Excel and Me

I’ll soon be teaching a bunch of students Microsoft Excel. This has been true every year that I’ve been a teacher, but in this case, it’ll be students who:

  1. Are not all that familiar with English
  2. Are not from an urban background

Which is a fun, exciting challenge, and I cannot wait to get started.

As part of preparing for this course, we’re asking folks to fill out a form about their usage of Microsoft Excel. You don’t have to, of course, but if you feel like helping out, you can fill said form here. But designing this form made me reflect on how I have used Microsoft Excel over the years.

  1. I started my career in analytics, building out predictive models for two firms based out of Bangalore. This involved high-falutin’ statistical packages (for the time), but about 75% of the work involved working in Microsoft Excel. I realized (very and painfully) quickly that I hadn’t learned enough about Microsoft Excel in college. But the good news was that Excel was incredibly simple to learn, and the payoffs were (and continue to be) huge.
  2. I then registered for a PhD, and the model that I built for my thesis was entirely in MS Excel. I used other statistical software to test the model and run a couple of additional statistical tests, but the model itself? MS-Excel.
  3. I worked for about five years in the renewable energy industry, first as a consultant and then as a full time employee, but interest rate forecasting, exchange rate forecasting, oil price forecasting was a major chunk of what I did. But in addition, researching about climate change was also part and parcel of the job. Each of these required the creation of a mind-numbing variety of charts, tables, and pivot tables, and Excel was always on the work menu.
  4. And since 2013, I have taught for a living. Not only have I taught at least one course around MS-Excel every single year, but I have also used MS-Excel in ways which ended up being a lot of fun. We built an attendance system using Google Sheets, for example, and I cannot tell you how much fun it was. But we also taught sampling distributions and the central limit theorem using Google Sheets, and so many other things.

So: it hasn’t mattered whether I’ve worked in the analytics industry, the renewables energy industry or in academia. Excel, or spreadsheet software more generally speaking, has been an indispensable part of my work life.

And in addition, I use spreadsheet software to track my invoices, track our household budget, and to track our financial portfolio. I’d probably depress myself out of wanting to work if I used it to track my productivity (or lack of it), but I assure you, this can be done too.

Long story short: get busy learning MS Excel (or a substitute) if you are in college right now. There’s no end of learning material that is easily available online, and if you need any help, please, feel free to teach out!

ashish at econforeverybody dot com

Work, Why Don’t You?

How should I beef up my CV is a question that will start to make the rounds on campuses all over the country, for it will soon be placement season.

LinkedIn will be awash with people happy to report, or excited to share (or in some cases, elated to announce) that they have completed course XYZ on platform ABC. Recommendation requests will come flowing in through the pipelines, and endorsements will abound. But simple Econ 101 should tell us that each of these have become so easy to acquire, and so commonplace an occurrence, that their value on your CV is commensurately lower.

Pamela Paul, writing in the NYT, has an idea that is fairly popular in the United States (although as the column explains, it could always be more popular), but doesn’t have quite as many takers in India: get a part time job.


Many instead favor an array of extracurricular activities that burnish their college applications, like student government and peer tutoring. This may be a mistake even for those parents and kids more concerned about college admissions than about what happens after that. Consider that having an afternoon job cultivates skills like time management and instills a sense of independence and personal responsibility β€” attributes that many college administrators say some students today lack.
But after-school jobs teach more concrete lessons as well. Personally, I learned more working outside school β€” starting with three afternoons a week when I was 14 and ending with three jobs juggled, seven days a week, my senior year of high school β€” than I did in the classroom.

https://www.nytimes.com/2022/07/30/opinion/jobs-teenagers.html

The ability to get, hold on to, and do well in a job – any job – is a rare old skill, and one that you’d do well to cultivate. In fact, what better way to signal that you are ready for the hurly-burly of the labor market than by proving that you’re already a participant? Pamela lists out ten ways in which a job helped her, and while you should go ahead and read the whole column, I’ll list out the ten factors here. Note that this is my summary of her ten points:

