basically, if you were a junior equity research associate and would like to eventually move to the buy side (be it MFs or HFs L/S) would you suggest to start managing your own - albeit - small - PA or venture into becoming a CFA® as soon as possible?
because unfortunately the two would be kind of mutually exclusive if I wanted to find quality ideas in the spare time, the trade-off
pros of PA vs CFA® :
-managing a PA is stressful but you get used to what will be like being on the buyside: important reality check
-the PA would be big relative to my total wealth so decisions matter (at least I hope my recruiter will understand that)
- excellent signalling device for when I get to the buy side
- the CFA® is very boring and time consuming. Also, very little stuff makes you a better investor (though some parts are useful)
- I love looking in depth at new ideas in different sectors and try to understand the big picture as much as possible.
Cons of PA vs CFA® :
- the main one is that, in my case, the sum is small on absolute terms (though significant in % terms), by that I mean 4k that could grow in time to 10k. peanuts, i know.
- CFA®, if studied right, is not a risky choice, whereas the PA would affect directly my life
- CFA®costs but the return on the investment is generally significant in terms of CV boost
but I may be missing something important and I would love to hear the opinion of people that have been to the other side and that can tell me about it. my main concern is about the size of the portfolio
If you already have experience, managing your own assets is much more crucial than the CFA. I would imagine if you end up getting interviews, it's better to bring up your own investing decisions so you can show your train of thought which will give an interviewer a clearer insight into how your mind works. CFA is just a pure grind and shows that you can put in the hours. I would imagine it to be helpful to someone who doesn't have much experience but from someone coming from ER, its use is marginal at best compared to managing your own portfolio. You would be served better attaining the CFA on the HF's dollar as they will usually pay for you to attain it (depending on the fund). I'm not in the industry yet so take my $0.02 with a grain of salt, but this is how I would look at it.
I see. would you say the size of the sum would significantly undercut the credibility of any decision/reasoning I undertook? or would they be "understanding" to this regard?
Is this a joke?
Regardless of buy or sell-side, don't forget that compliance for PA trading can be (and will often be) painful, especially if you're in a global shop. Sometimes I think the restrictions are in place to deter trades but that's my theory.
You're definitely on the right track with portfolio size. The question I'd ask is which option - CFA program or PA - is going to be long term material to you. Certainly a tough one.
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