Reading 12 clearly says: The Folly of Forecasting: Ignore All Economists, Strategists, and Analysts Reading 23 then starts teaching how to Forecast! What on earth!!! I learn to forecast from CFA; then become one of those Economists, Strategists and Analysts. Then guess what?! CFA tells the world; Ignore that guy! He’s one of those liars… Kinda wierd. Invariably, CFA is a path to irrelevance to the world. The sad part? THE INSTITUTE KNOWS IT! OK. I think this curriculum is getting the better part of me…
Isn’t that great?!!! You spend 2 and half year to learn the material, pass exams, now CFAI tell you that none of what you have learn matters. I felt the same way when I read this last year. LOL!!!
I think CFAI is afraid to commit to Reading 12’s way of thinking, so they’re playing it both ways.
they are basically saying we’re all a bunch of monkeys, but some of us monkeys will be smarter and have more common sense than the others. Sometimes knowing that you are limited in forecasting can make you adopt a strategy that is ‘healthier’ for your clients. And overconfidence is the sin of all of us
It sounds like it is just stressing the importance of maintaining a line of thought independent from that of the industry
ws, does that mean you didn’t pass? I am just wondering.
I would say there are all kinds of things in the world you can forecast, many of which are quite useful to your investment planning. For example, I can make a nice model predicting auto sales from oil prices and GDP growth. A better analyst can probably do better. That means I can do a decent job of figuring out how much macro risk is involved in automobile company securities and how well they might integrate with my ownership of treasury debt and oil wells.
Joe-- what’s a “decent” job? How has your model performed recently?
jeks Wrote: ------------------------------------------------------- > ws, does that mean you didn’t pass? I am just > wondering. No, I got my CFA charter already. It was just funny when I read that chapter during my study.
I wouldn’t read too much into it. Statistics is just that - statistics. There is nothing precise about it
There are a lot of contradictions in the material… I love it how first we have to get GDP correct - then after that we have to get the Sales level for an industry correct - then after that we have to estimate depreciation and interest charges in relation to sales - and then we can find a good industry — then we have to do individual security analysis “but wait - the 5th blade on the Mach-12 gives you an even closer shave, while the 6th blade stabilizes the remaining hair follicle the 7th blade takes off your first layer of skin…”