Okay so basic stats about myself=
Currently 23yrs old, have a year work experience working in operations/investments after graduating from a non target with a 3.3 GPA with a bachelors in finance.
I wrote the CFA® level 1 this Saturday...and was somewhat unprepared....was scoring around 50% avg on mocks. Anyways, only reason why I took this test was for a foot in the door at a better firm doing something more interesting...and to eventually help me become an analyst/portfolio manager.
I realized while studying for level 1 to become a "good financial analyst" I have to look at B/S, I/S, etc, and really understand all these accoutning rules and BS that I could really care less for.I've always been a rebel against the system and anything with "rules"such as accounting...I've hated with a passion.
Luckily enough I ended up graduating college and actually passed my financial and managerial accounting courses...barely. However after looking back at all my university textbooks after taking the level 1 test yesterday...I realize I did not learn a single thing. Sure maybe TVM and A=L+E, but that's about it literally. TVM has a lot of use in real life applications and learned a lot from economics that I can apply to trading/global macro analysis.
So here's my problem. I want to become a trader/analyst/PM/Hedge fund manager.
I've always felt to become great at any of the above choices, I need to learn everything each role does.
For example if I am trading AAPL based on technicals, I need to know the fundamentals of what the hell I am trading. If I am trading dollars, I felt like I should have a complete fundamental analysis done of what I am trading rather than a breakout pattern.
Basically my hate/dislike for accounting > my desire to brush up on fundamental analysis.
My hate/dislike for accounting > my desire to become a CFA® charterholder for a foot in the door at an established firm. My hate/dislike for accoutning > my desire to become a financial analyst/equity research analyst.
So WTF am i supposed to do???
Sure the answer may be, "suck it up and learn accounting." However I don't see the point of doing/learning something I HATe. But by not doing CFA® , there are less doors opened which equates to less things I could be learning at a great firm.
So far I have come up with the following options:
1. Focus on what I am good at and make my own road: Study and master TA, read more trading books, and practice and practice. Get laughed at
in the investment industry and academics, but I believe in TA despite the mockery. Although an average trader currently, try to become one of the greats like Paul Tudor.
2. Go teach English in Asia/join military and continue to do #1.
3. Relearn my native language (school), and get a job after done with curriculum. ex:Bloomberg using my finance and native language background.
Also while doing #1 on the side, but maybe hard with school+work at home country+hobbies.
4. Continue to work at a dead end job being underpaid, while doing #1 on my freetime.
5. Suck it up and learn accounting and memorize ratios/formulas for CFA® level 1. But in the REAL WORLD, there IS GOOGLE and MOST people can just reference that,
no need to memorize 100+ formulas/ratios and the 20+ differences between GAAP AND IFRS!!!!
Re-read your post. Basically, it seems you dislike reading financial statements, but want a job where reading financial statements is a critical piece of the job. It makes no sense. If you studied finance in school and literally learned nothing, maybe finance just isn't for you.
For god's sake, don't apply to a fundamental L/S fund and talk about technical analysis...you'll get laughed out of the room.
"For god's sake, don't apply to a fundamental L/S fund and talk about technical analysis...you'll get laughed out of the room." lol @"DickFuld"
OP, if you don't like accounting, financial statements, rules and basically everything else you've stated, finance just isn't going to be your bag, and that's in the IB/PE, HF's, long only AM, corp finance, or really anything finance related. I'm not in AM so maybe I'm wrong, but outside of a hard core quant trading/programming role where you'd need an advanced degree in a quantitative field (engineering, theoretical sciences, advanced math) or you're some sort of savant, you're going to be hard pressed to not be able to or want to read a financial statement. And unless I'm completely off base here, you don't just start at PM, you're first an analyst.
