ 9o'er9oint) &no'le("e
1+!ellent 4ommuni!ation 7 .ot- 'ritten an( oral
A.ility to i(entify an( sol%e issues effe!ti%ely on time/ eye for
(etails
Basi! &no'le("e of ma!roe!onomi!s
A.ility to ensure t-at tas&s 'it-in areas of res)onsi.ility are
!om)lete( in a timely manner
4-allen"in" !urrent t-in&in" .y im)lementin" ne' 'ays of 'or&in"
6no'le("e of (ata.ase tools 7 Bloom.er"/ <euters an( ot-er
finan!ial (ata systems
Education and experience
Ba!-elor>s?Masters (e"ree 'it- a ma;or in e!onomi!s/ a!!ountin"
or from a re)ute( institute 'it- 1 # 3 years e+)erien!e in t-e
similar )rofile
Compensation
o .e (e!i(e( on a !ase#.y#!ase .asis/ )e""e( 'it- t-e .est in t-e
in(ustry