HP12C: the CFA Exam's magic helper Ted Pick has a trick. The new CEO of Morgan Stanley can multiply six figure numbers by large numbers on demand, even beating somebody using a calculator. But is that a party trick or secret of his success? Surely both. How do you get that good? Approximately a quarter of the CFA Program is “very mathy” and a quarter merely “mathy". Across 9,000 pages, that's a lotta calcs. In 1963 candidates would take slide rules to the exam. If they were good enough for the Gemini Program, they were good enough for the CFA Program. The first pocket calculator – HP35 named after the number of keys - was invented in 1972. Steve "Woz" Wozniak, co-founder of Apple worked at HP at the time. 1981 rolls around and in the same year Bloomberg launched his Terminal HP launched the HP12C - optimized for finance. Instead of the HP35’s gravitational constant g, speed of light c and Planck’s constant h, it had buttons for NPV, IRR and YTM. Ted Pick’s predecessor James Gorman bought a HP12C in 1985 when at grad student at Columbia. It is still in his desk drawer. The HP12C is the T-38 Talon of Wall Street. The "trainer" for juniors. It has both haptics from heaven and is indestructible. HP calculators have been up to SkyLab, up Everest and even (by accident) through the alimentary canal of a hippopotamus. In each case surviving in perfect working order. And just as ChatGPT will enhance the art of essay writing, so too did the HP12C elevated math skills of finance professionals the world over. The Spartan lack of distractions was key. You use it for math, period. There is zero probability of having a reminder pop up or being commandeered by an incoming call. The cockpit of a 787 is no place to first learn the definition of coffin corner. So too the trading floor is no place to learn what convexity really means. Imbalanced leverage. This is why CFA Program rookies should abstain from Excel 365. The temptations of MDURATION, QUARTILE and GEOMEAN are too great. As every senior banker knows, truly important mathematics can only be done on the back of an envelope (or napkin). The ultimate goal of the CFA Program's computational temperance is to get you so good at mental math that you no longer need a calculator. You gain an intuitive understanding of ratios, bond math and derivatives. Your goal is for your HP12C to become an indestructible souvenir. If the boy Mozart could play the piano backwards and blindfolded in Salzburg, then you should not need a calculator in a client meeting. Say no to the gimmicks of the iPhone calculator with its side-on scientific mode. People will text you in the middle of stuff. And it doesn't do SLD. Instead join me and the other million past CFA Exam candidates and learn early on (reverse) Polish in that monastery of mathematics, the duplation-powered HP12C. The fact that they are gathering dust in CEO, CFO and CIO desk drawers in all financial centers serves only as proof that discipline pays.
Ian Baker
2mo
This almost reads like a love letter to the device and that’s understandable. For those who grew up in the era of the 12C, it’s been a constant companion for decades. A faithful aide who required a little effort to learn but was bulletproof once mastered. Not sure I’d take one up Everest (?!) but I’ve never been without one in a work setting. Ever.
Conrad Ramos
2mo
This was my go to. Expensive for parents to buy First Gen Engineering student this but education came first. https://en.m.wikipedia.org/wiki/TI-59_/_TI-58
Yeah, I'm a geek. Although that HP12C got me through my CFA exams, my HP48GX still reigns supreme - ERTW. I still don't know how to use the slide rules. Cool post Rob Langrick, CFA, CIPM.
Rob Langrick, CFA, CIPM Well, on the context of the CFA exam and University Finance course: the TI one is clearly most used in my region.
This post made me smile. I still have 2 12 C's from the 80's and still use them as my go to calculator. No one else in my house knows how to use it because the inputs are kind of backwards in their mind but, to me, it is intuitive and yes, they are pretty much indestructible. I agree that all good finance folks can do math in their head on the fly. That is an acquired skill. EPS grew from $1.35 to $1.75 so it grew by ? % Here is what made me smile. The 12C was so prevalent at our firm back in the day that I had to scratch my initials on the back of mine in case someone 'accidentally' picked mine up thinking it was theirs.
Ronald Uy, CFA
3mo
I used that for all 3 levels.
Love this. I was always a 17BII guy. No RPN, but I loved that box and I'm sure it survived all sorts of punishment that proved it was indestructible :)
Edmund Kwan
3mo
20 years later and I still keep one at home and another at work!
Richard Ellison, CFA, CAIA is a Cayman Islands based Independent Director and Digital Strategy Consultant
3moI preferred the newfangled BAII Plus...