Bernstein

Question 1

Bernstein info

Answer 1

Premier sell-side research and brokerage firm
Best known for equity research, consistently ranked no1 for in-depth analysis and forecasts on companies, industries and markets
“The blackbooks” provide unbiased, differentiated insights
Works with leading investment managers, pension funds, endowments, foundations, and corporations
Combines high-quality research with global trading distribution to service clients worldwide

Question 2

Values

Answer 2

Invest in one another
Strive for distinctive knowledge
Speak with courage and conviction
Act with integrity – always

Question 3

Recent cool news story regarding Bernstein

Answer 3

• Bernstein recently launched a new AI-driven research tool called GARP Bot that uses natural language processing to generate investment ideas by analyzing transcripts, reports, and alternative data sources. This showcases Bernstein’s innovation in leveraging AI technology.

Question 4

Cool story regarding oil and gas

Answer 4

• Insight report from Bernstein from Senior Analysts
• recent conflict in Israel and Gaza has raised concerns about impact on the oil complex and the threat it poses to the global economy and markets.
• Despite this, supply of oil has remained relatively stable, with no capacity taken offline and no moves by major players to take market share.
• While the supply and demand for oil are both expected to grow in the future, the most significant “market-moving” question has shifted to the potential for a direct confrontation between Israel and Iran.

Question 5

Examples of ability to manage deadlines and priorities

Answer 5

• Situation - the jobs and tennis balancing uni
• Task – how do I maintain my degree being my priority, especially with getting a good grade
• Action - working through my schedule and prioritising tasks which I know need to be put first
• Result - 2.1 degree whilst winning our league (haha)

Question 6

Ability to work as a team

Answer 6

In my exec roles and team captain for tennis at durham university – skills learnt: communication, adaptability, motivation
Currently working as a team in SIA
- Situation – SIA background – team of 5 meeting establishing our investment philosophy and objective. However, international student, really nice girl from china, didn’t understand all of what we were saying
- Task – not only making sure she understood, but also shared her input as likelihood is I would say something that isn’t correct – I am 100% no expert on stocks
- Action – downloading an live audio translator and adjusting the way we spoke. Asking her for her opinion and making sure she knew that if she did have any questions, she could whatsapp us afterwards
- Result – Very productive discussion where we were able to receive her opinion on the investment philosophy and what sectors she was particularly interested in.

Question 7

Time showing leadership

Answer 7

• Captain of tennis team currently but most important moment of leadership was during county cup finals
• Captained the Surrey team (I was oldest and knew the team very well)
• Task – how to motivate the team when we (surprisingly) lost our tie to Leicester and were at risk of going out at group stage of last 8
• Action – at team dinner, emphasising the fact we have to do everything that is in our control – win all our remaining matches – completely support other teams in the group stage which improve our chances of qualifying for the final
• Result – qualified by sets won (!!) for the final, which we won to become national champs

Question 8

Time showing analytical ability

Answer 8

• AP commodities and current dissertation and the current process and problems encountered with conducting a cost benefit analysis of carbon offsetting projects
• Action – reading on how to quantify the social cost of carbon and how to manipulate the data. Limit to what I can do so organising an out of hours meeting with a lecturer who specialises in this
• Result – Currently using stata programming to convert this into a stastically accurate result

Question 9

Why Bernstein

Answer 9

• firm’s commitment to providing associates with significant development opportunities, visibility, and incremental responsibility. Small intimate teams - allows responsibility but make meaningful connections which align with how I improve. Meeting the current associates when I had WExp, about the rigorous but constant learning environment make me believe Bernstein would be an ideal place to grow my skills in equity research.
• enthusiastic about the firm’s global presence and the chance to engage with institutional investors and companies worldwide.
• eager to roll up my sleeves and contribute to producing the , in-depth analysis that has made Bernstein the #1 ranked research firm.
• With my passion for unraveling insights, I know I would thrive in this intellectually challenging role. For all these reasons, I am very enthusiastic about the potential to launch my career as a Research Associate with Bernstein.

