Should I take the CFA course?

[hlpsg]

Hi
I was wondering if anyone here has taken the CFA course/exam. Is it of value in teaching you fundamental analysis? I'm thinking of taking the course to build a good foundation in understanding economics, etc. and was wondering what your views were.

I understand its a difficult exam to pass but even if I didn't get through I will still gain some knowledge.

Lastly, can I get a certification if I don't have any working experience in the finance industry?
(I come from a software engineering background).

Thanks, and hope to hear from anyone who has attempted the CFA course before!
HL

 

[legoman]

Hi
My friend is a prop trader and he did the CFA's, so did another friend who works for a hedge fund. They are a requirement in a lot of banking jobs. I am going to do them myself. I think its worth the effort.

 

[binsley]

Hi
My friend is a prop trader and he did the CFA's, so did another friend who works for a hedge fund. They are a requirement in a lot of banking jobs. I am going to do them myself. I think its worth the effort.

yep - well worth it. like any formal exam - errs on the theoretical side and if you are absolutely sure you never will want to be employed as an analyst/port. manager you may consider other routes to learning practical fundamentals (eg there is more practical info. in 'intelligent investor 'than the whole of the level 1 course imo)
i have only done level 1 so far so i am hoping the practical side picks up in the other 2 levels - but for sure if you are looking to be employed this quali. will look better good on the cv.

 

[Rhody Trader]

As was commented, the value of a CFA is really dependent upon your intent. If you are thinking of a career in money management, it could come in handy (though oftentimes an MBA will be acceptable).

If, however, you are only looking to learn to become a better trader/investor, there are much easier and less time consuming paths to take.

 

[SOCRATES]

Hard Road Ahead !

As was commented, the value of a CFA is really dependent upon your intent. If you are thinking of a career in money management, it could come in handy (though oftentimes an MBA will be acceptable).

If, however, you are only looking to learn to become a better trader/investor, there are much easier and less time consuming paths to take.

Actually, since you mention it, these grades bestow upon the holder the verification that they have followed a course of learning subject to a syllabus with a certificate at the end to prove it.

This is the standard which society sets and to which many are attracted. This is so because there is a path and there is an end in sight.

The certificate awarded to successful candidates is the proof that they have learnt what they have been taught, whether they have learnt it in depth, that is with understanding, or superficially parrot fashion, which is without.

For the graduates this is an achievement and a luxury.

The element of luxury enters the equation because after having overcome the obstacle course of the syllabus and the final exams, they can now relax and begin to gently forget, with the passage of time, what the syllabus contained in its entirely, down to the last comma, fullstop and semicolon.

The process of becoming a proficient trader is the opposite and very difficult if not impossible for many ordinay people. There is no easy path. There is no certificate. There is no exam. There is no relaxation. There can be no dereliction of effort. It is not easy as you say and, depending upon the individual and his character, can and may take a very long time.

Many people aspire, very few are fit for it, as the profession ultimately selects who will succeed and who will not and not the other way round.

This cruel truth is very painful to some people who can never succeeed.

I regret to tell you that you are subject to an unfortunate misconception, because it is, actually the other way round to what you hastily pronounce.

 

[Rhody Trader]

Well said Socrates.

My comment was only meant to say that if trading/investing is the objective, rather than spend long hours studying and preparing for a series of exams which may or may not have any practical use for the chosen endevour, one would be better off spending her/his time researching the the markets themselves more directly.

 

[SOCRATES]

That is correct. Glad to hear it. The great majority persuade themselves they can crack this. This is not constructed for them to crack, it is not a free orchard provided for them to come along and pluck ripe and succulent fruit as they please.

It is an orchard into which nearly everybody is invited in some way or another, but the orchard chooses who may stay and who may not, to enjoy the fruit consistently.

Few are able to realise that the right to remain and enjoy the orchard has to be earned. The process involves overcoming a huge obstacle course that only the fittest can survive. Very few TRULY dare to dare in the first instance therefore very few overcome ALL the hurdles.

Many aspire, very few are allowed to succeed. Curiously, the method of selection does not respect age, culture, education, wealth, looks, but operates on the basis of Merit, Ability and Conduct, and the ultimate requirement is the correct Character for it. In my circle, we call this the "BIG C".

This defeats nearly everybody, I assure you I have vast experience in this matter.

It is, ultimately what money cannot buy or what education does not prepare people for, nor age, nor looks, nor anything else, but the correct attitude, which to my dismay and horror is a rare attribute among the great majority of aspirants, who believe all of this to be some silly little game anyone can play but is in fact a deadly, relentless battle for profits in the middle of a huge, murderous, war zone.

 

[hlpsg]

Well said Socrates.

My comment was only meant to say that if trading/investing is the objective, rather than spend long hours studying and preparing for a series of exams which may or may not have any practical use for the chosen endevour, one would be better off spending her/his time researching the the markets themselves more directly.

