Success Factors for a Buy-side Analyst

As a member of the New York Society of Security Analysts, I was invited last week to listen to a panel talk about the buy-side and how to succeed in it.  There were four speakers:  Subrata Ghose, CFA, Lauren Lambert, CFA, Stanley Lee, CFA and Thierry Wizman.  Their points can be boiled down as follows.

Ghose is an equity research analyst at Lord, Abbet & Co.  To be successful, he must:

• Simplify his research for the portfolio manager to make decisions
• Be objective
• Have conviction in his opinions
• Be quantitative
• Talk to the entire supply chain of the company (vendors and clients)
• Not hide when wrong

Lambert is a portfolio manager at AllianceBernstein and former Director of Research for Non-US equities at Bessemer Trust.  She added the following points:

• Be excellent with clients
• Do not be too narrow i.e. do not just follow your stocks
• Learn about other asset classes

Lee is a portfolio manager for Neuberger Berman and runs the (David) Greene Group All Cap Intrinsic Value strategy.  His items were:

• Have conviction in your stocks
• Understand the industry and economic environment
• Have good ideas that make money
• Sell ideas in a simple manner

Wizman is the Director of Research at Artha Capital.    His notes were not targeted towards success factors but more of the difference between buy-side and sell-side.  They were:

• Buy-side is exposed to many opinions from the sell-side.  The sell-side analyst is by himself.
• Buy-side can have conditional opinions or change opinions easily
• Buy-side has continuous exposure to a small audience.  Sell-side has a large audience.
• Buy-side becomes portfolio managers.  Sell-side becomes Directors of Research.