Has the CFA lost its value?

MrJack5's picture
Rank: Monkey | 46

The other day I read an article from Bloomberg saying that this year a record number of candidates enrolled this June. Idk, but in my eyes when something becomes accessible to so many random people it losses its prestige. Over years I predict having the CFA will just be another tick on the CV and not something to boast about. Thoughts?

Comments (198)

Jun 18, 2019

Agree, knowing how to calculate and regurgitate randomly-selected formulas and random tidbits in a 3000 page-textbook on a 3 hour exam (2 parts) doesn't dictate how good of an analyst you are/will be. It's honestly retarded and a lot of of what determines if you'll pass is sheer luck (literally did you guess a few right answers to get barely above the minimum passing score)

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Jun 20, 2019

Sounds like someone failed his lvl 1 and is now convincing himself/herself it is useless. If you actually work in equity research like your profile indicates then you know as well as I do that the CFA is the gold standard for AM/ER

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Jun 23, 2019

Disagree with this. Have done it and am in AM. It's used as a way to get your foot in the door, but it does not always work. There are plenty of people I know with the CFA who it has worked out for and plenty of people who have not found additional success with the CFA. It may look good on a resume or get you some sort of an initial look, but it is not always a career changer. Ultimately your overall skillset irrespective of the CFA is more what matters.

Jun 18, 2019

The clear attempts to try and force you to learn meaningless material.... The clear grading system that does not reward understanding the overarching material, and instead quizzing you on granular details.... It is one of the lowest ROIs (time not cash) out of anything a young professional can do.

Edit:
- For AM type roles, I 100% understand the value. However, the vast majority are not in AM nor are they gunning for that type of role.
- As to the comment who said study harder and retake in December. I am not some CFA Level 1 hopeful who barely studied. I passed CFA Level 1 and am currently a Level 2 Candidate. So I am more than able to be vocal about how I feel I am wasting my time going through this process. Thanks "buddy".

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Jun 18, 2019

Couldn't agree more. Clear attempts to try and trick candidates on the exam. Not asking about the main ideas of the material but asking about the least looked at 25% of the material. Like wtf

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Jun 18, 2019

should've studied harder buddy. It's okay, try again in December.

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Jun 18, 2019

Did anyone say anyone was lucky? Geez man. You must feel pretty tough telling people to "shutup" behind a keyboard. People are allowed to vocalize their discontent for certain qualifications, degrees, and whatever they feel man.

I love people who go out of their way to attack people personally online. It's entertaining. Keep compensating "buddy".

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Jun 18, 2019

Sometimes it is not what you say but how you say it. Your initial comment was an insult to the people who worked hard to become a CFA charterholder.

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Jun 19, 2019
financeabc:

Sometimes it is not what you say but how you say it. Your initial comment was an insult to the people who worked hard to become a CFA charterholder.

True, but one thing I've learned on WSO is that CFA charterholders are the most easily offended people on the planet.

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Jun 21, 2019

Well if there's more people taking the exam, doesn't passing it signal than you're more knowledge about CFA related topics than others. I feel like with a larger sample size you passing or not passing would be a truer signal.

Jun 18, 2019

Short answer, yes.
Long answer, yeeeeeeeeeeeeeeeees.

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Most Helpful
Jun 18, 2019

I disagree with the posters above me.

Saying the CFA is losing its value because of the increased number of candidates is like saying HBS or Wharton are losing their values because the increased number of alumni. Yes, it does lose its prestige, but it doesn't lose its weight in the AM industry. The vast majority of AM jobs require it. Of course, it doesn't guarantee an entry to a high finance job like going to a target school does, but it certainly helps.

If you graduated from a top school and you landed a top job from the get go, then yes, the ROI of the CFA is not that high. If you went to a non-target and you're stuck at some back/middle office job and you're trying to break through, then you bet your ass you should at least try to pass level 2.

Lastly, saying that the education you get from the CFA is unpractical or doesn't help improve your skill set in analysis has got to be the stupidest thing I've ever read. Level 1 is very broad but level 2 and especially 3 really test how good you are in financial analysis and PM. The post above me saying that it's luck has no idea what he's talking about.

Most importantly, having the charter is a really great indicator of your work ethic. Unlike going to target schools, there's no benefit in having a rich daddy. It's 100% you.

I'd also like to warn you, OP, that the vast majority of those who register for the CFA fail to earn the charter. There are a lot of salty failures out there who gave up and just LOVE to throw the words "SCAM" and "USELESS!" everywhere they go.

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Jun 18, 2019
BobbySantiago:

I disagree with the posters above me.

Saying the CFA is losing its value because of the increased number of candidates is like saying HBS or Wharton are losing their values because the increased number of alumni.

I'll take it a step further and say it's like HBS is losing its value because of the increase in number of applicants. You still have to pass all three levels. With a 50% pass rate for all 3 levels, only ~12.5% of people actually make it... which coincidentally is the same rate as HBS acceptance.

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Jun 18, 2019

Multiplying the pass rates for levels I II and III might overstate the percentage of people who complete the program by passing the exams consecutively. I am sure there are some people who drop out of the program before passing each of these exams.

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Jun 18, 2019

Well, that's not really true. There are no time restrictions and you have an endless amount of tries. If you are determined enough, it is doable for most people with a finance degree.

It's almost like getting your driver's license - just because you got it, it doesn't make you a good driver.

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Jun 19, 2019

Wow you really think a 50% pass rate at each level means only 12.5% of people make it? And with this (wrong) math, you kinda sorta imply that its as hard as getting into HBS.

