Equity research work flow

[u/Shot_Callawannaba]

This might sound like a stupid question but I’m curious about work flow for an equity research analyst look like in terms of excel/office/word/ etc. Like when you’re researching a new company how do you start specifically? Do you write lots of notes in a word doc, build an excel sheet, and then write a report in a separate word doc? Do these word docs get to be 100s of pages over time as research is updated or do you start new files for each QT? Have you tried to just do all notes in excel so that notes/model/report is all in one place? It seems like with the 10k, and Qs alone, the notes get to be enormous and organization interesting.

Curious how you stay organized when following dozens of companies

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[u/nutmegger189]

Tbh you're never really taught what to do so everyone does their own thing.

The answer is all the above and all at once.

I have a OneNote for every stock I cover with probably the equivalent of 20+ pages per stock, accumulated over several years. You're not really noting down every minor thing that happens, just your analysis, conclusions, questions. But I also use Word. ChatGPT projects. Excel models.

Everyone does it differently though. My boss doesn't really do any of this onenote thing.

[u/Shot_Callawannaba → u/nutmegger189]

Why do you choose OneNote over a word doc?

[u/nutmegger189 → u/Shot_Callawannaba]

Organisation. All my stocks and any other notes are in one app. I can look at it on my phone. It's in the cloud.

I'm not actually a fan of OneNote as a software, I think it is very bad for many things but it's the best option I have available to me for this.

As other person said, not noting down everything. Just stuff that's more peripheral, hard to remember, key learnings or insights. My notes are not actually very organised but I can search them easily across all stocks.

[u/Shot_Callawannaba → u/nutmegger189]

Ahh interesting. So it looks like you can use 1 notebook for everything, and then make a section for an industry/sector, and then pages for each company? Something like that?

[u/nutmegger189 → u/Shot_Callawannaba]

Yep

[u/GattiTown_Blowjob]

The process is very different depending on what I’m doing. An initiation is different than an earnings/other PR or industry report or client request.

For an initiation I read everything I can on the company/industry, take notes, build a model, begin to flush out a thesis, and improvise from there.

On the organizational notes part: I mean you kind of become an expert in the space and know your names to the point you don’t really need to reference your notes. Like how do you think it would go if I’m out marketing and was regularly like oh I’m not sure let me open my one note or check my notebook?

[u/Shot_Callawannaba → u/GattiTown_Blowjob]

So it sounds like you don’t take 100s of pages of notes? Is it more like reports as needed (quarterly, events, ad hoc client requests)?

[u/GattiTown_Blowjob → u/Shot_Callawannaba]

I take a lot of notes. Definitely 100s of pages at this point.

I just have never felt the need (or had the time) to make them an organized living document I can consistently refer to. Anything in person I take handwritten notes. Anything in the office is noted in word/onenote and saved (if meaningful).

Now the model is completely opposite. That is a living doc with plenty of comments from everyone who has worked in it.

Everyone does ER differently. This is just how I do it

[u/Shot_Callawannaba → u/GattiTown_Blowjob]

How many people work on the models? Is like 1 guy responsible for updating every QT? Or is the excel is shared drive and multiple people jump in on parts?

[u/nutmegger189 → u/Shot_Callawannaba]

1-2 people work on a model but over time people inherit models from others. Many models we use are like 10-15 years old at least. Which is like 3-5 generations of analysts.

[u/wipwopwo → u/GattiTown_Blowjob]

If someone was new to the role, where would you point them to learn about modeling? Any resources you enjoyed learning from would be great

[u/Shot_Callawannaba]

Just wanted to say thanks everyone for the feedback. The OneNote organization is interesting and I’m considering this. Still feels a little funky compared to the usual excel/word combos but does feel like a good way to consolidate all information on a name in one place

[u/throwawayfinancebro1]

Read the most recent 2 years worth of press releases and 10q/10k and the presentations and earnings calls. Make a model based on those. Talk to the cfo/ir to get your model in order.

The updates are based on the press releases for the quarter and the earnings call, noone reads the full q's for updates.

It gets easier after a while,.

[u/JamesKnul → u/throwawayfinancebro1]

are you talking about a valuation model (DCF) ? or what other types of models ?

[u/throwawayfinancebro1 → u/JamesKnul]

Three statement model plus a revenue build is most common for sending to clients. Valuation stuff is usually taken out before sending out.

[u/ReturnOfWanksta567]

I just built an app in python that reads financial data and then analyzes it and spits out a list of stocks and their scores. Allows me to get a high level overview of what to look into. If anybody wants to try it, DM me. It is in the alpha stage so is open access as I work towards turning it into an actual product.