The response to my SFM Paper May 2016 Analysis has been overwhelming. Kind words have come from not only the students who had subscribed to my online SFM course but from other CA final students as well. Placing aside the analysis, the following discussion is going to be a little broader.
I come across various questions from students ranging over 'SFM', finance courses, careers and general guidance. I have always tried to answer these to the best of my capability, drawing all that I can from my experience and knowledge. I confess, sometimes I fail to respond adequately. Keeping the context in mind, I think it would be a good idea to share some of these questions with my views alongside.Sir, how do I prepare for SFM?
SFM is an awesome subject. There is very little to memorise except the dreaded Black Scholes!! But even that can be understood and imbibed. For you to do well in a subject, you need to fall in love with it. Let at least the affair go on till the day of exam :)
Look at SFM in parts- Derivatives, Forex, Capital Budgeting, M&A, Equity, Bonds, Mutual Funds... try mastering one topic at a time. While you do so give it all. Following a certain sequence helps. For instance, Capital budgeting ought to be done before other chapters. M&A should be done after you're done with equity.
CA as a course requires intensity - quite a bit to be covered in limited time. Have a progress tracker. I used to keep a tab on the number of times I would work out each problem. The real difficult ones carried special tick-mark as these called for repeat attention. In case you have the video tutorials, keep on record the ones that you would want to go through once again. From a last mile perspective there should be these identified special problems (3-5 in each chapter) to be looked at which should give you an assuring sense of 100% revision.
READ... THINK... PRACTICE
I got better at the subject after my exams. I recall having devoured a number of books on Corporate Finance during my holidays. I realised how little I knew and trust me, this realisation motivates you to know more. I suggest to all the interested students to go beyond the institute material and coaching material. Authors like Brealey& Myers, Damodaran, John Hull, Fabozzi, Vernimmen, JR Varma, Chandra... have come up with great stuff. Personally, I have been lucky enough to have been taught by some of these stalwarts. Reading their books by itself is a great learning and humbling experience.
Thinking comes easy once you read, especially when you get excited by what you read. There are concepts to be understood and one doesn't get it right in one go. I remember in my early days, it took me quite a while to understand the significance of 'reinvestment' assumption in Time Value of Money. It is basic but has powerful implications.
PRACTICE... in case you are a student your engagement is with the assignments, case studies, practice exercises to test your mettle and understanding. A more extended effort would be to have internship or work experience in the relevant domain. This does not happen easily in our country, but with persistence- very often students are able to get what they want.What do I need to get rank in CA?
This question very often comes to me particularly due to two reasons. One- I am a coach and am supposed to help students prepare and excel in their exams. Two - I was myself fortunate enough to achieve a rank in CA finals.
My submission is, never think of rank while preparing for your exams. Only think of giving it all. Once you start writing the exam- think yourself to be the best, well ahead of the rest. The assumed and self -conditioned arrogance (for those 3-4 exam hours) works fabulously well. Personally this frame of mind helped me outperform myself in the exams. Just to ensure that the balloon did not puncture, I would never ever discuss the paper after writing it.
Also my humble suggestion, while we fight for the coveted rank- don't regale yourself for too long if you achieve one or don't sulk endlessly if you don't. Careers are not made and marred by ranks (or by the absence of it). Sustained effort is the key to be happy in life.
Let me confess, I find this to be the toughest question to answer. It is not a standard question and does not have a standard answer. In fact this question gets best answered by oneself through introspection or by somebody who knows the student very well.
While all of us are talented, we are also in a sense uniquely talented. Generally, if I am convinced about the person's capabilities, I give them a specific answer. Otherwise, it would be grossly unfair to the student if I try answering this question not knowing the other person's interests and strengths.
In some cases I suggest to students to expand their horizon and look at other courses alongside. It becomes easier for me to address the concerns of those who are inclined towards finance.
I love answering this! I have immensely benefited from all I did- CA, CFA, FRM and MBA-Finance. As a professional finance coach and as a finance student- all these courses have helped me engage with the subject wider and deeper. I suggest one should look at these courses (the curriculum, the exam structure, the duration) and see which one is exciting them the most. Start with one. Trust me- the path will discover itself.What keeps you going as a trainer?
Primarily, love for the subject and the immense satisfaction of making a contribution to somebody's achievement. My humble suggestion is- love what you do and do what you love.