CFA Exam Day Arrives

1 12 2012

The big day finally came. Was I prepared? No. I’d forgotten about three quarters of the formulas and ratios I’d tried to memorize. I still don’t quite “get” fixed income trading, or technical analysis. My head swam as I tried to keep my sigmas and betas straight.


I’ll be lucky if I break into the top cohort of failures, let alone pass. Better luck in June, I suppose.


But most importantly, I learned something today, something that has nothing to do with financial analysis, economics, or remembering the difference between accounting for amortization and depletion, or Chebyshev’s inequality and the Sharpe ratio.


I got a taste – a tiny one – of what it feels like to be a Chinese student.

This test wasn’t held in a classroom, or at a computer in a testing center. No. It was held at the Shanghai Pudong Expo Center, the monolithic, black building next to the 2010 Expo China Pavilion, in a concrete-floored exhibition hall that could serve as a hanger for Airbus A380s. I estimated there had to 4,000 others taking the test in that room – approximately six percent of all CFA 1 candidates taking the test today worldwide.


And they were all Chinese. A sea of black-haired heads, clad in dark coats and sweaters, three-quarters in glasses. Average age? I’d guess around 25, but impossible to know. I was the lone laowai in that sea of huaren, or nearly (I did notice, later, one blonde, bearded fellow, and an Indian man. But they were the only exceptions).


It wasn’t the first time I’d been the odd duck in a massive Chinese crowd, but something felt different this time. Nobody looked at me. I drew no stares. Despite being clearly different… sandy haired, blue-eyed, long nosed, leather jacketed, US Passport on my desk… I didn’t arouse as much as a comment, in or out of the hall.


Sitting at my desk, spending half an hour waiting for the test to begin, I contemplated my situation, and suddenly felt something that I’d never felt at a standardized test before. A crushing sense of anonymity. Of being lost in a crowd. Of competing against impossible odds. Of being beneath the wheel.


I’ve always been very good at standardized tests. As far back as I can remember, it was rare that I didn’t break into the 99th percentile on an exam. SAT, ACT, ASVAB, AP, GRE, LSAT, GMAT… I feared no acronym. Bring it on. Whenever Chinese students went on about the dreaded gaokao (try saying “the dreaded gaokao” in an Australian accent… just do it….), and how lucky American students were, I’d tell them about the batteries of tests- PSAT, SAT, ACT, ASVAB, APs, IBs… and undoubtably more that have been forced upon us by No Teacher Left Standing in the years since I was in school. I estimate that I took at least 20 hours of examinations in my senior year of high school, and I doubt I’m that unusual (I had one acquaintance in high school who took 12 AP examinations. He entered university with Junior status.)


But in the US… it’s optional. In China, it’s everything. In the US, having a high score on your SAT is nice, and generally necessary for the highest rungs of the university system, but the SAT alone won’t get you in the door. Admissions committees use comprehensive methods – grades, recommendations, activities in and out of school, awards, research projects, art – to make their judgments as well. While the Chinese system makes a few exceptions for winners of national science and technology competitions, Olympic athletes and the like, in general, the gaokao is the exclusive criteria for the vast majority of students.


This reflects on the rest of society as well. While the “meritocratic elite” of the US can be just as hard to break into as China’s, the vast majority of Americans simply don’t aim that high. There’s no shame in deciding you want to be a schoolteacher (I once had a Chinese student who had aspired to be an elementary school teacher, but went into accounting, a profession that she hated, due to pressure from her parents), or getting your MD degree from the University of South Dakota rather than Harvard (JDs, on the other hand, are another issue altogether). While gaining a middle class lifestyle is more of a struggle than it used to be, it’s still within the capabilities of most. But beyond that, the pecking order of society isn’t our exclusive source of self-esteem. In addition to the plethora of civil society institutions that offer “alternative hierarchies” to climb, there isn’t as much of a stigma attached to defining yourself in another way altogether. As corrupted, sclerotic and decadent as our country and it’s systems can feel at times, there’s still a degree of social freedom – and security – that doesn’t exist in China, at least not to the same extent.


I felt, for a brief moment, the crushing weight of knowing you have only “one shot”. I looked around the room at the thousands of people taking an extremely difficult exam in a language that is not their own, and suddenly felt a deep empathy for them that I hadn’t before. This isn’t the product of modernity, either- this is the way it has always been. For 2000 years, the imperial examination system determined who would be a rice farmer and who would rule, and it hasn’t changed since (despite the chaotic interregnum from Sun Yatsen through Mao Zedong, in which the system disintegrated, before finding itself reconstituted in a modern, but all-too-familiar form). Just as millions of men before them read the classics and learned to imitate the stultifying style of the Eight-Legged Essay, today’s students cram hanzi, mathematics, science, English and propaganda to take the gaokao, knowing that it’s probably their one way out of a life at the assembly line or on the rice paddy.


This fetish for testing continues well into adulthood, as the multitudes sitting the CFA with me attested to… after all, once you’ve grown used to it, why stop? One peculiar thing I’ve noticed is that whenever I mention the CFA to Chinese friends and acquaintances, they all know what it is- it seems they all know someone who has taken the exams. Yet, when I mentioned that I was taking the CFA exams to my father, he immediately asked me what the CFA was. This is a very capable businessman with a large trading account who has been reading the Wall Street Journal for decades… and he doesn’t know the first thing about the CFA- not even what the designation stood for.


So, as I wait for my results to arrive in January (I probably failed, but there’s the off chance that I passed, and at the very least I can find out what I should brush up on for June), I can thank my lucky stars that I was born in a system where your life chances are decided by more than just a test… even if I might have benefited from such a system more than others, the tradeoffs just aren’t worth it.



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