Quant: Schweser v. CFAI

I just wanted to mention a quick, yet fundamental, difference between the Schweser and CFA Curriculum in regards to Quant reading 5. I haven’t read through Schweser yet, so I will likely comment on this more when I do.  However, I did review some concepts in Schweser today for additional understanding, and one thing I am pleased about is Schwesers focus on teaching the keystrokes.  Instead of teaching you how to calculate the formula, schweser focuses on teaching you how to obtain the same answer using the functions in the calculator.  I personally believe you need a sound foundation in the theory and the process of the formula, instead of relying all on a piece of technology, but that is a personal preference.  Come exam time I will be using the calculator, but I will also be able to decipher what the calculator is doing and why.

This makes it even more relevant that I go through the material with both sources, as now I can really build layers of understanding on each LOS.

- Steve

Dear Quant: Please jump off a tall bridge and plumet to your untimely demise…..thanks.

Disclaimer:  I had originally intended for this to be a one post deal, but the content was just way to large, so I intend to split it up into three posts: (1) this one, (2) Quant: Schweser v. CFAI (3) Quant: SS2 – Reading 5 notes

I take back whatever I said about quant in the past. Reading 5 was, simply, ridiculous.  I spent time figuring out the process to each example on all 41 pages of reading 5 in the CFA Curriculum. This was the original plan and I knew it would extend my overall projected time.   I think it really helped with my retention and understanding of the material, however it took me approximately 15 hours over two days to complete.  15 hours to cover 41 pages is by any measure, absolutely ridiculous, redundant and most importantly, extremely frustrating.  I finished the reading around 4 PM today, at which point I was supposed to move on to reading 6, but frankly, I was much to frustrated and discouraged to move on tonight.  It’s not that I found any of the content in this chapter relatively complex (although some minor details did give me some trouble at times), but its just the depth of the material and content inside this reading was immense.  Some of these issues stemmed from simple misunderstandings with basic mathematical principles and rules, while others required me to change variables and settings on my BA II Plus.

I am aware that we will not have to do these combersome questions on the exam, but I wanted to learn it for a number of reasons:

1. To increase my knowledge base
2. To prepare for more advanced quant I will be studying for FRM in November
3. To prepare for more advanced quant in CFA-L2

Quant in finance is a fundamental component of any valuation and analysis, and I knew I had a long road ahead of me before I truly mastered quant the way I want to.  However, truly mastering the minute details associated with each formula was a daunting task.  This chapter is supposed to be a fundamental part of the course, as well as the CAIA and CFP designations I will be taking in the near future.  So justifying the time is not the problem.  However, I am also under time constraints and my study schedule has now be severely altered.  I am also not sure if this chapter is a representative of the amount of time I need to put into every reading to gain this level of mastery or not.  These questions are causing a little bit of anxiousness and nervousness when looking at the overall study plan.  What makes me more nervous is the relative amount of content I have to cover.  I assume this is a natural feeling, and it will dissipate once I get through Quant, Economics & FSA.  However, at this pace quant would take 18 days for the curriculum material alone, which is not acceptable.  Its the not knowing that drives me nuts, so I hope I can get a feeling of my overall progress in this section soon.

For me, the ultimate frustration came in that, every single example I went through I had some sort of problem with. Whether it was my calculator rounding up, or entering in the wrong numbers, misreading the question, recalling the purpose of the formula or how to calculate a portion of a larger formula. I am usually a fairly patient guy, but when every single problem presents some sort of issue, I begin to get a tad bit irritated.  I am sure other people have similar issues, this is just me venting my own personal opinions.  Ultimately I feel that at the end of this painful process, I will be much better off.  Being done reading 5 I am fairly confident that I can score a 60% and above without having any revision or looking at the schweser notes.  This may not sound very good to some of you, but a 60% for me in quant is a significant improvement.  With my process (described in other posts) and thorough review, I think this painful approach will pay off. Not only do I review the extend content, but I review the narrowed down content (schweser notes & secret sauce), memory retention (cue cards) and practice (end of chapter problems, calculating examples, qbank).  This process for quant will be cumbersome and difficult to make it through, but I think I can really nail the concepts to my goal of 80%.  I also must say that these frustrating rants may continue while I am in quant, if these circumstances continue as well.

- Steve

Use of Notebooks

I thought i’d give a quick mention to the notebook system I have set up.  It seems to work for me so far, especially in quant.

