Playing the Certification Market

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I’ve heard different people say on several different occasions that playing the stock market is like going to the casino. Coming out ahead is all about luck, they tell me, and being in the right place at the right time. This is a fallacious line of thinking and demonstrates a lack of understanding on their part about how the market works. (Of course, this might be something they use to console themselves after losing a few grand from bad investments.) In fact, there are many venture capitalists out there who appear to have the Midas touch and seem to turn a profit on every deal. Are they just luckier? Hardly. When shrewd investors evaluate the worth of a company’s shares of stock, they consider things like the organization’s cash holdings, debt, quarterly and annual profits, and line of business. For them, it’s not some crapshoot but rather a science of sorts.


Warren Buffett, the investment mogul and second-richest man in the world (I’ll give you one guess who’s first), was ridiculed by so-called “experts” in the late 1990s for abstaining from tech stocks that soared in value almost without cessation. At the time, he claimed not to understand the IT industry well enough to justify large investments in it. This might have been true, but just as likely an explanation was that his own market analysis and intelligence showed him that Wall Street speculators had inflated the value of stocks for many tech companies, a number of which had large amounts of debt, few to no profits and profligate spending on frivolous, non-revenue-generating ventures. History proved Buffett right, as many of his former critics lost their shirts when the tech bubble burst.


The strategies employed by Buffett and other smart investors have relevance for IT professionals, and I’m not just talking about their stock portfolios. Techies can use similar methodologies to play the IT certification market, so to speak. Here are a just a few tips you can use to determine whether or not a certification would be a good investment:


Brand Recognition
Stocks of companies such as Wal-Mart, McDonald’s and Coca-Cola aren’t valuable solely because of the goods and services they provide. These enterprises have solid reputations among large numbers of both businesspeople and consumers, due in part to the quality of their output and also to successful marketing and brand-building efforts.


Similarly, some vendor-specific and vendor-neutral credentialing organizations enjoy a lofty status among IT employers and employees alike, which is attributable to difficulty and relevance of subject matter as well as old-fashioned branding. And just like investing in established, stable enterprises with good reputations, getting a certification in a widely used, widely regarded technology or product is usually a safe play.


Risk and Forecasting
Needless to say, playing it safe isn’t for everyone. Several people want to get high returns on their investments in the stock market, and they want the revenues to roll in sooner rather than later. However, this usually involves a trade-off: a high amount of risk for a huge payoff. The danger here is that the enormous return may never come, and you might actually lose all of the assets you put into the undertaking.


Again, this can be applied to IT certification. Let’s say you’ve attained a credential that covers a lesser-known tool or technology, thus demonstrating proficiency in an area that most of your fellow techies won’t go into. You’ll possess a very unique set of skills, but will organizations actually want it? What makes a certification lucrative is employer demand for the capabilities it verifies. For instance, you might believe that every retailer will use RFID technology for inventory functions in a decade, but would you stake your career on that prediction? It might be worth it. But before you make that decision, be sure to read plenty of industry reports and studies—preferably from impartial research firms—to find out if the buzz around a particular IT discipline is based on substantial analysis and not just hype. Also, talk to your professional colleagues to gauge how many people might try to break into this field—a glut of specialists in a certain discipline can be almost as bad as lack of demand.


Nearly all serious investors—even the most successful ones—will lose money on some of the shares they hold. Yet they manage to make their overall portfolio profitable by holding many different shares in many different companies in many different industries. The basic formula for turning a profit in the stock market is simple enough: Pick more good investments than bad ones. They invest carefully in a blend of low-risk and high-risk stocks and funds, established companies and start-ups, and short-term and long-term speculation.


Likewise, IT pros ought to diversify their certification portfolio. Get foundational, popular certs such as CompTIA’s A+ or the Cisco Certified Network Associate (CCNA), but don’t be afraid to attempt credentials in cutting-edge technologies and techniques. And keep building up your knowledge, whether it’s through certification, experience, training or academic programs. Remember, your greatest asset is your mind. Never stop investing in it.

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