i doubt anyone is under the illusion that anyone or anything can influence the curve after 5p on June 7. the goose is cooked, people.
rohufish - I commute on my bicycle (not motorbike) sometimes. Keeps me healthy even if I suck at it now.
I hate to flog a dead horse, but… Saying cash and carry arbitrage is irrelevant for a PM is rather like saying IRP or put/call parity is irrelevant to a PM. If so, where do you draw the line? One could say “I am an equity manager, why do I have to know about duration/convexity?” … I think CFAI - with 175,000 people taking their tests in one weekend - should aspire that we all know all these things. The alternative for the critics is more focused learning; either a more narrow curriculum or private study.
It’s actually not like saying that at all.
Well, I have not given this much thought, but my initial reaction was (remains for now) that you are drawing slightly arbitrary lines across the curriculum. I thought the IRP / Put-call comparison was valid because those are no-arbitrage theories which do not directly influence a stock-picker’s decisions. My duration-convexity statement is more of stretch, but I think that was my point, who decides what counts? If you don’t like what CFAI have chosen, then you may study something else. Anyway, aren’t we all supposed to be getting more sophisticated and isn’t the use of futures among PMs more prevalent?
JoeyDVivre Wrote: ------------------------------------------------------- > rohufish - I commute on my bicycle (not motorbike) > sometimes. Keeps me healthy even if I suck at it > now. joey, i’m quite the green lifestyle guy myself, so i very much agree with your choice mode of transport. plus the health benefits as you point out…although i have blind faith in my wife’s healthy cooking as a substitute for exercise right now - at least until the next LDL/trigs test.
Etienne Wrote: ------------------------------------------------------- > Well, I have not given this much thought, but my > initial reaction was (remains for now) that you > are drawing slightly arbitrary lines across the > curriculum. I thought the IRP / Put-call > comparison was valid because those are > no-arbitrage theories which do not directly > influence a stock-picker’s decisions. My > duration-convexity statement is more of stretch, > but I think that was my point, who decides what > counts? If you don’t like what CFAI have chosen, > then you may study something else. > > Anyway, aren’t we all supposed to be getting more > sophisticated and isn’t the use of futures among > PMs more prevalent? IMO any futures/options other than covered calls are not appropriate in the vast majority of clients accounts. i do agree with your theory that a quality PM should know of concepts they don’t have to use (or shouldn’t use). i just don’t think cash and carry would be at the top of that list. i’m not sure this “argument” is accomplishing anything though. 
There are no lines to be drawn. Arbitrage strategies are irrelevant to managers who do not arbitrage. If I interviewed a long/short equity manager who started talking about put-call parity, interest rate parity, duration/convexity, cash and carry arbitrage, etc. as part of his strategy when I’m supposedly paying him to make money picking stocks based on fundamental analysis and thematic outlooks I would get up and walk out the door.
Wasn’t the question about reverse cash-and-carry arbitrage of copper, something that I don’t even think is possible? We currently have spot copper at 8250 and 3-month copper at 8040. A Google search on Copper lease rate turns up all kinds of stuff but nothing relevant to this. I know about Gold, platinum, palladium, silver lease rates, but not copper. And according to these prices, the copper lease rate would need to be around the lease rate for platinum.
farley013 Wrote: ------------------------------------------------------- > There are no lines to be drawn. Arbitrage > strategies are irrelevant to managers who do not > arbitrage. If I interviewed a long/short equity > manager who started talking about put-call parity, > interest rate parity, duration/convexity, cash and > carry arbitrage, etc. as part of his strategy when > I’m supposedly paying him to make money picking > stocks based on fundamental analysis and thematic > outlooks I would get up and walk out the door. Probably I have not grasped the context of your view or misinterpreted it. #1 You acknowledge the obvious, which is that a fund of funds manager may need to look at arb strategies and some PMs manage such funds. So why is it not relevant? Off the top of my head - To pick specific holes, w.r.t. your hypothetical long/short manager: #2 IRP is relevant to international investing #2 Duration is relevant to understanding the risk around a company’s pension fund #3 Futures prices tell you something about expected spot prices, which might interest your long/short manager if he is looking at a commodity business. Are you being serious? That is a serious question, by the way, and not purely intended to irritate.
