Conan Barbarian, CFA

Conan! What is best in life?

To crush your enemies,
See them driven before you,
And hear the lamentations of their women.

Wrong! Lumi, what is best in life?

To crush your fellow candidates,
See them repeating exam levels below yours,
And hear the lamentations of their spouses.

That is good, that is good.

…And of course even better if it’s on the open steppe, with the falcons at your wrist, and the wind in your hair…

It’s been a while so I thought I should check in. Got about 15 hours under my belt in preparation for Level III. It’s almost exclusively time spent with the Schweser materials and not the official CFA Institute guides. The fool who persisted in his folly (trying to pass relying solely on the CFAI materials) has become wise.

This time around I anted up for the Schweser Full Meal Deal, as it were. I’ve got online video instruction, online practice banks of myriad questions, and at some point Schweser will finish their summarizing, condensing, and abbreviating mojo on the CFAI Level III 2011 volumes and finally mail out our printed study guides and practice tests.

The Schweser video instruction is especially helpful. The instructors so far have been university professors who are CFAs in addition to PhDs. I like their honesty about which sections they like and which they find dry, and also their occasional humor.

“You’ll have a different teacher for the next chapter and video. He’s smarter than me, but I’m better looking so it all balances out…”

One instructor tackles the question of which of the CFA levels is the hardest? He gives his opinion, as well as some good advice. To paraphrase…

It’s a tough call. Level 3 is probably easier than Level 2, but harder than Level 1. The thing you want to make sure you do is put in enough time to pass so that you don’t have to see my face next year. If you’ve made it to Level III, you’ve proven that you’re smart and can study. Your biggest risk is putting in a lot of study time for Level III, but not quite enough to pass. Don’t let that happen to you.

I’m sure people who work in a large office with fellow CFAs find out a lot of helpful, intangible scuttlebutt regarding the exams. But I’m not privy to that in my day-to-day existence as a one-man show, freelancer from home. The videos are helpful here too as the instructors occasionally deviate from the material itself to give you historical statistics as to how many times a certain type of question has been asked in previous years, how testable a certain section is, or what to do if you realize near the end of an essay question that you misinterpreted the scenario that the vignette was laying out, and that all your previous paragraphs were based on wrong assumptions!

My study strategy for Level III is going to be a repeat of what allowed me to successfully pass Level II on my second attempt. It goes like this.

(1) Use Schweser Qbank to build a 60-question practice test (spanning all material).
(2) Take said test. I’ll get a good number of the questions wrong in the process.
(3) At the end of the test, identify the area where I performed the worst.
(4) Go to Schweser study guides and review that material and re-work all sample problems. If I still feel fuzzy, work CFAI study guide problems too.
(5) Go back to step 1.

Once we get to about 3-4 weeks before the actual exam, the strategy changes slightly. Instead of working the short Qbank practice tests, I switch to the printed volume of longer, more exam-like practice tests. Instead of expecting to miss a few problems, I expect to miss none. Instead of treating the area with the most missed questions as an indicator of where I should review, any missed question is a Big Deal, so I go back and read whatever necessary to make sure that it will never happen again on any similar question. This sometimes involves making some sort of chart for the tricky stuff (like the multinational / subsidiary accounting from Level II).

Now let me ask you, what camp will you be in, on the evening after the next exam? Will you be celebrating just the fact that it’s over, like most candidates, and cautiously optimistic that you might have passed, given the curve and how hard everyone else also thought the test was?

Or will you instead be celebrating your success, knowing that you knocked it out of the park – and have little use for the charity of any curve? Candidates like this do exist. Check twitter for #cfa on the evening after the next exam. While most test-takers will simply be blowing off steam, you’ll come across the rare Conan or Conette who is, instead, toasting certain victory.

It’s inspiring, honorable, and definitely what is best in life.

14 thoughts on “Conan Barbarian, CFA”

  1. Ha! Unfortunately I’m averaging about 15 minutes per day so at this rate I’ll log only about 60 hours before test day. Now the Schweser boxes are starting to arrive. Time to ramp things up… 🙂

  2. Greetings
    If we use that equation and plug in the next two years (2007 and 2008), we get $3.54 and $3.82 respectively. So Excel predicts earnings next year to only grow by 0.5% (calculated from next year’s expected $3.54 divided by last year’s actual $3.52).

    Can you please explain the next 2 years and how do you get $3.54 and $3.82



  3. Hi Christo,

    I assume you’re commenting on this post. Not quite sure what you’re asking though b/c you seem to understand how to use the equation.

    If the question is in why the earnings growth is so small (0.5%) it’s because we’re using least squares linear regression to find a best fit straight line to what is really an exponentially growing curve. Therefore some of our points appear below the curve and some above. The most recent points were above the curve, so linear regression wouldn’t expect this curve upward to continue – therefore predicted future EPSs are at modest growth rates.

