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.

16 thoughts on “Delayed Launch?”

  1. I’m so much in trouble with the curriculum, i’m wondering why the hell i signed up in the first place. I’m not even through with a whole book yet and June seems like tomorrow. I’m sure you’ll do well though, thanks for ..well…sharing. Its still scary but i needed to know someone else with much more experience is stumped 😀

  2. Thanks for writing! It is a lot of material isn’t it? I’m going to be in a rush just to cover each page and sample problem of each chapter once before the exam. Can’t imagine that being enough preparation given that this is the first time I’ve seen most of this stuff.

    Just glad there’s no GPA for the program. 🙂


  3. Even though I have not signed up yet for my test, I am still reading your blog closely. Keep the blog going. From what my cousin is telling me, he just finished all 3 levels, you will never feel ready for any of the tests. He worked part-time and finished all 3 levels in the bare minimum amount of time (L1-Dec, L2-June, L3-June). After asking for some advice from him, he just told me to just keep studying and trekking on even if you feel like the books are piling up on you.

    After all that, my point is, keep going Lumilog!!!! Don’t give up and just keep reading and studying. Just might have to give up a few, MULTIPLE, nights out with friends but when you see the pass in the grade field, it’ll be all worth it!!! Good Luck!

  4. Thanks much for passing on the advice Yellowman, and for the words of encouragement! My wife and I are about to go out of town on a short vacation. She’s taking Nora Roberts novels. I’m taking Financial Statement Analysis. 🙂

    I can’t say all of this is too much of a sacrifice though. I’m really enjoying the material – just don’t feel like I’m retaining most of what I’m learning right now b/c it’s all so new.

    I certainly hope I can report a pass in the grade field in June. If not, I’m pretty confident I’ll be more than prepared if I end up having to take it again in December.

    Thanks for writing!

  5. Hey Lumilog,

    Hope you have a nice relaxing time on your vacation. Like the others, it’s nice to feel like I’m not the only one feeling so unprepared for June. But for me, I actually like the FSA parts. It kind of helps for me to think of it like … WWWBD …. what would warren buffet do … haha, cheesy yes, but it works for me if you understand the concept. It’s all really logical.

    Anyways, good luck! Oh, and thanks to Mick for all those invites to Doostang … you guys should get commissions!


  6. its great stuff they want us to learn isn’t it, sometimes i wonder that i may just get through with the multiple choice questions, but what if i have to analyze and write answers …ahh, a real fix then. I’m so awful at quant, but for the life of me i cannot sit still and read the theory at a stretch of 4 hours or whatever. Isnt the ethics part scary, they tell you everything you could alternatively do to get really rich, and then ask you NOT to do it 😀 …it makes you very wary, and i keep wondering if i’m going to commit some unheard of scam without even knowing what i did was wrong ! Now i better get back to Perfect competition….

  7. Is anyone revising, cracking the concepts and moving on, with a view to cramming the actual formula in the weeks prior to the exam? Tat’s what I’m doing, but just wondering if anyone else is?

  8. WWWBD – love it. 🙂 I’m pretty keen on the FSA stuff too, though I’ll definitely need at least another pass to remember all the rules.

    3 hours is the max I’ve ever put in for a single day – and it’s amazing how much you can get through in that time. Motivation is never my problem – just finding the free time.

    My approach so far has been to read the chapter and work all example problems and test problems at the end of each reading, taking care to understand the ones I’ve missed. So except for the occasional times when I find myself totally lost, I only hit each problem & each page 1 time.

    I’m hoping I’ll have time leftover to go back and work the problems at least a 2nd time before test day. No doubt I can be ready by December – but June will be a stretch!

    Thanks for the comments.

  9. Lumilog – I just discovered a prep course provider that does not charge untill after you pass the exam. I’ve used schweser study notes, stalla review course and mock exam and now i’m using sharp seminars. I recomend both stalla (helped me pass level I) and Sharp (switched due to schedule). I think the Mock Exam a few weeks before the real exam was the thing that put me over the top. It seems like the CFA waiver from allen resources would be ideal for your situation.


  10. Hey Lumilog-

    Loving your comment about how most candidates take one of two approaches – 1) memorization, or 2) understanding concepts. I think it was very tough for me to follow 2) even though one of the general partners at my firm told me that was really the key to it all. I think in the last few weeks of “crunchtime”, I stopped being as worried about memorization as just getting these concepts down and really knowing the ins and outs of the material…I

    ‘m happy to say that I passed Level I in December! Will not be taking Level II until next June though as the wife and are hoping to be first-time homebuyers but best of luck to you in June! I know you’ll do just fine…thanks for the continued insights on your study path…

  11. Eric – thanks. Took a quick peek and will definitely explore Allen Resources further. I like the way the payment is set up – reminds me of fee-only investment advising (keeping incentives aligned).

    Bob – thanks for the comments and congrats on passing! Even with 103 days left I feel enormously pressed for study time. Having a lot of fun learning so much but am afraid it’s all going in one brain cell and out the other.


  12. Lumilog-

    I definitely felt the same anxiety you are experiencing that there was no possible way that I could remember all of the material but, drilling through problems again, again and again seemed to serve its purpose for me [hopefully not too simplistic of a view?!?].

    One thing on practice exams: I did not do my first practice exam until about 4 weeks before the actual test. In retrospect, it would’ve been nice to do the first runthrough sooner than that to give myself time to absorb and work through problems more than I was able to leading up to the exam. I used the Schweser books and found them to be quite useful and eventually worked through problems only using these books….

    In an aside here, I really like what you said about needing to find a new trading strategy after learning about financial statement analysis and earnings management in particular. It does make stocks difficult to analyze now I would think when isolated using stock screens since fraud is something that is next to impossible to easily screen for; no problem with ETF’s in my mind though but I am not a day trader! As you said in your other post, at least it’s ‘anything but money market funds’ but who would’ve thunk that investment firms would even be concerned about mm funds with SIV’s and even agency paper exposure due to the subprime credit mess!


  13. Hi Bob – love your comment about “not being able to screen out fraud”. 🙂

    I haven’t done a practice exam yet – just the practice problems that are at the end of each reading. Many people seem to be recommending Schweser and I will probably bite the bullet and place an order with them eventually. Was going to do so a while back but got a little sticker shock at the price (though it’s definitely not cheap for me to have to keep taking the same exam over and over!).

    I chose index ETFs over index funds just because the commission is cheaper with my online trading service. Not a day trader either!

  14. hey,
    i could not find free lectures for FSA. its only eco, Stats & derivatives.
    i need help in FSA or i am screwed.

  15. Saurabh – it all used to be free but now it looks like only certain parts are. 🙁 All I can recommend is to keep working the problems at the ends of the FSA chapters. In the beginning you can’t see the forest for the trees and FSA/accounting seems to be a big collection of rules to memorize with no clear logic. Later on you start to see the big picture which makes memorizing the rules a little easier.

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