Advice for kid out of college....CFA or WHAT?

[heavenskrow]

I just went through the Level 2 curriculum, so let me add a couple of cents here. I would guess that the CFA could only help and not hurt. Part of Level 2 is about getting a clear picture of a company's balance sheet, dealing with off-balance-sheet financing and determining earnings quality. Why would you not want to have those tools in your toolbox?

There are no shortcuts in this game. It's ultra-competitive. If you can understand both fundamental and technical analysis, you will have an edge over those traders that only understand one. Have you heard the saying "in the short term the market is like a voting machine, but in the long term it is a weighing machine"? Why not trade those stocks where both the fundamentals and technicals are in your favor?

I am not a fundamental trader, but I can still think of two trades in the past few years that I might have done differently with the CFA behind me. One involved a company playing games with its rebate programs. Another involved understanding synthetic positions using options.

The CFA is hard, so don't feel ashamed if you have to take an exam again. I've met people on their fourth attempt at Level 1, and I most certainly will have to repeat Level 2. But there is more to the CFA than just the curriculum: things like self-study, discipline, and wherewithal are needed no matter what trading style you adopt.

Good luck with your decision.

-lf

thanks man. Well again this is one of the reasons why I want to get the CFA. As a trader that wants to run a global macro hedge fund one day/become a PM, I feel like fundamental analysis will be a great addition to my toolbox.

However I was talking with a CFA charterholder and he says that he didn't learn much that he can apply in the real world.
His quote,"
Again it depends on what type of “analyst”
Credit risk - not really covered in the CFA CBOK
Capital Adequacy - not covered
Interest rate - not really covered in the CBOK
Stock analysis - maybe but no real deepth in forecasting and management analysis beyond some fundmental formulas and B/S and I/S adjustments to move from GAAP to IFRS - not really hot sell side report items.
Portfolio manager - no real coverage of optimization tools
Corporate Financial Analyst - maybe but not enough accounting or Excel or Business Intelligence tools or analytics
Structured Instruments - not really covered in the CBOK
Personal Financial Advisor (not really an analyst role) - not covered anywhere near as much as the CFP
Economics - not really covered as maths would have to be pounded a lot more along with statistical forecasting
Financal Risk - VaR is mentioned some but not really covered that well
Derivatives Trader - not even close
Ethics - ok - I’ll give you ethcis"


It seems more like a certificate for a generalist. Although still the gold standard in this industry....I want to learn what guys like Jim Chanos or Kyle Bass are looking at.

 

[newwurldmn]

It seems more like a certificate for a generalist. Although still the gold standard in this industry....I want to learn what guys like Jim Chanos or Kyle Bass are looking at.

You are missing the point of taking the CFA.
The path to getting into a global macro fund as a junior trader/PM is pretty simple:
prove that you are intelligent, competitive, hard working, have a personality conducive to the specific firm, and show an interest in the subject.

The path to becoming a PM is pretty simple: give them confidence that you can make money.

You have many strikes against you: graduating from a non-target school (read: not as intelligent or competitive as someone who did) and who didn't learn their chosen subject matter (read: not as intelligent or hard working).

You should be loving taking the CFA because it allows you to prove that you can compete with those who did go to a target school, that you are competitive, and that you are hard working and you are constantly looking to improve yourself - even if it's not 100% inline with what you want to do.

It won't save your resume, but from what you have said, your current resume is extremely weak.

The fact that your thinking is so myopic will limit your career in finance, if it already hasn't elminated your chance to get into a top tier fund. There are very very few roles. At Kynikos, my bet is that there are 2 macro PM's and 2 juniors. There are literally thousands of people who have already demonstrated the above who are competing for maybe a few hundred jobs.

That's why people take the CFA. It's hard and it proves that you are competitive, intelligent, and hard working. No one will pretend that it made them more successful in their professions.

Anyhow, you will figure out what you want in life - just don't limit your options today, because careers are long and it's easy to get silo-ed or miss out on skills that can help you in later in life.

 

[sle]

What newwurldmn said! You current problems are

(a) Lack of industry experience or specialized education. Do not mistake punting stocks in your small account with the institutional game. Even with a proper finance education, majority of juniors joining take years to understand what's going on.
(b) A no-name school degree. Now, non-target schools with good name (e.g. École Polytechnique) would get you into a hedge fund too, but a second-tier school will not open doors. State University of Hawaii will not, you will get shoved behind Horewart and Snodfart graduates, even if you are as smart as they are.

CFA does a little to remedy both problems, though don't forget that to be a proper CFA charterholder you need 4 years of industry experience. If you are somewhat quantitative and computer-savvy, I'd suggest doing some volonteer research with some unit professor that is well regarded by the industry - he/she might recomend you, you might get your name on an academic paper or some other resume juice.

A word of caution - "high" finance is a pretty cold mistress. You pay volatility is very high, stress leves are insane and your career can end abruptly. Most people are burned out by mid-fortys, "it's a normal 30-year career crammed into a 15-year span". With CFA you will have the flexibility of switching to corporate finance and other avenues.

 

[heavenskrow]

hmmm well having to eat out of trash cans in high school....theres a reason why I had no motivation at the time.
Sure I could have still studied very hard and had a hard life, but my mind was on how will I get my next food....not study comfortably and possibly get a scholarship.

Even college....I chose the closest state school that I can commute to while living at home. Sure one might say, you could have taken out loans....you could have studied very hard to get a scholarship.....but nothing is guarenteed. Anyways enough with my B**tching..