    Not sure I explained it well but hope that answers your question – write back if not.
    – Lumi

  4. Regarding materials, I stick to CFAI books. Worked better for me:
    Level 1 / 2008: use CFAI books only – pass
    Level 2 / 2009: use Schweser – FAIL
    level 2 / 2010: CFAI books only – pass

    CFAI books are excellent material and I just don’t see how it can be substituted for summarized notes. I admit, I’m detail oriented.

    Good luck, it’s nice you’re posting about your experience and great to see I’m not the only EE/software guy that is trying to attempt this…


  5. Do you really think the L3 Schweser notes are helpful? I feel like the main instructor is just reading off the slides and not teaching anything. I thought the L2 Schweser notes were really helpful (with Andrew Holmes), but I think I might need to get a new set of lectures for L3. Any suggestions?

  6. Here’s the way I did it. I bought all of the CFAI (when I took it, it was the AIMR) reading materials and the Schweser “Key Concept Notes” for each level (this was back in the early- to mid-1990’s & it looks like the current equivalent might be the “SchweserNotes” package). The “Key Concept Notes” were basically printed outlines of the AIMR readings with a very brief summary sentence for each point and lists of important equations. I read all of the readings in the AIMR materials and took notes by hand in the Schweser books, expanding on the included summaries with any additional notes I thought were useful for complete understanding of each topic. I scheduled my study so as to complete this in-depth study about a week before the exam. The final week before the exam, I used my “enhanced” Schweser notes to review all of the study topics. This worked well for me. I passed each level when I did it this way.

  7. Chris – sounds like we both needed the same thing to pass Level II, a year of CFAI and a year of Schweser. We just did it in different order. 🙂 I’m relying on Schweser for about 90% of my studying for Level III. We’ll see how it goes…

    Matt – Thanks for writing. In a lot of the videos indeed the instructor just seems to be going through what’s in the Schweser notes. Probably the reason I find them helpful is not so much that they offer new material but that (a) they often make side comments about what has appeared on prior exams (b) repetition is the key to mastery, so even if it’s the same material it doesn’t hurt me to get it once through reading and a second time through watching and (c) variety is the spice of life, so I’m inclined to log more hours preparing if I can do so via a variety of tools (question bank, schweser notes, videos) instead of just slugging my way through the CFAI books in sequential order.

    A CFA – thanks for the tips and congrats on the passes. Always good to have a pro give his two cents. There’s some part of my brain that has never liked writing in pretty new books. It’s ridiculous and I should get over it.

  8. Hi Lumi, what would u recommend for CFA L1 …. schweser or Cfa curriculum. I had read Chris’s comments….please share your view.


  9. Good to read your blog. pretty much interesting stuff to read.

    Actually I just started taking Live Lectures from Schweser authorized training center. Do you suggest to take the Schweser Video as well. I thought of studying schweser books + CFAI books and Schweser pro questions. But i feel i need more insight purely because i am not from Investment background and level 3 looks for Investment policy, portfolio in detail. any thoughts on this. cheers and happy reading.


  10. Abhishek – I just used the CFA Institute curriculum for Level 1 and passed on the first try. From what I understand this is not uncommon, though you may need to call in reinforcements for the later levels as I have. On caveat for Level 1 is that with an engineering background most of the quantitative stuff on Level 1 was a breeze, but probably wouldn’t be for someone with a business background.

    Ram – As someone mentioned above, if you’re tight on money I’m not sure I’d call the Schweser videos 100% necessary. The do sort of mostly read what’s in the Schweser notes. I opted out on the Schweser videos for Level 2 and passed (after failing the first time using only CFA Institute materials). The bottom line for me is my wife is getting sick of me being in the program and wanted me to basically order everything Schweser offered to minimize the probability of having to repeat Level 3. I don’t find the videos necessary, but useful.

  11. I think CFA exams were much easier in the past. I did mine in 2000, 01 and 02. Level 3 pass rate in 2002 was 58%, which was the worst in the history back then. I would expect the rate to be even lower now.

    My deepest sympathy to you guys. The exam has to be harder now, otherwise there will be too many people with CFAs.

    Level 3 would be easy if you are working as a fund manager or those with experience in investment banking. Otherwise, the trick is to write study notes on to small cards, carry them around and read them while you’re watching some dumb cricket match or stupid football played by Chelsea or Manchester United.

  12. Antics – thanks for the tips! The material does certainly change over time. I recently met a guy who got his CFA the year I was born. He stopped me in the middle of my tirade against CAPM to ask me what the letters stood for. 🙂

    Anirudh – sorry! Just busy, busy. But posted a new one a couple minutes ago.

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