On January 14, Chartered Financial Analyst (CFA) Society Korea held the domestic final round of the "2022-2023 Research Challenge", a corporate investment analysis competition for undergraduate and graduate students. The participants, grouped into teams of three to five people, were assigned a company to analyze to determine the most profitable strategy when investing into its stock. The teams submitted written reports and presented their case to the jury, which consisted of directors and auditors of CFA Society Korea. The competition was held at the Lotte World Tower Sky31 Convention Auditorium. The KAIST Herald met Jed Barron, Principal of Excelsior Capital Asia and CFA Director, and Andrew Shin (also known as Yun Hyeon Shin), CFA Auditor, to discuss the final presentations of the competition and their views on the key points in corporate analysis.

Corporate investment analysis is something that requires vast and diverse experience. How often would you say students make successful predictions [in the 2022-2023 Research Challenge] and does it truly matter in this context?

Shin: I don't think it's really about how exact their predictions [are], because even professional analysts usually don't get it right. I think more focus should be around [their] efforts to [answer] the questions of what the target price should be and what the determining effects are. [The whole process of] collecting information, analyzing it, [applying their assumptions and formulae,] and arriving [at] the target price conclusion will be a great experience for students in their college years before they get into the real-job world. The purpose of this Research Challenge is for students to experience that before coming into the real market, and also to promote the curricula of the CFA program which includes all sorts of accounting, economic analysis, company analysis, equity evaluations, and more.

What do you think are stand-out qualities of an aspiring financial analyst that contribute most to their professional future?

Barron: Before you relate it to financial analysis or corporate strategy, [I think] the biggest issue is teamwork. When you talk about the future potential of how well people can do in a workplace, the ability to work together in a team is just critical.

[Secondly,] when you look at the presentations and hear how [the students] present, you can [generally judge their] level of enthusiasm; how much they really put into this, how much time, how much stress, how many arguments they got into — it’s the amount of commitment. I think that, obviously, is something that goes beyond just the day of the presentation and carries into the future.

I think the third thing is leadership. It's hard to do this — people are going to have different opinions and different ways of thinking about things, but someone on the team [should say], "I know we have different opinions, but how are we going to pull this together into one concise package [that] everybody is happy with?" And for the people who really demonstrate that leadership, [that’s something that will benefit them in the future."

How were winners of the competition determined?

Shin: 50% of the score came from the written reports submitted by the teams, [and] the other 50% came from the judges' scores based on the presentation. [As important as the amount] of information [was] also how effectively [the teams] delivered them. So, the scoring criteria focused on whether the students addressed the key topics, whether they [clearly addressed] their approach to drive that evaluation, and how confident they were [in] conveying the ideas as a team and as individual presenters.

How  important is the balance between showing the amount of research and statistical backing utilized in the business case and effectively making a case to the jury under time constraints?

Barron: You have to figure out how to get all the analysis across in a way that people are going to understand, [even] when you are under time pressure. Even though 10 minutes [sounds] short enough, if you become an analyst, there is something called "the elevator pitch" — you are given [two minutes to go] from the ground to whatever floor to get your message across. So [even after] you have done all the analysis, [you always have to consider] the question, “What are my circumstances?"

What kind of mindset should one have when presenting or negotiating, and how can one channel that inner confidence?

Shin: Practice would make you relaxed. And sometimes, you need to put yourself into the other person's perspective — if you were them, what would you do or think? If I did [something], how would you react to such behavior? If [someone] panics, would you just ask them to relax or ["let them go on exposing their cards" added the interviewer] Exactly, it's a person-to-person interaction; they are not going to eat you alive. But you need to practice and stay relaxed.

Do you have any recommendations for future Research Challenge competitors?

Shin: Where do you draw the line between being simple and being informative enough? Find a good balance between how much and how confidently you would [can] convey [the information], and how you will make it digestible enough for the judges. 

Also, when [Korean students] are given a question they don't know the answer to right away, they tend to take up the entire Q&A period. Some of the presenters today were given a question which they didn't really understand, [to which they gave an unrelated answer] rather than asking the jury to repeat it. This took up time and put pressure on their teammates. So, I would recommend staying relaxed and asking for clarification. 

[Finally, this isn’t only related to] this challenge, but if you do the work in the real world, [there is] no need to be so nervous about it.

The underlying messages that can be inferred from the interviewees as well as their remarks during the entire final round of the 2022-2023 Research Challenge can be summarized into a simple idea. Presenters without much experience get caught up with trying to showcase all the tangible work done behind the scenes. What one might forget, however, is the most important point — getting your message across. While prior research gives confidence to one's words, effective teamwork and leadership shows in the overall engagement and fluidity of a team.  As much as the business world revolves around making informed decisions and balanced negotiations, it is still a world of interactions between people.