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  #1  
Old 04-28-2018, 01:05 AM
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Default Battle of SDM: Fall 2018

The exam is over, which means it's time to start looking forward to the next one! Let's kick this thing off.

If you are starting (I know some people have gotten an early jump, even without the syllabus being final), welcome to the fight!
If you are planning on starting later, know that it is still two months until the "real" start of study season.
If you just took the exams, we would all love to hear any real-world advice from those in the trenches!

And if you have any questions at all, please let me!
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Old 04-29-2018, 08:27 PM
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Thanks Paul.

I think it is quite reasonable to assume no material syllabus changes will come for Fall (syllabus indicates Spring and Fall for 2018 for SDM).

If you are looking to get an early start, but haven't yet found out if you passed another exam, here are a few suggestions:

-the Nudge book is both interesting and useful for everyday life - so if you don't end up writing SDM this sitting, it is definitely not time wasted

-Failure of Risk Management (by the author of How to Measure Anything) is a bit more "technical" but applies generally to a lot of work actuaries do -- so another reasonable investment of your time

-The Undoing Project -- an interesting read; but note that much of the book is on the story of two great psychologists. The 300+ pages of content can be reduced to less than 20 pages for studying for the exam. This is a book you can read lightly and then when you really start studying can use the XP summary for it!

One thing students need to grasp is SDM has a tough pass rate (for students that have already passed a lot of exams). I have learned through working very closely with many students that they need to pick up their game significantly in many areas to pass this exam.

Let me know if you would like any help with this - we offer a very engaging exam product (pre-studying evaluation, marked assignments, and graded practice exams)

In the meantime, enjoy the spring!

Steve
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Old 05-01-2018, 07:57 PM
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The syllabus for next time is out! They have set our date for Nov 1. There was no change to the syllabus.

https://www.soa.org/Files/Edu/2018/f...dm-syllabi.pdf
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Old 05-04-2018, 03:57 PM
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Default Some articese that tie into the SDM syllabus

VW's ex-CEO Winterkorn finally charged with fraud!

https://www.bloomberg.com/news/artic...-cheating-case

Warren Buffett's annual meeting - article talks about large Apple shares purchase (Buffett has said that he likes Apple due to the high customer switching costs of it's iPhone -- Buffett uses some of the Five Forces principles in his investing choices for long-term value)

... article also discusses float at the end ... the SDM147 reading covers a lot of Buffett's ideas around float.

https://www.marketwatch.com/story/6-...ing-2018-05-04

So some current events that tie in nicely with SDM readings!

Steve
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Old 05-10-2018, 12:47 PM
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Default Home Capital update

Here is another current event tie-in with the syllabus: Home Capital's latest earnings.

(As an aside, shortly after the publishing of the study note article, Home Capital replaced it's very costly emergency funding with a lower cost loan from Berkshire Hathaway ... this article notes that the new funding with BH will expire soon.)

https://www.theglobeandmail.com/busi...ild-continues/

Steve
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Old 05-18-2018, 02:17 PM
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Another update on Home Capital - they found some banks willing to provide funding at a cheaper rate than Berkshire Hathaway and also cheaper than the emergency funding covered in the study note

"Home Capital Group Inc. has secured a $500-million standby credit line from two unnamed Canadian banks to replace its more costly emergency funding facility from Warren Buffett's Berkshire Hathaway Inc."
http://www.cbc.ca/news/business/home-capital-1.4665391

This ties in with this question from the last exam:

(i) Describe the cause of the liquidity crisis faced by Home Capital Group
(HCG).
(ii) Identify the action taken by HCG to meet its liquidity needs.
(iii) Describe one benefit and one cost of HCG’s action.

Steve
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Old 05-23-2018, 10:37 PM
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Here is a recent article that gives a nice example of the use of Credit Default Swaps (CDS). It also shows how a hedge fund might sell CDS when perceived as over-priced (this is something mentioned in the Shadow Banking study note -- in this case this would be the study note's "Asset Manager" selling CDS).