Hi, Thanks, that was want I wanted to know. I was trying to find out if the knowledge gained from the course was any good for practical applications.

 

[SOCRATES]

No, in practical terms - ZERO ! In point of fact, as all of this does not work the way academics percieve it ought to, if you follow the path set by academics you will certainly be misdirected in your quest for trading proficiency. In fact when accountants, actuaries, lawyers, etc., have the internal workings of market practice explained to them in detail the common response is that they become aghast at their own misconceptions as a result of having followed the conventional acadamic path set for them in their syllabuses. Not withstanding the previous, these certificates have value in two senses, one aspect of value is the kudos associated with the attainment of them, the other is that employers use them as yardsticks in evaluating candidates, but for anyone contemplating the odessey of becoming a trader, both of these measurements of value are in the end analysis, a pyrrhic victory.

 

[ravenglass]

The CFA is an excellent qualification & I would recommend taking it if you have the chance. Getting a good education about the markets is important.

If you look into the background of all the great traders/investors you will notice that nearly all of them (except John W Henry & Keith Campbell) have good educational backgrounds. They have attended the best University's, they have good degrees, masters degrees, MBA's, Phd's & other professional qualifications such as CFA, Accountancy & Law.

 

[SOCRATES]

When Education becomes Miseducation.

The CFA is an excellent qualification & I would recommend taking it if you have the chance. Getting a good education about the markets is important.

If you look into the background of all the great traders/investors you will notice that nearly all of them (except John W Henry & Keith Campbell) have good educational backgrounds. They have attended the best University's, they have good degrees, masters degrees, MBA's, Phd's & other professional qualifications such as CFA, Accountancy & Law.

I concede that the point you make of an individual obtaining a good education is important.

What you do not understand however, is that the ability to reason and to act in accordance with that reasoning has nothing to do with education, it has to do with the character of the individual concerned.

I am telling you this because I have a lot of experience with this.

In this regard, in some cases, some forms of education are actually detrimental to this process, on the basis that if the individual has a degree, well, he persuades himself that he knows it all, does he not ?

What is even more grave is that individuals devoid of scruples can fool themselves into believing all of the above and actually persuading others this is so.

Additionally, the ability to reason and logically deduce, has to emanate from within a framework of morality. The idea that a certificate exonerates the individual from all of this,
may or may not be acceptable in ordinary life, but not in the world of trading.

This is because in the world of trading, the individual cannot fudge. It is a cruel world of yes and no, and it is a shock for most people, let alone those who are under the false assumption that the possesion of a degree or some other paper qualification in any way exonerates them from the conduct the market demands from all of us.

Therefore, yes, it is beneficial to hold a degree, but not for this.

Also this is because if you are capable of looking into all of it very deeply, much of what is taught as part of conventional education is not designed for people to use to make themselves totally and absolutely free. Therefore you are also in addition subject to a further set of misconceptions.

All of it is subliminally quite the opposite. It is constructed and designed to persuade people to put themselves on treadmills of some sort of another, of their own making, for life.

Trading, and trading effectively has the opposite object. The object is for individuals to attain total independence and freedom via their own success in this regard. You can now begin to see that this requires a different type of thought process for which educations of the type you mention are not suitable, in fact, often detrimental in the extreme for the reasons I detail above.

And, to conclude, it frequently occurs that the academics who have attained pinnacles of educative achievement do not succeed commercially, that is, if they choose to become traders.

This in addition causes them to become resentful against the achievement of others who do not succumb in being miseducated like they are.

 

[SOCRATES]

Now I forgot to tell you.....I will put it to you plainly, blunt and to the point:~

If you want to get A DECENT JOB you must have some basis to prove you possess the the bits of paper a prospective employer will be OBLIGATED BY CONVENTION TO USE AS A YARDSTICK, CRUCIAL TO HIS SELECTION PROCESS.

If you aspire to become a trader you will have to acquire the money, the kit, the knowledge, the time, the dedication to the pursuit of excellence, the correct attitude, the correct mindset, and ultimately, if you do not have the correct CHARACTER (which is what you cannot acquire in any university and what even money cannot buy) it is not that you will fail, but YOU YOURSELF WILL ULTIMATELY PREVENT YOURSELF FROM SUCCEEDING !

And that.......is what makes the difference.

 

[hlpsg]

Now I forgot to tell you.....I will put it to you plainly, blunt and to the point:~

If you want to get A DECENT JOB you must have some basis to prove you possess the the bits of paper a prospective employer will be OBLIGATED BY CONVENTION TO USE AS A YARDSTICK, CRUCIAL TO HIS SELECTION PROCESS.