Call me crazy, but I'm starting to think getting a CFA doesn't guarantee that someone has the right skills to be an investor.

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Jun 19, 2019
BobbySantiago:

The vast majority of AM jobs require it.

Credibility lost.

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Jun 19, 2019

I can only speak to the buy side and yes, it is very helpful to have the CFA designation if you are looking for a analyst or PM job. I am not sure if it is required but I would think that it would be a preferred item on a job post

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Jun 19, 2019

It's a fact. Look up job postings in AM and ER and see for yourself.

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Jun 19, 2019

I couldn't agree more - non-target slapdick here. Passing Level I helped me break into a Big 3 rating agency, and passing Level II gave me job board access to the local society which helped me break into boutique IB. Having the Charter has helped in many ways with respect to networking.

Jun 20, 2019
BobbySantiago:

Most importantly, having the charter is a really great indicator of your work ethic. Unlike going to target schools, there's no benefit in having a rich daddy. It's 100% you.

AMEN

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Jun 21, 2019

Nailed it.

Jun 22, 2019

Agree. Not sure on the accuracy of this stat but I read a while ago that only ~4% of everyone that enrolls in level 1 actually go on to become charterholders

Anyone can watch Bruce Lee movies but doesn't mean they know karate

Jun 24, 2019

Mostly agree with this, but disagree with the 3rd paragraph about applicability/skillset. I've done CFA and the major flaw in it for Levels 2 and 3 truly is the applicability and what it says about your skillset. Just because you can memorize a bunch of stuff does not mean it helps. The test does not say anything about how good you are in financial analysis and PM. It just says you know about it and are familiar with the terms. If you're doing back office and have gotten through CFA, you won't move up to the top of the resume book for an AM position just on the basis that you have the CFA.

I mostly agree with everything else you said.

Jun 27, 2019

What do you think would help a person move up to the top of the resume book for an AM position?

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Jul 1, 2019

"Most importantly, having the charter is a really great indicator of your work ethic. Unlike going to target schools, there's no benefit in having a rich daddy. It's 100% you."

Preach.

In any case that after this there is some anti-capitalism jumping in saying, "There is no such thing as meritocracy and there is only privilege," or something like that: OK. But we can at least agree that less privilege is at play in getting a CFA charter than going to target schools.

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Jun 18, 2019

To be fair, though, there is one redeeming aspect of the CFAs--one characteristic that is actually legit, the calculator. One of the two calculators permitted to be used on the CFAs is the HP 12C, and apart from the fact that its name sounds like some highly involved consulting framework, it is the epitome of Banker technology. The 12C embodies everything about us--elegant, bold, somehow clinging on to life in a world that no longer needs it. One look at its brushed plastic exterior and you think: "Damn, this thing is pro."

Excel Mobile, it speaks a pure, unambiguous language: Reverse Polish, a postfix notation that eliminates non-commutative issues. So instead of having to enter 7 + (5 * 2) - 5, you'd enter: 7 5 2 * + 5 -. Direct and to the point, crisp even--exactly how Bankers think and speak. I met a model from Krakow once, and although we hit it off physically, her English struggled, blocking us from that real "same plane" level I like to reach. So as a gesture of cultural sensitivity, I decided I'd speak to her in something closer to her native tongue. Over Lil's Wayne's Lollipop, I pointed between us aggressively and instructed: "You, friends, 2, TIMES PLUS... panties MINUS" Boom. "Same plane," said her eyes.
https://www.leveragedsellout.com/2008/07/chartered...

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Jun 18, 2019

TI gang

Edit: BA2 plus professional gang

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Jun 19, 2019

"From what I gather, though, it's a set of exams that you take to get certified to be a money manager out in Ohio". Even as an Ohio native I had to laugh at that.

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Jun 19, 2019

It looks like you have that link bookmarked:) I have seen you use it multiple times

Jun 21, 2019

You, my friend, are one cool cat. You definitely made the most of your CFA studies.

Jul 4, 2019

I wish the CFA exams would gradually go to MS Excel for financial modeling and integrate finding the value of a business (or financial instrument) using the techniques used on the street. It doesn't have to be every exam. Maybe L2 or L3.

The practical aspect of the exams would be much better. If the CFA exams had a 'hit the ground running' kind of education system, the value of the charter would go up significantly.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

Jun 18, 2019

Prestige =/= value...I feel like a few people could take that to heart on a more holistic basis as well.

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Jun 20, 2019

The majority of the forum doesn't understand this at all. Most are worried about prestige over a bigboi paycheck.

Funniest
Jun 18, 2019

I know it's gotten some bad press recently, but CFA made a billion dollars in May, a 10% increase over last year alone. That's third to only Starbucks and McDonalds and CFA has many, many fewer stores. If anything, its value is only increasing.

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Jun 19, 2019

Are you a CFA? ;)

I appreciate the humor. Take my SB.

Jun 19, 2019
PeRmAnEnTiNtErN:

Are you a CFA? ;)

You can't just ask someone if they're a chicken restaurant. Uncool, man. Uncool.

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Jun 18, 2019

People look at the CFA and discuss it in terms of pure educational value-add, but the CFA will continue to persist in asset management because people who make hiring decisions are for the most part charterholders themselves. These people will want to justify their own investment of time and effort into the CFA by legitimizing it as much as possible. The easiest way to do that is by hiring other charterholders. And that leads to the next generation of hiring decision makers that are also charterholders. And so on.

