Acronyms and Mnemonics

CFA Level III
#1

I know there are other threads on this topic, but some of the material is dated, and some people may not have any exposure to it, so I wanted to bring it up.

I think it’s a good exercise to share some best practices on constructive ways to remember certain topics. I’ve included several that others have posted in various threads and from different websites.

This thread also had some good ideas - http://www.analystforum.com/forums/cfa-forums/cfa-level-iii-forum/9985960

For properties of a valid benchmark - SAMURAI

Specified in advance, Appropriate, Measurable, Unambiguous, Reflective of manager’s current opinions, Accountable, Investable.

Belief Perseverance Bias - CON CON CON REP HIND

Conservatism, confirmation, illusion of control, Representativeness, Hindsight,

Info Processing Bias - FAMA

Framing

Anchoring

Mental accounting

Availability

Emotional Bias - LOSERS

Loss aversion

Overconfidence

Self-control

Endowment

Regret aversion

Status quo

Psychological Traps for analysis – ASCORP

Anchoring

Status Quo

Confirming Evidence

Overconfidence

Recallability

Prudence

Macro Performance Attribution steps - “NRABIA”

Net Contributions

Risk Free Asset

Asset Class Allocations

Benchmark returns

Investment Manager returns

Allocation Effects

#2

Stickied

#3

For asset classes:

HELDM - pronounced “Held ‘em” as in “Held Them” - if they fit the criteria below then you “hold them” in your portflio as an asset class. A little tenuous, but there you go….as long as you can remember the link.

And I would list it out as follows:

H - Homogenous

E - Exhaustive (same as “make up preponderance of world wealth” - if they are “exhaustive” they include everything)

L - Liquid

D - Diversifying

M - Mutually exclusive

#4

RTFQ is one that I use pretty extensively.

#5

anyone have any more to add?

#6

Valid Benchmarks ----> SAMURAI

#7

Macro Performance Attribution steps - “NRABIA” - THE NRA "B"owls "I"n "A"utumn

#8

+1

#9

For whether to add a new asset to a portfolio (I used to always confuse which sharpe ratio went on which side of the equation: SIPS

Si>pSm

For how you hedge currency exposure: R eal S alty P eanut B utter - R eceive forex, S ell it forward: P ay forex, B uy it forward

For how to manage duration with different interest rates: IRR SOLD: I nterest R ates R ise, S ell L ong D uration

#10

For me, PROSAC for psychological issues is easier to remember than ASCORP.

#11

What does RTFQ stand for?

#12

Read the f@cking question :slight_smile:

#13

hahaha. …

#14

For Belief perserverance I use:

RICCH

as in “IM RICCH BITCCH” in the voice of course of the great Dave Chappelle

#15

Risk Management process.-PRIMA

Policies and Procedures

Risk tolerance (define)

Indentify risks

Measure Risks

Adjust Level of Risk

#16

For this one I prefer:

SET (Policies)

The (Define risk tolerance)

IDeal (Identify risks)

MEasure (Measure risks)

ADam! (Adjust)