CFA: worth the time and money?

Discussion in 'Professional Trading' started by elstontrader, Apr 15, 2010.

  1. I'm an undergraduate studying Economics and am considering pursuing a CFA in order to work in the financial sector as trader or financial analyst?
    Is there any CFA's our there willing to share input?
    Pro's and Cons?
    Master's in Finance vs CFA?

    BTW: I'm open to anybody with experience in the financial sector, not just CFA holders.
  2. I think in consideration of the fact that there are thousands of CFA applications, it does not have the same exclusivity as before.

    To make the answer simple, the CFA is very specific and can help with certain jobs. But overall, i don't think people give a shit outside of equity research and portfolio management.

    It may help on interviews bc it shows dedication, hardwork and the ability for one to have a capacity to understand hard concepts. But when a person has achieved a given level of experience, it does not give you any edge. It might help for entry level participants who need any angle u can get.
  3. Allow me to share my opinion with you. My perspective is one of a person who has worked both on the buy and sell side as a trader for 10 years now, and is currently studying for the level 2 portion of the CFA.

    Within "The Business", a CFA designation is taken quite seriously. If you're serious about your career, few things show it better than attaining a CFA designation.

    To answer another posters comments:

    1.)The CFA is "specific", if by specific you mean "specific to the field of finance." You'll get a good explanation for nearly ever facet of high finance through the course of your study. Certainly you will not learn more than somebody who has been working in a specific field, but you'll gain a much better understanding of the interlocked world of finance.

    2.)The only people who don't "give a sh *t" about the CFA are people who don't know what it means and are not in charge of hiring you. Anybody worth their salt on a trading desk - unless they have some sort of chip on their shoulder - is at a minimum going to look at your CFA designation and acknowledge that you have put a fair amount of time in to learn The Business. It is not an unknown designation on major U.S. trading desks by any means.

    3.)"It does not give you edge once you've reached a certain level." I have no idea where this individual has come up with these statements, but it is simply untrue. I have been a trader now for close to 10 years. I currently develop algorithms and trade those algos myself. I have a very broad understanding of finance, based both on my experience and my general understanding garnered over the course of my career. That being said, studying for the CFA has opened my eyes up to my own field like never before. Think of a good pilot who goes through an entire, multi-year course on the design, construction and maintenance of his aircraft. Sure, he doesn't need to know how the actuators on his flaps actually work - but does that hurt?

    To address your concerns specifically:

    -You can study for the CFA, and take the exams, while you are in college. HOWEVER, you cannot get the CFA charter until you've actually graduated AND have 4 years of relevant work experience.

    -Of all the degrees (Ms. Finance, MBA, CFA), MS in finance is definitely the most useless. I've never seen more disinterest in MFA's than when I was out recruiting for the bulge bracket firm I worked for. I didn't know a single MFA holder in my class, or on any of the desks I worked for. The same is *not true* for the MBA and CFA designations.

    -The CFA takes a LOT of time. It's not like getting an MBA, which is like going back to college (except this time, college is more like a country club). You cannot breeze your way through the CFA like you can an need to learn the materials, and that takes time. Learning does not come on a strict schedule, with a nice easy grading curve at the end that almost guarantees a passing grade. If you cannot dedicate at least 3 months (minimum) study for each test, then don't even bother. That is one reason the pass rates are so low...lots of people sign up, far fewer put in the time required to at least pass (that doesn't include "mastering" the material).

    If you're not in the business, then it's really not a good idea for you to take the CFA. In 3 years you might find you hate finance (I hated finance until I was in the business for 3 years). It will be a waste of time for you in almost any other field of business outside of finance should you take it and not use it.

    If you have any other questions, feel free to PM me.
  4. Yes, very valuable. Learn correct spelling, grammar, and punctuation first.
  5. Thanks for all the input...
  6. Can I ask what fields you are in?
    In many ways our responses don't contradict. When I saiid in my response that cfa is useful for specific jobs, I get the impression that you are in the field where it is simply valued. I have been a trader for 8 years which is not vastly different from your 10. I want to ask, how many fund managers do you know have CFA's? I have met many across many fields and in reality the only places that really value the CFA from my own experience is are places that need portfolio management and/or equity research. The cfa itself covers a variety of topics in the financial field and therefore I encourage anyone to study. At end of the day, for example, a global macro fund will have very little use for CFA candidate. A place like DE Shaw needs something more quant based. A firm like Susquehanna would like a CFA candidate. Before the financial crisis, equity research at places at ML and GS valuued it. A bond fund would look at your your CFA designation, but a commodities firm would give buttfuck all about CFA.

    to add more to it, the industry has changed a bit post financial crisis. For years the MBA became minimum requirement, But in reality books teach you theory but don't teach you how to make money. The theory can go a long way, but nowadays bc economic conditions changed the banks are a bit skeptical of hiring MBA's who have big egos when they can train a business undergraduate with the same capacity to learn. I thinkk CFA overall is much better than MBA bc it is cheaper, self study and less CFA's around on those reasons alone.