I post these examples/articles as a way to try to make the study material a little more relevant/real.

Only the first few paragraphs need to be read ... here is the best part:

"Here’s a hypothetical situation for you. Let’s say Company X is in bad shape: It has a lot of debt, its business isn’t doing great, and it is running out of cash. It is likely to default on its debt in the next few months. In desperation, it sounds out financing options, but no one is all that keen to lend it any more money since there is no clear path to getting paid back. Credit-default swaps on Company X trade at distressed levels, say 40 points upfront—you have to pay $40 to insure $100 of debt for one year—reflecting the market’s expectation that default is likely and that recoveries in default would be low."

"Hedge Fund Y notices that Company X CDS is expensive and starts selling a bunch of it. People keep giving it $40 to insure $100 worth of debt for one year, which they think is a good trade because Company X is in such bad shape. Then, after selling a bunch of CDS, Hedge Fund Y springs its trap. It calls up Company X and asks, “would you like to borrow some money?” “Sure,” Company X says, “that is exactly what we want, but no one will lend us any.” “We will,” says Hedge Fund Y. “What’s the catch,” asks Company X. “Well,” says Hedge Fund Y, “what we really want is for you not to default on any of your debt for the next year.” “That’s not a catch at all! That’s what we want too,” says Company X. “Great,” says Hedge Fund Y, “so why don’t we lend you enough money that you’ll definitely be able to pay your bills for at least, say, 13 months.” “Sounds good,” says Company X; “if you do that we are confident that we will pay all our bills for at least, say, 13 months.”

https://www.bloomberg.com/view/artic...-is-everywhere

Steve
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  #8  
Old 06-01-2018, 05:38 PM
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Default The Amazing Psychology of Japanese Train Stations

Just saw this recent article on the use of "nudges" in Tokyo's train stations (some of the world's busiest):

https://www.citylab.com/transportati...ations/560822/

The Amazing Psychology of Japanese Train Stations
The nation’s famed mastery of rail travel has been aided by some subtle behavioral tricks.

"Rail stations, whether in Japan or elsewhere, are also great places to see “nudge theory” at work. Pioneered by behavioral economist Richard Thaler, who was awarded the 2017 Nobel Memorial Prize for his work, and Harvard Law School professor Cass Sunstein, the theory posits that gentle nudges can subtly influence people towards decisions in their own (or society’s) best interests, such as signing up for private pension schemes or organ donation. In the U.K., there’s a government office devoted to the idea, the Behavioural Insights Team (or “nudge unit”), and their work often shows up in the transit realm."

Have a great weekend!

Steve
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Old 06-16-2018, 09:02 PM
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Default Quantitative Cyber-security Risk Management

One of the things that was added to the SDM syllabus recently was a number of chapters from "How to Measure Anything in Cyber-security Risk". (Note... This text has not yet been tested in anyway as it was not on the Spring sitting).

Chapter 6 covers the importance and methods of decomposing complex risks to be able to better quantify those risks. A short case study at the end of the chapter is the decomposition of reputation damage risk. I saw this article discussing reputation risk from 5 major data breaches

Do Data Breaches Permanently Affect Business Reputations?
Massive data breaches make headlines, trigger stock price slips and often lead to executives getting fired. Some companies, however, not only recover from breaches, but end up thriving after the dust settles, says Eric Pinkerton, regional director for Sydney-based information security consultancy ...

https://www.bankinfosecurity.com/how...tation-a-11048

By the way, Happy Father's Day to everyone ... particulalry those folks that are both parents and are writing SOA exams!

Steve
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Old 06-19-2018, 08:46 PM
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So last month, VW's Winterkorn was charged in the US and now Audi (subsidiary of VW) CEO has been arrested in Germany on the emissions scandal covered in the 176 study note Hoaxwagen!

https://www.bbc.com/news/business-44517753

Steve
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