  1. Being good at a job is a very different skillset when compared to being good at studies – which is a polite way of saying college doesn’t teach you all you need to know. Every single person who has left academia and joined the corporate world will nod appreciatively on reading this statement, guaranteed.
  2. Being fired, or quitting your job, is not the end of the world.
  3. You tend to appreciate money a lot more when you realize how little you are paid for an hour of honest work
  4. Promotions can be based on duration of employment, not on level of skill, and this is an important lesson for life
  5. You are paid for your time, and the work you put in during that time. Slacking ain’t appreciated!
  6. Bosses can be mean. Not all, and not all the time. but bosses can be mean.
  7. You will work with folks who are different from you, in many ways and with many consequences, and you have to figure out how to deal with it
  8. Some of these folks, simply because of who they are and how they made it to the same job as you, will pull you down to earth, by helping you realize how lucky you are to be where you are
  9. Boredom is part and parcel of all jobs.
  10. School skills can be acquired out of school – but the reverse isn’t true.

Any job is fine – it needn’t be a desk based job. In fact, the more physical labor is involved, the more you are likely to learn. I managed an art gallery while I was in college to earn money on the side, and also taught econ to students of commerce, and I learnt more by trying to handle the art gallery.

But a job interview is likely to go that much better if you are able to say yes in response to a question about prior work experience. The more interesting the job, and the more well thought out your responses to a question about what you learnt on the job, the better your chances!

Further reading: Tyler Cowen tells us about his first job (follow up post here), as does Alex Tabbarok (this post has more than a dash of surrealism!)

Meet the MIT Banana Lounge

Yup, really. There’s a place in MIT where you can lounge around and eat bananas. A lot of bananas.

https://twitter.com/iaincheeseman/status/1513467068351451137

How many is a lot, you ask? 280,000 bananas in this academic year alone. This is a project run by the Undergraduate Association at MIT, and they also place pianos around campus for folks to give it a try, and for those of us who prefer a more sedate outlook towards life, they also have a hammocks team, who are doing exactly what you hope they would.

The bananas are for free, by the way. If you happen to be on the MIT campus, you can drop in and chomp away to your heart’s content, courtesy an MIT alum who’s also been known to, um, do other stuff besides.

Cool stuff, right?


The reason I bring this up is because I and a student at GIPE were chatting the other day about questions that her juniors were asking her. And the question was about how they didn’t have “enough R projects” to do. (R, for the uninitiated, is a software that econ nerds like to freak out over.)

I’m always a little befuddled when students say they don’t have projects to work on, or are looking for datasets to work on. The lazy answer to give to queries such as this is something along the lines of Kaggle, or Google’s Dataset Search. There’s hundreds of such data sources available online for free, and they’re one simple Google search away, so that’s one reason for my befuddlement.

But the primary source of my befuddlement is the fact that students in possession of a software looking for a dataset is very much a case of the cart being put in front of the horse! Software is a tool that helps you in the work you’re doing. But the approach that most students take is that they have the chops to use the software, and they don’t know what work to do.


You could always try and see if you can get an alumni to buy bananas, and forecast demand for bananas!

Trend! Seasonality! Forecasting! For bananas consumed on campus.


I ask you: which is a cooler story to tell? A story in which you say that you downloaded a dataset from the internet and did some modeling with it…

OR

A story in which you say that you and a bunch of your friends got together and convinced your college to give a room to stock bananas, convinced an alumni member to sponsor these bananas, figured out the logistics to procure, transport and store these bananas, and used a tool called R (or Python, or SAS or SPSS or whatever) to forecast demand?

The second option teaches you project management, the art of pitching a proposal, teamwork, logistics and coding. And so much more besides! It builds a story that works for the team, the institute, the community, and you use a statistical software the way it was meant to be used: as a tool that makes your life easier.

I know which story gets my vote.


