Chartered F****in’ Analyst: Knowledge is a Problem

by Johnny Debacle

Direct quote from a CFA study guide book:

The primary factor leading to overconfidence in professionals is knowledge (education or experience) which leads them to think they know more than they think they do[.]

Those italics are from the book, not from us.

Take Away for the CFA Candidate: In order to get a CFA, one must keep in mind that knowledge, specifically derived from education or experience, is bad.

Recommendation: Short me, dude, short me right in the face.

Related Reseach:

Ad Sense Ad Sense


  1. Sean
    February 26th, 2008 | 3:45 pm

    Let’s just go all out and short anyone who’s ever been to college and/or held a real job before.

  2. Meglatonk
    February 26th, 2008 | 5:12 pm

    Meglatonk rolls a 17 on his 24 sided di and longs himself and other LARPers.

  3. pirate vs squid
    February 26th, 2008 | 5:32 pm

    “which leads them to think they know more than they think they do”


  4. February 26th, 2008 | 6:08 pm

    Yep, that is what it says.

  5. Size
    February 26th, 2008 | 8:09 pm

    suddenly, I’m even less proud of my having the CFA designation (or however the heck you’re supposed to say it) than I was before.

  6. To The Hilt
    February 27th, 2008 | 9:38 am

    So glad I have to spend my weekends reading that crap.

  7. Andrew
    February 28th, 2008 | 9:39 am

    It was when they phoned me up at 8pm on New Year’s Eve asking me was I sure I wanted to let my membership lapse that I knew I’d made the right decision.

  8. LTB
    July 14th, 2008 | 1:26 pm

    My favourite CFA moment was at the London exams this year. The sound system failed in the morning and they had to use a bull horn to deploy their facist instructions instead. Big deal, nobody cared.

    9 long hours later, when everyone was itching to get out and start drinking, the CFA lady (a definite short) made a point of apologising for the failure earlier and very pointedly made clear that it was the exhibition centre’s fault. This was so typical of a classy organisation like the CFA.

  9. POWinCA
    February 1st, 2009 | 3:31 pm

    Someone ought to sue the CFA Institute for anti-trust violation.

    In my test facility alone, there were over 700 people each paying over $1000. Subtract out the minimal cost of the books, proctors, facility, grading, and administration and there is ENORMOUS profit left over. If you fail an exam, you have to pay nearly the entire fee again. The 65% failure rate is obscene.

    The books were horrendous, using a thousand words to say what 100 would do. They were filled with errors and I didn’t discover my errata sheet until a week before the exam. I had spent countless hours on the practice questions trying to figure out why I got answers wrong when, in fact, I was correct.

    The exam, which I failed, was a joke. It was written in a manner designed not to test your knowledge but to trip you up. They asked questions from the most obscure parts of the text. The ethics questions split hairs. The curriculum had numerous lists, and they asked you to identify which item was NOT on a particular list; the “correct” answer was invariably on one of the dozens of other lists.

    I could have taken the entire exam without a calculator. After spending weeks trying to learn how to do PV, FV and other calculations on the HP 12C, they asked exactly ONE question on that.

    I taught Stats and Econ for eight years and I’m certain I got every one of those questions right. In fact, I wasted valuable study time trying to refresh my knowledge on Econ and Stats. The questions were elementary. The young finance and accounting majors behind me in the lunch line were crying about the Stats and Econ. So it’s wrong to think your education and experience don’t matter. I had no accounting or finance background, which was the difficult part for me.

    I’m still going to press on with CFA for a few reasons:

    1. My company pays for it (although I’ll likely have to pay for the retest)
    2. I know much more about how they write the test after having taken it, and I know I can pass next time.
    3. The designation will carry weight in my current job even if it’s worthless. Like a Spence signalling model, education doesn’t have to provide useful skills as long as it separates high ability from low ability people by opportunity costs.

    Thanks for the enjoyable website though. It makes me feel better to know that others, including CFA charterholders, think that CFA is full of $^!+.