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Jun 19, 2019

You just made the best argument against it, ie its continuing influence will depend not on underlying value but on self-interested charterholders propping it up only to justify their own investment.

I'm not saying that can't happen, but I'd say that's a very weak foundation on which to build something. I would bet strongly against the continuing relevance of the CFA if that's what it's going to rely on.

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Jun 19, 2019

How can you bet against people's self-interest it's the basis for like 95% of the things that have persisted through time

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Jun 19, 2019

Isn't that exactly what's happening with big firms only hiring from top schools? I think bias out of ego is wrong in general but I think all else equal a person is more qualified in AM and ER if they have the CFA and come from a non-target than being a target alumni without the charter.

Also, no one is claiming that the CFA guarantees anything. Most candidates are in their 20's and still early in their careers so it's doubtful that they will compete with someone that the is way above them according to your ranking system based on experience alone.

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Jun 26, 2019

Really? You'd count that as a negative? If the CFA only made you better at flossing your teeth, but had a vast network of people in positions of authority which could be leveraged for opportunities to succeed, it would have less value to you? You're trying too hard to be contrarian and refusing to acknowledge any point that isnt in line with your initial position. For that matter frats, clubs, alumni bases, religious ties, family networks all must have no value to you either then? Which would be ironic because everyone on WSO knows how valuable the aforementioned relationships can be. None guaranty success in your career, but all provide opportunity to succeed. What's more valuable than that?

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Jun 18, 2019

"Accessibility", the downfall of the CFA? What're you even arguing? The more ppl that sign up, the more validated the program is. The more job posts that require the CFA (every single AM, Credit Analyst, IM or related role on the planet), the more important it becomes.

Sure, there's less "prestige" when the # of charter-holders goes from 250m --> 1mm next decade. But nobody entered the program to have something no one else has, that's not the point. It's slowly accomplishing its mission of being THE standard in $ mgmt.

I just sat for L2 and my only caution to you finance folk who sht on it is: fine, if you have a great IB or consulting job then stop thinking about it. But, for all you guys you talk about breaking into AM/IM/HF or anything buyside (ex-PE) as an exit from your sorry ass keyboard-monkey role, you should seriously reconsider trying at least the first 2 levels. It's infinite job security in the form of a 6 hour exam.

And if you don't learn anything new about valuation in L2 then you're either brain-dead, or the late-great fundamental investor Benjamin Graham

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Jun 18, 2019

Agreed. L2 was a really good learning experience all things considered.

Jun 19, 2019

i'll take the benji graham option

You killed the Greece spread goes up, spread goes down, from Wall Street they all play like a freak, Goldman Sachs 'o beat.

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Jun 19, 2019

Honestly man. The amount of people who shit on a designation that half are too stupid to pass astounds me. No one here is arguing that the CFA is the silver bullet but for a dude like me who's passed all 3 levels in arguably the most saturated city in North America, I get interviews I should have no business getting especially with the experience I have.

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Jun 19, 2019

'Infinite job security?' CFAs get fired more often than you think...

Jun 19, 2019

He probably meant that as in it's easier to find new jobs if you get fired

Jun 20, 2019

100% this. Its like crapping on the value of the CPA. Millions have it but I can bet that the unemployment rate for CPA is much lower than the rest of the labor force.

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Jun 18, 2019

Just sat for level 3 this weekend, I hope its worth it and I hope I passed, this thing has eaten my springs the last 3 years.

Jun 21, 2019

I feel you on that. I just sat for L3 and I want my springs back!

Jun 18, 2019

I'll second a lot of what's already been mentioned regarding the disconnect between # of candidates and diminishing value. I'll also say I'm a little annoyed by the use of "prestige" and "something to boast about". That's not what this is about. Leave that to the transparently insecure "people of means".

I'd go further with the counterargument that value continues to increase because everyone that already has the charter has an interest in making the exams a bit more difficult across time. It adds to their own credibility. Second, the charter gains value with more social proof, which is typically going to increase with more successful candidates. Notice the other designations don't have the same brand recognition, even though they may still be quite valuable.

JUST DO IT. Don't let your memes be dreams.

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Jun 19, 2019

Interesting points made. My own view at the start was more people doing CFA - more charterholders. So from an interview point of view it wold go from "Oh wow you passed the CFA impressive" to "Okay you also have the CFA", so its value is diminished. But I completely understand it increasing in value as a result of becoming the industry benchmark.

Jun 19, 2019

I am a CFA charter holder so my views will be biased. In my view, having the charter tells me two things about you. First, that you have the willingness to study for something while working which is a huge time committment and a real social killer. You really have to be interested in the material to commit spare time to doing it. And secondly, it shows me that I can trust you to learn what I need you to learn to be good at your job. If I need you to read a 300 page industry primer on the semiconductor industry and get up to speed on it I can take the view that it should be possible for someone who crunched through 300 pages of CFA books.

Jun 19, 2019

100% true...

Jul 4, 2019

most def / sb

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

Jun 19, 2019

I totally agree with you. The reason behind CFA lost its prestige is that there are 90% of people working in the investment sector are not charter holders.

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Jul 4, 2019
davismia290:

The reason behind CFA lost its prestige is that there are 90% of people working in the investment sector are not charter holders.

If 90% were not CFA charterholders and there are 150,000 charterholders in the world, that would mean the sector only has 1.5 million people.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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Jun 19, 2019

Just my .02 since it's not really my world, I'd say it's the most impressive distinction one can have in finance. Just about anyone can take the exam, the same can't be said for an M7 MBA.

