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Harvard MBAs Show This Isn't the Time to Buy or Sell

This year, fewer new Harvard Business School graduates took jobs on Wall Street, which may seem on the surface like a bad market indicator. But this is actually a positive signal, according to Ray Soifer.

In case you missed it, The New York Times reported that Soifer, a Harvard MBA and founder of Soifer Consulting, released his 2009 Harvard MBA Indicator, which draws its conclusions from looking at the jobs taken by each year's Harvard MBA graduates. When too many end up with Wall Street jobs, Soifer says, this indicates that the market could be getting too hot and is therefore heading for a fall.

The Times explains:

If more than 30 percent of Harvard MBAs end up in what [Soifer] defines as "market-sensitive jobs" -- a subset of the financial services category that includes investment banking, private equity and hedge funds -- it's a long-term sell signal. If that number is below 10 percent, it is a long-term buy signal.
This year's graduates sent out a neutral signal, with 28 percent taking market-sensitive employment. Last year, the number was 41 percent, a strong sell signal.

When might this indicator be a sign to buy? Don't hold your breath. The Times reports that not since the early 1980s has the number of Harvard MBAs taking market jobs dipped to 10 percent. The indicator has more often shown sell signals.

But for now, if newly-minted Harvard MBAs are any indication, you can hold on to what you've got.

Image courtesy of Flickr user matze_ott, CC 2.0

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