Posts

CFA L3

  Value-Based Approaches Benjamin Graham is regarded as the father of value investing. Along with David Dodd, he wrote the book Security Analysis (1934), which laid the basic framework for value investing. Graham posited that buying earnings and assets relatively inexpensively afforded a “margin of safety” necessary for prudent investing. Consistent with that idea, value-based approaches aim to buy stocks that are trading at a significant discount to their estimated intrinsic value. Value investors typically focus on companies with attractive valuation metrics, reflected in low earnings (or asset) multiples. In their view, investors’ sometimes irrational behavior can make stocks trade below the intrinsic value based on company fundamentals. Such opportunities may arise due to a variety of behavioral biases and often reflect investors’ overreaction to negative news. Various styles of value-based investing are sometimes distinguished; for example, “relative value” investors purchase ...
Post a Comment
Read more

CFA Ethics BOOK

Image
Standards of Practice Handbook 12th Edition STANDARD I: PROFESSIONALISM Standard I(A) Knowledge of the Law Members and Candidates must understand and comply with all applicable laws, rules, and regulations (including the CFA Institute Code of Ethics and Standards of Professional Conduct) of any government, regulatory organization, licensing agency, or professional association governing their professional activities. In the event of conflict, Members and Candidates must comply with the more strict law, rule, or regulation. Members and Candidates must not knowingly participate or assist in and must dissociate from any violation of such laws, rules, or regulations. Guidance Members and candidates must understand the applicable laws and regulations of the countries and jurisdictions where they engage in professional activities. On the basis of their reasonable and good faith understanding, members and candidates must comply with the laws and r...
Post a Comment
Read more