Saturday, January 21, 2006

CFA prep.. thoughts

I started thinking about CFA after I got into MFE. My main concern was my lack of finance work exp, so I wanted an additional qualification on my resume that signaled my interest and aptitude for finance to future employers. But my main surprise from the CFA program was that it is also an excellent way to get started in understanding the basics of finance, accounting and economics. In a way, a crash course combining most MBA year 1 type courses.

Of course, one gripe most candidates who have to pay for it themselves have to face is: Is the cost worth it? After all, the books, exam fees, enrolment fees , prep materials, etc can run into a couple grand easily. Moreover, it is not an exam that can be passed with a month or two of studying (unless you have a very strong accounting and finance background).

I started looking seriously at the materials in August.. Some thoughts on my prep (remember that this is stuff that just worked for me..):
  • There is no subsitute for solid studying - I used only Schweser prep materials. For level 1, I think those are enough. Some people study from books and claim that its better. I am not sure, when you have limited time, its better to read from some notes. Also if you havent done already - sign up for the free tip of the week at schweser.com. I really liked the key SS concepts email I used to get every week.
  • Do all areas throughly. I left out a couple of areas - microecon, and some parts of quant (I dont like hypothesis testing too much.. its too boring).
  • Be on top of the game on accounting and investments (equity, debt and derivatives). These topics and ethics are the most important. My accounting was really bad - so I just did the good old technique of rote-memorizing key concepts. Believe me, it helped.
  • Speed is crucial. I think this is where I got some help. My engineering background has taught me to do calculations fairly quickly.
  • The actual test is tougher than what I found on Schweser sample exams. So it better to do a couple of exams from other sources.
  • Be a calculator wizard....use your calculator regularly during your studying.
  • I took the exam in December in SF. Be prepared for small things like parking, food, etc. Be mentally prepared for two long 3 hour sessions. It is mentally as well as physically demanding.
  • Ethics questions on the real test were tough.. the practice book and GIPS standards need to be studied very carefully.
  • The candidate readings are very important. Many questions came from the AIMR candidate readings.

I am glad I passed, mainly because when I started this journey, I didnt know too many engineers who had done this exam. In any way, I think it helped me understand some basic concepts. Now, I need to start thinking about Level 2.... The question is - Can I prepare for Level 2 while doing MFE course fulltime???

6 Comments:

Blogger aloke said...

congrats quantjock! how long did you spend prepping in total?

3:48 PM, January 21, 2006  
Blogger Quantjock said...

Aloke,

I didnt track time, but it wasnt too much. I think maybe 5-10 hours a week with some sort of asymptotic function in the last weeks (due to taking sample exams).

5:45 PM, January 21, 2006  
Blogger Gmat-Guru said...

Hi,

Congrats for passing the CFA level -1. I have one query. I am a software engineer with no previous finance background. Do you think it is possible for me to clear CFA in June' 06? I can at the max spend 10-15 hours per week for the preparation.

Thanks in advance

5:13 AM, January 23, 2006  
Blogger Quantjock said...

GMAT-guru,

I just saw your blog.. 790 GMAT man.. whew. CFA level 1 will be a breeze for you Mr. Genius!!

5:36 PM, January 23, 2006  
Blogger shane hp said...

hi iam a engineer who passsed out recently. istarted investing and discoverd that i hava flare for finance..

one of my friend said that this is better way to equip yourself..to find a carrer in finance..rather than doing an mba in finance what are ur comments on this?

5:15 AM, January 24, 2006  
Blogger Gmat-Guru said...

Thanks for the comment. If you have some CFA material soft copy, Please let me know "gmat.guru@yahoo.com".

I am planning to use the soft copy material to cover as much as possible during the office hours coz of time constraints.

I hope you are doing great in your MFE.

2:45 AM, January 25, 2006  

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