Harvard Business School

  • 09 Nov 2006 at 11:01 AM
  • analysis

HBS Grads Flock To Wall Street, Ruin Market

Hawes-hbs.jpgOkay. Fine. That’s probably not the way the Harvard Business School market signaling metric described below works at all. But we still kind of like the idea of too many HBS graduates getting a little to aggressive with those pitchbooks and tanking the market.

Everyone has his own method of timing the market. When Joseph Kennedy’s shoeshine boy began asking him for stock tips in 1929, old Joe had a hunch it was time to sell.
Ray Soifer, a retired executive from Brown Brothers Harriman, has his own system. And it’s proven itself to be a splendid long-term indicator of the American equities market.
Mr. Soifer tracks how many Harvard Business School graduates choose market-sensitive jobs each year. If 10% or less of that year’s class take jobs in investment banking, investment management, sales & trading, venture capital, private equity, or leveraged buy-outs, it’s a long-term ‘buy’ signal.
If 30% or more take such jobs, it’s a long-term ‘sell.’
This year, some 37% of Harvard Business School’s graduate found work on Wall Street, up from 30% a year ago and 26% for the Class of 2004. The trend suggests that Wall Street is becoming bloated and the American economy is ripe for a slowdown.

Equities Swing With Harvard MBAs [New York Sun]