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What Is CFA, Part 1: A History of the CFA Charter

edited September 2013 in 300 Hours
imageWhat Is CFA, Part 1: A History of the CFA Charter

Posted by Zee One of the most common questions we get here at 300 Hours from potential CFA candidates is: What is the CFA designation? As this site is for potential candidates as well as for current...

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  • ZeeZee Charterholder London - UKPosts: 1,550 Sr Partner
    Hey peeps - wrote this some time ago, had fun researching it. Let me know what you guys think! ;)
  • Definitely enjoyed reading it. Its always interesting to know the foundations of the charter we have today. Good Job!
  • ZeeZee Charterholder London - UKPosts: 1,550 Sr Partner
    Thanks @Dr_Pain28! It was great researching. We're looking into perhaps interviewing key figures at the CFA Institute so if you have any interesting ideas for interviews let us know!
  • That's great @zee! I had no idea that the Charter was borne out of one of Graham's thought bubbles!

    It was about 15 years ago that I first came across Graham's work in detail, in his epic (co-written with David Dodd) 'Security Analysis'.

    Back then my "trading style" was very different - kind of what some would call momentum trading blended with some technical analysis....but there was a bit more to it than that (anyway, the details aren't important). After reading Security Analysis I thought I'd but it to the test, so over the course of what must have been about 6 months I undertook the process of testing, applying and comparing the results of some of the (really, really basic) concepts and measures against my actual trades (using historical data and security selection based purely on the numbers, and without fear or favour of any specific company). I found results similar to what I was achieving with my approach, except with far less risk (greater consistency of returns, less absolute volatility and the balance sheets of the companies I was now investing in were better).

    I certainly don't regret having spent years and (I would say) thousands of hours researching and applying my previous ER and investment model as it has provided me with some great perspective when review other investment managers' approaches (and in particular their risk management frameworks). ...actually on that point, I find that almost none of the Technical Analysts I have come across have much of a grasp of fundamental analysis, yet are quite willing to laugh of the suggestion that fundamental analysis can outperform.... but that's a tangent for another day.

    For anyone interested in ER (even if just to understand why you would or would not invest in a company) I recommend Security Analysis as a starting point (or, if they want a condensed abridged version, The Intelligent Investor is also brilliant).

    Ok, got on a bit of a rant with that.

    Tis' scotch-o-clock in my part of the world now, so that'll be my sign to go....
  • It's port-o-clock where I am now ;)
  • @Zee, its quite interesting.
    Thank you :D
  • ZeeZee Charterholder London - UKPosts: 1,550 Sr Partner
  • Great read - makes me appreciate the process more!
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