A very successful Equity Research Project

A core part of the MFin curriculum is that students produce an equity research report on a company that we choose for them and present their buy or sell recommendation (no holds allowed) to a panel that includes external investment professionals. Yesterday evening we had the nine presentations from this year’s class. Three of the members have been on the panel every year since the start and we all agreed it was the best overall performance in the four years of the MFin.

It’s a lot of work and quite a lot of stress to get a report and presentation done in time. Especially when students have two 3-hour exams to prepare for in the week before. So why was it better this year? It may be down to the class, but aside from there being more students I don’t think there is any major change in quality, as our entrance criteria haven’t changed. I do think there may be a more harmonious quality this year, with fewer of the “strong” personalities who in the past have made some of the teams less efficient. One goal of the project is to deal with the sort of personality conflicts and bad management styles that inevitably arise in any group of people. But there seemed to be fewer such problems this year.

The other possible reason is that we changed the ERP process this year to reflect suggestions and criticisms from last year’s class. We gave the students their companies and the teams much earlier in the term so they had more time to get used to working together. I spent more time on the preparation (valuation, corporate analysis and industry analysis) than in previous years and spaced it out over more days. We also had more time for students to think about these subjects with their specific company in mind. And we had an additional session at the end of term to make sure that everyone knew what they were supposed to be doing.

In previous years and especially last year, the key to a successful outcome has been cohesive teamwork. Some teams waste so much time arguing about how to do the work and who will do it that they run out of time to do the job properly. We tried to make sure that this year such arguments, if they occurred, were over before the vacation period when the work was supposed to be done. (I was the supervisor this year, but I don’t know if that made any difference, as last year’s supervisor was a very experienced equity research analyst.)

I don’t know for sure if these changes are what made the difference but I’m pleased that the outcome was so good and that the students have left the project with a positive feeling. It does show that we do try to learn each year from mistakes or missed opportunities and do a better job next time.

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