Usefulness of ACCA from a student who aspired to be a value investor
I fell in love with investing before I learned nuts about accounting. As a student who learned and loved science in high school, I tried to read public company annual report. I found that I was only able to admire those appealing millions of dollars of sales, and net profit without really knowing what was going on.
I noticed that three of my best mates were studying ACCA, I wondered why there were so people studying this course…I knew nothing about the course, and after I had only a glance at the syllabus, I guessed that it would be very interesting. My brother told me "You can become a recognised accountant with an ACCA Qualification." This sounds cool, I signed up for the CAT course (Certified Accounting Technician) and I was fortunate enough to be recruited as a junior audit trainee at the same time. However, I never thought I was going to be an Accountant...
I tried to read the Annual report from time to time, and I found that I had been able to gain better understanding. I also started to read "Security Analysis" by the father of value investing, Benjamin Graham. In this book Ben discusses a great deal about different accounting practices, in which I realised that in order to be a good investor, I need to be a good accountant. Of course, accounting is just one small (but vital) part.
The subject that I love best is Finance, I get very excited to know that the first assumption and ultimate goal of Finance is to maximise shareholders wealth. There are so many people around the world learning about Accounting and Finance who all seek to uphold the integrity of the system and maximise shareholders wealth, isn't that wonderful?
Investors nowadays are much more fortunate than the past as they are being supported by a strong force of Certified Accountants and strict IFRS or GAAP regulations. In my opinion, Corporate scandal is inevitable as this is human nature, but we can reduce the chances of it happening!
However, there is frustration too. The teaching of Benjamin Graham is completely against such financial theory in which we are learning in either paper F9 or P4. Through continuing learning of value investing, I found that the financial theory that we are learning is almost completely useless, impractical almost. Hence, I face the problem of studying things that I don't believe in. This stops me from going any further and this is a serious problem in ACCA study. Finally, I come up with a solution, which is I try to think that I have to learn these financial theories in order to know why it is so deadly wrong.
In my humble opinion, I think all of us should try to think for a reason to study any of the papers, whether it is Tax, Accounting or whatever. Having a sense of purpose can be an important motivations which push us forward in life!
Hi, Liew
I am also happy to learn that there is another value investor taking ACCA!
It's still good for us to learn F9 and P4, therefore we can understand what those guys in the financial world doing..
Cheers.
Se Chai
Posted by: Se Chai | 02 July 2009 at 16:19
Having studied F9 and read Benjamin Graham's "The Intelligent Investor" I can quite agree that the theories in F9 are not quite useful to a value investor who relies more on his investment temperament than theories so to speak.
CAPM, Beta values and diversification are mere "noise" to me. :)
Personally i'm against EMH as well.
As an aspiring value investor it is refreshing to learn that a fellow ACCA student actually shares the same mindset of a value investor as me. Way to go, Se Chai!
Posted by: KY Liew | 26 June 2009 at 09:19
The financial theories that ACCA teach in the financial management papers are considered to be fundamental to the understanding of finance without going too deeply into any specialist stream of investment finance.
Paper F9 aims to cover areas in finance that any accountant needs to master, regardless of any future career aspirations. In order to have this basic understanding, general theories such as CAPM, dividend valuations, efficient markets, real options etc are vital and ACCA teaches them with any limitations in their use being clearly highlighted.
P4 broadens and deepens the knowledge from F9, specifically aiming at those who would wish to work at senior financial management level. It is not aimed at preparing students for any particular or narrow specialist area of finance, but should a student wish to specialise later, P4 gives the student a solid knowledge of the theoretical aspects of finance and requires them to apply these in realistic business finance situations.
James Johnston
Business Relationship Manager
ACCA - UK
Posted by: James Johnston | 17 March 2009 at 16:27