You could build shared calendars, YouTube playlists using Google Sheets, demos for sampling using Google Sheets, or anything else that takes your fancy. Use Statsguru to analyze cricket stats using Python, automate the creation of book recommendation websites, or well, give bananas away for free.

But datasets for projects?

You’re limited by your imagination alone.

On Talks of a Shorter Duration

I had the occasion to give two talks recently, both of a rather short duration. One was to last for about fifteen minutes, and the other for about seven minutes. Both were related to some academic work that I have been a part of, and I’m sad to report that in both cases I could have done much better.

My profession entails talking for long periods at a time, and I have no problems speaking off the cuff for an hour at a stretch, and even longer is in some sense preferable. I prefer to talk without having any notes or (where possible) a presentation. This allows me to speak about the topic at hand, but also go down rabbit holes of thought depending upon either how my own memory is jogged while I’m speaking, or in response to a question that a student might ask.

I have no clue if this is efficient or “best”, but it is the way I have enjoyed being taught, and it is the way I enjoy teaching.

But alas, this method (efficient or not), doesn’t serve me well when it comes to talks of a shorter duration.

It is not as if I did a very bad job – at least, I hope not. I know I got across most of the points that I wanted to, and was able to respond to all questions that were asked – but I also know that I could have done a much better job.

So where did I go wrong?

  1. I made the mistake of assuming that a shorter talk is like a longer talk, just, well, shorter. I’ve done my share of presentations back when I used to work in the corporate world, and I should have known better. A short talk is not like a classroom lecture at all!
  2. In what way is a shorter talk different? First, assume that you will need a minute to provide context, and at least two minutes per “core argument”. Add in a minute to sum up, and you’re already past your scheduled time if you have three key points to make.
  3. Which means two things. One, try to keep your core arguments down to two, at most three. Second, you will need an outline for a talk such as this, if not an actual script. My mistake was to not do the second of these things, and just try to go with the flow, and wait for inspiration to strike while speaking. Rookie mistake! I had an outline, but the mistake with my outline was that I had tried to cram in too much for both talks. For shorter talks, minimize your key points, no matter how painful this is.
  4. It’s not as if I don’t have an outline in my head when I begin a lecture in class, of course I do. It’s just that the outline is rather vague. That’s a deliberate choice, as a lecturer – vague because I can repurpose it on the fly on the basis of what questions I get, the feedback as I speak from the students, and whatever tangential connections I can make in response to both of these things. In a longer talk, I have the ability to course correct, reflect, back-up, or circle back to an earlier point. In a seven minute talk, no such luxuries are possible.
  5. My very first manager back when I was in the corporate world made me sit in an empty meeting room and deliver dry-runs of what was to be my first “big” presentation to the walls of that meeting room. I did that (I’m not exaggerating) five times, and felt like a fool for doing so. But hey, come the time of the presentation, I felt and was ready.
  6. And I forgot all about this! I should have done the same thing to prepare for both of these presentations, but neglected to. I can and should do better: lesson learnt.
  7. But hey, there’s a lesson in this if you’re a student prepping for interviews and group discussions. Dry runs really do help! Make on outline of the key points you absolutely need to make, and practice making these points. Have your bedroom’s wall interview you, if you cannot find a real, live “volunteer”. But trust me, it’ll help. It is certainly infinitely preferable to leaving the talk/interview and realizing that you ended up not saying a couple of things that you really wanted to.
  8. And finally, if you ever happen to see me talking loudly and excitedly to nobody, worry not. I probably have a short talk coming up πŸ™‚

Yes, But What Did You *Do*?

True story, the one that I am about to narrate, although both the person in question and the firm will remain unnamed.

A firm had come on campus for placements, and I happened to know one of the people who happened to be on their recruitment team that day. Midway through the recruitment process, said person came to my office for a chat.

He appeared to be rather frustrated. And when he was halfway through the cup of coffee that had been offered to him, he spoke about what was frustrating him so.

It was, he said, the same story with all of the candidates he’d interviewed that day. When the interview reached the stage where they asked the candidate about their internship or projects they’d worked on while in college, the same conversation played itself out.

