Hello! I am late 30’s, physician, L1 candidate for Dec 14. I work 50-60 hrs/wk, make mid 6 fig’s, and enjoy most aspects of my job. I want to pass my L1 b/c I just enjoy the material and want to learn how to value private companies; I don’t necessarily want a job in finance. In many respects, CFA material is way cooler material than, say, histology or some other boring-ology. I am married with kids.
I am genuinely jealous and simultaneously have deep respect for all you CFA charterholders and upper level candidates. You are truly financial wizards. This material is tough!
Should’ve done this CFA when I was younger with a fresh brain, but med school, residency, boards-certification got in the way. However, I don’t think I could’ve done i-banking or jr analyst working 100 hrs either. So for the most part I am happy with my decision to become a physician - it was a decision that had a high-probability of a decent lifestyle, but certainly not like an extravagant PE, PM or hedge fund owner or i-banker lifestyle.
A private company I want to value, comprised only of physicians as major assets and their support personnel (plus telephones, etc), how does one depreciate/amortize the physician assets - if at all? Over how many yrs and what other GAAP/IFRS idiosyncracies are involved? They don’t even own stethoscopes.
Now to finish SS9 (while on-call in the hospital while everyone is out on a Saturday night). I’ve only done Corporate Finance and SS9 since mid-April. One thing I wonder about is that there are buttons on my HP12c that can do the calculations automagically and get the correct answer, but I wonder if it is better to work out the calculations manually to arrive at the answer? (this is my first test since college that I’m allowed a calculator!).
I haven’t gotten to that part yet, but I’m guessing that valuing the company’s common shares would involve DCF, cap ratio, or comparing earnings multiples to a similar company?
I know, I know, I’ve got a long way to go before I understand this finance stuff. I will get there slowly.
Funny, the website I made whilst in residency, Decisionking.com, uses a weighted average technique which I note is like WACC and a lot of other weighted averages here in this L1 material.
Enough procrastination. Thanks for reading this far. And congrats again to all you charted and upper level folk.
In general terms, there are three ways to value an asset: 1) multiple of revenues 2) price per unit (like $/sq ft) 3) cash flow. I’d imagine a doctor’s office would be more under #3, but really have no idea.
Read valuing a business by shannon pratt then find/buy some articles on valuing physician practices. A lot of the value in a physican office is allocated to the personal goodwill of the doctors, we’re actually valuing a few right now where I work but too lazy to get into it.
CFA shouldn’t be too challenging for you; I had many pre-med semesters that I thought were significantly harder than any of the CFA levels.
To me CFA is ultra challenging. I’m old, brain isn’t as fresh, and material is difficult.
lol yeah ObamaCare…that could potentially be a motivator for me I suppose if things become worse. Medicine is difficult work with crazy long hours, no doubt. Worst part is seeing good people suffer day in, day out. It wears on you; it makes you think about yours and your family’s own mortality every day. The long yrs of training and the hours - wouldn’t do it again for any reason nor any amount of money. Unsure if this means that I should, or should not, have chosen medicine as a career. I do get a sense of fulfillment when I know I’m helping someone who is hurting, but that may not be enough with long hours, tough cases, legal BS, and… ObamaCare. I do know I’m pretty damn good at what I do, and I like doing it…b/c I’m good at it (if that makes any sense).
But I have always been fascinated with the markets b/c the data are always changing minute by minute or they’re is some new news event - whereas white blood cell counts are usually abormal if > 10k, and this never varies much. I have developed some pretty good stock screens with decent Sharpe’s based on relative strength, std dev, correlation, income/revenues, dividends, payout ratios, debt, etc. I’ve backtested, out-of-sample tested, and forward tested the screens with good results. I’d like to improve on all this with CFA knowledge. So I misspoke (mistyped) earlier: I’d like to learn to value public companies using CFA material for stocks that pass my screens and learn to value a private company’s future earnings potential and what its common stock may be worth all within the context of the prevailing macroeconomic trends. I want to be able to assess better the managers of my managed accounts, question better the private equity deals that I run into and oversee the portfolio better myself. One day, I will have to oversee the family trust and my mother’s portfolio which is 10x mine. I can honestly think of no better way than by being a “Chartered Financial Analyst Charterholder”.
Honestly, though it probably won’t be possible for me. I am only able to study now since my wife and kids are abroad for 2.5 months and then less when they get back. Since wife/kids won’t be going abroad for as long next year, they’ll be less studying time avail. Of course, if I pass in Dec, I wouldn’t take L2 until 2016…
Thanks a bunch for the link to the Physician Practice Valuation book. I’ll see if I can get my hands on this.
Only a few more hours of call to go…
Anyone else concerned with stock mkt cap / GDP ratio and Shiller PE?
anyone is welcome to learn, why not? everyone is involved in personal finances like a “financial analyst”, just like everyone is involved in consumer “consumer analyst”
i’ve seen MD’s working in PE and hedge funds before, so it does happen. they didn’t have the CFA charter though, so obbiously if you get hired into one of places, it won’t be because you’re expected to be a finance wizard
primary care docs are getting screwed the most these days, you must specialize or its basically not worth it (med school, malp insurance etc) like $110k and falling
obamacare has worsened the tiered classes of healthcare. more hospitals/docs are refusing medicare/medicaid now (where the govt says I’m going to pay X and you’ll take it), and “narrow” networks that obamacare created which comes with the age old strategy where businsses hope that by taking lower pay, you get more business. (I wonder how long it takes before we start hearing about long lines and poor wait times)
that’s why on CNN you always hear about some poor cancer patient losing her doc after switching to obamacare. her “new” plan “saves the system” money, because they cut her doc choices way down to a small group of people
Funny, I always envisioned doing something similar to what you’re doing when I was in college- building up a medical skillset and taking it to investments.
Get Damodaran’s Valuation book - it’s encyclopedic, and goes inot great depth. If you’re specificly looking at valuing a firm, it’d be far more on point than the CFA curriculum.
Phallus size is completely relevant in this discussion b/c:
The discussion included the question of whether a career in medicine or a career in finance via CFA would have resulted in increased happiness.
Phallus size is always relevant.
Cmon CFA’s, you of all people should know that the deferred income due to the 8-10 yrs of post grad training (half of which you are earning zero; the other half 40k/yr) to become a physician results in a pretty low IRR? If you include total school loans (which thank goodness was not applicable in my situation, and I don’t think school loans were included in the study), the results are abyssmal - and I certainly would not have done medicine then. In fact, one study ranked it as such: CRNAs (nurse anesthetist), MBA, JD, MD in decreasing IRR. The commentor who mentioned primary care salaries is the most true statement I’ve read in this thread.
But I guess if you do what you enjoy, then you’ll be alright.
I did get the Damodarian text thank you, but I’m finding that I appreciate the comprehensiveness of the CFA material more. Again, I wish I attempted the CFA levels earlier in my life. It is probably not just for knowledge; rather I’d argue that it is an incredible feat and as such, a badge of honor. Like my mild cauliflower ear from jiujitsu.
I’m going to study now that I’m done with work and a nap. You CFAs and Level III passers, you enjoy your day for us. It is a pretty day outside - too pretty to be studying. Quality health and life is short from my point of view.