Margin of safety, retake CFA

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CFA test did not turn out the result I liked to see. I thought about the reasons, besides the unlucky factor (my score right around the pass/fail line), I attribute the main reason to myself: I did not work hard enough, and my financial knowledge is not good enough. Imagine if I could make more than 70% in all the sections, I would not rely on someone’s mercy on passing the test. Thinking along those lines, I decided to not to challenge the result (in CFA exam rule, one can pay $100 to get it re-scored). I will pay $480 to re-take the CFA level I this Dec.

Of course, the key for me is make sure this time I work hard, make sure I reallly understand all the materials, so that I would have sufficient margin of safety (not the razor thin margin of safety, or pure luck like the June test).

Buying stock with Margin of Safety in Mind
This reminds me Chapter 20 of Ben Graham “Intelligent Investor”, as Warren Buffett emphasized at this year annual shareholder meeting. By that, Ben/Warren meant buy a good stock at bargain price, so that in case something terrible go wrong, we can still sell the stock without a big loss.

Just for fun: my unlucky test experience in the US
TSE: Test of Spoken English. I failed it when I first arrived at Rolla, understandable considering my spoken English at the time, and lack of preparation time. The second time (after a semester) I thought I should be able to pass, because I prepared and could recite all those topics. Well, the result is ironic, because I recite I spoke very fast with my accent, the teacher could not understand it very well. So I failed again.

Driving written test: I read through the brochure and thought I was good. So I went to take the test. Failed the first one with 8 errors (out of 25). Reviewed for half an hour, took it again, this one failed again with 6 errors (to pass, one can make at most 5 errors). I went back and read the book again. The next time I got 100 because I studied, and the test center only has two sets of exams, both of which I took last time 🙂

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