Talking to Myself

Now claaaaass!
Less than 4 months to go till I get the chance to to repeat CFA Level III. I’ve put in a handful of hours of re-preparation (32, to be exact). For the longest time it was hard to figure out what the proper game plan needed to be.

After my crash-and-burn at my first attempt at Level II, the strategy for the second go-round was obvious. I hadn’t used 3rd party study materials like most other candidates, ergo my downfall.

Sure enough when I used 3rd party the second time around, I passed!

Can’t do that with Level III as I began with an even more expensive 3rd party package right out of the starting gate and it didn’t do the trick.

To be sure, my problem with Level III Attempt #1 was surely not so much what material I used to study but how little studying I actually did. What did I log, 240 hours? I can hear the CFA Guidance Counselor tsk-tsking me for such slim preps. I could just re-order the materials for Attempt #2, but repeating the same actions while expecting a different result is a definition of… well… you’ve probably as sick of that saying as I am.

Then I happened upon this advice that gave me a shot in the arm. Actually, skip to Lesson 2: The #1 Technique for Raising Your Grades.

The suggestion is excellent and I know this because it’s what got me through undergraduate and graduate engineering studies with respectable grades. How could I have forgotten?!

Back in those days I had a huge dry-erase board in my 1-bedroom apartment that I would spend time working problems on in preparation for an upcoming test. Initially, I found it was helpful to talk out loud to myself while trying to solve the problems. Eventually, as I had no roommate to mock me, this evolved into my working the problems as the professor, chewing on the corner of my glasses, explaining out loud to an imaginary class what I was doing in each step and why – complete with imaginary questions from the audience and multiple! exclamation! marks! next to points! I found interesting!!! as I worked myself up into a Charlie Epps frenzy!!!!!

Not convinced that this approach is Efficacious Maximus? Let me tell you a story… In our electrical engineering classes, we didn’t have many girls. Therefore I noticed when they – errr, she – was in class and when she wasn’t. I noticed she was present for all lectures but absent for all exams! I didn’t consider it any of my business until after a particularly horrible test when we were informed there would be no curve because someone (guesses?) had scored very well. Now very much my business, thank you! I pounced after class and demanded to know what the disappearing act was all about.

    “Ummm… I was diagnosed with ADD so I have to take the exam separately.”

    “You mean a different test?!”

    “Same test…”

    “SAME TEST?!”

    “I have to be able to talk out loud to myself!”

Presumably she did the same when preparing – and it was working.

Well I’m doing an – ahem – more mature version of Herr Professor these days, going to my home office, shutting the door, and teaching each of the problem sets out loud as I work them. When I walked out the other day, my wife asked how the students were. “THEY WERE ACTUALLY PRETTY QUIET TODAY!! HA! HA! DIDN’T SAY MUCH! HA! HA! HA HA!!!!!”.

With the CFA material I’m usually not a professor, but something closer to Director of Research. I substitute the name of my LLC for the name of any fictitious trading companies in the problem sets. If the problem has me doing an equity swap to reduce portfolio exposure to a single stock, it’s re-written to be the portfolio of my largest client to make it feel important. I work the problems as if I’m explaining to a new hire why, for example, we’re only buying 283 shares to hedge 500 call options due to the low delta.

What’s that? Having trouble remembering what all the Greeks refer to? Let’s go through it again then, starting with delta and gamma. Now I like to think of gamma being to delta what acceleration is to velocity…

The time passes much more quickly this way since I’m having fun. And to be honest, this is more in line with why I signed up for the CFA program in the first place. The goal was to pass the tests as a byproduct of learning the material and not the other way around. It sounds equivalent, but it isn’t quite.

It might not be the charm for the exam in June as it’s quite slow for the quantity of material I have to master in the remaining time. But there’s no better way to make sure I remember what I do cover almost permanently. In 1996, I taught Electronics I & II classes to undergraduates – got rave reviews (really!) – and I bet I could teach them today with very little preparation. Each day I taught, I taught twice. Once to an empty apartment, once to the lecture hall.

9 thoughts on “Talking to Myself”

  1. Totally agree Lumi. Although finding a sympathetic human ear is even better. My dad always said that a good way of checking that you fully comprehend a concept is if you can successfully explain it to someone else. Consequently, he is currently learning all about the process of forming capital market expectations… Which, I hear, is marginally more interesting than pension asset / liability risk matching…

  2. Lumi,

    Nice narration of your thought process .. 🙂

    Not sure where/who to turn to for the following question .. so I am just checking with you ..

    Where can I get a sample exam (essays) for Morning session for Level3? I saved mock exams from last year, but it only has item sets from the afternoon session. But I would to see the pattern of essay questions. Is there any place you can suggest that I should look at? thanks,


  3. hmmm… i think i only saw what the essay questions would look like in the 3rd party materials (schweser). however, some of the questions at the end of the CFA chapters are worded the same as the test essays. they’re the ones where it asks you to circle whether you agree / disagree and justify your answer, like Queston #4 at the end of Reading 8. your best bet would probably be the Schweser Practice Tests though in order to get a more thorough survey of what the test is like. hope that helps!

  4. As for third party material – the minute I finish a chapter in Schweser, I get paranoid – OMG, what did they leave out that CFAI might test. Reading both then gives me a headache. So I mostly stick to CFAI books + QBank for additional practice. I just pray to Flying Spaghetti Monster this approach works for L2. (It did in L1…)

  5. Hee hee – I’d forgotten about FSM! I think your approach sounds alright. I have a theory that whatever you’re doing wrong in your study approach, it can be partly offset by logging additional hours. We never know exactly what we’re doing wrong of course – so just put in as much time as you can in ways where you still feel like you’re learning. At some point you might get diminishing returns from Qbank if you start to memorize all the questions.

  6. Hi Lumi,

    It has been a while since I last posted on here. I hope all is going as planned for your L3 studying. How are things with L3?

    It has been a pretty rough path to passing the 3 CFA exams for me. Cleared L1 on the first try and then hit L2. I did not pass on my first try and was left with the worst band possible, Band 10. It stung when I saw the results, knowing I put in the time and effort. The thought of being possibly being only a few questions off hurt the most. My second attempt hurt even more, I ended up with a Band 8! The first thought was, “I did worse!?!?!?!?” Even after putting another 300+ hours of studying in, I somehow ended up with a lower band ranking. To this day, I am still a little puzzled by how I performed on my second attempt. But as I study for the L2 exam for the third time, I just hope come exam day, I have enough in me to get me past the pass line. I am still amazed at how many hours I have put into this one exam over the past 2-3 years of my life…….crazy!

    Anyways, let me know how you are progressing through your L3 studies. Look forward to hearing from you.

  7. Sam – don’t remember, sorry! I do recall that only Level III’s were told to bring pens & pencils so maybe you’re on the right track.

    Yelloman – nice to hear from you. I’ve been thinking of doing a post on this topic for a long time b/c I know where you’re coming from. Please stay tuned (& keep studying).

  8. Can anyone please tell me how many hours of studies are recommended for Level 3?

    The writer says 240 hours are not enough and now I AM PETRIFIED. I’m just beginning to study.

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