“Tell me about your internship at xyz”

“I interned in the abc department at xyz.”

“Ok, what did you do there?”

“I worked on project pqr”

“Yes, but what did you do in that project?”

“I worked with lmn”

“Yes, but what did you do?”

“I submitted a presentation on def”

And on and on, round and round the mulberry bush. It was frustrating, he said, because it was mostly the same story in most of the colleges and universities where they’d been for recruitment. Now, I’m sure (or hopeful, at any rate) that the story will be not quite as bad in the very top tiers of academia. But based on my own experience of interviewing candidates, his experience rang true.


Interviewers don’t ask you about your internship in order to be impressed by the firm you interned in, or to be impressed by the title of your project. They’re interested in the following:

  1. What skill sets did you have to use to complete your part of the work?
  2. Which of these skill sets did you pick up on the job?
  3. What appreciation have you gained of that skill set as a consequence?
  4. Are you aware of where you fell short, and if so, what are you doing to get better?
  5. And as a coda of sorts to all of this, what would you do differently if you got the chance to do the internship/project again?

And so when interviewers ask you about what you did in an internship, you have to answer the unsaid questions. What they’re really asking, what they really want to know, is whether you are have acquired the ability to apply your learning. Whether you have the self awareness to know where you’re lacking. Whether you have the “fight” to acquire those skill sets you don’t possess. And most importantly, are you able to assess work you’ve done, and figure out how to do it better the next time around.

When interviewers talk about “attitude”, “willingness to learn” and “jigar“, this is what they’re talking about.


Which brings me to the most important part of this blogpost. There are two ways to react to what I’ve written so far if you’re a student preparing for job interviews.

The first is to train yourself to tell a story like this better, and more convincingly, in an interview.

But that’d be the wrong approach.

The second is to actually apply all of this in your next project. Actually doing all of this makes talking about that much easier, wouldn’t you say?

And as a consequence, writing your CV becomes that much easier.


The bottom-line: doing the work makes talking about it convincingly that much easier.

How to prepare for interviews, you ask? Simple.

Do the work.

What I would ask if you claimed you knew Excel

Fridays have become gyaan sessions about employment, internships and jobs, and I suppose that’s a fine thing to keep going. Here are posts on the past two Fridays: On Interning, and “Cracking” Interviews.

Today is about what I would ask you if I was the interviewer, and I see on your CV that you claim to be proficient in MS-Excel. This post will hopefully help you figure out if you know Excel well enough – and by your responses, it’ll help me understand if I’m asking good questions!

Here are ten questions I would have asked about MS-Excel in an interview. I’ve tried to arrange them in increasing order of difficulty, so the first is the easiest one

  1. Is it possible to work with text data in Excel? Can you give me an example?
  2. What exactly is conditional formatting? Can you tell me about a time you used it in MS-Excel?
  3. How would you password protect a file in Excel?
  4. When are you better off using data filters instead of pivot tables? Whatever your answer, what is your reasoning?
  5. I’m not a fan of pie charts. Do you agree with my opinion, or not? Why?
  6. Give me your best guess about a keyboard shortcut in Excel that I’ll not be aware of.
  7. Index and Match, or Vlookup – which is better, and why?
  8. How would you go about creating dynamic charts in Excel? Or sentences that update automatically when new data is fed in to the sheet?
  9. What is your favorite Excel add-in? Why?
  10. Walk me through the coolest project you’ve ever done in Excel. (This last one if I’m convinced that you are a proper, legit Excel ninja)

How did you do? How did I do? What are questions that I should have asked but didn’t?

“Cracking” Interviews

I had written about maximizing soul the other day, and acing interviews is one of the best ways to think about minimizing time, effort and cost, rather than maximizing soul.

Because, in my opinion, cracking an interview is the same thing as saying that my work isn’t good enough to get me through the door. So what can I say, do or project in the interview that can tip me over.

