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Morning Coffee: 400+ hours of study to pass the CFA? The obscure hedge fund making lots of money

CFA study

No sleep, the secret to CFA success

The CFA results are out. It is, of course, a tough nut to crack, even if you’ve undertaken the recommended 300 hours of study. Perhaps it’s necessary to do something extra special.

Yesterday was the results for CFA Level I and II. Typically, the pass rate for level I remained low, but 43% of candidates made it through this time around – 1% more than 2015 – while level II pass rates remained stable at 46%.

What does it take to get through? Well, take a look at the unbridled joy and faint despair among those who’ve received their results on specialist CFA site Analyst Forum.

There’s a common theme – exceeding the 300 hours of study the CFA Institute recommends increases the likelihood you’ll make the grade. One candidate who passed first time, said he clocked 400+ hours with a “beautiful, newborn crying all the time, no sleep and working full-time”. Another says he passed “easily” first time after studying for “about 440 hours” with “two little kids and a full-time job”.

How should you use this time? One candidate who failed said they spent “way to much time reading” and not enough time “putting pen to paper” writing out formulas and taking mock exams. Memorising formulas is key, he says, and you should take at least six mock tests.

Practically, though, how much of the exam do you have to get right? As we’ve pointed to before, it’s a complex calculation that the CFA Institute likes to guard closely. There are various iterations, but it pays to score more than 70% in modules that hold a lot of weighting. Here’s the rub for level I – you can get less than 50% in up to four topics. But if you do, it’s likely you need to get more than 70% in at least three subjects and 51-70% in the rest.

Separately, if you want to make big money in hedge funds, learn to code – or get someone to do it for you. Bloomberg has profiled Joseph A. Meyer Jr. who leads a small and little known hedge fund, Arjun LLP, which just happens to be killing it.

The hedge fund never loses money, he says. How? “I’ve got a spreadsheet that did the calculations,” says Meyer. “And then I just got coders to code it, so that the computer’s coming up with it, ’cause I can’t, I couldn’t, manually do something like that.”

At Man Group, which reported its first half results yesterday, asset outflows were countered by strong performance at its computer-driven fund, AHL. Across the industry, though, assets slipped by a huge $20.7bn in June. So, learn to code.

Meanwhile:

“Banks are figuring out that providing every product and every service to every client in every country was just wrong,” said Vikram Pandit, who led Citigroup from 2007 to 2012 and used to tout what he called the company’s globality. “So they are unwinding and shedding assets. We’re not close to being done.” (Bloomberg)

Boutique investment bank Peter J. Solomon Co has been hiring (Reuters)

Banking analysts simply do not get Pokemon Go (Bloomberg)

An RBC Capital Markets trader who went on an adventure holiday in Greenland by himself has been missing for 12 days (Telegraph)

KKR is doing well (Financial Times)

Unicredit’s new CEO has wasted no time clearing out the management team (Financial Times)

You are most likely to become a millionaire if you work in financial services (Business Insider)

There are still far too many asset management companies out there (Financial News)

“Fee experience” = the new guff word for costs. Expect banks to be stripping out ‘fee experiences’ next quarter. (Financial Times)

The Democrats have mixed gender bathrooms (WSJ)

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