Andrew Sheets is the Chief Cross-Asset Strategist for Morgan Stanley, responsible for identifying investment opportunities and risk across global asset classes. Prior to his current role, he spent 10 years in the firm’s credit research department, serving as Chief European Credit Strategist from 2009 to 2014. Andrew received dual degrees in applied mathematics and economics from Brown University.
I majored in math and economics, which prepared me for my work with statistics. It’s a useful way to look at the world. Problems in finance can often be reduced to simple statistical issues such as how two sets of numbers interact. Plus, you discover a lot of valuable myth-busting and analysis through statistics.
In research, it helps to have a curiosity about news and current events, as well as a healthy level of skepticism. You have to constantly stay aware of things. It requires you to follow multiple news sources and stay on top of events.
Public speaking and communication are another crucial part of research. There is a big misconception that public speakers are born rather than made, which was not true in my case. But I worked with a colleague who is an excellent public speaker, which helped. You can get a sense of how to interact and how to answer questions. The most nerve-racking and rewarding part of my job is answering the questions. It forces you to think on your feet. I’ve been lucky to be able to observe, and it’s something I try to pass along to my team.
I was on a third-round interview in New York and was pulled in to talk with one senior-level individual. I must have looked worried because he asked, “Why are you nervous?” He pulled out a bag of Ruffles and bottle of water and said, “Eat and then we’ll talk.” We had a very nice conversation, but he didn’t have to do that. Since then, I’ve found a great amount of happiness working for the firm.
It’s difficult when you’re applying for roles that you don’t know much about. I had no idea what an investment banker was. What was very helpful was doing the summer analyst program. I got to see the real world in 10 weeks on the job. I figured out this was interesting and realized there’s a huge range of different roles within different divisions at the firm and found a group I really liked.
I started drawing in college, working for the school paper as editorial cartoonist. I put that on my resume and it came up in almost every meeting. The person that hired me wanted to add cartoons to research reports to get people’s attention. I started drawing cartoons for him and for the firm, and clients seem to like it. My creativity has been rewarded.
I read things in the financial press that are simply not true. There are a lot of myths out there. People naturally want to find connections, but the part of the job I find most rewarding is sifting out myths.
In 2010, there were a lot of concerns around Ireland’s credit risk, and claims that bank liabilities were 800% of GDP. That number didn’t seem right. We checked and there was a lot of double counting in the way the ECB was rolling out the stats. The correct number was more like 200% of GDP, and we recommended Irish government bonds. It’s one of our better calls in the last five years.
What tools and resources do you have available to you at Morgan Stanley that contribute to your research?
The biggest resource we have is the network of experts inside the firm. If I want to get a better understanding of UK politics, Brazilian inflation, Federal Reserve policy, global oil demand, or the sales outlook for the iPhone, experts on each one of those issues are just phone calls away within Morgan Stanley. That range and depth of expertise are hard to replicate and a real advantage, I think. If we’re doing our job right as analysts, we’re bringing these views together to help answer really difficult questions.
They come from reading the news and thinking, “wait, that conclusion doesn’t sound right.” They can come from frustration with a lack of hard data around certain ideas, and a desire to try to fill in these gaps. And they often come from conversations with the firm’s clients: questions that you are asked that make you think, “I don’t know the answer to that, but I think we can figure it out.” Ultimately, I think we’re looking for people who like finding creative ways to answer hard questions.
Finance attracts competitive people, which has its advantages and drawbacks. But one thing that’s struck me during my 11 years here is an emphasis on collaboration, and intolerance for prima donnas. This is also a place that takes pride in developing its people and promoting from within.
In my career, I have repeatedly seen managers prefer to push more junior employees beyond their comfort zone, rather than bringing in more experienced outsiders. That can mean pressure, but it is also sometimes the best way to determine what you’re really capable of.