I think that accounting is boring from the side of actually being a bookkeeper, controller or a CPA but you have to have some appreciation for it because it's the language of business. How did you get through an entire finance undergrad disliking accounting so much? I don't mean that in a demeaning way, but truly, you don't seem to like finance. Like others have said, you should really look for a completely different field for your own good or you'll hate what you do.
you will never succeed as an analyst or PM if you are not passionate about it, and while it's not imperative to get a hard on from looking at a quick ratio, you need to LOVE analyzing companies to be good at it and to be able to sell yourself. to echo Mr. Fuld, if you plan on working at a LS fund or really anywhere that's fundamentally based, technical analysis does not matter. if you don't like rules, I'm not sure why technical analysis makes sense, you guys look at at patterns & charts & crap. HFT based on technical analysis uses algorithms (series of steps/rules), so I'm not sure where you're going.
it sounds to me like you dislike the establishment (bad for finance), but are attracted to finance because of its sexiness and earning power, and don't be upset, this is typical for a lot of people. I'd go elsewhere, look at a different industry. if you dislike establishment, rules, etc. but want to make money, you should go into big tech (you'll have to go back for a Masters in Computer Science from a top tier uni) or start your own firm doing something you enjoy. unless you work in PWM and produce significant revenue, it's tough to be entrepreneurial in finance. hell, my partners are top producers in our area and we are still beholden to every FINRA, SEC, and firm rule there is.
Well I realized that yes to become an analyst, I will need to solidly understand accounting. So I crossed that off my list. However is it necessary for a PM?? And do most successful traders know fully understand the fundamentals of whatever stock they are trading????
Accounting rules vs technical analysis patterns is very different. Technical analysis is never a rule. It is merely a higher probability of the pattern succeeding. It is never 100%, there are many fakeouts and patterns that form into larger patterns. In a sense you have to be very flexible from what I learned, and that's what I love. In fact I love it because it gets dismissed from all the academics and many established funds. I've personally gone into interviews for many long only funds and kind of get questioned, but I really don't care what they think as personally I've seen it work with my own eyes and has made me quite a handful during my time in college as well.
I guess my question is do elite traders use any of this CFA stuff in analysis before trading???? Or is it completely irrelevant and pointless?
many PMs either are still analysts or have an analyst background, it helps you when you question analysts for positions. I'm one of 2 PMs, and I play PM/analyst, the other PM is very analytical and knows his stuff, and I'm confident he wouldn't be as good as if he didn't have that background.
besides, there are far more people that want to be a PM than there are PM jobs. most people become an analyst, then senior analyst, then if they're lucky, junior PM, then co PM, then PM. but that's a big if.
about fundamentals, depends on the shop. 90% of shops have an awareness of fundamentals even if they're not value investors, I'd be mortified if a fund owned by a client/potential client made decisions solely based on technicals.
you sound like you need to look at futures/options trading or HFT. forget about going into a traditional finance role which requires understanding & enthusiasm of things you despise. if you have strong math & computer skills, you might be able to go into one of the fields I mentioned as they're less like traditional AM and more what you're talking about.
PS: CFA doesn't teach a lot of trading strategies, but some concepts. a buddy of mine who does FX & interest rate hedging for a BB crushed that part of Level 2 so I'd say most of it is relevant.
I know how you feel because I found accounting a little dry in school as well but I enjoy analyzing companies and got a newfound appreciation for accounting. It really helps and you definitely can't succeed in an analyst role unless you, as you said, just suck it up and learn it.
Yeah I guess one reason I didn't do so well during undergrad was that I did not believe in any of the things I was learning. My mind at the time was that this does not apply in real life/trading...I was more interested in learning how to make more.
My main interest is global macro, technical, intermarket, and behavioral finance....is there anything for me in the investment industry?? You say finance isn't for me.....yet it was the only major other than economics where I could learn more about the market.
you're killin me @"mrgrape"
sorry to be redundant, but yes there may be something for you, I said "look at futures/options trading or HFT."
you may never make PM at a traditional AM firm because of your feelings about fundamental analysis, and I'm making an educated guess rather than speaking from experience on futures, HFT. technical analysis is completely off my radar (because I think it's bullshit, but this isn't the place for that argument) so I may be missing something, but I'd look for other threads on that and go from there.
