A Little-Known Signal for Investment Bank Hiring

Call it “the Harvard Factor.” In fact, that’s exactly what Ray Soifer, a former banking analyst and Harvard Business School grad does  call it. Soifer is now a consultant and has discovered that the number of Harvard graduates who pursue Wall Street jobs is a contrary indictor to the strength of the job market.

According to his “Harvard MBA Indicator,” when the number of Harvard grads finding jobs in investment banking, private equity or hedge funds exceeds 30 percent of the graduating class, the market is overheated and ripe for a tumble. Conversely, if the number of grads falls below10 percent, it’s a long-term “buy” signal, and time to start hunting for an investment banking job, according to a story in BusinessInsider.com

Only about 28 percent of Harvard’s MBA class pursued financial careers in 2009, compared to 41 percent in 2008. While it’s not an out-and-out bullish signal, it may indicate that job opportunities are picking up. The last time the Harvard MBA index dipped below the 10 percent for a “buy” signal was in the early 1980s, when the Dow Jones index traded below 1,000.

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