Jun 19, 2019

From my point of view, I don't think the value of the charter is derived from some kind of sense of exclusivity. There isn't any unique or special knowledge you are acquiring through the program and there aren't any hurdles to taking the exams, it more so demonstrates that you have a minimum level of knowledge of a variety of asset classes and related topics. It will not make you a better analyst, but that is not the intention of the program and that can only be acquired through experience.

For me personally, I would not be in my current position without participation in the program. It definitely had/has signaling effects and shows that you have work ethic, can handle the material that you will encounter on the job day to day, and that you are committed to the industry. I think those attributes are really what is most valuable about the charter. MBA admissions give weight to the CFA not because they're looking for better investors, but because of those signaling effects, which is especially powerful for non-target applicants.

To those who say they haven't learned anything from being in the program or that some of the content is useless, I think that is a red flag that you just don't understand how to think like an investor. You might be an equity analyst and not care about bonds or whatever, but markets are dynamic and interconnected. You need to be aware of how each piece interacts with the others to truly have a deep understanding of your coverage area as an analyst. I know that we're never going to have to price a swap by hand in the real world, but that really isn't the point of learning that material.

Lastly I'll add that at a lot of shops you'll see MBA OR CFA preferred in job posts, and when they say MBA, they're talking about top programs. I don't know of any other certification in any other field that carries that kind of weight. Additionally, at the shops that I would be most interested in, a lot of guys have both a top MBA and CFA these days. I think the CFA designation is more of a box checker than a differentiator. I do not have an MBA and all else equal if it is me, vs a guy with just an MBA, vs a guy with both, I would expect to lose out to the guy with both.

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Jun 19, 2019
Secyh62:

For me personally, I would not be in my current position without participation in the program. It definitely had/has signaling effects and shows that you have work ethic, can handle the material that you will encounter on the job day to day, and that you are committed to the industry. I think those attributes are really what is most valuable about the charter.

I second this comment. Being able to clear at least L2 has great value for someone with a non-traditional background trying to break-in into AM/IM/ER.

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Jun 19, 2019

I agree with almost everything you wrote. As you said it opens up doors for people to get jobs that he or she may not be able to get without being a CFA charterholder. I especially agree with the non target aspect of your comments. I enrolled in the program partly to compensate for going to a non target school and because it was an unwritten rule that each person in my associate PM role was expected to be enrolled in the program.

I would just add that while it may seem like a big commitment at the time you are enrolled in the program (and it was), it is only 3 exams. I do not want to understate the time and sacrifice involved, but it relatively small compared to the number years you may end up working in the industry....A couple of years of studying versus potentially 40-50 years in the industry

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Jun 24, 2019

There are multiple reasons why CFA is a touchy subject for a lot of people. Coming from someone who has done CFA.

  1. Cost/Benefit analysis isn't always favorable. If you're spending a third of the 300 hours learning Ethics/Compliance bylaws for something you'll likely never use, you can why some are tempted to not do this.
  2. Much of the material is way too templated and simplified. Derivatives calculations using pen and paper are ancient in today's software based world. Level 2 overly emphasizes memorizing formulas and steps to calculate final numbers.
  3. Helps for someone who is an asset allocator and needs macro/industry knowledge, but not fundamental analysis. You do not learn how to build models through CFA. You may understand what goes into it, but I did not learn how a financial model worked in the CFA program.

The important question is whether you could have learned all this material through a more efficient route than through the CFA. I think they could make it a lot more efficient. I'm still happy I did it, but I spent a lot of time thinking this is either common sense/useless/or not applicable at all today. There's also too much focus on trivial details and memorization and almost makes it feel like they're trying to get you as opposed to trying to help you learn.

I realized very early on why it's much cheaper than an MBA. It gives you a launchpad to propel yourself, but not all the skills needed to succeed. That you need to learn on the job, on your own time, or through other methods.

Jun 19, 2019

When something gets more popular, it can either gain or lose value. At first, more popularity increases value because its a signal of rising credibility. Once credibility is established, additional popularity can become a signal of increasing accessibility.

This is of course simplified and you can always have a mix of the two happening at any given time.

With CFA, at least in the US, I suspect it's passed the point of rising credibility. I think whatever reputation is assigned to the credential is pretty established at this point. So if a lot more CFAs pop up in the US job market, it's a sign that its becoming less exclusive.

International is another story. It may still be on the upswing internationally and additional CFAs overseas (at least in some markets) may be helping it establish credibility there.

Jun 19, 2019

Okay, so let's say it is losing it is value, then what? It doesn't change the fact that it's becoming more of a "oh wow you have the CFA? Impressive" to "sorry, you don't have the CFA. This isn't for you.". It doesn't change the fact that majority of AM jobs require it.

The CFA was never exclusive in the first place. If you have a few thousand dollars and a bachelors degree then you can enroll. I'd argue that based on this fact alone, the CFA has a higher intrinsic value (education wise) and thus more credibility than going to a target school where your admittance is based on whose your daddy and what does he do (and what race are you).

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Jun 19, 2019

I was just trying to answer OP's question directly.

The consistent loud protests of CFA holders to even the lightest criticism, in my opinion, reveals some insecurity about the value of it.

Jun 19, 2019

Pros of CFA:

1. CFA proves that you know basic finance. Level I simply tests whether you know what you're supposed to know after 4 years of undergrad business school. Your degree DOES NOT prove that or your GPA. Think about it. Only 40% of people pass CFA Level I....that's pitiful considering that it's basic finance knowledge. In my career, I've worked with top 20 business school grads who didn't understand basic concepts like Working Capital....sad but true. CFA doesn't prove that you're a good analyst but it at least proves that you learned the basics. Applying them is another matter.

