Just curious to know if anyone has applied anything you learned from CFA study to make some profit during the past volatile market… Did you feel you learned a lot useful things to be a smart investor? 
No
Seeing how CFA seems to love credit related investments (based on the huge reading in Level II: MBS, Mortgage passthrough securities, CDO’s, CDO squared etc.) I think the average portfolio based on the CFA way of looking at risks would be down 75%.
yes, now i only invest in the most undervalued penny stocks. CFA + Tim Sykes Investing program = mad scrilla
The CFA studies need updating; without a certain degree of maths education, the future of this designation is seriously in question --> calculus, probability and numerical methods should be included. The majority of quantitative methods can be picked up by individuals even without a maths background; unless you’re going into academia, it really is quite a subset of maths which is *currently* required. With all the higher computing power, quantitative strategies will increase. A portfolio manager who doesn’t understand certain nuances of derivatives will eventually be shown the door. I bet CFA Charterholder’s who avoided these instruments probably lost a substantial amount of clients due to bismal comparable returns pre mid 2008…other Charterholders who did, but didn’t understand the nuances of the above instruments probably got annihilated…
Ethics has definetely been useful…
^ HAHA!!! For many, it appears that the ethics has been useful to stay in the gray shaded area!!
Keys Wrote: ------------------------------------------------------- > The CFA studies need updating; without a certain > degree of maths education, the future of this > designation is seriously in question --> calculus, > probability and numerical methods should be > included. The majority of quantitative methods can > be picked up by individuals even without a maths > background; unless you’re going into academia, it > really is quite a subset of maths which is > *currently* required. > > With all the higher computing power, quantitative > strategies will increase. A portfolio manager who > doesn’t understand certain nuances of derivatives > will eventually be shown the door. > > I bet CFA Charterholder’s who avoided these > instruments probably lost a substantial amount of > clients due to bismal comparable returns pre mid > 2008…other Charterholders who did, but didn’t > understand the nuances of the above instruments > probably got annihilated… No
^ ?
disagree with Keys. If you are a quant shop, sure you need more math capabilities. But there are tons of shops that are not quant driven, dont follow trends, dont do managed futures, etc…i think the math education provided in undergrad, along with the curriculum, is sufficient for many strategies out there. In addition, if you are a quant/math person, why bother with the CFA? All that valuation, FRA crap must be worthless…
to answer the OP question: I dont know that I necessarily have profited from things in the curriculum, but I think it has made me a better investment analyst person. Whether that means understanding why we are holding PAC bonds, why we are whatever duration we are, how economic issues may impact investments/FX…I find myself understanding more and thinking at a higher level than I did before. Some of that is experience, some I definitely think is due to the studies.
tvPM Wrote: ------------------------------------------------------- > to answer the OP question: > I dont know that I necessarily have profited from > things in the curriculum, but I think it has made > me a better investment analyst person. Whether > that means understanding why we are holding PAC > bonds, why we are whatever duration we are, how > economic issues may impact investments/FX…I find > myself understanding more and thinking at a higher > level than I did before. Some of that is > experience, some I definitely think is due to the > studies. exactly
i can look ANY chart and tell you exactly when you should have bought and sold to maximize your profit.
ConvertArb Wrote: ------------------------------------------------------- > i can look ANY chart and tell you exactly when you > should have bought and sold to maximize your > profit. And I can make a chart to say anything you want to say, just lemme tweak the timeframe, scale, my own trendlines, kaboom S&P is going to 8000…kaboom oil is going to $1…
CFA studies probably help you avoid more disastrous mistakes than they do help you identify awesome investments. There is definitely value in that, but it is harder to point to good examples of that value. I agree with the poster who says CFA studies enabled one to think at a higher level than before.
tvPM Wrote: ------------------------------------------------------- > disagree with Keys. > > If you are a quant shop, sure you need more math > capabilities. But there are tons of shops that are > not quant driven, dont follow trends, dont do > managed futures, etc…i think the math education > provided in undergrad, along with the curriculum, > is sufficient for many strategies out there. > > In addition, if you are a quant/math person, why > bother with the CFA? All that valuation, FRA crap > must be worthless… A factor of the current crisis is (generally speaking here): -> MBA sales/traders and Execs (MBA/CFA folks) who are trained in classical finance and cannot understand higher level quantitative methods. -> physics/maths PhDs who do not understand fundamental analysis and analyzing stocks like gas dispersing through water… I’m referring to the union of these skills! We need to speak at least 50%-70% of a common language! and then let room for specialization. Everyone needs to make themselves future proof; CFA Institute should make an effort to do this or the business charterholder will quickly end up in retail brokering when the engineer takes their seat! If you are a hedge fund, you aim to create the highest return for your clients…I have not noticed any other consistent returns other than those generated by top notch quant funds or value firms that take enough stake in the company to actually affect management.
^ the last statement assumes they are not totally leveraged to the t*ts
agree on some items, a union of the two if best, but then again having knowledge in every aspect of everything is best. CFAI provides a good (in my opinion) platform for learning a lot about a lot of subjects. Yes, if you are going to work in managed futures you need more specialization. If you are going to work as a value fund you need more specialization. But the breadth of the program shows that you can learn, have basic (or more than) knowledge of a variety of topics and are in better position than those without it (generalization). I dont think it is their role to provide the deepest understanding of every topic, its the persons role to seek that out thru experience and education. I don’t see engineers putting everyone else last in line, I just dont, maybe I am wrong. Some quant funds have done well, others who saw models break down during periods of sharp reversals and other issues crashed hard. CFA isnt the end all, although many candidates do not believe it, but it makes you better rather than worse and thats what I am after.
Great post and insightful responses. I don’t work in PM, but would be interested to hear others thoughts on this. Whether you agree / disagree on the quant emphasis for the future, etc. The new CQF (?) seems to be trying to bridge the gap between quant / traditional finance that Keys mentions, but my understanding from quant folks is that the cert. is a joke to true quants (Ph.Ds). I’m sure glad I have my accounting designation to fall back on if CFA doesn’t work out and quants take over the world!
The thing the CFA program gives you is confidence. Warren Buffett and many other successful investors are happy to say “I don’t understand this,” or “this is too hard for me.” If you passed your CFA tests you should feel comfortable saying that, too. I bet that no quant now, or in the future, will be as successful as Warren Buffett is as an investor. I say this because quants limit themselves. The same tools they used to manage risk on the downside are the same ones they use to sell on the upside. The very nature of their practice ignores valuation.