CFA Learning Strategies for Old People
In October 2008, I decided to register myself to take the Chartered Financial Analyst (CFA) Level 1 Exam in June 2009. This exam is widely known to be a daunting challenge, with very low passing rate (after 2000, there hasn’t been a single year/half-year where the passing rate is higher than 50%).
We don’t know the result of the December 2008 exam yet, but the passing rate for the June 2008 exam is a mere 35%. Daunting indeed!
I was actually very excited when I found out about this passing rate. I was always one of the very top students in class, from elementary all the way to university. I loved the feeling of studying, understanding, and then acing a test or an exam. Since my graduation, I haven’t tested myself against a challenging test like this again, and I thought it’d be fun to do this like the old times, and ace the exam as always.
So when I got the thick CFAI books (they weigh at 8 kgs–roughly 17.6lbs):
- I immediately set up a plan to study those books.
- I even thought at that time that using commercially available study notes like Schweser was surely something that only a lazy bum would do. Smart, diligent people would surely read through the CFAI books and produce their own study notes!
- I planned to go through the CFAI books in the order that I thought would give me the biggest bang for the buck.
I was very much looking forward to my study sessions!
In the 3 months that followed, I read, and read, and read, and read the CFAI books. I updated the plan and created study notes. I started a Google group for CFA email study group. I hung around analystforum.com a lot. On top of that, I continued researching and reading more about the exam itself.
What 3 Months Have Taught Me
If I could go back 3 months and redo this all over again, would I?
Definitely not.
Because within this 3 months I learned quite a bit of things:
- It’s not rocket science. The material itself is OK, even if you don’t have a finance background (I don’t). Sure, it can be quite hairy sometimes, but it ain’t rocket science. As long as you spend time to read and understand it, there shouldn’t be any problem with understanding.
- But there is a LOT of material to cover. Ha ha, oh, big surprise, right? Well the 3 months just made me realize how much was really there. You need to dig into each topic deep enough to be able to answer questions, which is OK, but here’s the main challenge: you need to maintain that depth for every topic for months, at least until the exam is over.
- You WILL forget more than a few details in just a few weeks if you don’t keep revisiting the material. I really spent a lot of time reading up on quants. By the time I finished reading fixed income, I didn’t even remember what platykurtic was. And don’t even start talking about Ethics!
- The best-laid study plan will go awry. No matter how good a study plan sounds in the beginning, if you’re a married 30-something with a fulltime job like mine, trust me, there’ll be many occasions where you wouldn’t be able to stick to the plan.
- Forget study notes. Creating your own study notes is actually very time-consuming, and worse, you don’t really know what you need to know and what you don’t need to know. You can follow the LOS, but the LOS can be quite broad sometimes. Schweser does a lot better job at this than one man doing this part time ever will.
- Practice with lots of questions. You can only truly know what you don’t know by answering questions. Lots of questions. Breezing through bank discount yield, HPY, EAY, and money-market yield is easy. They are easy to understand. Having the definitions stored in your head so you can answer questions about them is a different thing. This is an exam. The best way to prepare is by taking lots of practice exams.
- If you’re like me, you need study notes and practice questions. For the longest time I resisted even the idea of buying any kind of study notes and practice questions. After burning a few weekends studying, though, it dawned on me that paying around a thousand dollars to make sure that I don’t have to do this again is very much WORTH IT. The hours spent to repeat this the second time, the hours I’ll never get back, the hours I can use to research more investments and running my business, are worth much, much more than just a thousand dollars.
New Strategy: 140 Days To Go
So. with 140 days to go, I’ve only covered Quants, Ethics, Fixed Income, and half of Derivatives, and I’m changing my strategy:
- I’ve stopped updating my Study Notes. Sorry guys. I enjoyed writing down these notes, but it’s just not the right strategy for something like this. The majority of the time should be spent working on practice problems, not writing notes.
- I’ve stopped planning using the waterfall model, and have switched to iterative model now. No more extended review at the end of a reading. Read everything, and reread again near to the exam. Read everything first once is my top priority now.
- For reading, I’ll use the Schweser study notes. Have you seen how thin those Schweser notes are? We’re racing against time here. We can always go back to reading CFAI books after passing the exam.
- I’ll use CFAI books only for: (a) the chapter summaries, (b) the exercise problems, and (c) further research in areas where the Schweser’s explanations aren’t clear enough.
- I’ve started doing practice questions everyday to cover areas that I have covered so far. This is mainly to help with retention–I don’t want to forget kurtosis again until July 2009
I will revisit this strategy again in March 2009. 140 Days To Go!!!
January 19th, 2009 at 2:30 am
Great Read Ray, I subscribe to your strategy. Its same as mine, I’m practicing heavily early too, doing a 120 question test off Qbank after each study session I cover.
January 19th, 2009 at 7:04 am
Thanks C_JAY, I’m sure we’ll ace this exam together!
January 29th, 2009 at 2:24 pm
Hello Ray,
Very resourceful site. Great job. I just started my prep on Jan 1st 2009. So far, I have only covered 4 readings in volume1 including 3 in Quant and 1 in Ethics. I used to think just like you but I guess now I have to change my strategy and buy the notes. Do you know how do we get those notes for a lesser cost? Did you buy them at full price from Schweser online?
Do you think we can pass with just study notes? Feel free to reply to my email id. And, all the best on 5m$. I’m sure you must have calculated the rate of return you need to get to achieve that.
January 29th, 2009 at 8:26 pm
Hiya Value Investor–glad to have another person going for this exam with me in June 2009!
Depends on your time and bandwidth really. After a few months of doing this I found that I severely underestimated the time I needed to read through the thick CFAI books. I wasted a lot of time writing my notes too, which I have stopped updating.