Basically the last two guys are saying, you are f__cked in terms of getting into a good global macro fund based on current resume.
What things other than let's say a MBA at a top university, can I have a chance at getting in? Developing strategies/trading records for over X years??

 

[newwurldmn]

hmmm well having to eat out of trash cans in high school....theres a reason why I had no motivation at the time.
Sure I could have still studied very hard and had a hard life, but my mind was on how will I get my next food....not study comfortably and possibly get a scholarship.

Even college....I chose the closest state school that I can commute to while living at home. Sure one might say, you could have taken out loans....you could have studied very hard to get a scholarship.....but nothing is guarenteed. Anyways enough with my B**tching..

Basically the last two guys are saying, you are f__cked in terms of getting into a good global macro fund based on current resume.
What things other than let's say a MBA at a top university, can I have a chance at getting in? Developing strategies/trading records for over X years??

If your story were true you probably wouldn't be saying "welcome to corporate America" like some entitled millennial prick.

Normally those experiences build character. And one of my friends was the offspring of a welfare mom in the inner city. He graduated cum lauded with two varsity letters from an Ivy League. He's a credit trader. As an intern he was sending half his pay checks home (while the rest of us were boozing it up)

 

[sle]

Basically the last two guys are saying, you are f__cked in terms of getting into a good global macro fund based on current resume.
What things other than let's say a MBA at a top university, can I have a chance at getting in? Developing strategies/trading records for over X years??

(a) yes, you are f*cked at least for now, but it does not mean you are f*cked forever

(b) you can do one of the following
--- Top 10 MBA - best in terms of opening doors and getting the networking going, but very expensive. Can be done part-time.
--- MS in finance from a top schoo - lower cost, but lower bang per buck.
--- CFA, which will help you especially if you are looking to be more in AM game or, possibly, corporate finance. Really low cost and can be done part time
--- Do part-time volonteer academic research that could lead to good contacts or academic papers. No cost, can be done part time, but requires commitment
--- Date a daughter/son of a hedge fund manager. Cost varies, results can vary too.

(c) You have to realize that there is a million of "you" out there - every bank/HF employee is quietly dreaming of becoming a trader or a PM. The competition will be stiff. This said, I'd say (and any senior trader/PM will agree) that finding a smart and hard-working junior is very hard.

 

[heavenskrow]

(a) yes, you are f*cked at least for now, but it does not mean you are f*cked forever

(b) you can do one of the following
--- Top 10 MBA - best in terms of opening doors and getting the networking going, but very expensive. Can be done part-time.
--- MS in finance from a top schoo - lower cost, but lower bang per buck.
--- CFA, which will help you especially if you are looking to be more in AM game or, possibly, corporate finance. Really low cost and can be done part time
--- Do part-time volonteer academic research that could lead to good contacts or academic papers. No cost, can be done part time, but requires commitment
--- Date a daughter/son of a hedge fund manager. Cost varies, results can vary too.

(c) You have to realize that there is a million of "you" out there - every bank/HF employee is quietly dreaming of becoming a trader or a PM. The competition will be stiff. This said, I'd say (and any senior trader/PM will agree) that finding a smart and hard-working junior is very hard.

Reading back on my old posts to see the wisdom shared by others here.

"Date a daughter/son of a hedge fund manager. Cost varies, results can vary too." That will probably be my only option haha. Sad but true.

Anyways working at an investment advisory shop...realizing that they are selling VA's to clients while pretending to be their best friend raping commission fees out of them....I decided to leave that. I could have worked my way up but I just don't want anything to do with shady shit.

I did take the CFA level 1. Failed with a band of 9. I could have studied again and probably passed, but decided I was wasting my time learning something I did not want to be learning.
Same thing in college...I took finance to learn more about trading...but most of it was professors bashing TA, hyping random walk theory, and corporate finance...

Anyways I think there was a lot of wisdom shared by everyone here. CFA shows that you are smart and have the dedication to pursue that hard of a certification. I think it's great that there is such a valuable certification in finance, but it's not for me =]

 

[Maverick74]

Reading back on my old posts to see the wisdom shared by others here.

"Date a daughter/son of a hedge fund manager. Cost varies, results can vary too." That will probably be my only option haha. Sad but true.

Anyways working at an investment advisory shop...realizing that they are selling VA's to clients while pretending to be their best friend raping commission fees out of them....I decided to leave that. I could have worked my way up but I just don't want anything to do with shady shit.

I did take the CFA level 1. Failed with a band of 9. I could have studied again and probably passed, but decided I was wasting my time learning something I did not want to be learning.
Same thing in college...I took finance to learn more about trading...but most of it was professors bashing TA, hyping random walk theory, and corporate finance...

Anyways I think there was a lot of wisdom shared by everyone here. CFA shows that you are smart and have the dedication to pursue that hard of a certification. I think it's great that there is such a valuable certification in finance, but it's not for me =]

If that is what you got out of your finance class you didn't attend class much.

 

[OddTrader]

I did take the CFA level 1. Failed with a band of 9. I could have studied again and probably passed, but decided I was wasting my time learning something I did not want to be learning.

I am just wondering whether this CFA path would be most suitable to your talents, as many can get a pass the level 1 while studying their final year of university.

 

[heavenskrow]

If that is what you got out of your finance class you didn't attend class much.

I actually did, maybe I am just dumb but I did graduate with pretty good GPA.
Again nothing I learned was related to trading, so I didn't bother to retain anything.
Only learned enough to pass test.