From Corp Finance to Sell-side Equity Research

I worked at Lowe’s in various parts of corporate finance for almost 7 years, but my true passion was stocks. I studied statistics in school, and my first job out of college was as an actuary for an insurance company. The work was horribly boring, so I immediately switched to Lowe’s in the finance department. I still was doing statistics, but my role incorporated some accounting as well. After 3 years, I transferred to corporate finance and spent time calculating the expected return from promotions, events, and other internal projects. The work was very interesting, but my true passion was in the stock market. I read about 10 blogs every day, and my wife even thinks I am a bit obsessive the way I talk about how the world is going to end. That is what happens when you spend too much time on If you spend enough time reading these blogs (Mish, Zerohedge, Calculated Risk), you start to understand what information real hedge fund analysts study. Working at Lowe’s I was very curious about the housing cycle so by reading Calculated Risk, I could get a better picture of the macro trends. For me, the easiest stocks to study were housing cycle related names such as paint, carpet, and home building companies. After my 6th year at Lowe’s, I knew it was time for me to make a move to Wall Street. I spent time with a friend who worked at a hedge fund to learn how to analyze a stock. The big picture analysis was very similar to the way I thought about things, but he showed me the detailed level of modeling and research he was doing. It was way beyond what I had imagined. Professional stock research is not for amateurs. The case studies on SOW are great examples of how to pitch stocks, so I bought a couple of them to help me get a hang of it. Once I felt comfortable with how to pitch, I had to get some interviews.

Getting an interview as a research analyst can be quite difficult if you don’t have any connections. Not living in New York, I didn’t have much to go on, but I reached out to my network and started to drum up some interest. I did a bunch of analysis on the carpet company Mohawk and wrote a Wall Street caliber report. I used the report to help me get in the door some places. I sent my case study to anyone who would read it, and I got some great feedback. Some people said thanks, but no thanks, but a handful of people asked me what else I had. I didn’t have much, so I started doing work on my second case study. This time I made it a short. I focused on a small niche company that had $500mm in market cap that no one has really heard of. This way I could be the expert and there would be less of a chance that someone could really challenge me on the details of my pitch. The strategy worked. My friend sent the write-up to his friend at a middle market bank, and they brought me in for an interview. They covered hard line retailers including Lowe’s and Home Depot, so they were particularly interested in me.

The extra steps of doing the research and writing 2 reports made me stand out and showed I had the ambition to be a great analyst. To be a good analyst, you have to think outside of the box and not follow the herd. I received the offer and went to work at the bank as a research analyst. This less traditional way of applying for the job helped differentiate myself from my peers and ultimately got me the job of my dreams.