First Post

I decided to fire up a blog in order to share my experiences and thoughts while preparing for Level I of the CFA exam which I'll be taking December 1, 2012.  Considering the financial and time commitment involved with taking the CFA I think this should be a worthwhile endeavor.

Note to those who don't procrastinate - signing up earlier saves you money.

Sunk cost?

As of this point I have minimal knowledge/experience of the CFA other than basic information gleaned from public sites, great forums like wallstreetoasis.com.  For the as of yet uninformed the CFA takes a LOT of work to pass, and the pass rate is quite low: 38% for Level I, increasing to 42% for Level II and 52% for Level III, the final level of the test.  Presumably the pass rate goes up as candidates are weeded out, and I guess those that really want all three are a rarer breed (I'm not sure how many people 'stop' after passing Level I or II).  CFA Institute reckons that the average successful candidate spends an average of 300 hours passing each of the three levels.  The test is December 1, just before my birthday.  That means I've basically got 2/3 of September and all of October and November to make a roughly 275-325 hour plan, prep for the exam, and then hit the pub (pass or fail, I'm gonna need a good strong pint of London Pride after this).

My Background

I studied finance/accounting at a state school with a good undergrad business program and managed a cumulative 3.7, which was a high 3.8 until senior slide syndrome set in.  I took the GMAT shortly thereafter and managed a 730 (96th%ile), which is solid but by no means genius level.  I would consider myself a good (but not great) test taker, and my bigger strength is actually in words/critical reasoning, not numbers (GMAT breakdown was V 42/95th%ile, Q 48/84th%ile).  This can supposedly be helpful in the Ethics section of the CFA.

After undergrad I took a job as an analyst with a boutique investment bank and advised on restructuring and bankruptcies for a few years.  After that, I attended grad school in public policy at the London School of Economics, from where I recently graduated.  During that time I interned for a hedge fund investing in distressed situations.  I'm currently still on the job hunt (tough for Americans to land jobs in London these days) so in the meantime I am living with my girlfriend in Europe (Italy) and frankly have a good chunk of free time on my hands until my EU work permit situation settles.

All told, I figure I am generally smart enough to pass Level I, and now is a probably a good time to do it.

Why CFA?

In reality (at least, in my version of reality), I'm taking the CFA because:

1. I find finance interesting and I like the idea of actually being certified in some way for my profession
2. I want to at least know the material that all these other financial analysts have been studying - it's a way to understand what common knowledge base many analysts share, and potentially understand how some other analysts might think about a situation or come up with new ways on how to evaluate situations
3. It doesn't hurt to have passed level I for investment management jobs/interviews (though it's no silver bullet)
4. I've got some free time and I want to be constructive with it - one can only really watch so many episodes of Mythbusters and Sopranos

I don't expect the CFA to teach me how to be an investor - for that I think one should really turn to the teachings of actual investors (I love Klarman, Buffett and Marks).  But I do expect to learn an interesting thing here or there that makes me think and perhaps challenges some of my existing views on investing and finance.  I'm sure people have lots of views on whether the CFA is 'worth it' - in my particular case, I have decided it is (at least Level I).

Anyway, that's probably enough for the first post - looks like my materials are ready for download :)  I welcome any comments or questions and I'll try to respond in a timely fashion.

Buona sera