Excited by a delivery I received a few weeks ago whose packaging better resembled that of a fridge than what I would have expected of a curriculum for the CFA, I now find myself stunned by the realisation that weekends are out of stock until December if I wish to pass the CFA.
As I discussed in my CFA Level One study plan, I do not have a finance background short of a bit financial mathematics and general knowledge about particular areas. I hadn’t intended to be able to cruise through the CFA as everyone that I had spoken to had suggested that it was one of the most challenging courses out there. Having said this, I was not expecting the full extent of the enormity of information that I will need to take in before December in order to have a chance on the day.
For those out there who are considering having a go at passing level one of the CFA, consider this: 18 topics spread across mathematics, economics, accouting, financial statement analysis, fixed income securities, derivatives, portfolio management and corporate finance. You are allowed to bring a calculator and pens into the exam, but are not allowed notes or formula sheets or any other aids. You then have 6 hours to answer 240 questions spread across all these topics.
My most relevant initial reflections on my study so far include:
- I have decided that reading all the CFAI Curriculum (3000+ pages) that they sent in the Fridge packaging is simply not possible by December in addition to working 40 hours a week and staying sane. I have decided to use the Schewser course notes, video series and audio files as planned.
- The Schweser Video series that I got my hands on are particularly helpful and I am finding it makes the information much easier to take in if I watch the video, take notes about the concepts in the video at the same time and then read the Schweser course material following this.
- The Audio files that discuss each topic in a question / answer manner, whilst being mindnumbingly monotonous, are very helpful and are good to listen to on the way to work. Especially when combined with my iPhone.
- Ensuring that I think about at least one or two topics every day is important to ensure I committ recently learned information to long-term memory and to stay on top of things. My skiing trip to New Zealand today should make this interesting.
- The prereading that is required for Economics and Financial Statement Analysis (i.e accounting) is looking like it is actually going to be required. I was hoping this would not be the case but it does appear I will have to start at the bottom. This is going to be a challenge!
- The first two books which include Quantitative Methods, Economics and Ethics have so far been relatively straight forward short of my lack of a foundation in economics.
- In particular, Ethics will be very straightforward I believe (helped by my legal background I think).
- Quantitative methods will just be like throwing in first year university advanced maths and stats degree and will be tough but definately doable. I am not yet far enough into Economics to make a judgment.
I plan to continue giving updates about my progress as I continue into to CFA information vault so please sign up to my RSS feed (www.jamescox.com.au/feed). Here is an updates CFA level one exam – 4 days before it.
If anyone else in Sydney is doing the CFA exam in December 2008, get in touch with me if you so wish
My compilation of short articles has been a bit short of articles lately as a result of me beginning a new job and study for the CFA (Chartered Financial Anaylst) level one exam in December.
Firstly, I am working for a stock market research publication known as Intelligent Investor which applies value investing principles to analysis of Australian listed companies. For those out there that invest in Australian equities, either contact me or fill out the form below and I will organise a free trial of the service for you. It is regularly around $600 a year so there is some value here for the readers of my blog.
Now onto my plan for passing the CFA level one exam without a finance background. The following is a somewhat ordered plan of what I will do to pass the CFA level one exam (I found analyst forum very useful here and particularly thank saurya_s for his guidance):
- Overview - Watch the Schweser videos for each of the course modules with the course notes open on my second monitor at the same time. This will take approximately 48 hours by my estimation but will give me a solid introductory overview to what the whole course is about. I must ensure to cross reference the CFA learning outcome statements during this process. I need to have this done by the end of August 2008.
- Order of Study - Whilst I am most looking forward to a few key areas, I have been advised that following the order of Quantitative methods, Economics and then Financial Statement Analysis at first will be most beneficial as the course is cumulative. During my study, I plan to read each section and then devote at least a few hours afterwards to revise whatever I have just learned.
- Get familiar with financial Calculator – I have chosen to use either the Texas Instruments BA II plus or the BA II plus pro. Getting familiar with all the new functions will be important early.
- Identify and Read Schweser Notes - Identify strong and weak areas and begin reading and annotating the Schweser course notes (books 1-5). During this process, if i get stuck, I will refer to the CFAI texts if necessary or ask someone for help. I am lucky enough to work at a place with a bunch of very intelligent analysts so this should be fine. I estimate this part to take approximately 4 minutes per page as an average or somewhere around 80 hours.
- Listen – As odd as it may be, I plan to listen to audio tapes explaining the material on my way to work. Again, I will listen to the Schweser material that I have got my hands on.
- Complete Concept Checkers – Either whilst I am annotating the notes when I read through them or after completing my first read through, I will attack the concept checkers at the end fo each module in each book. I expect this to take approximately an hour per module or 16 hours. I will try to ensure my understanding on the concepts is spot on at this point but also be conscious of getting my time per question down to less than 60-70 seconds as time will be a factor in the exam.
- Reinforcement and Flashcards- If time permits, I will read through the Schweser CFA level one course notes one more time making reference to my annotations. I will then make flashcards to help me remember key parts of the course.
- Read Schweser Secret Sauce – This is a condensed 220 page version of the course. I will read through this once I am fairly comfortable with it all and use it to reinforce key concepts. I expect this to take 7-10 hours.
- Exam practice - practice exams, end of each book questions, Schweser question bank, and Schweser books 6 and 7 that are full of questions. The aim is to do so under time and to get above 80% in each of the more difficult Schweser practice exams. After I have done each question, I will think about what was tested and focus on the concept it is getting at.
- Exam strategy - Identify strong areas and weak areas. I will not spend time on questions intended to throw me in the exam, it is well reported that this sends many candidates to their demise. Do the Volume 6 and 7 exams after you have finished all material. You should aim to get 75%. Schweser tests are difficult but if you crack 75% you will surely get at least that much in the real exam which is far more conceptual. By working with maths, you will know how things are affected.
- Things to remember about the CFA Level one exam - I need to get 70% in the real exam to guarantee a pass.The real exam is less numerical and more conceptual than the practice questions. Constantly revising and keeping tons of key messages in my mind will be crucial.
I may add to this plan over the coming months and write blogs as to my progress. It is August 10 now, I have 120 odd days left.
Updates: CFA Blog Level One reflections Part One. Another great link for CFA study advice. Contact me below if you need help locating any of the materials I mentioned above.