How (And Why) To Start Reading the News if You Want to Enter Consulting or Finance

The easiest way to think about reading the news is like opening a savings account – the earlier you start saving, the more capital you’ll have compounded in the long run. However, unlike a typical savings account, interest is paid in two forms: enhanced understanding and meaningful conversation. Everything you consume helps you get more out of your readings, as well as expand your mindset in academics and work. It’s this understanding that will allow you to figure out the right questions to ask in interviews and networking. You’ll also obtain a more diverse set of topics to discuss with friends, family, coworkers, and professors. By knowing more than just the headlines, you’ll be able to build credibility quickly and make a genuine human connection in each conversation.

This all holds especially true if you are entering the finance or consulting industry. In both of these fields, your job will be heavily reliant on your ability to uncover insights and subsequently explain them in a succinct way to your boss and clients. In many roles you will be analyzing either one industry or company, and can expect to be very strapped for time as new deals and engagements come in every week. Consistently reading the news will give you a stronger historical context and improve your ability to research quickly when you do hit the desk.

These are the same capabilities that will be tested in interviews with questions such as, “Tell me about something you’ve read in the news.” After a short exchange, it will be immediately apparent to the interviewer if you actually know what you’re talking about or if you skimmed the top headlines in an industry a few days before you walked in. To that point, there’s a lot of news out there – but most of it is just noise. Trying to memorize headlines is a headache and not helpful in interviews, as companies want to see if you know the “why” not the “what.” The problem usually isn’t that “you don’t have time,” rather, reading an article by the WSJ or Bloomberg can be dense and boring when starting off unless you have a framework to follow.

Where To Start

The easiest way to learn business jargon and get a succinct analysis of daily headlines is starting with newsletters such as the Morning Brew or Bloomberg’s "5 Things You Need To Know to Start Your Day." These resources only take five minutes of your morning to read through, something you can do over breakfast or your commute, and cover a variety of topics and industries every day. If you have already started reading but feel like you don’t understand the drivers behind the headlines in business or the economy, then try the following path:

1. Start with the economic factor that gets the most press in the news: the Federal Reserve. Try to understand how and why they change interest rates, and how that rate affects mortgages, treasuries, corporate bonds, credit card rates, and all other debt. Start on WSJ here.
2. Then think about interest rates in the context of how it ties in with the business cycle. There’s a lot of evidence based arguments from analysts and economists on what they think the Fed should or shouldn’t do, so those will be good to read as well. Bloomberg Opinion is good place to find this content.
3. From here, it will be good to look at what happened in 2008 and how different entities responded before understanding what creative tools the Fed will have (or not have) to combat the next crisis.

It is recommended that you find a few friends and split the price of a subscription to WSJ and Bloomberg, as both sources will prove invaluable to you in the long run. The goal should be to fully understand an article rather than just trying to get through it. Make sure to click through each hyperlink to gain insight into the context of an argument, or search up any terms you don’t understand on Investopedia.  Remember that this process takes time, and it’s better to build your habits on reading at least two or three articles every day instead of trying to read a few dozen articles once a month. Within a few months you should be able to see patterns in analysis and arguments about key monthly economic indicators (CPI, PMI, Payroll, Wage Growth) and know who it affects.

What Industries to Read First

After understanding the basic drivers of the economy, you should move into reading about specific industries. This can more confusing, as industries change a lot quicker than the economy does, and is affected by many more factors that are not as transparent or easy to find as CPI and GDP.

When reading into the headlines of an industry, focus on understanding who the incumbents are and how exactly they make money. Always read with a list in mind of the main three to four problems are in the industry, as these will typically be the drivers behind their mergers and investments. Some of these problems are cyclical, while others can be due to changes in social preferences, adopted technologies, or competitive environments. Below you will find a few cornerstone industries to start reading about, each with its own unique problems and trends:

• Energy: This is the most commonly talked about commodity, and is closely tied to the economic cycle with a reliance on debt to fund expansion. Start by researching how the percentage breakdown of different sources of US energy (oil, natural gas, renewable energy, nuclear) have changed over time – especially after 2014 – as well as the costs of building new plants for each.
• Consumer & Retail: This is a big category, but start with Food & Grocery. This industry is very easy to initially understand and tied directly to US consumer spending. While everyone must buy food, you will see different levels of demand for each product through economic cycles. Think about the interaction of food manufacturers with grocers, and how e-commerce, startups, and private label are changing the space. Afterwards, expand across beverages and apparel to see which trends are different from food and why.
• Healthcare: This one can be confusing, but it can be easily understood if broken down into pieces. Start with pharma and then move into insurers and primary care, focusing on how costs to the consumer are changing across socioeconomic classes and states, and what the main drivers behind costs are (role of conflicting incentives is a good thing to keep in mind). Try to piece it back together and see what the overarching problems are in the industry as a whole when you feel comfortable.

Please keep in mind that the focal points listed for each industry are not exhaustive and consistently evolve over time. When reading about an industry, there are many more other resources available which conduct a deeper dive than an typical article. For example, many consulting firms and think tanks publish thought leadership, which are research reports on current trends and new technologies in that industry. After half a year of reading, it’s a good to focus more on how these industries interact with each other and specific business models within each.

Remember, reading is something that must become a habit equivalent to brushing your teeth or going to the gym. Just like how you can’t negotiate with your bank to pay you five years of interest in one year, it will be impossible to cram a whole year’s worth of reading one week before an interview - and you will not reach the adequate level of understanding to talk critically about it. So start now and have fun. Your future you will thank you!

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