2. CFA proves that you're a hard-worker......sometimes. If you're studying for the CFA while working full-time at a high stress job, I'm impressed. However, that said, it seems that more and more candidates are students who have knocked it out before starting an intense job. I know a lot of people permanently stuck on Level II or III simply because they are now working very intense IB roles and just can't finish it.

3. Amazing refresher. Again, this depends on when you took your CFA tests. I took Level 1 several years after graduating, and then level 2 after several more. It was great to really refresh on the concepts and strengthen your understanding, especially now that you can apply the concepts to your job. Test a Harvard grad 10 years out of school vs. someone taking the CFA this weekend on basic finance concepts across various topics...the Harvard grad will get smoked....as the years go on, you start getting very rusty, particularly in concepts that you don't use every day. Anyone priced a bond or option lately? How about a credit default swap?

Cons of CFA:

1. Poor ROI - I'm still working on my CFA, but as someone mid-career, honestly, it's not going to help me all that much.

2. Questionable job placement - CFA is a great way to get your foot in the door, but personally, I haven't been super impressed with a lot of CFA chart holders. Some people do amazing, and then there seem to be a lot of people in random mid-level Treasury and Risk roles. Decent jobs....don't get me wrong, but not sure if their extra studying was worth it or had any effect on their career.

In conclusion, almost none of this has changed with more CFA test-takers. What I think is happening is that you're seeing more people take the CFA as a way to get an entry level position whereas beforehand it was more a designation for established professionals.

Overall, I don't think that CFA will lose value for certain chartholders. However, I think that employers will start differentiating between those got their CFA a year or two out of school versus those who did it as professionals. If you are not quite a professional, you basically don't get benefits #2 and #3 above. It's a proof of basic finance knowledge and nothing else.

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Jun 19, 2019
NoEquityResearch:

Pros of CFA:

1. CFA proves that you know basic finance. Level I simply tests whether you know what you're supposed to know after 4 years of undergrad business school.

I do not think you need to have a specific type of bachelors degree (business degree) or any **relevant **work experience to sit for the exams. With that said, you do need to have relevant work experience to be awarded the designation.

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Jun 19, 2019

Yes, it's true that you need to have experience to get the CFA, but from what I've seen, they seem to be pretty loose on the qualifying experience. It's supposed to be four years of experience where 50% of your role involves the investment decision process. If that standard was held up more strictly, very few people would receive the CFA.

Just look at the recent surge in test-takers. Do you think there is an equivalent surge in employment roles where 50% of the position involves the investment decision process. If anything, these positions are shrinking rapidly rather than increasing.

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Jun 20, 2019

In regards to questionable job placement, one thing that people often forget about in the whole "MBA vs. CFA" debate is that there are some pretty lackluster placements of M7 MBAs as well.

Yes, an M7 MBA is often THE requirement to get a MF post-MBA associate role, or an analyst role at a top-bucket public markets fund, but just because some of the people in those seats have M7 MBAs does not mean that all M7 MBA grads are getting top-tier finance placements.

Using the outlier outcomes (for both the CFA or MBA) often doesn't paint an accurate picture of what the average individual can expect from either.

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Jun 23, 2019

about 7% of enrollers end up with the charter so how basic of your basic?? never heard anyone admitted into top mba or business graduate fail to get the degree. fairly speaking with respect to the mission completed percentage, top business school's master degrees definitely are more BASIC.

Jul 4, 2019
NoEquityResearch:

Pros of CFA:

1. CFA proves that you know basic finance. Level I simply tests whether you know what you're supposed to know after 4 years of undergrad business school. Your degree DOES NOT prove that or your GPA. Think about it. Only 40% of people pass CFA Level I....that's pitiful considering that it's basic finance knowledge. In my career, I've worked with top 20 business school grads who didn't understand basic concepts like Working Capital....sad but true. CFA doesn't prove that you're a good analyst but it at least proves that you learned the basics. Applying them is another matter.

I agree somewhat except feel that Passing Level 1 is a strong indicator that you have 'mastered' the basic working blocks of finance. I think 'knowing' the basics isn't enough for these CFA exams as they are pretty tricky.

But this helps to teach something integral in the world of finance: details matter. The attention to detail needed to survive in the program is very high, in addition to a high amount of work ethic required to complete each level.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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Jun 19, 2019

I don't think the CFA is losing its value. Two points:

1) Increasing candidate numbers can be put down to China's relatively recent opening and the overall trend of professional careers becoming more competitive. Irrelevant to the value of the certification.

2) The "skills" you learn from the CFA are as irrelevant as the skills you learned in your bachelors. If you're trying to break into finance from a non-finance background then it's still a good way to demonstrate interest. If you're trying to get into the buyside it's still highly regarded, if only because everyone you're competing with with have it. And for everyone else, most people will be at least a little impressed that you were determined enough to put yourself through hundreds of hours of study, most likely while already working a full time job.

Jun 20, 2019
hyperxenophiliac:

I don't think the CFA is losing its value. Two points:

1) Increasing candidate numbers can be put down to China's relatively recent opening and the overall trend of professional careers becoming more competitive. Irrelevant to the value of the certification.

