I am a Chartered Accountant with no work experience. A CGPA of 6.5/7 in BCom; 91.08% in 10th and 87.67% in 12th. My CAT score was 99.37%ile with ~98%ile in each of the 3 sections.

My interview was at The Orchid in Mumbai on the 18th of March in the afternoon slot. I had a panel consisting of 2 Males P (Professor of Quant) and A (An Alumnus). IIM A has an AWT before the PI which is similar to the AWA of the GMAT. The argument given to us was on the workweek which is 5 working days and 2 holidays currently and how it is beneficial to switch to a 3-1-2-1 workweek. A critique on the same was expected from us. The time limit is 20 minutes. Post this we had the Personal Interviews and I was 2nd in my Panel.

I walked in, and was asked to sit. I greeted the Panel.

**P:**

So you are a CA. You have also done B.Com. Tell us which was your favourite subject.

**Me:**

Finance, Sir.

**P:**

So what did you study in Finance?

**Me:**

Owing to my Chartered Accountancy, quite a lot actually. I studied Capital Budgeting, Lease Financing, Mergers & Acquisitions, Valuation, Futures, Options, Swaps, Bond Valuation, etc.

**P:**

So imagine you have to manage my portfolio. I give you money. You have to invest it. What is the strategy you will follow?

(Note that the only one chapter that I forgot to mention from my CA Finance syllabus was the one I was asked about!)

**Me:**

Sir, are you a long-term investor or a short-term investor?

**P:**

I am 40 now so…

**Me:**

So I assume at least a horizon of 5 years?

**P:**

I was thinking more like 15+ years!

**Me:**

Oh that’s great! So for a period of 15-20 years, I will use the Coffee Can Portfolio. Let me explain. I will study the stocks that have achieved a consistent Revenue Growth of 10+% CAGR and an ROE of 15+% for the last 20 years. Then I will invest 10-20% based on your risk appetite in each of these stocks today. Then I will do the same research next year and invest another 10-20% using the same strategy but with an additional year’s data. I will continue this till all the money is invested(barring 20-25% which I will invest in risk-free securities) and then I will not churn the portfolio for 20 years. This strategy has statistically outperformed the benchmark Sensex YOY for the last 20 years. So I consider it to be a very fruitful passive investment strategy. It is almost sure to statistically outperform the market as a whole.

**P:**

So when you say statistically outperform, what does that mean?

(Note that the one thing he picked up from the entire strategy was the term “statistically outperforms”. He was a professor of Quant and it probably seemed like I was sure about the strategy so he took the decision out of my comfort zone and into his!)

**Me:**

It means that if you analyse the data of the last 20 years, this strategy will give you a better return than the market index.

**P:**

So that is historical data. What is the difference between Statistical Data and Historical Data?

**Me:**

Historical data is the data of the past years that is available to us. Statistical data is the data that we get after applying statistical formulae to the historical data and making inferences. For example, we will have the data of the prices of these shares over the last 20 years. We can calculate the risk and return based on the changes in prices. That would then be statistical data.

**P:**

What is risk? How do you measure risk?

**Me:**

Using Standard Deviation(SD).

(I also wrote the formula. I was asked to explain further. So I gave an example.)

Suppose you take the return of 5 years as 7,8,9,10 and 11% respectively. The average return(x-bar) comes to 9%. Now using the formula, you can calculate the risk of the stock.

**P:**

But every year I am getting a positive return. So where is the risk?

**Me:**

It isn’t just about a positive return. You are not getting a fixed return of 9% each year. So your return is fluctuating. The risk is the volatility of the return which is measured by SD.

**A:**

If you take a return of 8%. Then x minus x-bar is -1%. But if you put it in the formula it gets squared. So negative becomes positive. And over a long period of 20 years, everything will be positive. So where is the risk?

(At this time I felt like I am starting to lose control. I was taken purely out of my comfort zone where the question had transgressed into the derivation of the formula!)

**Me:**

(Reiterating) No sir the risk is in the volatility of the returns. Not in negative or positive return.

**P:**

No no you are not understanding the question. Over a long period, there will be no risk. Isn’t that correct?

**Me:**

As you increase the time frame the risk will obviously go on reducing, since you are increasing the denominator.

**P:**

What if I increase the numerator also?

**Me:**

Then it will depend on what is increasing more.

**P:**

Laughed it off slightly. Is there a better measure of risk than SD? Don’t you think SD is insufficient?

**Me:**

I can’t think of a better measure. I haven’t given it much thought as to whether SD is insufficient for evaluating risk. I will have to go back and analyse it.

(I could have and probably should have mentioned Beta as a risk measure. But for some reason, I couldn’t recollect it at that moment. In hindsight, it was a slice of luck that I couldn’t recollect it. Had I mentioned it, the rest of my interview would have revolved around more mathematical formulae which I wasn’t sure about! Fortunately, the academic part of the interview ended here and I got to bring to the table some other aspects of my personality.)

**P:**

So tell us about your hobbies.

**Me:**

Sir, I am passionate about football and I love watching the English Premier League. I am also a fitness enthusiast. Dancing, singing and a lot of sport are some of my other interests.

