Earnings Call: Ken Carroll

When you ask Professor Ken Carroll about his career, he will tell you that it is “long and varied.” As somebody who worked for some time before returning to school myself, I admire Professor Carroll’s experiences as testament that there is no “straight line” career path. After graduating from Louisiana State University with a BA in Political Science, he started his career as the kitchen manager at esteemed New Orleans eatery, Arnaud’s, which is far from the realm of finance. Professor Carroll said he thought this was the most strenuous job of his life in terms of time management and relationship management. He cites the long, late hours which made him feel like he was living life “opposite of everyone else.” After his experience at Arnaud’s, Professor Carroll returned to Tulane for his MBA, which he achieved in 1996. He then worked for Entergy New Orleans where he had valuable experience in corporate reporting. Professor Carroll led reporting for the company’s New Orleans segment which gave him a real unique look from the inside, allowing him to “get to the nitty gritty of things,” as he puts it. After two years with Entergy, Professor Carroll joined the investment bank Johnson and Rice in New Orleans, where he spent twelve years covering the oil and gas industry before retiring from the industry in 2012 as a Senior Analyst. I had the chance to sit down with Professor Carroll and ask him a few questions about his experience and the Freeman Reports class that he teaches.
Q: Can you give me a brief overview of the key learning goals of the course?
A: First and foremost, we want Freeman Reports analysts to truly understand the industry and understand the job of an equity analyst. There are still no good textbooks out there about equity research, I’ve bought a few. The books are all about excel, not about the business. This class almost becomes a modeling lab, doing things piece-by-piece and keeping it practical. That said, modeling is only one aspect. This class spans the entire curriculum from business communication, to modeling, to corporate finance. Analysts have to be thinking about all of these things all of the time to truly understand value drivers. This class is a well-rounded experience that ties things together for MFINs.
Q: How do you think that Freeman Reports prepares you for careers other than equity research?
A: Analytical thinking is essential in any industry and there are analyst positions in every business, it doesn’t necessarily need to be energy. No matter where the MFIN graduates go, they will be thinking about and combining different data points and taking broad views to synthesize data. In many cases, our graduates will be reading SEC filings and in some cases, creating them. As an analyst, you must track your business and be able to express yourself, as we do in the Freeman Reports course. One skill that people tend to overlook now is writing. The writing portion has even been omitted from the SAT; however, these skills are vital in the real world. As a good professional, you must be able to create an argument in a concise, well-constructed format. We work on all of this in Freeman Reports and it is all very portable.
Q: What aspect of the course do you think is the most difficult for students to comprehend and how do you try to approach this difficulty?
A: We cover a considerable amount of information in a very short period of time. The toughest part is just getting students to understand the industry well enough to have some sort of investment recommendation, which is one of the main goals of the course. We want students to go beyond basic ratio analysis. P/E ratios, book-to-market ratios are good, but we want students to learn the language of the industry and provide some expertise.
Q: What is the hardest thing to replicate in the Freeman Reports course that analysts face as a professional?
A: The hardest thing to replicate is probably the presence of clients that will scrutinize your work. Clients want to understand what you are doing and they are constantly second guessing you. In the real world, you might make a bad projection and never hear from a client again. Things with clients blow up sometimes. Another thing that can’t be replicated is access to management. I could easily call a CEO of a company that I was covering and ask a quick question that might clarify a problem that I had with a projection. With that access comes the responsibility of establishing and maintaining a relationship. Unfortunately, 200 grad students simply can’t have that access.
Tommy Milburn