Delayed Launch?

For a chronological index of my path to the CFA, click here.

About 10 days back I finally finished up Economics (Volume II), took a hard look at the remaining 4 volumes, and wondered how in the world I could possibly be ready by test day (June 7).

So I did what thousands of Level One candidates before me have probably done. I wrote to the CFA Institute to ask if I could move my test date from June to December!

They quickly wrote back to let me know my options.

    Can you “move out” your test date – from June to December?
    No. You can however withdraw from the one you’re currently signed up for and register for the later one.
    Do I get some or all of my money back?
    Of course not. But Diermeier is getting some new shoes!
    So what’s in it for me?
    By withdrawing now, you are free to register for the December exam as soon as your form is processed (1-2 weeks). And as the Fee Schedule shows, the earlier you register, the less it costs. If you don’t withdraw, you have to wait until 60 days after the June exam before signing up.
    Do I have to buy the study guides again?!
    CFAI knows you’ve already got the 2008 curriculum. So regardless of whether you sign up for the December exam due to withdrawing from or failing June’s exam, they give you a US$50 credit to account for their not having to send you the study guides a second time.

More complete info regarding withdrawing can be found here.

Well-rounded Candidate, Early A.M.
Well-Rounded Candidate – Early A.M.

I haven’t decided yet what I’m going to do. Will probably give June a shot just for the practice – can’t imagine passing.

But a lot has happened in the past 10 days. I’m already about halfway through Financial Statement Analysis (Volume III) at page 355.

FSA has turned out to be much less dry than I expected. And it seems more applicable to day-to-day trading than Economics (which I still think is better suited for future business owners or Fed chairmen).

Apart from being more applicable, Volume III also has a fair dose of figures, tables, and optional sections that make the pages go by quickly. 🙂

I was expecting it to basically be a crash course in accounting. In part it is, but just when it starts to grow boring, they throw you a bone. Like taking a closer look at a set of example financial statements to see that even though a company is growing assets at a double-digit rate, equity is at a standstill (so liabilities are growing double-digit too).

I must give kudos to Jayanta Sen’s free CFA video lectures for giving me the right mindset for FSA. In one of his Accounting 101 videos he says there are two approaches to learning the material:

    (1) Memorize all the rules in an ad hoc fashion
    (2) Understand the basic concepts first, worry about the exact rules later
Well-rounded Candidate: Late P.M.
Well-Rounded Candidate – Late P.M.

It is so obvious in hindsight that (2) is the way to go.

But when you have your head down trying to cram for a test, like we all are, your brain tends to take the approach of “what do I need to memorize here for the exam”. That would be (1), definitely the hard way considering the quantity of rules – US and international.

There are grueling parts to FSA. The whole LIFO / FIFO conversion thing really slowed me to a crawl.

But it’s important to know how some of these parameters can calculate out to different values depending upon the accounting technique used. I’ve always plugged my parameter ranges into Yahoo Finance’s stock screener and accepted whatever it spits out pretty much at face value.

In conclusion, it’s very cool to begin to be able to decipher financial statements – especially looking up those of stocks you already own (favorite new diversion). I find it a lot like trying to read a newspaper in a foreign language that you’re learning. Some parts jump out and make perfect sense – others still a mystery until you’ve learned more.

Four months till test day! 😕

Update: I finally passed all the CFA exams and wrote an eBook about the program. If you’re interested, click here.