I’m currently studying for the Level 1 because I have an engineering background and want to get into the finance world. I’ve always been interested in investing, and I was wondering if anyone here have actually been successful at analyzing companies after acquiring their CFA certification?
Was your path to getting a CFA just to help with your career or was this also a reason for you to get a CFA (to get into investments)?
as a (good) engineer you will be fine.
“Did being a CFA holder make you successful at analyzing stocks and have you been successful?”
Of course.
Duh.
I certainly would say I have a much better idea of whats going on with my portfolio at any given time due to the program. Only through 2 levels but it certainly gives you the basics of running through a companies financials and getting an idea about the business and running the numbers.
Started investing my own cash a year ago and have done pretty well, how much of that is skill and how much is luck really? Who knows. The market has been doing well since I started so really you could have thrown darts and picked stocks and done decently.
I was pretty surprised when I realized the vast majority of CFAs don’t give a **** about investing. It’s just a career, pretend, shine shoes, comb hair, talk the talk, collect check. I talk to them about markets and real world stuff, and they stare blankly.
^ anyone who isn’t a major part of the investment decision making process is this way. as the cfa is increasingly becoming a requirement for wholesalers and other people person positions, cfas as a group are becoming less security focused. sad but true. hell there’s plenty of indexers on AF. how’s that for a lack of investing passion.
indexing =/= lack of investing passion
I subscribe to a little bit of both. Anybody else use core-satellite strategy?
What the hell does analyzing stocks successfully mean anyway?.. If you’re not better with accounting, FSA, and corporate finance after the program, color yourself stupid.
Beating the market, something like 0.003% of CFAs are able to do consistently.
lets say there are 150k Charterholders worldwide, so 0.003% is 4.5 people.
seems legit
Exactly, they suck that bad.
does anybody not use the core-satellite strategy?
Thinking up these fancy terms is what the CFAs are busy doing (“core-satellite” was previously known as “holding ETFs”).
core-satellite means, passive core, active satellites. in my case, my satellite (borrowings and cash) is massive compared to my core (retirement assets) but over time it makes sense that my core will become much larger.
^ Physics renders a more massive satellite orbiting a less massive core impossible.
I run a highly concentrated portfolio of top picks. My only passive investments are where I have restricted funds that need to be stuck in passive stuff.
I don’t try to buy losers. Indexers try to buy lots of losers. It’s still the better strategy for the average person though… but I’m not an average person. Also: a big piece of my “core” is in low equity market correlated business investments (not real estate, but some there too).
So, if I understand correctly, the only worthy pursuit for a charterholder is picking stocks and beating the market?
How about this… active management is a zero sum game, less the fees. By choosing to invest actively you are choosing to participate in a game with lower probability of success than low cost indexing. That’s just simple algebra.
Now, what is the value to society by being able to price future cash flows and determine a fair value on a company’s stock price? I’d say it’s important, as a society we need people to do this menial work. And they should get paid well for it…given that computers can do most of the grunt work, I’d say this job is worth a slightly above average pay grade for it’s benefit to society.
Morningstar tells me that there was roughly $13 Trillion in invested mutual fund assets at the end of 2015. $11T of that was in actively managed funds. The average equity management fee is well north of 1%. 1% on $11 Trillion is… a lot of freaking money. Way too much money is going to people who are adding no value to society and who are treating investing like a game, not like a rational allocation of capital.
Serving clients and advocating for a rational way to meet financial goals is not for those who are dispassionate about investing.
it was a joke clearly. i do the same as you. my core is forced savings that are forced to be in some sort of fund. so i passively index. i imagine i will passively allocate some of my unrestricted funds as they grow in size. i see a portfolio of 30 individual stocks as effectively indexing so i see almost all “active investors” as low cost indexers. i prefer big bets on 1-3 companies (my satellite) while keeping a basket of blue chips as my core. i’d imagine most people don’t have a satellite like my satellite and they shouldn’t.
CFA was a complete waste of time. Outside of Level 1 which taught me basic accounting concepts.