Einstein said:

We can’t solve problems by using the same kind of thinking we used when we created them.

I’m not suggesting you attempt an Einstein, but doing the same thing over and over again and expecting different results is just ridiculous, bordering on madness. It is sometimes difficult to blame an exam strategy that has served you well in the past, but by learning my lesson the hard way, I was able to come up with a few methods that got me through the exams. One of these methods is to have a good mental picture of the course.

A well-known method of mind mapping might come to you when we talk about having a mental picture, but I’m not merely talking about mind mapping. Mind mapping is a method, created to facilitate this mental picture. I have tried it. I love the colours. I love the pictures. I love how I could visualise the whole course on a piece of paper. It provided me with a more interesting way to remember stuff than to remember pages and pages of words.

However, I know of others who actually memorised the pages. They could tell where page 17 of Chapter 6 is. They could tell how far to flip the notes to get to that page and even know if it’s on the left or right side of the folder / book. They could even tell where the paragraph that they want is, whether it’s on the top of the page, in the middle or at the bottom right corner of the page. Again, this is just another method.

Whichever method you use, the key concept here is to have a mental picture of what you are studying.

You must at an instant be able to know where the information you need is. You must know what is contained in each chapter, what are the key takeaways of each chapter are. You must know how each chapter links to other chapters. You must know the relationship between all these chapters. The stronger the relationships, the stronger your mental picture.

It may sound strange but this is the key to getting a good grasp of the course. A firm and good understanding of a course does not mean you just know and understand each sections individually, you must also be able to understand how each sections relate to one another. Knowing your course inside out is the first tip to passing exams.

A quick test of this is whether you can answer these 2 questions:

1. Do you know what Chapter 13 is all about?
2. How does this relate to Chapter 4?

You can swap these numbers with other numbers and always test yourself. This simple exercise will determine whether you truly know your stuff. I know this is tedious but during crunch time, the simplest method is often the most effective.

Even a supermodel trips on these heels sometimes

A beautiful model strucks an acute sense of awe in us. When you see it, its power, its elegance, and its ability to provide everything you need in one concise package can leave you with no doubt that it more than fulfills its purpose. But, even supermodels trip on the runway. What makes you completely convinced your actuarial model will do any better?

There are countless books written on the recent financial crisis, and one of the criticisms circle back to the financial models that were used to estimate the future cash flows. Without going into the debate of whether the financial model itself is solely at fault, there are a few practical pointers we can learn from using a model. Even for a super super model.

1. A model is a representation of what could be

A supermodel parades down the runway, showing the latest spring collection of the year. It shows you what you could be wearing, assuming that you are as tall as that model, as lithe as that model, and with the same joie de vivre.

In short, a model shows you what you could be. Really?

It actually shows you one version of the reality, given a set of assumptions. Most of the time, a model is a simplification of reality. If you have a model that models the reality exactly, this is known as the oracle, and you probably don’t need your job as an actuary anymore. But seriously, complete predictability is no fun.

2. A model eats and shits

A model depends on what it is fed. If you feed it garbage, you will get garbage, hence the “garbage in garbage out” quote. Occasionally, you do get supremely accurate predictions even if you feed it garbage – note the famous Paul the Octopus who accurately predicted the World Cup 2010 results 7 times in a row. I’m not saying that Paul was fed garbage, I’m just pointing out that Paul is an octopus. And I know people do rely on Paul. Just know that you are relying on an octopus, or whatever model you happen to be using. If the prediction did not come true, would you blame the octopus or would you blame yourself?

3. Sophistication does not equal prowess

Just as you cannot depend on an octopus or flipping a coin, you cannot depend on sophistication either. A supremely sophisticated model may appear to take into account of all variables, but ultimately, it is still a model, a representation of what could be. We still cannot predict the weather. Could predicting human behaviour be any easier? Could you have predicted a black swan?

4. Beauty is in the eye of the beholder

Ultimately, the model relies on human interpretation. Yes, you must understand what the model does. And furthermore, you must understand the things that you feed it as well. But when it comes down to it, you must interpret the results that it churns out. As with any interpretation, it is subjective. Actuaries are known for being prudent and this is where prudence is highly recommended. Interpret your results, but do build some margin. Allow for a wider margin of error if you do not know the model and its inputs well.

Editor’s note: The black swan is a phenomenon made popular by Nassim Taleb who wrote the book with the same name, The Black Swan.

Just 3 tips... remember them well!

Being an actuary is not just about passing exams, but if passing exams worry you, all you need to do are these 3 things:

1. know your material inside out, and outside in
2. answer what the question is really asking
3. assuming 1, never forget 2.

These might be obvious, but a lot of us think we know the material, but we don’t, at least not sufficient to apply it as and when we want it. That is pitfall number one.

