Sunday, July 17, 2011

CFA Preview Lecture : Securities Market @ Sunway 17/07/2011

Mr. Th’ng Beng Hooi, CFA giving a Preview Lecture on Securities Market


As part of their marketing, Sunway Tes and AB maximus held yet another preview talk at Sunway last Saturday. Yet, there are some Investment-related insights which I picked up and discuss in some detail here.


Retail Investors
(ie: you and me)


One interesting point was when Mr. Th'ng was ranking the order of investors for equities and it went somewhat like this:

  • Institutional Investors
  • Corporate Investors
  • ...
  • Syndicates (yes, they are in every market even KL)
  • ...
  • Insiders
  • Retail Investors ===> That's you and me!

Basically, he was making the point that we retail investors have very little advantage going for us.The other investors above the pecking order not only have the experience and knowledge but all the information needed right at their fingertips. What possible advantage can we have over these other investors?
(Yet interestingly, majority of fund managers don't beat the markets, so what edge do you have over than them?)

In fact, maybe none except long term holding. ie: for retirement as opposed to a mutual fund which has to make good returns annually Of course, this was coming from a self-proclaimed fan of Buffet(read: value investor) but he makes a good point on what little advantage you and I as retail investors have.

So? We have to be patient. Chances are information-wise we lose out to the syndicates, insiders and the big boys at the top as they have teams of researchers and what not behind them.

That's easier said then done, of course- Stocks being easily traded with a click of mouse these days, making it even more of a game running on emotions rather than rational decision making.

If you grow impatient, you may sell although the time frame you set out has not been met. So, that for me was an interesting reminder on what (little) advantage we retail investors have.

Also, at the end, he had a Q&A where he raised and addressed 2 interesting questions(funnily he posed to himself - see pic):

1) Fundamental or Technical Analysis - Which is better?
Mr Th'ng gave a good analogy - It's like Shaolin kung-fu. If you have a different style (crane, tiger, mantis, etc), doesn't really matter as long as you can defend yourself right? So, whatever works for you. As a Buffet fan or a CFA holder, that would usually mean fundamental but personally, the speaker uses both.

2) Will computers take over human jobs (in this field)?
Nowadays, trades are carried out automatically by computers. In fact the 2010 flash crash of the DOW recently (wikipedia here) was caused by such a sell programme that triggered other trades. Some firms out there deal with High Frequency Trades (HFTs) where trades are automated with programmes that pick up data and act on it.

However, this does not necessarily the end of our jobs - you still need a human to key in such data and formulas, no?

That aside, I know will go in my thoughts about the CFA part-time lectures offered by Sunway-Tec + AB Maximus (with Stalla materials):

CFA Part-time Lectures
This has been my 2nd preview lecture and the pricing for their weekend classes is RM4000 and RM 3600 for individual and corporate sponsored respectively. It includes revision and mocks. Sorry, don't have the sheets with me atm and can't find it online for exact details.

The lecturers so far have been impressive and the Stalla materials look impressive in the two preview lectures I have been. Also, Sunway is not too far compared to say Kasturi and the other Management College in KL apparently offering CFA classes too.

Unfortunately for me, it clashes with work on Saturdays so I might just settle for self-study with the Cafepacer (www.cafepacer.org) and maybe the Studymaster (thousands of questions to try out) and see where I get this December.

Oh for the other candidates out there, one question was posed:

Schweser or Stalla Schweser apparently is more concise and hence, suited for the time-strapped candidate. Stalla has been around longer but is more detailed. Sunway-TEC will be using Stalla so they endorse Stalla obviously.

Full Disclosure: This is an unsolicited/unsponsored post.

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