I got the notes from Kaplan Singapore, which were quite a bit cheaper than the ones we could get from the Schweser website (SGD1000+ vs SGD732).
Can we pass with just study notes? I’m a first time taker like you, so any opinion I have about it is rather worthless for now since I can’t back it up
But in any case, I’m not using the notes exclusively–I still read CFAI books when Schweser’s explanation is not detailed enough (e.g.: Hypothesis testing).
All the best!
January 30th, 2009 at 5:44 am
Hi Ray, love the blog, was wondering if you’d mind if I linked to yours from mine and hopefully you can return the favor. Drop me an email at jamesmorales@gmail.com and let me know.
January 30th, 2009 at 10:22 pm
Hi Jim! Sure thing, let’s do this
February 4th, 2009 at 9:39 pm
Are you worried that the study notes might leave out some info that will be required in the exam?
For example, in study session 2, the notes have a section (7.5) on semivariance, semideviation, and related concepts that is not covered in the Shweser notes.
The Schweser notes skips straight from sample deviation to Chebyshev.
February 4th, 2009 at 11:04 pm
Hi Dave, at present, my main worry is to finish all the readings as soon as possible–for which purpose Schweser is a lot more suitable. I do find myself having to go to CFAI books time and again though, especially for Econs–but strictly for greater understanding. The main reading material is still the Schweser notes at this stage.
About semivariance, semideviation, they are not discussed in Schweser notes because they are not mentioned in the LOS (I just checked). So yeah, I think it’s a reasonable bet to take.
April 24th, 2009 at 6:58 pm
My fellow on Facebook shared this link and I’m not dissapointed that I came to your blog.
June 20th, 2009 at 4:04 pm
Dave,
I really found your article beneficial. I’m tkaing the CFA Level 1 in December, I have an engineering background and work full time in an engineering firm. I purchased the 08 books, just to get an idea adn am planning to register in August. I started studying about two and a half weeks ago and I just got done with reading 6. I do take my own notes and following the schedule with a full time job and other responsibilities in life is impossible. Do you have any other advice that would be useful to me?> I am very discouraged by the fact that I am not even done with the first book yet. NOt even half way done!!!! Which practice exams are you doing? At the same time I don’t want to end up spending another 1000 dollars on top of the 1000 registration fees.
Thanks for this article! Helped out a lot!
June 22nd, 2009 at 9:28 pm
Hi Nikki,
Well, I’m not Dave, but thanks
My suggestion would be to finish reading as soon as you can. A lot of people do not finish the readings fast enough because they grossly underestimate the amount of material and the amount that one has to retain in one’s memory to pass this exam.
After finish your reading once, read through once again–here’s where having Notes would be helpful. If you have seen how thin Schweser Notes 2 is compared to CFAI book 2, then you’ll understand what I mean.
All the best!
July 26th, 2009 at 4:54 am
Hi Ray,
Hope you are not having nightmares regarding you impending results! I just recently registered for CFA levels I . I had economics major in my Graduate programme. So i am familiar with economics and quant. Though, I haven’t studied much in last two years so i am bit rusty ( i am scared !).
I am planning to focus completely on Schweser study notes to start with and offcourse practice exams. Please tell me, should i buy the recent Scheweser notes or 2007 will do. If i have to buy the latest, where can i buy them cheaper?
Thanks for this article, it helped for i need all the help(tips), as i am working (from home) and have my hands full with one and half year old baby boy.
Best of luck for your result!
July 28th, 2009 at 11:03 pm
Hi Vicky!
I think you should try to buy the latest Schweser Notes–they definitely helped me a lot! Don’t get scared about being rusty–I have been out of school a lot longer than you, but I managed to get back to the rhythm anyway
I’m not sure where you can buy it for cheaper–I suppose if you have a friend who passed the June exam and you’re taking it in December you can probably get him/her to lend you the notes or something?
In any case, all the best! It will be challenging with your hands full with a baby boy–but I’m sure you will tackle this challenge well!
July 28th, 2009 at 11:31 pm
[...] VERY HAPPY to report that my learning strategies apparently worked!!! Pure Unadulterated [...]
July 30th, 2009 at 8:20 pm
Hi Ray Congrats and good to know about the success…— just wanted to check i purchased books for June 09 exam but was unable to make it.. can i use the same books for Dec 09 exams? Also, did u guys refer Schweser Q-bank? Also, the useful audio links u mentioned earlier was from stalla or schweser?
Thanks
CM
July 31st, 2009 at 10:04 pm
Hello CM, I believe so, yes, you can use the same books for Dec 09.
Yes, Schweser Q-Bank. I don’t think I ever mentioned anything about useful audio links?
August 6th, 2009 at 3:21 pm
[...] went through a period of trial and error for a few months. In January 2009, though, I settled on a strategy that has proven itself to be helpful in getting the result that I [...]
August 28th, 2009 at 2:10 pm
Great job Ray! Congrats.
September 24th, 2009 at 3:06 am
So, were the Schweser Notes by themselves enough to get through?
December 8th, 2009 at 3:58 pm
In June 2009 session, I attempt CFA Level II exam and unintentionally I took an invalid calculator in the examination room since I was going through mental distress. During the first 10 minutes the proctor took from me the invalid calculator and I later on I keep on doing my exam. On the basis of marks i cleared my Level II but CFA Institute started investigation for my invalid calcultor and finally announced that my result was void. I have a chance of appeal against this decision. I want to ask whether is there any chance that CFA Institute through the appeal consider my case and reverse this decision considering the fact that I took this invalid calculator unintentionally.
December 12th, 2009 at 8:57 pm
ufaq, I’m not the CFA institute so I really can’t tell. But seriously, what were you thinking? And you’re a L2 candidate to boot. I doubt the institute would reverse their decision, honestly.