Question 10

Why research associate

Answer 10

• allow me to utilize economics background and experience in commodities analysis to contribute to Bernstein’s acclaimed equity research. Producing high-quality equity research and gaining in-depth knowledge of industries appeals strongly to my analytical nature.
• Current dissertation is analysing tourism data and ecotourism, a sector I actually learnt a lot about and its development whilst my work experience with bernstein
• comfortable with quantitative analysis

Question 11

Questions to ask

Answer 11

• Regarding the joint venture with Societe General - What are the expected impacts on Bernstein’s equity research division from this partnership? Will it lead to expansion into new geographies, access to new datasets, or additions to research coverage?
• Are you confident you will retain your independence of though after SocGen?

Question 12

Contents of an equity research report

Answer 12

o Industry research (competitors, trends, etc.)
o Management overview and commentary
o Historical financial results
o Forecasting
o Valuation
o Recommendations
- Can also include
o Investment risks – can be operational, financial, or related to regulatory issues or legal proceedings
o ESG – How the company manages the relationships related to ESG

Question 13

Industry research

Answer 13

• Lots of info on trends and competition in the industry
• Porter’s five forces come in handy to ensure you’ve covered all dynamic of industry

Question 14

Porter’s 5 forces

Answer 14

The model encourages organizations to look beyond direct competitors when assessing strategy and, instead, consider broader environmental forces.
competitive rivalry, supplier power, buyer power, threat of substitution, and threat of new entry

Question 15

Management overview

Answer 15

• Necessary to understand the quality of its management team before considering a potential investment in a company

Question 16

Historical financial results

Answer 16

• One of core jobs
• Compare them to analyst’s expectations
• performance of a stock is largely based on reality vs expectations, so it’s important for an analyst to analyse and understand if the actual historical results were below, at, or above market expectations.

Question 17

Forecasting

Answer 17

• two main ways of forecasting top-down and bottom up
• Top-down forecasting looks at industry-first (its size, growth, pricing, etc.), then determines how much market share a company is likely to have, and finally, works down to revenue.
• A bottom-up approach starts with the basic drivers of revenue, such as the number of customers, or the number of units sold, and then works up to a revenue forecast.

Question 18

Valuation

Answer 18

• Takes all the assumptions from the forecast and build on them with even more assumptions, such as discount rate or valuation multiple (both very subjective)

Question 19

Recommendations

Answer 19

• In the recommendations section, the equity research analyst will have a target price (or price target) which tells investors where they expect the stock to be (typically) a year’s time.
• they will often make an actual recommendation to investors about what they should do. The language varies from bank to bank, but examples include:
  o Buy / Overweight / Long
  o Hold / Market weight / Neutral
  o Sell / Underweight / Short

Question 20

Three-statement finance models

Answer 20

• Income statement – businesses profitability
• Balance sheet
• Cash-flow statement
• These three statements are informative tools that traders can use to analyze a company’s financial strength and provide a quick picture of a company’s financial health and underlying value.

Question 21

DCF Models

Answer 21

Discounted Cash Flow analysis helps determine value of an investment based on its future cash flows.
The PV of expected future cash flows is arrived at by using a projected discount rate.
If the DCF is higher than the current cost of the investment, the opportunity could result in positive returns and may be worthwhile.
Companies typically use weighted average cost of capital (WACC) for discount rate as accounts for the rate of return expected by shareholders.

Question 22

Discounted cash flow formula

Answer 22

check word or phone camera

Question 23

Equities vs bonds vs cash/cash equivalents

Answer 23

Fixed income
You lend money to an entity and, in return, they pay you a fixed amount until the maturity date, which is the date when the money you initially invested (the loan) is paid back to you.
Equities – owning shares
Cash equivalents – Considered very low risk since almost no chance of losing money
Examples of cash and cash equivalents include cash parked in a savings account as well as U.S. government Treasury bills (T-bills)

Question 24

Derivatives

Answer 24

are financial contracts, set between two or more parties, that derive their value from an underlying asset, group of assets, or benchmark.
- Prices for derivatives derive from fluctuations in the underlying asset.