The simplest way to crack an interview is to be good enough to be recruited.1


But, all that being said, and most probably ignored, here are some points to think about when you want to “crack” an interview.2

  1. As a fresher, it is perfectly fine to not have any prior work experience. Don’t sweat it if you have no work-ex to show on your CV. At you age, and your level of experience, that is a feature, not a bug.
  2. Given your lack of experience, and presumably prior work-ex, the interviewer is likely to focus on your CV. This is the streetlight effect: what is most easily searchable will be searched. Whatever is on your CV – the only piece of paper that the interviewer has to go on – is what they’ll focus on the most.
  3. That’s why all the agonizing over the CV – it becomes your calling card during the interview.
  4. Keep your CV as brief as possible, preferably less than a page. I still keep my CV to below a page.
  5. The economics-y way of thinking about this is very similar to how a presenter uses a PPT. The PPT should be a complement, not a substitute. Since you’re the one giving the interview, and not your CV, your CV should be nothing more than a bridge for the interviewer to reach you. It should be short on detail, but as long as possible on sparking curiosity.
  6. If your CV is able to spark said curiosity, it is up to you to turn that spark into a raging fire. To me, personally, your ability to speak English isn’t a deciding factor3. Your ability to communicate, to get your point across – in any mutually understandable language – that is very much a deciding factor.
  7. For example, if the interviewer says “Tell me more about this project/internship/whatever” – that’s a spark.
  8. Do not rush into a description of the project.
  9. Tell the interviewer about skills that you used to do the project well. Make sure these skills are relevant to the job that you are interviewing for. (Example: “I used my knowledge of VLOOKUPS in MS-Excel to do xyz”)
  10. Or tell the interviewer about skills that you acquired while doing this project. The second sentence in point 9 above applies here as well. (Example: “I learn how to use VLOOKUPS in MS-Excel to do xyz”)
  11. Or tell the interviewer about skills that you become aware you were lacking in while doing this project. Again, the second sentence applies. But also, in this particular case, you should also be able to tell the interviewer stuff that you have done to begin acquiring these skills. (Example: “I learnt that I had to know VLOOKUPS in MS-Excel inside out in order to do xyz. I have learnt how to do this by doing abc”)
  12. Now, all that being said, you should precede pts. 9, 10 and 11 by explaining in no more than three sentences the following:
    1. What was the point of the project? (That is, was the idea behind the project to increase revenues for the firm, decrease costs for the firm, or increase speed to market for the firm?)
    2. What was your specific role in the project? (That is, where did you fit in the big picture? This shows an awareness of both your own specific role, as well as the ability to understand how the whole project comes together, and why.)
    3. Quantify the success of the project. (Overall, we were able to increase x metric by y% over z years.)
    4. There is no way in hell you are going to be able to do this without writing it down. Please, spend the time and write down, in your own words, your answers to each of the three points above. Writing it down makes it clearer in your head. Trust me on this one.
  13. If you’ve done pt. 12 well, followed by pts. 9, 10, and 11, congratulations. You’ve turned that spark of curiosity into a raging fire. You’ve done this by demonstrating:
    1. A passion to learn stuff relevant to the task at hand
    2. An ability to think clearly and cogently about the work that you do
    3. A clear awareness of where you need to improve, and what you’re doing about it.
    4. The ability to communicate your work and its relevance clearly4
  14. Do this well enough, and you should be able to “crack” the interview.

  1. “What if there are many people who are good enough?” is the response I usually get when I say something like this. Contradictory, no? If there are many people who are good enough, then you aren’t good enough to be better than them. Work on that first![]
  2. This blog post is written assuming a fresher is sitting for an interview. Some points don’t change no matter what type of an interviewee you are, some do.[]
  3. Language should never be a barrier![]
  4. Again, the point is to not be Shakespeare, the master of the English language. The point is to be a very, very good communicator. Short, sharp sentences, and clarity of thinking – that’s what matters.[]

On Interning

It is hunt-for-an-internship season at our Institute, as I suppose is the case all over the country.

