Bloomberg posted an article that discussed how far out of favor Wall Street has fallen in the eyes of Harvard MBAs.
The article quotes a recent preliminary survey of this years graduates. The results show that only 4% intend to join an investment bank after receiving their MBA. Only 1 person amongst the top 5% expressed interest.
This is in sharp contrast to 2007 (just prior to the crash of the financial markets) when 13% chose to go into investment banking.
Perhaps not. In a famous, often cited study, a consulting firm coined a theory called the “Harvard MBA Indicator”. The study basically found that when more than 30% of Harvard’s MBAs end up in market-sensitive jobs, which is basically defined as investment banking, private equity and hedge funds, it’s a long-term sell signal. If that number is less than 10% it’s a long-term buy signal.
This theory has played out in history. The sell signal was strongest at the peak of the market in 1987, 2000-2002, and in 2007-2008, which makes intuitive sense. Human psychology results in a strong herd mentality. There is no difference when it comes to choosing a career. This plays out across colleges and graduate schools as jobseekers tend to target hot markets after they have peaked thereby missing the next peak.