Who am I?

Financial Analyst

Financial Analyst, yes, I know it sounds boring, but bear with me, and I shall (hopefully) convince you otherwise.

Most people think that an analyst job, particularly one in finance, is a strenuous desk job full of complicated statistics and Microsoft excel. Yes, I must admit that is true to some extent, but I would like you to view this job in the same light as that of a DJ or an art curator. Why? Because they all involve the act of curation. For instance, as a DJ curates a playlist for a particular mood or a museum director for a particular theme an analyst curates a portfolio (collection) of stocks given certain circumstances or requirements.

Last Summer, I interned at the Aditya Birla Sun Life Mutual Fund, a mutual fund in Mumbai, India. What a mutual fund does is create, curate and, manage a portfolio (collection) of assets on behalf of their clients (investors) and take a fee off the profits for doing this. My task was to help in the research of these assets, particularly stocks. A stock is essentially a claim of the ownership off a company and I was examining stocks in the microfinance sector of India. Companies in this sector essentially provide small sized loans to individuals and companies all over India. However, instead of just “sectors” I like to think of them as stories and my job as to examine how these stories will unfold along with which company will benefit the most from this story. In this case, the microfinance institutions signify the story of the transformation of India – a poor country with abysmally low credit and these institutions provide financial services to the lowest strata of society and use credit as a means to improve their livelihood. It was my job to judge which one of these enterprises would be best positioned for the coming five to ten years, given the size of opportunity.

This is where the entire aspect of curation enters frame. Just as a DJ would use and examine inputs such as the crowd he or she was catering to and their preferences to decide the type of music to play, I had to utilize various inputs such as the future regulatory and economic environment along with the technology infrastructure that companies are deploying to judge which company has the best competitive positioning in the sector going forward. I also had the opportunity of going to rural parts of India to actually visit the branches of a few of the companies I analyzed which gave me a more holistic view of the business models.

Besides the apparent “curation”, I also enjoy the fact that this portion of finance, that is purchasing equities and ascertaining their value, is basically gambling, but with a lot more inputs. In poker, you never know what the next two cards are going to be, bets are on judgements of human behavior, probability, or luck. The purchasing of stocks is a more polished and “less risky” version of this, if you may. Granted there is a mountain of information to examine before buying a stock, no one exactly knows what the future beholds, it is basically a very educated guess on the future. That’s the nature of the beast, risk versus reward.

I aim to pursue a career in this educated guesswork at in the near term. However, it is not something I see myself pursuing over the very long term as I hope to do something entrepreneurial in nature. However, finance is a great foundation, as it is the essence and key foundation of any great business and this exercise in educated guessing should equip me with some of these tools.