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Harvard MBA Indicator

What is 'Harvard MBA Indicator'

A long-term stock market indicator that evaluates the percentage of Harvard Business School graduates that accept "market sensitive" jobs in fields such as investment banking, securities sales & trading, private equity, venture capital and leveraged buyouts. If more than 30% of a year's graduating class take jobs in these areas, the Harvard MBA Indicator creates a sell signal for stocks. Conversely, if less than 10% of graduates take jobs in this sector, it represents a long-term buy signal for stocks.

Explaining 'Harvard MBA Indicator'

Started and maintained by consultant and HBS graduate Roy Soifer, the Harvard Indicator gave sell signals in 1987 and in 2000, which were both terrible years for the stock market. The esoteric indicator is meant to represent long-term signals based on the relative attractiveness of Wall Street jobs. The more grads that are enticed to go there, the more bloated Wall Street becomes and the more likely the market is nearing a top. When stock markets are doing poorly, fewer grads want to enter the sector.


Further Reading


New economic and financial indicators of sustainability
onlinelibrary.wiley.com [PDF]
… to predict the market: “If more than 30% of HBS graduates take market sensitive jobs1 While … data. 4. Analysis of MBA Stock Indicators The following section looks at the validity of the claims of the Harvard MBA Indicator. Using …

Anatomy of a scan: Digital market intelligence and economic literacy in the MBA curriculumAnatomy of a scan: Digital market intelligence and economic literacy in the MBA curriculum
www.tandfonline.com [PDF]
… to predict the market: “If more than 30% of HBS graduates take market sensitive jobs1 While … data. 4. Analysis of MBA Stock Indicators The following section looks at the validity of the claims of the Harvard MBA Indicator. Using …

Executive networks and firm policies: Evidence from the random assignment of MBA peersExecutive networks and firm policies: Evidence from the random assignment of MBA peers
academic.oup.com [PDF]
… to predict the market: “If more than 30% of HBS graduates take market sensitive jobs1 While … data. 4. Analysis of MBA Stock Indicators The following section looks at the validity of the claims of the Harvard MBA Indicator. Using …

Dynamics of the gender gap for young professionals in the financial and corporate sectorsDynamics of the gender gap for young professionals in the financial and corporate sectors
www.aeaweb.org [PDF]
… to predict the market: “If more than 30% of HBS graduates take market sensitive jobs1 While … data. 4. Analysis of MBA Stock Indicators The following section looks at the validity of the claims of the Harvard MBA Indicator. Using …

The economic implications of corporate financial reportingThe economic implications of corporate financial reporting
www.sciencedirect.com [PDF]
… to predict the market: “If more than 30% of HBS graduates take market sensitive jobs1 While … data. 4. Analysis of MBA Stock Indicators The following section looks at the validity of the claims of the Harvard MBA Indicator. Using …



Q&A About Harvard MBA Indicator


When does a high number of HBS grads accepting market sensitive jobs signal a sell signal for stocks?

If more than 3 of a year's graduating class take jobs in these areas, the Harvard MBA Indicator creates a sell signal for stocks. Conversely, if less than 1 of graduates take jobs in this sector, it represents a long-term buy signal for stocks.

What was the performance of the stock market during those years?

The S&P 500 fell by -22% in 1987 and by -15% on average during those two years.

What is the Harvard MBA Indicator?

The Harvard MBA Indicator is a long-term stock market indicator that evaluates the percentage of Harvard Business School graduates that accept "market sensitive" jobs in fields such as investment banking, securities sales & trading, private equity, venture capital and leveraged buyouts.

Why did Soifer create this indicator?

He created it because he felt that there were too many people going into finance after they graduated from business school instead of other industries like technology or manufacturing. He also wanted to show how bad things could be if everyone went into finance at once.

How many times has the HBS indicator given sell signals?

It gave sell signals in 1987 and twice since then (2).

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