g-d damn CPA exam results came

[robh23]

well fin stmt analysis was one of my better areas, but its boring.

i know quite a lot of people do the cpa and end up on wall street, but they are the exception when it comes to the cpa.

at the end of the day i want to work in equities and "accounting" doesnt even begin to address how to make decent money in equities.

 

[Hector13]

Originally posted by: robh23
well fin stmt analysis was one of my better areas, but its boring.

i know quite a lot of people do the cpa and end up on wall street, but they are the exception when it comes to the cpa.

at the end of the day i want to work in equities and "accounting" doesnt even begin to address how to make decent money in equities.

I am not sure if by "equities" you mean equity capital markets, trading, or equity investing. Since you are taking the CFA, I assume it is the latter (investing in equities). In this case, I hope you are not going to a fundamental shop as you may be disappointed to find that fundamental analysis is little more than financial statement analysis... which, as we already know, means accounting. And if you are going to a "good" fundamental fund, the amount of accounting you will need to know will be more than what is on the CFA.

 

[robh23]

Originally posted by: Hector13

Originally posted by: robh23
well fin stmt analysis was one of my better areas, but its boring.

i know quite a lot of people do the cpa and end up on wall street, but they are the exception when it comes to the cpa.

at the end of the day i want to work in equities and "accounting" doesnt even begin to address how to make decent money in equities.

I am not sure if by "equities" you mean equity capital markets, trading, or equity investing. Since you are taking the CFA, I assume it is the latter (investing in equities). In this case, I hope you are not going to a fundamental shop as you may be disappointed to find that fundamental analysis is little more than financial statement analysis... which, as we already know, means accounting. And if you are going to a "good" fundamental fund, the amount of accounting you will need to know will be more than what is on the CFA.

i know from interviews and general awareness that stupid hedge funds and most investment managers just reconsider the sell side mumblings, but smart people dont do that, and the smart hedge funds i have talked to and generally know about do their own research, and yes hector that means much more than thinking about last years inventory prices.

 

[Hector13]

Originally posted by: robh23
i know from interviews and general awareness that stupid hedge funds and most investment managers just reconsider the sell side mumblings, but smart people dont do that, and the smart hedge funds i have talked to and generally know about do their own research, and yes hector that means much more than thinking about last years inventory prices.

I honestly don't know where you are interviewing, but you'd be hard pressed to find a fundamental money manager (hedge fund or not) that doesn't use accounting data for almost all of their analysis. I remember reading a survey last year of the most popular factors used by buy side managers.. if I can find it at work I'll post it for you, but I can almost guarantee you that the top ones will include:

earning per share
book to price
p/e
return on equity
momentum
accruals
debt to equity
dividend payout
etc...

all of these (apart from momentum) come from analyzing company financial statements using.. guess what... accounting.

And good luck deciphering pro-forma earnings for a multinational company that is acquiring a foriegn firm without a great understanding of GAAP and accounting.

 

[krunchykrome]

If success doesn't come naturally for you, perhaps failure is more of your style.

 

[robh23]

Originally posted by: Hector13

Originally posted by: robh23
i know from interviews and general awareness that stupid hedge funds and most investment managers just reconsider the sell side mumblings, but smart people dont do that, and the smart hedge funds i have talked to and generally know about do their own research, and yes hector that means much more than thinking about last years inventory prices.

I honestly don't know where you are interviewing, but you'd be hard pressed to find a fundamental money manager (hedge fund or not) that doesn't use accounting data for almost all of their analysis. I remember reading a survey last year of the most popular factors used by buy side managers.. if I can find it at work I'll post it for you, but I can almost guarantee you that the top ones will include:

earning per share
book to price
p/e
return on equity
momentum
accruals
debt to equity
dividend payout
etc...

all of these (apart from momentum) come from analyzing company financial statements using.. guess what... accounting.

And good luck deciphering pro-forma earnings for a multinational company that is acquiring a foriegn firm without a great understanding of GAAP and accounting.

most of my ideas come from sentiment and fundamentals turn arounds, and you find them by reading good news sources, and doing some screens for unreported stocks with tell tale numbers, then further investigations. most stocks are reasonably priced, the ones that are well out of whack normally have a black cloud or management change over them, and i usually find the numbers of little assistance in understanding the situation.

one recent example was the italian milk company parmalat. i looked at their stock from the short side when they were at 2.20 on the monday. by friday they were bust. unfortunately although their debt looked high on monday, its wasnt so high that the firm looked irrescuable, then by friday it turned out there was a massive fraud going on, so if i had taken a bet i would have doubled my money in a week, but from their last quarterly, you couldnt tell their sitation, so i left it. if i had rang their milk suppliers in italy id have found they hadnt been paying properly since september, and that would have been a big lead, but unfortunately i didnt, if i had a hedge fund, maybe i would have but there you go. either way the trick to turn this trade from a bet to an analysis was scuttlebutt. the accounts were useless.
in terms of factoring in the cost trend in widgets, for mega corp and their acquisiton, nothing could bore me more, im a hunter not a farmer, im opportunistic, i dont want to lasily monitor a few firms and issue stock targets; sell side analyts dont have a good track record in crossing to the buy side. im also contrarian i like to call sell siders wrong, either because they are being too cautious, are doing a target more based on momuntum than facts, or they are simply wrong - which is the least often occurrence of these three situations.