2) The "skills" you learn from the CFA are as irrelevant as the skills you learned in your bachelors. If you're trying to break into finance from a non-finance background then it's still a good way to demonstrate interest. If you're trying to get into the buyside it's still highly regarded, if only because everyone you're competing with with have it. And for everyone else, most people will be at least a little impressed that you were determined enough to put yourself through hundreds of hours of study, most likely while already working a full time job.

Well, I think some other people may think it's pitiful one wastes 1000+ hours that could have been used for more productive activities. And pretty much any activity (learning to play golf, spending time with kids, going to church, sleeping...) is more productive than doing the CFA when it's not for the purpose of going into AM or related fields.

Jun 20, 2019

I've heard of plenty of people doing the CFA for the wrong reasons (basically anyone who thinks it'll get them into IBD, especially with no impressive work experience/GPA/school behind them - this probably accounts for a decent chunk of the pool). In those cases, I agree with you.

But education is education - I wouldn't say dedicating 1000+ hours to anything productive is "pitiful". It's certainly not going to hurt your resume, and chances are a lot of the people doing the CFA wouldn't be spending their free time doing anything else to advance their goals.

Jun 20, 2019

It completely depends on the person and their current situation, background, and goals. If you are already in a good job in the sell side and you're doing the CFA just for an ego boost, then yeah, you're wasting your time. If you are trying to break through AM or if you come from a non-target and you're trying to boost your resume, then it's definitely a great investment.

Jun 20, 2019

Certainly better to have than have not if you lack relevant work experience. Obviously experience > anything but that's not always possible.

Jun 20, 2019

I think it's that thought process that pulls a lot of people into the CFA. The fastest route (experience) isn't available, so let's try a different one (CFA).

Question is, is there a 3rd route that's less clearly defined, but is a better ROI than CFA. Would involve some messy combination of networking and self-teaching. Doesn't sound good at first, but if you apply the 1,000 hours of CFA study I think you end up in a better place.

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Jun 20, 2019

I'm all for that third route but that requires a certain temperament. Not everyone is comfortable with that level of risk nor do they want "that" lifestyle.

FWIW, I'm an entrepreneur netting out 7 figures and when I see things like this my reaction is the same as yours but I've learned over time that not everyone has the risk tolerance for it and it's really not a great lifestyle unless you absolutely have a huge boner for risk. Most of the population just wants to do X knowing that Y will be a result of doing X.

Jun 20, 2019

Dude, your view on obtaining a better ROI on getting lucky with networking compared to the ROI from the jobs you can potentially get after becoming a CFA charterholder does not make a lot of sense. I think most people enter the CFA program with the ultimate goal of getting a better job. The HR departments of most buy side firms use the CFA charter as a screening factor. I am not sure how the HR department would view a person who claims to be self taught, without a designation or relevant degree.

Btw, you can be enrolled in the CFA program and still do a good deal of networking.

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Jun 20, 2019

WSO's COO (Chief Operating Orangutan) | My Linkedin

Jun 20, 2019

You can look at this in 2 ways
The last 3 people to hire me are CFA charterholders. And I think that if you are applying to jobs your eyes naturally gravitate to the ", CFA" after your name. So from a personal branding and marketing perspective it does help because it gives people a baseline to know what you are capable of and what you know.

But maybe from a prestige stand point the more people who have a CFA charter makes it more of a commodity and lessens its value. But you can also view the glut of people taking the exam and obtaining charterholders as expanding the network. You have mutual interests and can bond with other charterholders over the process of obtaining a charter...so there's a human connection element to it as well

Jun 21, 2019

the thing is the larger the alumni group gets, the loosest the bond gets between the community members. Because what does bond all these people, really? Three letters. It would take a lot of nepotism/cronyism to bond such a large group of people who just share a willingness to work in Finance and having taken the same exams. That is not a real network.

I get that people who did not go to target schools feel the need to differentiate and signal that "I'm much more capable that my school/GPA would let you think". I also get that recruiters are for the most part completely uneducated to the position they advertise and that they just select candidates by ticking the boxes and searching for keywords. In that respect the CFA, for junior positions, can bring your a couple of interviews. Are those couple of interviews worth the 1000+ hours? Knowing that with such time you could probably become decent in two foreign languages, become a war machine in Excel/SQL, develop into a hobby that can make you an interesting and balanced person people actually like to talk to, and become member of a club (golf, whatever) that will give you networking opportunities, well i think it's pretty easy to design a programme that will be so much more educative and catalyse your self-development track much better than the CFA will.

But again,

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Jun 21, 2019
The_Declaration:

Knowing that with such time you could probably become decent in two foreign languages, become a war machine in Excel/SQL, develop into a hobby that can make you an interesting and balanced person people actually like to talk to, and become member of a club (golf, whatever)

I get that you do not think it is worth the time and effort. Most people who take the CFA exams are tying to get better jobs or advance at their current company. Why would a finance person early in his or her career want to use the time to learn two foreign languages, become an excel wizard, etc.? Most people are in their 20s when they enroll in the program. They sacrifice the time now so they can have a more balanced life down the road.

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Jun 21, 2019

Didn't stop Ivy League alumni and they're growing by the year so why would it stop charter holders?

Jun 21, 2019

The "why not just spend 1000 hours networking and reading books on your own?" argument really doesn't make any sense to me. Perhaps I'm just lazy or have ADD or something, but there was no way in hell I was going to be disciplined and focused enough to crank through thousands of pages of dry material (and actually LEARN IT, not just casually read and forget a few weeks later) unless it was part of a structured program with looming exams on the horizon.

