Motivation for the CFA

It's that time of the year again. The curriculum arrived months ago, and after getting through Ethics and Quantitative Methods it was promptly forgotten, but now Financial Reporting and Analysis needs to be cracked and I need to re-find my CFA motivation.

The Big Picture
First I remind myself why I am taking this certification. Matched with my MSc Finance these three letters should allow me to side step the MBA in the future. After transitioning from candidate to member, career doors should swing open, and salaries should double. I should be able to consider myself an expert in my trade, and wield financial analysis like lawyers or doctors wield subpoenas and scalpels.

Big picture thinking only gets you so far, especially when it's so intangible. If passing my level II exam were to give me a 1997 Porsche 993 GT2, then hey, print the poster and I'm motivated! But when it's going to further career goals I'm already hacking away at with academic credentials it gets a little harder. Add on top the fact that I have 4 years to pass the last two exams because I still need the work experience, and working the 7-12 shift after schoolwork is not appealing.

But it's still important. Most people in this industry are perfectionist, workaholic, status freaks, and failure is no option. While I like to think this only partially describes the finance side of me, lately this side has bullied all the other me's into submission - so let's feed the beast. Let's pass the hardest of the 3 tests in a year where school stretches through June, and getting the grade is already stealing time away from the dinner time internet break. If nothing else, the challenge itself should motivate!

Tools for the Weary
One of the fun things about Finance is the visual presentation of data. Throw stock prices into a graph and a plain column of numbers tells a story of hard times and good times, surprises, impending doom or unrestrained growth; these are the stories we will tell our kids, picture books full of MACD trends and bollinger bands. Something I discovered while studying for lvl I, was that the same thing that I enjoyed learning could in fact help me learn it!

Pop open a new excel sheet and start tracking your hours. With some in-cell if statements you can make tables populate how much time you've spent on each section, and how much time you have left to your ### hour goal. The most important graph however is the hour tracking graph. By plotting date on the x-axis and hours studied on the y-axis you can visually see how your performance is trending. Be careful to use a bar chart, a line graph gives you the impression you are studying between periods. In fact run a 14 day MA chart below it, and you can see where your work tapers off. Basically the whole goal is to keep the graph trending up, piling more and more hours in each week as the exam gets closer. Make yourself look like a 1998 tech company; for me coaxing this graph upwards gave me more of a reason for "one more hour" than anything else I was doing.

Testing
Beyond some soul soothing excel playtime, the biggest thing I took away from level 1 was how much testing early helped. I don't have the time to start studying 2 months before the exam and devote major time daily, so I need to start really early. Because of this my ethics reading in September will suffer some major retention depreciation over the winter. By doing some tests along the way, and then doing nothing-but the month before, you are forced to keep things fresh, and you get feedback on where you failed to learn the first time. The CFA questions do an okay job at this, but the Stalla questions (or Schweiser I presume) poke at the content with enough of a different approach that you will quickly realize what was memorized and what was learned. And then in the last month, surround yourself with others writing the test. Me and a buddy would study all day on the weekend and then throw the hardest questions we had encountered at each other. It made it competitive which always helps with motivation, and provided an element of fear on a regular basis which helped us burn the oil in the week ahead.  

Will add more through the winter, for now Reading 22 needs its due attention.

How to make your 4th Year in a Finance Undergrad Count

So you've spent 3 years in your BComm and you've just started to get into the exciting stuff. You've cruised through your foundation accounting courses, and finally gotten through the marketing, ops man, and info tech courses that round out your BComm requirements. Now you get to finally get to the meat, advanced investments classes, fixed income, derivatives. Having just graduated, here's what I think makes the most powerful 4th year BComm if you want to move into a i-banking role, or back office investment role.

Lets start at the end of your 3rd year. Hopefully you've been very involved with finance and investment clubs so far, and have taken - and aced - every quant pre-req you could get your hands on. Also (unlike myself) hopefully you have interned at a firm and made a connection that will push your resume forward come September when Analyst recruiting starts. Either way at the end of your third year you need to strongly settle on your goals. What job do you actually want? Can you get it with a BCom education? Do you have a connection that will vouch for you come September - don't be fooled by those online applications, if you're shooting high enough they are merely a facade; all the hiring happens through personal recommendations. So line up your contacts, grab that internship and work your but off.

Even if you think you can get this job with an undergrad I'd hedge your bets. Take kaplans GMAT prep course in the evenings after-work during the summer and plan to write that ungodly demoralizing test sometime in September. Obviously if you've decided you want to be hard-core quant back office you're going to need a masters in financial engineering or financial economics and so you should be looking at either the GMAT or the GRE.

Come August start making your push for that September Analyst hire (they hire in September for a July start the following year). Reach out to your network and try applying to 5-10 of the top firms that hold your job of choice. Enroll in the CFA level one for a June test date and put it on your resume. If you've got the connections and/or the grades you'll get picked up, if not you're preparing for the +1 lap.

So assuming things didn't pan out, pour your heart into GMAT prep and try to grab a 700+ score. Then apply to an MSc program that will give you that added push (see previous post). Don't forget the extracurricular's; for me my GMAT was nothing to brag about but experience I had outside of class opened doors to the right MSc program. Finance specific stuff is a plus, especially research based. Get on a project with a prof, or your schools pension fund, and make it as quant heavy as possible. You want to be talking about modeling in your interview, not how you proof read some technical writing. Case competitions are good to hone public speaking, and they are usually a welcome break from the grind as they often involve travel.

If you can, line yourself up for 4th year Economics courses in modeling - Econometrics classes. These classes are often qualifying courses for Masters degrees in Economics and they are tough but extremely valuable. There is really only a couple of 'good' times to learn about heteroskedasticity, autocorrolation, GARSH models, unit roots parameters, and ridge regressions, and the leisurely pace of an undergrad class is one of them. Obviously knock yourself out with every finance course offered, and if you can stomach it, take intermediate accounting as well.

As the year trickles on apply for the November cycle of grad school apps and start plugging time into the CFA level 1. It will generally parallel your 4th year classes nicely but it takes a lot of time and to fail would unravel an important part of your whole brand package.

Looking like your hot shit to a firm is really all about momentum. Because many students - especially from mid teir schools - don't land in the September of their 4th year it's really easy to lose momentum when you know you're going to have a whole year between undergrad education and your eventual hire. If you can pack that time with as much finance as possible you'll A) commit mild social suicide amongst your non finance friends and B) look really hungry for a job, the hungrier the better in an employers eyes generally.