Formula Notebook

• Every formula in the book I write in the notebook with a short description and a legend.

Review Notebook

• I list any topics that I want to come back and review because it is (a) hard or (b) I am not 100% confident
• I wont use this as a conclusive review guide, but I will use it to start off my review process by drilling down on the weakest areas and moving on from there

Rough Work

• I use this to record rough work, including every example inside the text(s) that I work out manually.

Notepad

• Here I keep a running list of things to do that pop into my head when studying. It can be about CFA or anything else.  I try to clean this list up every 1 – 3 days.
• I also keep a list here about topics on the blog, notes on a post and so on….

Duo-tang of CBOK

• To give myself and overview of the macro based concepts of the course, and an idea of how i’m progressing

Schweser Library Videos (Free)

I just wanted to make a quick note on the three free videos that come with you Schweser subscription:

• CFA Level 1 Exam Overview
• Code & Standards Overview
• Level 1 GIPS

I can’t speak to the rest of Schweser videos, but these were just terrible.  I didn’t even make it half way through the Code & Standards and its not because it was boring.  It was terribly organized, slow and generally uninformative.  Maybe other people found them useful, but I didn’t think it was worth my time even watching.

- Steve

Done Ethics

So I am officially done ethics, here is a list of what I completed:

• CFA Curriculum SS1
• Schweser Study Notes SS1
• Schweser Secret Sauce SS1
• All chapter quizzes and knowledge checks in both books
• 20 questions from QBANK
• ALL the Ethics Stalla Cue-Cards
• AnalystForums (posts on ethics – about 10 minutes worth)

I decided not to do additional QBANK questions for Ethics, since I scored above 80% on three separate tests (CFAC, Schweser, QBANK).  I will save a majority of those questions for the review process or maybe a refresher exam after Quant.  The schweser test was surprisingly difficult, but I appreciated that.  You could tell the material was geared towards the new exam format, as there was only 3 answers to choose from and there was a lot of “least likely”, “most likely” style questions.  I still squeaked by at 80%.  I got 10 questions wrong, which shows me I am indeed around a 70% on ethics.  I am now moving on to Quant for the next week or so.  I will have a better idea of the time I will dedicate to it after today.

- Steve

CFA Cirriculum v. Schweser Notes v. Secret Sauce

I just thought this was an interesting way to view the fundamental difference between these three resources, content.  A lot can be said about content and its usefulness, which is why I think that it is prudent to start with the CFA then go through the schweser and follow up with the secret sauce.  The content keeps getting more narrow and more specific and really drills down. Below is an example of the ethics (ss1) sections of the course:

1. CFA Curriculum: 166 Pages
2. Schweser Notes: 63 Pages
3. Secret Sauce: 6 Pages

Ethics Update…..

So I completed SS1 – SS4 and now i’m just plowing through the Schweser notes on it.  Found the content pretty straight-forward though I can see how the questions could be tricky if they really drilled down on the material.  The GIPS standards is definitely my weakest section, only because of all the little intricacies and the fact that i’ve never seen it.  I was surprised how much of reading 4 was optional content, it seemed relevant, but i’m not complaining that I don’t need to memorize that stuff.  I know CFA is trying to drive the Codes of Conduct down our throats, but the amount of examples in these chapters was excessive.  It was so much, by the end I was ready to jump off a tall bridge. I am still waiting on the CPH and GIPS handbooks to show up, so in the mean time I will continue on with my studying. These are the focus areas I think I will come back to later:

• GIPS Compliance Statement
• Standards of Conduct
• Sections of GIPS
• Code of Ethics
• Process of the PCP

I found the use of Secret Sauce, Stall Cue cards and qbank to really help drive this material home as a interim review process.  I liked the methodology to reinforcing the material, so I think I will continue with that approach.  Of course, ill have to add secret sauce somewhere in there…..likely at the end.

Secret Sauce Arrived!!!!

I decided to order secret sauce from schweser a couple days ago.  It arrived 2 days after I ordered it, which does not surprise me.  Schweser has consistently outperformed Stalla in my personal experience, at every turn.  That’s a debate that has been beaten to death, and i’m not about to start again here.  It’s amazing how Schweser really trims the content down to the relative stuff.  If I was to recommend only one study solution, it would be this one.  Trust me, worth the money and convenience.

