#CFA So glad I started this last night and decided to continue over the weekend. This SS is an absolute bear. I never touched residual income models in grad school and only barely touched the FCF models. Of course, to get the FCF pieces you need to know how to calculate FCF from a financial statement and work backwards from either Net Income or CFO so brush up on your Level 1 skills. The key here is lots of problems to drill home the steps involved and the little tricks. I haven't gone thru the Market Based and Private Company valuation stuff yet, that also looks like a bear of a section.
I'm ahead of my study plan which is great because I want to spend the entire next week on this SS to completely master it. I'm betting at least 10% of the exam will come from this SS alone which is 2 item sets. Plus if you master this, the earlier material on DDM's is made that much easier. Since this is the heart of the curriculum, it's important to own this material early. I don't want to spend much time on this during review month since I do need to make up some ground in the FRA sections.
Plan for rest of weekend is to watch the lecture on the Market Based and Private Company valuation sections tonight, then double back and do more problems on the FCF, RI models. Tomorrow I'd like to do more quizzing on the Market Based/Private Company section and then during the week complete quizzing and updating of my notes and flash cards. I think this section definitely requires some flashcards to help drill those key steps in your head along with some good note taking.
By next weekend, I'd like to have SS12 completed and then spend that weekend on pure review of the entire Equity SS's(10-12). Entering the home stretch, time to buckle down and get even more serious than I have been from the beginning.
#CFA I tried two iPhone apps for Level 2 that were relatively inexpensive so I figured I would post a review for those of you that are iPhone users.
Pass the CFA Level 2 is a nice flashcard app that covers the entire curriculum and breaks down the material by LOS. Useful for quick reviews of the study sessions. Only things I don't like are that you can't flip thru the cards and that there is no setting to automatically show the answer. I'm not big on using flashcards to quiz myself except for formulas and it would be nice to just have the answer show up automatically. Price was $19.99 so not too expensive.
I also tried CFA Level II : Economics which is a free app by Quartic Training. Econ is definitely a weak area for me and this was very helpful in doing some nice reviewing of the material. I like that it points you to the material in the CFAI, Stalla and Schweser material. You can tap the screen to go back and forth thru the flashcards and the material is presented as soon as you view a card. I wish they had more for the other SS's. I love how it has a solution section that goes thru the computational stuff in this SS too. You can also add your own notes for a flashcard and even email them. Sweet, sweet sweet.
I have not tried the Allen CFA apps as they are way too expensive for my tastes. I would never want to do any serious quizzing or review on the iPhone anyway, it's more for quick review.
Check them out if you're a iPhone user. Hope they help.
Wrapped up SS11 tonight by finishing the Dividend Discount Model readings. This stuff is second nature to me as I saw this throughout my master's programs and a lot of it is overlap from L1. I still have to wrap up the item sets for this section and then it's on to SS12 which seems to be the meat of the exam. Schweser calls it the heart and soul of the CFA program so you know it'll be tested heavily. My goal is to finish it by Sunday night and then do an exam on SS11 and 12 together.
I've started using the Schweser Level 2 workshop slides when I go thru the material which helps me summarize the key points and is a useful review tool before quizzing.
Boy, tonight it really hit me how much work I have left to do for this exam. Plenty of time but boy the material just keeps coming and coming and coming like a never ending train. I just finished Equity 1 and Alternative Investments(SS10 and 13) and began Equity 2(SS11) tonight. I'm starting to hate Peter Olinto. His lessons make me write more in an hour than I normally write in an entire year and I always have to pause the lesson to catch up.
Will try to get thru the rest of the lectures tomorrow night. I haven't been as disciplined recently as I've needed to be. That stops today. I'm shutting down my personal life for these last 75 days outside of seeing my kids. No way I'm going thru all this suffering to not pass this exam.
I'm typing this on a plane on my way out to Phoenix to visit my best friend who moved out there recently. I wrapped up Study Session 9 this week which marks the midway point of the studies for Level 2 in June. I have to say, only halfway thru and this is already much harder than I anticipated and definitely a step up from Level 1. The material isn't difficult, it's just so much to absorb and master and a lot of it is brand new even for someone like me who has a MBA and a MS in Finance. I was lucky enough to see some of the Quant stuff in my MSF program and I'm hoping I covered some of the derivative and fixed income material as well. The accounting piece was brand new to me top to bottom which is probably why I struggled with it. I'll definitely have to go thru each SS again to really master it come exam time.
Since I have a 5 hour flight to sit thru, I'm using some slidess from Schweser that summarize the Level 2 material. I figure it's a good way to review the core concepts I've covered so far so I don't forget them. As I went thru the slides I noted what areas I felt weak on and would need to focus come review time.
Ethics - Overall strong area for me. Lots of problems will help drill this stuff home come exam time.
- Areas of Focus - Soft Dollar Standards, Prudent Man vs Investor, Research Standards
Quant - Another strong area for me. A lot of this I saw in my MSF courses but some of it is new.