Examples of derivatives include futures contracts, options contracts, swaps, and forward contracts.
Derivatives can be used for various purposes, such as hedging against price fluctuations, speculating on future price movements, gaining exposure to different markets or assets, or managing risk

Question 25

Simple Moving Average

Answer 25

MA = Sum of closing prices in number of periods n in the moving average divided by n

Question 26

Futures vs options

Answer 26

An option gives the buyer the right, but not obligation, to buy (or sell) an asset at a specific price at any time during the life of the contract. A futures contract obligates the buyer to purchase a specific asset, and the seller to sell and deliver that asset, at a specific future date.

Question 27

Value at Risk

Answer 27

statistic that quantifies the extent of possible financial losses within a firm, portfolio, or position over a specific time frame.
most commonly used by investment and commercial banks to determine the extent and probabilities of potential losses in their institutional portfolios.

Question 28

Written assessment

Answer 28

• Synthesise the info
• Analyse trends
• Recommendations
• Company update
• Risks and disclaimers

Question 29

Lisa Clive

Answer 29

• Senior analyst European Medical Devices and Services
• Ranked #1 in sector in Institutional Investor’s 2016 All-Europe Research survey
• • How did you make the transition to senior analyst - what skills helped you the most or lessons
• How do you find the biggest challenge to break through to clients above everyone else
• Whats your brainstorming process for new areas of research

Question 30

Michael Parker

Answer 30

• Head of APAC and EMEA research
• Previously a senior analyst covering Asia Coal, Power, and Renewables
• Previously worked for renewable energy company
• What attracted you to the concept of renewables considering the time you decided to spend your career focusing on it?
• How did he achieve each step in his career to get here
• Creative and innovative guy – how can you get your product out there – communicating without direct talking with clients
• How do you make sure our content is above all the noise in research out there
• Being really interested in how research is consumed

Question 31

William Woods

Answer 31

• Analyst covering EU general retail, food retail, and food delivery
• Have you always been focused on this sector given as an upcoming graduate, it is not what I stereotypically imagine as a sector focus?
• You’re covering 3 distinct groups of companies, massive responsibility, how do you do that and how does your associate help you do that?

Question 32

Stock market developments

Answer 32

• Stocks rallied strongly in novmeber as inflation showed signs of peaking. Uncertainty around whether inflation moderation will continue
• Job market and consumer spending have remained surprisingly resilient but some cracks in housing data
• China unveiled major changes away from zero-COVID restrictions, boosting investor sentiment around recovering Chinese growth in 2023. Chinese stocks saw a powerful rally.

Question 33

4-step approach to answer market sizing questions

Answer 33

• Ask clarification questions
• Map out your calculations
• Round numbers and calculate
• Sense-check your results

Question 34

Describe a specific event from your childhood that left a lasting impression on you.

Answer 34

• Final of a tournament in Southampton I was 10

Question 35

Can you remember a situation where to you had to multitask to accomplish a task or solve a problem

Answer 35

This term is perhaps the hardest ive ever worked
o Final year of economics degree
o Job applications
o Two jobs
o Performance squad of tennis

Question 36

Describe a complex problem you encountered at work or in a project

Answer 36

• EDA and had to work with stata programming
• Assumed we’d done coding before, I hadn’t
• Easy way out would have been copy the suggested code
• Taught myself basic python

Question 37

If presented with a complex task with no instructions, how would you approach it

Answer 37

• I would begin by gathering all available information and defining the scope.
• Next, I would brainstorm potential approaches and seek advice from team members or mentors.
• I believe in staying adaptable and being proactive in finding solutions

Question 38

Describe a time when you faced a disagreement or conflict within a team. How did you handle it?

Answer 38

During an important team match last year, we had differing opinions on the best approach in doubles. Before the match started, I suggested we take 5 minutes to share our thoughts, actively listening to each team member. Identified common goals, and proposed plan that incorporates everyones ideas. reached a consensus and successfully moved forward as a united team.

Question 39

How do you approach brainstorming sessions to generate new ideas and concepts?

Answer 39

• During brainstorming sessions, I encourage all team members to share their thoughts without fear of judgment.
• I use techniques like mind mapping with beenfits of each idea to visually explore connections between ideas.
• I ensure everyone has an opportunity to contribute, and I build upon others’ ideas to foster a collaborative and creative atmosphere.

Question 40

Biggest challenge facing bernstein

Answer 40

Passive vs active investing
- Index funds very cheap
- Asset managers have been doing worse than the index