The process is trickier than usual, because of the pandemic, and for that reason I wanted to put up a small outline of my thoughts about internships.

  1. At the start of your career, optimize for learning, rather than branding. This means that in your internship, and your first job, you should optimize for firms where you are likely to learn a lot, rather than firms that are prestigious. Prestigious firms are likely to be more bureaucratic, and more about status. This means that the junior employees aren’t likely to get a lot of crucial, really important work. The pay will be better, the Friday parties will definitely be better, but the opportunity cost will be high as well.
  2. Learning how to document the work you’ve done is a very, very underrated skill, especially in internships. One way to be really and truly remembered at the end of your internship is by handing your mentor a docket of what you did, what you wish you had done, and a documentation of all the processes you learnt about.
  3. Best of all, include a section for the next intern in this team. Include stuff like who to meet in payroll, where is the best chai to be had, who in IT is especially helpful etc, along with the obvious stuff. Not only is paying it forward a good idea in and of itself, but that next intern is automatically a friend for life.
  4. Go for all the chai and sutta beaks that you are invited to, even if you don’t smoke or drink chai. Relaxed conversations with your mentors or seniors is invaluable, and soak in all the info you possibly can.
  5. Learn Excel. Here’s a laundry list to get you started: HLOOKUP, VLOOKUP, INDEX, MATCH, OFFSET, SUM, SUMPRODUCT, COUNTIF (and all the variants). Pivots, filters, data analysis add-in, solver add-in, charts, trace precedents, what-if analysis, data tables, goal seek, data validation. You must know all of this in and out, and be able to know what you can use when. YouTube videos, websites will help, but the best way to learn is to sit with a colleague and ask her to help you out. I cannot emphasize this enough – you need to know Excel. It doesn’t matter which role, which team, which department. You. Must. Know. Excel.
  6. Whatever productivity suite your organization is using, soak yourself in it. GSuite, MS Office or anything else. Know the ins and outs of the email system, the calendar tool and the internal messaging tool. Invest the time to make yourself a ninja in it. Trust me, it is worth the effort.
  7. Seek out a mentor in the organization if one isn’t allotted to you. Set up weekly lunch/tea meetings with the mentor, and have her tell you stories about stressful times in the office.
  8. Continue to learn whatever tools you got access to at the workplace. It could be Tableau, Crystal Ball, R, Jupyter notebooks or anything else. Again, soak yourself in the tool, and start on the path of becoming a ninja in it. This will take time, but it is worth your while.
  9. Learn the big picture. Ask your mentor how whatever project you are working on fits into the larger objectives of the workplace. My very first manager told me something I have never forgotten: every single thing you do in the workplace is either raising revenues for the firm, or is cutting costs for the firm, or is improving speed-to-market. If what you’re doing is achieving neither of these three, then it is a waste of time. Ask, until you are clear about the answer, how your project fits into this simple model.
  10. Lastly, about landing an internship. Do not send out blanket emails to contacts on LinkedIn, or elsewhere. Shortlist not less than ten, but not more than twenty people, and write them a personalized note. These folks should have skillsets you want to possess – it doesn’t matter where they work. The note should include a specific question about this skillset. If they answer – and to such specific notes they usually will – take their advice to heart. Incorporate it into a project you are working on. Send them this project, and ask for feedback. Then ask if they can help you land a gig. All the notes I get on LinkedIn just ask for a gig. That’s a waste of a potential networking opportunity.

So what are forward markets? What is speculation?

Definitions don’t make sense unless they’re applied, and applications aren’t useful unless they’re relatable. So to understand forward markets, let’s work the other way around. Let’s start with a relatable example, and work backwards to arrive at the definition.

And what, pray tell, is more relatable than placements for students?

That is, after all, the point of an education. No?

So, anyways, placements. Here is how placements work: a company lands up on campus in the month of (say) October 2021, interviews a bunch of students, selects some of them, and offers them a job. Let’s say one of these students, who’ve been offered a job, accepts the offer.