- Areas of Focus - ANOVA table calcs, assumption violation(serial correlation etc), time series
Economics - Definitely my weakest area by far. Only one item set so not gonna get too bogged down here.
- Areas of Focus - entire reading. Probably just going to use the Secret Sauce to review high level core concepts and aim for the best.
FRA and Corp Finance - Decently strong here.
- Areas of Focus - Pensions, Intercorporate Investments
I also watched a lecture on Equity.
#CFA To follow up on the earlier post, while I still need to drill down on specific areas in each SS, this is a high level ranking of where I feel I'm strong/weak at for each SS up to this point
- SS1 - 2 - Ethics - STRONG - I remembered lots from L1 and review time in the past month will ensure I own this area
- SS3 - Quant - STRONG - I owned this in L1 and a lot of this stuff I covered in my MSF curriculum.
- SS4 - Econ - WEAK - Not too worried, I felt weak in L1 Econ but did well enough to get over 70%. This is only 1 item set anyway. I will review it but not devote too much time to it during my last month.
- SS5 - 7 - FRA1 - MEDIUM - I will definitely reread this stuff top to bottom in the last month. I did the same for L1 and it worked well. I do need to take a day to list my strengths/weaknesses so I know where to focus more.
- SS8 - STRONG - Only the one area to bone up on and I should be fine.
#CFA Did a PassMaster session on the first part of SS8 tonight. Not too bad. Corp Finance was a strong area for me in school and on L1 so I expect to do well here on L2.
I probably should have started doing this much earlier, but I'm going to begin listing what I feel are my strengths and weaknesses in each Study Session so I know where to focus come review time. I'll try to go back thru the earlier SS's and ID areas I'm strong at and can gloss over and areas where I need to really reread the material and do lots of problems. I'll start with this SS and make it a habit to list them after I quiz myself.
Strengths
- Using the EAA(Equivalent Annual Annuity) approach
- Effects on inflation on Budgeting
- Capital Rationing
- Project Risk Analysis and Market Risk
- Real Options
- Budgeting Pitfalls
- Budgeting Alternatives
Weaknesses
- Projecting Cash Flows - This stuff isn't hard, I just need to go thru it top to bottom again to drill it home. Started to get it after I went thru the quiz questions a 2nd time.
I also began reading the next section in SS8 to get a headstart on the weekend. Will be taking tomorrow off to rest a bit and actually experience life before taking the weekend to finish SS8 and start SS9.
#CFA OK ignore what I said about SS7 being pretty easy. After a quiz session in Passmaster and Qbank I walked away scared. I don't know if this will be true come exam time, but it seems you need to really remember a lot of the adjustments that get made on the financial statements and not just at a high level. I mean knowing exactly when to add back depreciation expense at the right tax rate, etc etc etc. I can't imagine the real thing will actually expect you to know that level of detail but some of the Schweser questions were very difficult if you didn't recall the exact process to adjust the statements. You also better know the ratios down cold which is something I struggled with initially. I'll need to make some flashcards or a formula sheet and just have them memorized along with the Dupont model.
Just to prevent me from jumping off the balcony I decided to see what kind of questions the CFAI text asked at the end of readings 24-26 and those don't seem to be as intensive as some of the Stalla/Schweser ones so maybe I'm just blowing this out of proportion. Whatever the case may be, I will need to do a complete top to bottom review of FRA during the last month. Part of me wants to do it now, but I don't think it's worth it, I'm likely to push the schedule out further and forget the material anyway. With the weighting what it is, I'm better off lumping it with the final review of Ethics during the final month so it's fresh come exam time.
At any rate, tomorrow's plan is to review and quiz the first part of Corp Finance(SS8 - Capital Budgeting). I'll probably take Friday off to rest my brain a little before trying to finish the remainder of Corporate Finance(SS8-Capital Structure and Leverage and Dividend Policy) Saturday. I'll then try a Progress Exam for SS1-8 Sunday and begin SS9. I mentioned I want to leave at least a month of review time and I think I can accomplish that if I follow this schedule.
#CFA I watched the Stalla lectures tonight for Study Session 7 and did some basic quizzing. This stuff is pretty easy all things considered, especially since a lot of it leverages the material from L1, especially when it comes to the DuPont analysis stuff. It's definitely worth reviewing some of the L1 concepts. Stalla has a good PDF that reviews it located here.
Most of this came right back from L1 after looking it for a while. I'm going to reread the two sections in the study notes tomorrow night and finish the quizzing including the item set questions before moving on to the first part of Corporate Finance on Wednesday.
I also obtained the Schweser QBank which I will be using as part of my quizzing going forward. I've discovered the QBank questions are more "CFAI like" than Stalla's questions. I'll use Stalla's for my initial quizzing but then use QBank over the weekend for my final reviews. I'm also going to try to get thru all of Corporate Finance by the end of this coming weekend. I'd like to take 1-2 weeks off my current study schedule so I have a full month of review. Right now I'm scheduled to finish the initial readings the week of 5/17 which only gives me 2 weeks of review. I think I can speed up and finish by 5/7 which gives me almost a full month to review, and take mock exams left and right.