If you aspire to become a trader you will have to acquire the money, the kit, the knowledge, the time, the dedication to the pursuit of excellence, the correct attitude, the correct mindset, and ultimately, if you do not have the correct CHARACTER (which is what you cannot acquire in any university and what even money cannot buy) it is not that you will fail, but YOU YOURSELF WILL ULTIMATELY PREVENT YOURSELF FROM SUCCEEDING !

And that.......is what makes the difference.

Hello Socrates,
I will like to become a successful trader. However I come from an engineering background with little schooling in economics and finance. My only "education" if you can call it that, in the markets, is from reading trading books. I am now seeking what path to take in my education. I am not studying to get a job at any institution (however I will consider it if it can lead me to success), but to learn to trade for myself. I habour no misconceptions about just how hard its going to be, and I know lots of perseverance and time will be needed before I even dare to think of becoming profitable. I also understand that some people try their whole lives but still fail at this.

One of the problems I face is that there are so many paths out there, I sometimes have difficulty deciding what to do. Options, trading using TA, trading futures, writing trading systems, value investing in shares based on FA, pairs trading, etc.

I was thinking the CFA exams may provide a good background for me to understanding the markets. If the major institutions use it to judge the people who are going to be doing the research for them I gather its not going to be completely useless, since these major institutions are the "smart money" after alll. However, when I spoke to the head lecturer from a University in San Francisco conducting the Masters course being offered (which prepares students for the CFA exams), he said something which greatly caused me to be skeptical, he said that technical analysis is nonsense and does not work. I was very surprised to hear him say that, and I also wonder, if he, with all his academic knowledge of the markets, had to make a living as a lecturer, and can profess that TA is nonsense, what can I expect to learn?

However, I also think that the knowledge I will gain will give me a strong grounding in basic economic knowledge, but how useful this will be to help me become a successful trader, is what I'd like to find out.

So if I were to rephrase my question to ask, what should I do to pursue my education to becoming a successful trader, what would be the recommendations? Study trading books, CFA textbooks, learn from a successful mentor (if one can be found), etc.?

Thank you all who have responded to this post, I believe this thread will also help other beginners like me.

 

[SOCRATES]

You say you have an engineering background and that must be a plus, because engineering requires the application of logic, but the disadvantage is that engineering is a rigid science. Trading is not a rigid science, it is an art form that contains a sort of flexible science. This is what serves to baffle everybody, including your lecturer whose comments I find absolutely hilarious. You have my permission to tell him so.

In my posts above I detail the merits and demerits of rigid learning. Unfortunately nowadays it is fashionable to pass off rigid learning as education. Nothing could be further from the truth. This is why for example your lecturer discounts Technical Analysis but earns his living teaching a topic that is as dry as dust, and has no practical application in making money from trading the markets effectively.

In fact a study of Economics is a distinct disadvantadge if you need to cultivate the perspective to think freely about the reality of trading because it harnesses your thinking in a direction which is not creative or inquisitive. I tell you this because it is my experience, as I struggled for years with the theories of Malthus, Keynes, Adam Smith and co., to name but a few, only to become more and more confused by one economic theorist arguing his corner against another, but none of them providing a practical guide to making money in the markets that anyone could follow.

This is not what people want but it is what they are given, so your comments do not surprise me at all.

My recommendation is that you follow the sensible threads on this website and you concentrate your efforts on learning what drives the markets.Just hang around and if necessary I will keep an eye on you so that you do not become corrupted with nonsense.

As for mentoring, there are several members who will gladly render you this service, Mr Charts for one, as I myself no longer teach newbies, because I am too busy with other projects. I will concede the choice presented to new aspirants is bafflling by virtue of its variety. But you yourself have to decide in which direction you wish and choose to direct your efforts first.

 

[hlpsg]

Socrates, thank you very much for your insights.

 

[shawnzki]

I'm currently studying for the IMC before attempting the CFA next year. Like myself you want to start off somewhere a bit more basic first then I, along with others, would recommend this. It's a start and provides threshold competence which you need in this industry anyway. I'm scared to hell of doing the IMC next month but know it's a step forward. Good luck to you. Remember - baby steps!

 

[sehik]

What is an IMC

 

[ravenglass]

There is another point to consider many of the greatest investors, speculators & traders in the world have non financial skills that have helped them become billionaires:

George Soros considers himself to be a philosopher, he was a student of the great Karl Popper & used his teachings to develop his success as a speculator.

Carl Icahn studies & uses psychology.

Marc Rich has great language & communications skills.


Many people study Ayn Rand (including myself) they believe that her teachings help them to develop more successfully (her most famous follower was Monroe Trout).

There was even the case of the Feshbach Bros, who followed the teachings of L Ron Hubbard!

 

[ravenglass]

What is an IMC

Investment management certificate from the Securities Instituite.

 

[sehik]

Investment management certificate from the Securities Instituite.

Thanks for that, i think the sort learning a 'learner' like myself and perhaps a few others need, is a course that focuses on technical analysis. Any info on this will be appreciated.