You are getting a little carried away with the amount of technical knowledge you assume that a manager would need to evaluate #1, 2, and 3. When equity managers evaluate commodity businesses they do not buy or sell stocks based on what their expectations of spot prices are, they invest based on how they think the company will perform given price level x, y, or z. Managers do not buy and sell on an incremental basis based on arbitrage relationships unless you are a CTA or a quant fund. Again, if a managers gets that bogged down in irrelevant details they are taking time away from more important issues like analyzing companies and managing portfolios.
completely agree with etienne and ahahaha. Half the morning exam was on IPS or easy behavioral stuff. By all accounts the PM section was fairly easy. That’s 75% of the exam. If you got an 80% on those parts of the exam and a 20% on the rest of the morning session, you got a 65% overall and you passed. No reason to complain. Heck, if all you did was get through Schweser book 1 and half of Schweser book 2, that would have covered about 40% of the exam, mostly in the AM session. Fill in “C” for the entire rest of the PM session, and that’s another 10% or so. So basically if all you did was know Schweser book 1 and institutional IPS, and you randomly bubbled in answers in the PM and made zero attempt to answer AM questions right, you would have gotten a 50%. What do you think the minimum passing score is? How much higher is it than that? Maybe MPS is a 60%? Every multiple choice question you know (except ethics which I already counted) basically raises your score by three quarters of a percentage point. So what did you need to know to get a 60% on this exam??? – Schweser book 1 content. – Institutional IPS – Any 13 other multiple choice questions – how to randomly bubble choices on the rest of the PM test – how to entertain yourself while everybody else is doing the second half of the AM session (optional)
farley013 Wrote: ------------------------------------------------------- > You are getting a little carried away with the > amount of technical knowledge you assume that a > manager would need to evaluate #1, 2, and 3. When > equity managers evaluate commodity businesses they > do not buy or sell stocks based on what their > expectations of spot prices are, they invest based > on how they think the company will perform given > price level x, y, or z. Managers do not buy and > sell on an incremental basis based on arbitrage > relationships unless you are a CTA or a quant > fund. Again, if a managers gets that bogged down > in irrelevant details they are taking time away > from more important issues like analyzing > companies and managing portfolios. I agree with most of the above. Was just flagging that the lines are fuzzier than I thought was implied. After my staunch defence of the curriculum, I hope I pass. Otherwise, I am switching allegiances in August and &*^? CFAI, they don’t know $%£! about anything… Anyway, my attention turns to France - Italy for the evening. By necessity, I will also be keeping a very close eye on Netherlands - Romania, and hoping the Dutch don’t throw the game.
see you in the quarter finals etienne
newsmaker Wrote: ------------------------------------------------------- > completely agree with etienne and ahahaha. > > Half the morning exam was on IPS or easy > behavioral stuff. By all accounts the PM section > was fairly easy. That’s 75% of the exam. > > If you got an 80% on those parts of the exam and a > 20% on the rest of the morning session, you got a > 65% overall and you passed. > > No reason to complain. > > Heck, if all you did was get through Schweser book > 1 and half of Schweser book 2, that would have > covered about 40% of the exam, mostly in the AM > session. Fill in “C” for the entire rest of the > PM session, and that’s another 10% or so. So > basically if all you did was know Schweser book 1 > and institutional IPS, and you randomly bubbled in > answers in the PM and made zero attempt to answer > AM questions right, you would have gotten a 50%. > > What do you think the minimum passing score is? > How much higher is it than that? Maybe MPS is a > 60%? Every multiple choice question you know > (except ethics which I already counted) basically > raises your score by three quarters of a > percentage point. > > So what did you need to know to get a 60% on this > exam??? > – Schweser book 1 content. > – Institutional IPS > – Any 13 other multiple choice questions > – how to randomly bubble choices on the rest of > the PM test > – how to entertain yourself while everybody else > is doing the second half of the AM session > (optional) Posts like this is exactly the reason why I say that CFAI is not doing a great job distinguishing prepared candidates vs. non-prepared candidates. Apparently, according to newsaker, we can pass this even if someone didn’t prepare well enough for this test. THIS IS THE REASON WHY THE TEST NEEDS TO BE MORE SCIENTIFICALLY DEVISED TO PREVENT JOKERS LIKE THIS FROM PASSING THE TEST. My point once again is: Make the test cover wider breadth of topic areas with deep scope. And stop messing with incoherent questions with tangential topics where everyone is going to guess on it anyway. According to newsmaker, ill prepared candidates with half the mandatory of knowledge base can pass the test. We need to fail these people. The only way to do that is to devise a better test.
yup, flunk newsmaker, dang it…this is almost against the code and standards…peddling mediocrity so brazenly
Lol…
> Anyway, my attention turns to France - Italy for > the evening. By necessity, I will also be keeping > a very close eye on Netherlands - Romania, and > hoping the Dutch don’t throw the game. We don’t throw games, our substitutes are good enough to kick ass. Now let’s see if we need to hurt Russia or Sweden this Saturday… I’m feeling pretty confident either way!
The only thing I would worry about now if I was a Holland fan is that things have gone too well…
I guess it wouldn’t have mattered even if the Dutch had thrown the game. The French team sure looked pretty pathetic this time out.