**P:**

All this is okay in festivals and everything. Tell us about a hobby that will be useful to us as an academic institution.

(I was befuddled. The discussion was not going to move away from academics after all!)

**Me:**

I have developed a hobby of reading books related to finance and economics in the last one year. Some of the books I have read are The Big Short, Freakonomics, The Rise and Fall of Nations. I am currently reading Day-To-Day economics which is from the IIM A Business Books series written by the IIM A professor Satish Deodhar.

(I was 100% sure the next question was going to be on that last sentence, for obvious reasons.)

**P:**

Do you read or watch news? How do you get your news?

(Stumped me yet again. I was just not able to lead this interview, was I?)

**Me:**

I read the Economic Times every day and also the editorial page of TOI. So that is how I get my daily news.

**P:**

Tell us the 3 watershed events in the Indian Economy in the past decade.

**Me:**

Can I think on that for a minute Sir?

**P:**

Sure.

(I started to remember the important events. Frankly, I had started following news just about a year back. So the decade was out of the question. Furthermore, when you take a minute to think in the middle of an interview it is very easy to panic and to not be able to think. So staying calm is the key. I noted down 3 events in the order of their occurrence:

1. Modi Government being elected.

2. Raghuram Rajan resigning as the RBI Governor.

3. Demonetisation.

I could speak at least a bit on each of them. However, I chose to play smart. I decided to start with Demonetisation since I had the most content and statistics on it; hoping the discussion will never come to the other 2 topics).

**Me:**

Sir one of the biggest events in the recent past that have affected the entire nation is of course Demonetisation. Demonetisation was an economic failure in my opinion (Gave a few statistics to back it up). However, as the Uttar Pradesh election results would confirm, it has turned out to be a massive political success!

**A:**

So why do you think this has happened? I mean it has hurt the economy hard. So why did the people in UP view it so positively?

**Me:**

Firstly the massive victory in UP for the BJP was due to a lot of factors. They managed to unite the Non-Jatav Dalits and the Non-Yadav OBCs, the Brahmins and the Dalits, etc. This was the driving force behind that victory. However, demonetisation could have had a negating effect on this driving force which it did not. The reason is that people in UP have been ruled for years by SP and BSP governments which were characterized by red-tapism and bureaucracy. So in the eyes of the UP people, some change is better than no change, as change gives them hope for the good times ahead. Also, they saw this reform as one which takes money out of the pockets of the rich and puts it in theirs. Since the reform was marketed this way, it seemed to have a positive effect in the minds of the UP population.

However, the shortcomings of Demonetisation cannot be ignored. In my opinion, it was a half-hearted move. What really should have been done was the introduction of the Banking Transaction Tax (BTT).

(BTT was the topic I had done extensive research on and I had plans for different situations in which I will bring it to the conversation. I saw an opening and did it. The panel seemed to be interested in the topic too. I had done this in my IIM Bangalore interview as well. Finally, I led the interview for the next 5 minutes with lots of statistics, perspectives, solutions, etc. On a related topic the discussion moved on to Digital India since it is the core of BTT).

**P:**

So how to solve the problems associated with making India Digital?

**Me:**

Firstly, to promote digital payments or a cashless economy, the Government must bear the charges associated with it. For instance, when Rs.100 are exchanged in cash between 5 individuals, the last individual will get Rs.100 and each of the other 4 would have paid Rs.100. However, in case of digital payments, there is a charge of 0.75%-3% levied on each transaction. So the last person doesn’t receive Rs.100 and each of the other pay more than Rs.100 thereby generating money out of thin air! This cost needs to borne by the government.

Secondly, rural India needs to be educated about the Banking System to begin with. Only 45% of the Indian population is formally banked. So in terms of the other 55% Digital India can only be the 2nd step. The first step has to be educating them about the Banking System.

**P:**

Alright! That’s all. Thank you for your time. You can take something from this bowl (of Mentos).

**Me:**

Thank You, Sir. (Nodded at both of them and left).

(It was an interesting experience. I was out of my comfort zone for most of it and felt it strongly when the discussion went to the derivation of the SD formula. There was little room for me to lead the discussion and I had a couple of failed attempts. But I kept trying to lead the discussion and finally, when I did manage to do that, it paid rich dividends. Because in the last 10 minutes of the interview, I was on top of everything and all is well that ends well. So I left with a high. Also, as you would have noticed, the discussion did not go to the other 2 watershed events; as I had expected, or hoped!)

*Verdict:*

**Converted! And the way people look at me changed forever.**

## Comments

Amit Beniwal

jaat ram

u converted iim Bangalore this is interview experience of iima right?

31 Jan 2018, 03.12 PM

+Read Replies (1)

Dilip Mishra

He converted both the calls and chose B over A!

31 Jan 2018, 11.47 PM |

Hopeful Aspirant

Sir*

31 Jan 2018, 05.34 PM

Yash Surana

Hi Amol, while calculating your composite score in IIM-A as well IIM-B, did they consider your CA Final marks or your Graduation CGPA?

16 Dec 2018, 07.00 PM