Does the job start in October 2021? Of course not! It begins in June 2022.

In other words, a company and a student have entered into a contract. This contract says that the student will give the company eight hours of her day, Monday to Friday, in return for which the company will pay her a salary.

But the deal has not been struck for immediate delivery. The student doesn’t start work in October 2021. A price has been agreed, the terms of the contract have been agreed, and both the student and the company have signed on the dotted line – but for a transaction that will take place in June 2022. That, my friends, is a forward contract.

Now, having gotten the point, let’s learn the language that the beasts of this jungle like to use. The student, because she is selling eight hours of her time, five days a week, is the party with the short contract. The firm, because it is buying eight hours of the student’s time, five days a week, is the party with the long contract.

(Why the hell don’t they just say buy and sell, then, these financial folks? Lyk, srsly, ryt? Lmao. Brb.)

The price that the two parties have agreed upon is known as the strike price, because it is the price at which the deal has been struck.

So, quick recap: going long | going short | strike price | forward contract.


Here is how the placement process works in almost all colleges in India. If you sit for an interview, and you’re made an offer, you’re “out” of the placement process. There are variations to this rule, but in essence, the logic is that once you and the company have struck a deal, you can’t sit for any other firm that comes on campus later.

So here’s a conundrum for you: what if the company in October is a firm called HDFC, and it is offering you a package worth 8 lakh rupees (INR 800,000). The conundrum is that there is a very strong rumor (but it is, unfortunately, a rumor) that Google will be on campus next month, and they’ll be offering 20 lakh rupees (INR 2,000,000).

HDFC will pick up 20 students, but Google will pick up only 5.

Do you sit for the HDFC process or not?


There’s no right answer to this question, of course, and because of the uncertainty, cases such as these cause a lot of angst among students every year. But let’s assume that a student decides to “play it safe” and does sit for the HDFC process.

Here is what the student is thinking: sure, lower salary, and sure, no Google. But hey, a bird in hand is worth two in the bush, no? Better a low paying job for sure than the risk of not being placed by June 2022. Us economists would say the student is being risk-averse. Those finance guys would call her a hedger.

A hedger is somebody who ain’t worried about missing out on a high-paying job later. A hedger prizes certainty. A hedger mitigates risk. The price you pay for mitigating risk – the opportunity cost of risk mitigation – is that you lose the potential upside.

Choosing to put money in an FD rather that investing in stocks is hedging. Doing an MBA rather than starting a business is hedging. Locking in a job, even at a lower price, rather than waiting for a better one that may or may not come along – that is hedging. You’ll sleep soundly at night, knowing that HDFC is waiting for you in June 2022. You’ll feel a twinge of regret when your BFF lands that job at Google (of course you will), but hey – you played it safe, and that’s no bad thing.


OK, so you’re the hedger. What about HDFC, or Google? What should we call them?

Well, how much does a recruiter learn about you in a 15 minute interview anyway? All that they have to go on is that interview, and your CV. We know all about CV’s!

So when Google, or HDFC, or whoever, really – when they give you a job offer, they’re taking a bet on you. You may be the next CEO of those firms, who’s to say? Or you may be fired six months after starting your job. Who’s to say? Like I said: they’re taking a bet on you. They’re speculating.

Folks who take risks in financial markets: they’re called speculators.


Me, personally, I always get a little nervous when folks start to talk about excessive speculation, or banning speculation. Because, as an economist, I think about the student and HDFC as entering into a transaction in which the student sells the risk of being unemployed, and buys peace of mind in return. HDFC, on the other hand, sells the peace of mind of having money in the bank, and speculates on the student.

If you ban speculation, where’s the hedger to go?

A market needs people on the sell side, but also on the buy side. Without both of these animals – the hedger and the speculator – the jungle called financial markets can’t function. Just like without firms willing to punt on students, the market called placements can’t function.

I’ve yet to meet a student, past or present, who complained about “too many firms coming on campus”. And what’s good for one market, is also good for the other.

No?