Knowledge acquisition

Malthusian

Deleted_User wrote: »

Disagree that statistics isn’t important.

What are we disagreeing on again? I only said that advanced statistics is mostly irrelevant, not that statistics isn't important.

While as a passive investor I don’t actually apply it, knowledge of stats helped to understand advantages and disadvantages of various approaches. Quants base their whole risk analysis on advanced statistics.

Retail investors should not attempt to be quants. Most quants fail to consistently beat the market.

And, looking at the details of these modules, why are they missing even the most rudimentary security analysis? Where do they study the difference between money weighted and time weighted returns?

R02.

Do they even have the maths required to understand it? How about history of investment?

R02 - R05 to the extent that legacy issues are still potentially relevant.

Lawyers and accountants go through years of university training and tough selection.

After which 90% of them emerge as bog-standard lawyers and accountants, most of whom end up as provincial conveyancers or bookkeepers adding up the totals of column A and column B for local garages.

Some of the most financially incompetent people I've met have been accountants. Accountants are by and large hopeless with economic concepts, all they understand is how to do tricks with numbers. Obviously this does not apply to the best accountants but we're talking about pass-mark-scrapers here and why local garages still need to be allowed to employ them.

Look at Carillion, Enron and Patisserie Valerie. The cream of the accountancy profession was responsible for these abject failures of audit oversight. Now imagine how much worse the people who don't get to be senior partners at the top 4 are at accountancy.

[Deleted User]

Malthusian wrote: »

What are we disagreeing on again? I only said that advanced statistics is mostly irrelevant, not that statistics isn't important.

Retail investors should not attempt to be quants. Most quants fail to consistently beat the market.

R02.

R02 - R05 to the extent that legacy issues are still potentially relevant.

After which 90% of them emerge as bog-standard lawyers and accountants, most of whom end up as provincial conveyancers or bookkeepers adding up the totals of column A and column B for local garages.

Some of the most financially incompetent people I've met have been accountants. Accountants are by and large hopeless with economic concepts, all they understand is how to do tricks with numbers. Obviously this does not apply to the best accountants but we're talking about pass-mark-scrapers here and why local garages still need to be allowed to employ them.

Look at Carillion, Enron and Patisserie Valerie. The cream of the accountancy profession was responsible for these abject failures of audit oversight. Now imagine how much worse the people who don't get to be senior partners at the top 4 are at accountancy.

Looking at R02, I am not seeing either fundamentals of security analysis or anything about time and money weighted returns. Seems like it ought to have been included for someone who gets to decide investments. There are related concepts, eg time value of money but the focus is on simple, qualitative. high level, not requiring maths beyond O levels

https://www.cii.co.uk/media/10122203/r02_syllabus_2019-2020.pdf