    So very specifically, if you want to get into equity research and/or equity, bond portfolio management the employers may have it as requirement. Some top tier firm will have it as a minimum requirement just bc they want to raise the bar of the applicants - this might be the case at equity trading firms.

    At end of day, CFA does very little to help one trade. I am curious as to what and how you trade. And reality is, a small percentage of head traders, portfolio managers and fund managers have the CFA. I have seen some places that specifically do not want guys with CFA or research analyst bc they were looking for guys who were pure traders.

    If you want to get a CFA and then apply for jobs where you looke for the CFA as minimum requirement, you will find very quickly that you will limit job search very quickly. As great as it is, overall I don't think It provides any edge bc people hire for personality and train for skills. And in some jobs, you caan be too smart for your own good.

    Every CFA candidate will tell you its great. But non cfa candidates don't give a shit. And there are way more non CFA designation holders in this world than there CFA's.

    How many of these guys are CFA holders?

    Goerge soros
    Dwight anderson
    Bruce kovner
    Paul tudor jones
    Julian robertson
    Hugh hendry
    Bill Gross
    Louis Bacon

    Me myself, without mentioning my name. I am a director for a 2 billion dollar commodities hegde fund. And I could care less about CfA bc it does not help at all in our business. I am happy with a guy who can display thorough undderstanding of valuation and applicable sense.

    There is a big section in level 1 that makes you study black scholes model. But you will never be able to trade options. There is a section on futures, but you will still need a separate lesson on commodities cost of carry. There is a section on bond duration, but you will still need a separate lesson on how to trade bonds. So the cfa is worthless to me bc I will still need to train my candidate from scratch for that job but I will have to pay him 20,000 dollars more just bc he has a CFA. YEAH RIGHT!!!!!
  7. ballsofgold.
    if you need someone sharp to work in brazil, im here for you!

    my view is that you need the CFA to get a foot in the door if you dont already have connections or an mba from a top 10 school.
  8. Well if you can trade cocoa and sugar then let me know. But this is the point I was trying to emphasize to the thread starter. It can help with interviews especially if you don't have connections. It shows you are smart and hard working.

    But in the real world, I find this still to be order of priority in terms of landing jobs:

    1.) Experience
    2.) Connections - father or friend or referral
    3.) Cfa and mba together
    4.) Mba
    5.) Cfa alone

    Now of the candidate is going for hardcore equity research and pf management then cfa can go a long ass way. Anything outside of these fields is a toss up. I agree overall, the cfa curriculum is awesome in temr of personal development and helping one to develop overall understanding of financial markets. But you def need experience to apply these theories. So inconsideration of how the real world works - CHOOSE YOUR TIME WISELY.

    Me, I abandoned the cfa. I already had my foot in the door. I do better financially than a lot of people. I trade my own money on the side and have done pretty decent trading futures and option vol. The cfa helped, but I cud have read many different books. I just read in general. The book that helped me the most to make money as a discretaionary traser in makong money is technical analysis books and ralph natneberg books out of many books I have read. The general successful candidiate studies his craft in general and the CFA has commoditized that the same way financial institutions commodtize education. The difference is that the CFA costs you a few thousand dollars.

    I have an bachelors from baruch college. Google this man, CHRIS PIA. He has made more money than we can all fathom and he has a bachelors degree from Baruch as well.
  9. CHRIS PIA,I did find him. He said dump the dollars; but I need the dollars to trade US stock. Yes, the US dollars sucks, but don't we all need the US dollars to trade/invest in US stocks?

  10. that is just a quote, dumping dollars can mean anything such as investing in hard assets to or sell dollar index to get negative exposure.

    Add this man to the list of successful managers who don't have a CFA.

    Patrick McMahon
    #10     May 23, 2010