If you're just reading the Intelligent Investor or whatever, it's very easy to put it down if there's a fun happy hour after work or a new show on Netflix you want to check out, but when you're enrolled in an actual program with a lot of invested time and money on the line, you really prioritize your studying.

I have plenty of finance and investment books at home, and I hope to eventually get through them while reading a few chapters before bed here and there, but there's no way I'm going to consume 1,000+ hours of academic reading (and again, actually LEARN it) in 18 months unless its through a program like the CFA.

The "why not just spend your hours on X?" argument can also be applied to MBAs and MSFs, which, like the CFA, offer different benefits and ROI to different people. I don't understand why there needs to be a debate about the value of a CFA (or MBA or MSF for that matter) when the simple answer is that its different for everybody.

Jun 21, 2019

Fair enough. Sounds like you know how your brain works pretty well.

IMHO I think it's extremely hard to be an investor without being naturally very interested in it. True of many fields but especially investing because its zero sum, actually negative sum after expenses. With most jobs, you can be disinterested and still create value because the labor accomplishes something.

Investing is about effectively taking money from others while simultaneously burning money on expenses, so no value is created without a significant edge. Given that it's already hard to have a significant edge, I can only imagine how much harder it is if someone isn't interested enough to naturally want to do the homework.

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Jun 21, 2019

You gotta be a troll. Every comment you made in this thread has a passive aggressive insult.

No, it's not how HIS brain works, it's how every human brain works. Your ridiculous comment implies that the greatest investors spent hours every day learning on their own outside of a structured program and didn't go to top schools and did graduate studies and spent a fortune.

Learning on your own is great but it doesn't give you credentials that are well respected in the industry.

The very irrational and passionate hate you have for the charter is giving off a drop-out vibe. Just saying.

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Jun 23, 2019

no it's not zero-sum at all.

Jun 21, 2019
Ricky Sargulesh:

I don't understand why there needs to be a debate about the value of a CFA (or MBA or MSF for that matter) when the simple answer is that its different for everybody.

Well OP's question was about the value of the CFA. So if you think that's a dumb thing to discuss, you have the choice to not participate in the discussion. Instead, you've oddly chosen to attack those who do participate.

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Jul 4, 2019
Ricky Sargulesh:

The "why not just spend 1000 hours networking and reading books on your own?" argument really doesn't make any sense to me. Perhaps I'm just lazy or have ADD or something, but there was no way in hell I was going to be disciplined and focused enough to crank through thousands of pages of dry material (and actually LEARN IT, not just casually read and forget a few weeks later) unless it was part of a structured program with looming exams on the horizon.

This is the most difficult part for many - the self discipline required to structure 5 months of studying for one exam.

Its pretty fucking hard. I definitely botched a few years studying to go out on the town with friends and hang out with chicks.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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Jun 21, 2019

I don't think a higher acceptance will have any effect on the prestige of the CFA I mean as long as they keep it 'exclusive' enough so it's not like they're just handing them out, it'll remain important. However, it definitely has more of a prestige in different areas of finance like asset management (frankly any type to me analysis side or client side) think of the cfa a lot higher than say investment banking. Now any banker with the right head would never say the cfa looks bad obviously when we see that on a resume it's worth noting but in our everyday job the cfa material isn't that applicable. At least for the M&A side

Jun 21, 2019

I've passed level 3 together with my wife at the same time. We did it with 2.5 months of intensive studying. Tbh in terms of learning, CFA teaches a lot about professionalism, and really nothing much useful on technicals. But it does tell a lot about a person's grit and ability to skim through thousands of mundane stuff.

Right now it's nothing more than a personal ego booster XD

Jul 4, 2019
Plundit:

I've passed level 3 together with my wife at the same time.

Isn't that kind of cheating?

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

Jun 21, 2019

So simply because Bloomberg reported record numbers this year you think the CFA charter has lost its value?

Two questions you should ask yourself:
1. What's the pass rate for the exam?
2. As of today, what's the estimated total number of CFA charterholders worldwide?

Personally, I think the fact the record numbers are pursuing the designation makes it all the more desirable. Everyone would like to go to an Ivy League school and I suspect the number of applications far exceed the numbers that get in. So in my view, your premise is flawed.

DO

Jun 21, 2019

I see the CFA as a preferred item on job postings everywhere in AM. This excludes PE and VC. When I was interviewing for my current role, I was specifically asked whether I planned to pursue the designation. They also very much wanted to know my current progress. As an aside, you're also starting to see the CAIA popping up, but mostly on the allocator side, and it's certainly not as common as the CFA.

More people enrolling doesn't necessarily mean high pass rates or even more people passing (pass rates can fall).

I certainly have my issues with the CFA curriculum. I think it's overly bloated, and while it tries to test whether you can apply the material, it doesn't always succeed. A lot of the material you learn is useful, but sometimes it feels that you're learning in a vaccum, without learning how to apply the material in practical situations or in a representative daily job. This, to me, is the biggest issue.

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Jun 21, 2019

IIRC aren't pass rates determined by the number of people they want to get the designation (IE, a 50% pass rate with 2k applicants last year doesn't mean if 10k applicants apply this year, 5k will get it. It just means there will be a 20% pass rate this year)

Jun 21, 2019
Aerfally1:

I certainly have my issues with the CFA curriculum. I think it's overly bloated, and while it tries to test whether you can apply the material, it doesn't always succeed.

I think the material is designed to be broad. I would have preferred to have studied equities, financial accounting and portfolio management but I had a deal with all of the other topics as well. At this point, my only quasi complaint is the annual fee but I guess they charge fees to help with the costs to run the organization.