I read the first section on ethics, and I was pleasantly surprised.  They managed to cut the entire ethics section down to 6 pages, and it was written very well.  The thing I liked most about the secret sauce was that the writers recommended which parts of the content to focus on.  So for example, they would mention how to study the standards of conduct, instead of just straight memorization.  Everything was in condensed format in lists and a lot easier to read, though I don’t see how you would use just the secret sauce without background knowledge in the content.  I definitely agree that you can purely study off this after you’ve read everything.  The book is small enough to become your essential notes for the final weeks.  Anyways, I am very glad I bought secret sauce, definitely a solid grouping of the essential content of the curriculum.

Studying Starts Tommorow…..

Tomorrow starts my CFA mass studying.  Only about 3.5 months behind the regulars…..which is both motivating and slightly depressing.  However, I chose in January to take the CSC and CPH before the CFA and so far I don’t regret it.  Ask me in a couple days and I will likely have a different answer for you.  None-the-less its time to buckle down, log-in some insane hours, hope there is enough red bull to sustain me the next 2 months.  I have developed a system in excel that tracks my progress within each reading, including the pages read and the time spent.  Its extremely practical and requires very little attention.  I like to see progress, and what i have left to do so I think it will be a valuable addition to my efficiency and effectiveness.

Tomorrow the plan is to start on the first page of the first book.  My calendar says reading 1 and 2, but that is a guideline.  I will likely try to hammer out all of ethics, or at least a large majority of it.  Right now I am not sure what kind of pace I will be proceeding through the material, and that will affect any initial revisions I complete at the end of next week.  I also have a study group on Sundays which is just starting up, which I have chosen to not participate in. I can’t assume the meetings will be more effective then personal study time, as the CFA-L1 is said to be almost entirely conceptual.  Working in teams has to many complexities in setting up and administration that I don’t have the luxury to waste.  Furthermore the travel time is only justified if I can justify the end result, which I can’t in this case.  I can justify the 3 times a week I travel to the gym to train for some upcoming marathons.

My plan for this blog (hopefully) is to complete a post per day on all of the items I have covered.  If I cover three readings, I will make one post with all those reading.  Unlike the CSC and CPH I wont be making an individual post for every reading as that would detract from my studies to much.  I think a post per day in relation to the material I have covered is adequate.  I will try to upload other content as it becomes relevant in the course of my studying.  From here I am going to upload some links to the site, and play with the lay out a bit and then head over to analyst-forums for a quickie.  I have a bunch of odds and ends to wrap up today as well, so hopefully the red bull lasts long enough to keep the blood flowing.

- Steve

My Study Schedule….

I am not going to upload my schedule here because it wont make sense without about 3 posts worth of explaining.  Basically, I structured the schedule to be both variable and fixed, to accommodate for the inevitable variance in the schedule.  My goal was to have everything done before April 1st, allowing 1 month of study time, but my review process wont allow me to do that unless I rush through some sections.  I originally was going to just rush those lesser weighted sections to meet this deadline, based on the fact that to many candidates don’t spend enough time practicing the material.  My process takes into account the Learn, Apply, Review methodology, so I am not banking all in one area at one point in my studies.  Being that I am entering into this exam late (as I knew I would), my process has to be methodical and realistic. I have come up with a system that, with a variance of 1 week, is pretty solid in its foundations.  The process isn’t revolutionary or anything, but I did take the advice of many individuals and built a custom plan based on a number of factors.  So, to illustrate this point I will use Study Session 1 (SS1) as an example:

SS1: Ethical & Professional Standards

Reading #1

• CFA Curriculum
• 40 Questions from QBANK
• Stalla LOS Cards for the reading
• Schweser Reading
• 40 Questions from QBANK
• Stalla LOS Cards for the reading

Reading #2

• CFA Curriculum
• 40 Questions from QBANK
• Stalla LOS Cards for the reading
• Schweser Reading
• 40 Questions from QBANK
• Stalla LOS Cards for the reading

….and so on.  Each reading covers the same process. This seems overly optimistic given my time-frame, but I am fairly confident I can approach and complete it within the time frame I have set out.  Furthermore, I might not proceed in this exact order in every circumstances.  For example, the derivatives section is fairly small, so I will likely complete the entire SS instead of doing the Readings individually. This process takes me to the second week of April at which point I will complete a very intensive review process using some of the resources mentioned in the last post.  I will discuss this plan when I get closer to the date.  I fully expect this process to evolve and change over time but I believe it provides me with a strong base to achieving my goal in this strict time-frame.