Once you know the material, a lot of us try to regurgitate what we know, regardless of what the question is asking, or answer in a non-committal and unassertive way, such that it might seem like we know what we are talking about, but we do not demonstrate it clearly enough. This is pitfall number two.

This is what I mean by “answer what the question is asking”. If the question asks you to list out the pros and cons of a particular model, saying “the model is robust” is not sufficient. You have to say why is it robust, how is robustness manifested, and at what point does robustness breakdown and becomes fallible. Your point about “the model is robust” is now split into 3 separate arguments, pointing out 2 pros, 1 con.

Under stressful exam conditions, we tend to forget number 2. Hence the third tip. NEVER FORGET number two.

Regardless, welcome.

We hope you find at least some of the stuff here interesting if not completely astoundingly groundbreaking. Our views are biased (as all views are), and perhaps not really all that well informed. We don’t masquerade as experts in any of the topics we are writing on, and would like to know your views so we can expand our own horizons. We also like to think that we don’t take ourselves all that seriously, and can take a healthy dose of constructive feedback although flattery is much appreciated.

If there are any particular topics you feel we should consider adding, please also let us know. If you want to know more about any of the topics, or just want to say hi, contact us.

Does the colour of the bottle matter if they all contain the same pebble inside? What really are your options?

I am sure the actuary will have something to say about the concept of “endless”, but since I am not the actuary, my view is this. We are limited by our imagination, and thus we must do all we can to extend the limits of our thoughts. “Huh” you say? Recall a time when we were children (yes, it is fresher to you than me), all our classmates wanted to be teachers, or doctors or policemen, I bet you no one said “architect” or “actuary”. We did not know what these roles meant. We were only exposed to a scant few roles, and that was it. As we grew up, of course we were exposed to more things, and our horizons expanded. Can you imagine if our world view stayed as a 7 year old and those were all the possibilities we could envisage?

To make our possibilities truly endless then, it would make sense that we need to continually search for things to learn, talk to people who are different from ourselves, and really learn about the options that you have. I am sure you must have heard this all before, but I am also sure you cannot remember the last time you did something that was meaningful, but made you truly uncomfortable. And I don’t mean just going to the dentist.

But where to start? Perhaps by telling yourself that it is okay to do things that you are not “naturally” good at. Perhaps by telling yourself that just because you cannot make a living out of it, doesn’t mean you don’t enjoy it, or that it cannot be infinitely rewarding. You may be tone deaf, but nothing beats being in a bubble bath and singing your heartbreak out. Buy a ticket to the opera, or that pop concert, or sit in a cafe listening to a band – join a class, borrow a book, buy a second-hand instrument. Many a time we think we have more to lose, but really, don’t take yourself all too seriously, whatever your parents or your teachers told you your competencies were. They could be wrong – remember your teenage years when you thought all adults were dull and idiots, no reason to join the crowd now is there?

To cite an oft repeated quote from Shakespeare:” There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy” – Hamlet

You've eaten your graduation cake, now what?

Hello newly minted graduate

You’ve put on the robe, and that mortar board, taken enough pictures with your friends and family. Cleared out your dormitory room, said your goodbyes and well wishes, watched the commencement speeches of Steve Jobs, and other celebrities for some inspiration.

What’s next? The “real” world?

Remember when you were in high school (I remember anyway) and you got on the train and saw the working herd, on any given weekday? Heck even those in the fast flashy cars. They look like, well, the working herd. I recall thinking to myself whether after years of school, this is it. This is what lies ahead in the next 10, 20, 30 years. And it seriously scared me. “More Intelligent Life”  recently gave me this article.

The idea is that just doing something that you find rewarding and motivating, can really last you a lifetime. The trick, dear newly minted graduate, I am sure you know, is finding it, and grabbing it.

The first thing you may want to consider, coming fresh out of school, is not some wild European trip – although it certainly gave me an interesting perspective. I think you should give some thought to what you want to be when you grow up. I often ask my closest friends this question even though we are in our 30s – what would you want to be when you grow up? You will be surprised that for many, many people, those ideals, those dreams, remain relatively consistent. Meaning, you may have the same dream (but perhaps tempered with a dose of reality), through your idealistic 20s, and not quite weary 30s.

And what’s the point you say?

If you can dream it, and have held on to it, then please for goodness sake, pursue it. Be authentic, at least to yourself – you know what it is that keeps you excited, makes you catch your breath just talking about, and worse, makes you boring to others who don’t share the same interests because you insist on sharing with them. Yes, I know you know what I am talking about. Do you really need some psychometric test to tell you what you like? I remember taking such a test on a computer in high school – don’t remember what I got, but my now naval captain of a warship classmate got “seamstress”. I kid you not.

So save yourself years of wasted energy, try, just try it. Because having made your dream a reality, you can then dream an even crazier one, and make that, your reality as well. And who knows, you might just live the life you dreamt of. It certainly beats being one of the working herd. And if you fail, well, some of the working herd can buy nice things…