Harvard MBA Indicator The Harvard MBA Indicator is a contrarian, long-term stock-market signal based on the share of Harvard Business School MBA graduates who take "market-sensitive" jobs—roles closely tied to financial markets such as investment banking, securities sales and trading, private equity, venture capital, and leveraged buyouts. Key takeaways
* The indicator measures the percentage of Harvard MBA graduates entering securities/Wall Street–type roles.
* If more than 30% take such jobs → long-term sell signal.
If fewer than 10% take such jobs → long-term buy signal.
Between 10% and 30% is considered neutral.
* It is contrarian: heavy interest in market jobs signals euphoria and potential market tops; weak interest signals pessimism and buying opportunities.
* Historically it has produced more sell than buy signals and has highlighted major market turns (notably signals before 1987, 2000, and 2008 declines).
* This is a long-horizon indicator and should not be used for short-term market timing.
How it works The premise is simple: graduates’ job choices reflect the relative attractiveness and perceived profitability of Wall Street careers. When many MBA graduates flock to market-sensitive roles, that suggests high expected returns and a crowded market—conditions often preceding market peaks. When few do, it suggests the sector is out of favor and valuations may be attractive for long-term buying. Explore More Resources
The indicator is calculated as the percentage of a graduating class taking market-sensitive jobs. Thresholds were defined to produce buy/sell/neutral signals as noted above. History and notable readings
* The series was compiled and publicized by Roy Soifer, a Harvard MBA, beginning in 2001, though it references historical placement patterns.
* Record high: about 41% entering Wall Street roles in 2008—shortly before the 2008–09 market crash.
* Record low: reported around 1937 when roughly 1% entered Wall Street.
* The indicator hit the long-term “buy” level (under 10%) in 1982, ahead of a prolonged bull market.
* It has historically generated more sell signals than buy signals.
Interpretation and limitations Strengths:
Offers a behavioral, supply-side perspective on investor and industry sentiment.
Useful as a long-term, contrarian gauge rather than a precise timing tool. Explore More Resources
Limitations:
Single-school sample: Harvard MBAs are influential but not fully representative of the entire finance labor pool.
Structural shifts in finance and graduate career choices (fintech, startups, alternative careers, regulatory changes) can weaken the indicator’s relevance over time.
Does not provide signal timing or magnitude—only a directional, long-horizon signal.
Data quality and classification of “market-sensitive” roles can vary year to year. Conclusion The Harvard MBA Indicator is an esoteric but historically interesting contrarian measure linking graduate career choices to long-term market sentiment. It can complement other macro and valuation indicators, but should be treated cautiously and not relied on in isolation for investment decisions. Explore More Resources