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

[newwurldmn]

Hey thanks man I really appreciate this advice.
I guess when I fail this test this saturday....I will have to sign up again....and actually try to learn accounting to pass even though it is full fledged torture and I'd rather master TA.....cry.
Reality sucks =[ Welcome to corporate world, working up the ladder, by first passing CFA level one.

Coast through school; don't learn anything; and then you can't get the highly competitive sexy lucrative job.

Life's so unfair.

 

[TangoBravo]

Sad that a freshly minted Finance grad does not have basic skills needed to practice finance.

Try to avoid thinking in terms of 'accounting' and think of it as 'financial statement analysis'. The two are related, but inherently different skills.

If you like TA then you probably enjoy looking at trends, volatility, volume and price action, reversals etc. Once you learn to read the financials they can paint a picture of a company that is as pretty to look at as any chart. Let's leave aside for now the reliability of the numbers reported. That is a different thread.

Good luck with your CFA, it is a long and tough road. It probably will not help your trading but it will make you a lot tougher mentally just from the sheer effort involved. It will also boost your confidence and competency and raise your market value for certain buy/sell side jobs if you decide to pursue them.

 

[dealmaker]

So I got my bachelors in finance from a non target last May. Ended up getting a job at an investment advisory firm doing bitchwork and currently underpaid.

I signed up for the CFA level 1 last December mainly to get my foot in the door at a reputable investment firm and am set to take it in a few days....
I've been reading previous threads on ET how relevant CFA is for trading and I agree with most comments, its the "gold standard" in the industry but it really has no use in trading.

One major thing I realized while studying for CFA level one is that accoutning is 20% of the exam.....and I HATE ACCOUNTING. I always felt to be a good trader/investor, I should work on my fundamental analysis more.... For example if I was short Enron based on a technical pattern I saw, I want to understand the fundamentals as to see if there is an actual valid reason to hold the position. But then again....I just hate it, and don't want to learn the "rules" of accounting.

So basically my dilemma is... I hate the material the CFA has you learn ....I'd rather study TA and improving on trading. However CFA is still looked highly upon many of the positions(PM/analyst jobs) I want to land....As much as I want to land those types of jobs...I'd rather be trading independently.
I feel like to get there though....I should start off with analyst, then PM, then trader.

If I were to drop the CFA, what do I do to get a foot in the door? I heard CMT is a joke but I am very curious in getting it. For example Elliot wave is something I don't believe in atm, but need to fully understand it before I make a firm comment on it and for that CMT could be beneficial. My interest is TA/trading, but I also need to break in and start building up a bigger capital to trade comfortably. I have no idea how to get there though

If look at the major hedge funds over whelming majority of traders have CFA i.e. if you desire to trade at Hedge Fund level its a must...

 

[MrN]

Why do you think you are underpaid. What skills do you have that are worth something in the marketplace?

It is amusing that so many people love to "consider options" as if those options are actually open to them. For example, so many people like to say, "banking sucks, all those hours" as if they could get one of the competitive jobs such as a front office IB analyst at a bulge bracket firm. Or, "accounting sucks, but i want to work in finance". If that is yoru attitude the only job you will get in finance is as a greeter at Bank of America.

Not sure how someone with that unrealistic attitude plants to succeed in trading or anything else that is ultra-competitive.

Just adding, if CFA is too hard for you or a major barrier do to "accounting" to save you time - you are in the wrong field unless u want to be a pure salesperson. And there is nothing wrong with that .

 

[nomoremondays]

Professional investment roles are pretty much a arms race nowadays. Requirements like CFA's are just ways to cull the pool. If you want that job you have to suck it up unfortunately...

 

[textrader4]

Classic!!

+1

Some men put on a uniform, go off to war and come home without their limbs. This kid has to learn accounting. Sigh....

 

[heavenskrow]

Sad that a freshly minted Finance grad does not have basic skills needed to practice finance.