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Sep 29, 2019

When did you start noticing the CAIA becoming more prevalent? I'm considering getting it after I get the CFA since you only need to take 1 test if you have the CFA, and it seems more relevant to what I want to, but it's just that from what I understand it's not that common.

Jun 21, 2019

Adding my perspective to the number of good points already made.

I see the CFA as a sign of commitment to the AM profession/industry. If someone sacrificed all that time out of their life to get the charter, then he/she must be really serious about investing and is more likely to stay at the firm long term. Some content is useful and a lot of it isn't, but the willingness to go through all of the bullshit required to get those letters after your name says something about your intentions.

Jun 21, 2019

Like everything, you need to practice the material. It's really a testament to your commitment. You're gonna have charterholders that suck and those that commit the time to find nuance in the application of the subject matter.

What else is as comprehensive?

Pairing a good network with the cfa and additional commitment will make you a stellar candidate. Afterall, there isn't even 1% of the globe that are charterholders. Hell, not even 1% of the US population. All three of those can be done if you really have interest.

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Jun 21, 2019

Probably depends on the market/asset class

But I'd say it's a must have in competitive markets

It shows your financial knowledge, hardwork and overall adaptability/learning skills

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Jun 21, 2019

I went to a target undergrad, but was in science. I decided to start taking the CFA after graduation and landed my current buy-side job a couple of years later because my boss thought it meant I really wanted the job and could work hard since I had no background and studied at night after work. I'm starting my MBA at H/S/W this Fall, and I'd say the CFA has been tremendous for my career even though I'm in PE/VC.

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Jun 21, 2019

Agree - it shows hard work and ability to dedicate to a task. I have written to CFAI as I heard that they will be offering L2 twice a year, that is ridiculous and is the slippery slope of diluting the membership. Also, the test should not be taken on the computer or given instant results as that further cheapens the exam and membership.

Any other CFA Charterholders I encourage you to write to your local CFAI org and CAFI corporate. I am willing to pay the postage.

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Jun 21, 2019

I am not opposed to people taking the exam on a computer. They are probably tired of dealing with all of the barely legible content.

What is their rationale for offering level 2 twice per year?

Jun 22, 2019

Why are you opposed to making the test more convenient for people?

Jun 21, 2019

It means nothing if you cannot use the things you have learned and apply it to actual work. Also companies don't just create jobs because of the amount of people who enrolled to do the CFA. They hire on a per need basis so they aren't gonna keep hiring people just because. Also most people won't even pass or go through with it kinda like University.

Jun 21, 2019

Never feel sorry for yourself big dog.

Jun 23, 2019

target school should be the real questionable thing. not CFA. Target school tests your daddy but CFA test your real finance knowledge.

Jun 23, 2019

the good news for natives is that I guess more than half of the new charters or candidates passing level 3 in the US are not US citizens but almost any position requiring cfa level skills isn't H1B friendly which means when you talk about the real numbers of charter holders, cut half of the total.

Jun 23, 2019

OP if you want a fair and balanced range of opinions, I suggest you read both the comments here as well as the answers similar to your question on Quora. I know people here will bash the audience that Quora collects but if you want to look at this in a more holistic way, you'll want ideas from all over the spectrum. Take the best points that matter to you from both worlds and then you can come to a conclusion for your own circumstances.

Jun 23, 2019

The CFA is not losing value; however, I believe it holds higher value for certain careers. It is still a difficult exam that not everyone can pass. Everyone knows it is vital for a career in AM but how useful is it for working in other finance jobs (banking, M&A, PE, CorpDev, VC, etc.)?

Either way, when I see someone has passed parts of it or have those three letters after their name, I'm confident that they are disciplined, hard working, and smart. It speaks to drive as much as it speaks to technical prowess.

Jun 24, 2019

Basically non existent in IB/PE/VC. CorpDev is mostly a post-IB job so it's not that common in CorpDev either, but I could envision it being a little more common in CorpDev because CorpDev isn't always post IB. People sometimes come from other backgrounds so you might see the occasional CFA.

Jun 26, 2019

It was a rhetorical question, but I agree. I work in CorpDev and didn't come from banking. I passed Level 1 and it was a resume talking point but nothing major. They cared more about my modeling/valuation experience from advisory/consulting.

Jun 23, 2019

the issue 's become hot because those heavily relying on nepotism do worry that the certificate can indeed screen who is capable who isn't.

Jun 24, 2019
MrJack5:

The other day I read an article from Bloomberg saying that this year a record number of candidates enrolled this June. Idk, but in my eyes when something becomes accessible to so many random people it losses its prestige. Over years I predict having the CFA will just be another tick on the CV and not something to boast about. Thoughts?

You 'read' that candidates 'enrolled' and now think the CFA is 'accessible'?

What exactly does enrolling have to do with accessibility

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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Jul 3, 2019

The more people have the CFA accreditation = the less value this qualification holds. Essentially its value is diluted if every Joe Blow has a CFA next to their name.

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Jul 3, 2019
MrJack5:

The more people have the CFA accreditation = the less value this qualification holds. Essentially its value is diluted if every Joe Blow has a CFA next to their name.

You can't read bro. Please explain how enrolling in the CFA exams and having CFA after your name are synonymous.

https://www.cfainstitute.org/-/media/documents/sup...
Also, the numbers aren't super high for pass rates. Not that many people make it through, making the path from being just 'enrolled' and a 'CFA charterholder' very distant.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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Jul 3, 2019
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"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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