Could you talk a bit more about your job? I somehow managed to get a summer internship in investment banking and am trying to learn more about the financial world in general
Sure! So banking (and IB) comprises a whole load of quite different things, which I'm sure you'll learn all about on your internship (congrats btw!).
I'm an equity analyst at a long-only, contrarian fund. Breaking that down:
Equity = stocks, but in this case it specifically means listed stocks, stocks that are publicly listed and trade on exchanges
Analyst: nonsense word with no real meaning haha, in my case it means I analyse the equities.
Long-only: means the fund that I work at holds our investment for a long time, typically 3-5 years. This is pretty long for a fund, where 1-3 years is more common.
Contrarian = being contrary, going against the grain. It means we buy stocks other people don't like and avoid stocks everyone likes. Essentially, we're looking for unloved stocks that we think are undervalued, either because they're unpopular or they've had a short term headwind or something like that. (The most famous contrarian investor is Buffet).
Fund = way of pooling money. Our fund's clients are mostly institutions (pension funds, endowments from universities / charities, etc) but we do have a small retail offering (retail = available to the public). We have... well I don't want to say the specific amount, let's go with between £10 - £50bn in assets under our control.
I'm also buy-side, meaning my fund actually buys equities, vs sell-side, which means you recommend equities. IB's often contain units that are sell-side (so I can read like JP Morgan's opinions on a stock) but also can be buy-side (so JPM might also be investing in stocks in a different department).
I also only do European equities (stocks listed in Europe + the UK) and I'm industry agnostic (so I can look at any industry). Sell-side analysts are usually industry specific (so they cover like, Chemicals or Oil and focus on the industry/sector).
In terms of what I actually do day to day: it varies a lot but basically I look at stocks, get to know the industry and the company by reading reports (often from sell-side), come up with a thesis as to why it might be a good investment, do some forecasting and modelling to figure out whether I think it's undervalued (cheap, we might be interested in buying), overvalued (expensive, not for us -- these are the kind of stocks you short but my fund doesn't do shorting), or fairly valued (probably not that interesting to us but could be for diversification benefits). My fund's research process is really involved because we hold positions for such a long time -- we have to be pretty confident in our choices, so it can take around 3 months from coming up with an idea to fully finishing the research process. Then if we decide to invest, the covering analyst (aka the person that did all the research) has to keep up to date with the stock!
For me, I love that it's a good mix of math and writing (our fund is not too quant heavy, we do a mix of qualitative and quantitative research -- as an analyst in my team, I do a lot of the qualitative stuff and then our quant team does a top-down look at the funds as a whole and also does specific quant research sometimes). I also really like how varied it is -- I can look at a wine distributor Monday and an oil major Tuesday. And I love that it's really intellectual -- we have proper debates on our potential investments that are the closest things to supervisions that I've found in the real world.
Hope that's helpful, let me know if that's confusing or you want more info on anything!