Try to avoid thinking in terms of 'accounting' and think of it as 'financial statement analysis'. The two are related, but inherently different skills.

If you like TA then you probably enjoy looking at trends, volatility, volume and price action, reversals etc. Once you learn to read the financials they can paint a picture of a company that is as pretty to look at as any chart. Let's leave aside for now the reliability of the numbers reported. That is a different thread.

Good luck with your CFA, it is a long and tough road. It probably will not help your trading but it will make you a lot tougher mentally just from the sheer effort involved. It will also boost your confidence and competency and raise your market value for certain buy/sell side jobs if you decide to pursue them.

That's exactly my main problem with the CFA. I am not learning jack to help me make more money in the markets. It's just a challenge...which I enjoy and that's about it, the challenge. Same as the challenge in beating the market.

Although I don't like fundamental analysis when it comes to trading, I feel like for "investing" it could help greatly. I guess I am just a little weary on how effective it is....For example let's say you do your fundamental analysis on a tech stock during the bubble...Your models say it's overvalued, yet prices continue to rise and rise and rise. You miss out on the 40% return you could have had with TA. Or even vice versa your models say it's severely undervalued and continues to crash and burn while believing in your model......

I mean sure I want to become a guy like Jim Chanos, digging in deep into the statements and shorting stocks like Enron. But as a TA/trader my role is to catch onto the smart money who has already done the work for me. Fully knowing I will not be as smart as Jim Chanos or the institutions that have 100+ analysts under their belt.

It's like if I don't believe in it....why the hell am I studying it. I mean yes I understand there is some things I can learn but I don't fully believe in it.

To sum it up, I want to have the same understanding as Ben Graham and Buffet, yet I dislike all these rules and stupid differences between IFRS & GAAP. I love hearing guys like Jim Chanos talking about shorting Enron, or people who were shorting subprime mortgages....did they all do FR&A to figure out what was going on???

All these analysts out on Wallstreet. They had "buy" ratings on Enron while it slowly drifted down. Then plop...goes into the sinkhole....Only a very select guys were able to see what was really going on....But did the analysts with CFA see through that???? Probably not, but the TA's could see the selling vs buying and join the smart money who has decided to dump and short.

 

[heavenskrow]

Why you want to work for a bank? The hours are terrible and the pay (compared to trading your own $) is not great (for entry level anyway). I know quite a few folks who started with small capital bases ($10K) and run that up to hundreds of thousands. There is risk of ruin of course but at least if you make it you make your own hours and won't have to sacrifice your weekends to make someone else rich.
If you know you can't trade through, then by all means get that CFA and go work those 70-80 hours a week

I want to work at a global macro hedge fund. I just want to learn what a real fund does and take that with me to my individual trading account.

 

[lesserfool]

Only a very select guys were able to see what was really going on....But did the analysts with CFA see through that???? Probably not, but the TA's could see the selling vs buying and join the smart money who has decided to dump and short.

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

 

[Brighton]

All these analysts out on Wallstreet. They had "buy" ratings on Enron while it slowly drifted down. Then plop...goes into the sinkhole....Only a very select guys were able to see what was really going on....But did the analysts with CFA see through that???? Probably not, but the TA's could see the selling vs buying and join the smart money who has decided to dump and short.

Here's something to remember about Enron and some of the dot com bombs - they may have carried BUY ratings from high profile analysts, but 1) Buffet or other Graham disciples never would have purchased them, and 2) some of the shenanigans (to put it nicely) that were commonplace at the time led to Sarbanes-Oxley, the end of Arthur Andersen and perhaps worst of all, the creation of "Business Insider" because Henry Blodgett, former stock pimp/professional liar, was banned from the securities industry and needed to make a living.

But if you kept your wits about you and had at least some understanding of accounting and financial reporting, it's unlikely you would have been caught holding the bag.

If you want some contemporary examples of dot com redux, consider Zynga, GroupOn and maybe Uber (at least at its current valuation).