You could look into becoming a TA at a traditional AM company (TRP, PIMCO, Vangaurd, Janus, etc.) and try to position yourself on a more macro oriented desk. These guys trade tons of stocks (the fundamental analysis you seem to hate), but also trade tons and tons of government bonds, currencies, and some derivatives (forwards, swaps, options, etc.). Of course, these roles are mainly execution based on what the PM says, but it would give you chance to be close to the markets trading macro products while building a network within the company itself and the sell-side. Plus, your background is alright for it. When I did an internship at one of those AMs, most of the current traders had started in operations and worked their way up.
This is just a suggestion and I think you should reach out to alumni in the industry and ask some questions if you haven't done so already. Then you can decide whether or not a TA position is something worth pursuing.
Here are some examples I found after a quick search:
Janus - Fixed Income Trader
https://career8.successfactors.com/career?career_ns=job_listing&company…
TRP - Some fixed income trading/TA jobs if you specify the job category as "Investments"
https://corporate.troweprice.com/ccw/html/content/taleo/careers.html?la…
thanks guys for all your input. I realize I don't have to lie to myself to do something I don't like doing and that there are other options out there. But getting that TA job at let's say Vanguard/PIMCO requires a lot rather than just a kid from a non target.
Even a CFA charterholder is rethinking FA, "Brian D. Singer, CFA, told delegates at the 67th CFA Institute Annual Conference in Seattle that fundamental analysis is no longer sufficient for investing in the new world order. We are more interconnected than ever, and that means data alone is not enough to properly understand and measure risks."To understand the U.S. today, Singer encouraged delegates to study the period 1900 to 1932. Parallels include income disparity, geopolitical instability, domestic political polarization, high debt levels, and a central bank in uncharted territory (the Federal Reserve was created in 1913, and today is engaged in unprecedented quantitative easing)."
Dude. Come on. You sound like a know it all who knows nothing. You didn't do well in school because you thought none of it applies to real life? Where did you get this nonsense? You got a whole bunch of preconceived notions in your mind that are TOTALLY wrong.
Do you say you like technicals and simply don't "get" fundamentals? Why all this heartache and walls of text? Just do FX trading at a bulge bracket and call it a day.
well i am trying to get to a point where the fundamental analysis I do can separate the truth from the noise much like Chanos in Enron/Kyle Bass on Japan. A lot of the books I read during uni was efficient market hypothesis....what a load of baloney, or academics who totally disregard technicals. CAPM and Fama French.....I don't think one can value a stock based on that alone. Even if one can value a stock at say this and this price, there are other conditions that affect the current stock price. I feel like uni should do a better job of applying things taught in basic finance to real markets, where they move based on supply vs demand of buyers and sellers, also correlations/systematic risk of the entire market and how it affects stock p.
Again I feel like to be a good trader, I still should get some sense of fundamental analysis. Technical is simple, but still has a learning process that only one can really learn from applying everything taught in basic books to real markets on a continuous basis. Fundamental analysis....well let's just say I still have no clue where to start other than P/E, market cap, div yield.....
You answered your own question. Fundamentals require knowing frameworks and valuation. There is a process that can be taught in school. That's what school is for... Case studies and neat examples. The real world is not neat. Therefore in the shorter term there are dislocations causing technical movements. You can't teach those in school because they require real, dynamic simulations. You can teach chart analysis but it won't click until you do it. That's part of the reason this business is an APPRENTICESHIP.
You will fail in an apprenticeship if you don't come in with an open mind. You aren't having an open mind. You are flat out wrong that fundamentals are not "real world" and you will learn the very very very hard way even if you are a sell side trader. Why? Because you clients are hitting your bid and lifting your offer based on a view at least partly based on fundamentals. You don't have to be an expert on it, but you better have a view from your own analysis or someone else's.
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