To the hordes of graduating Harvard students headed to high-paying investment banking jobs next fall, a cautionary note: as the number of Harvard MBAs entering the securities industry rises, the stock market tends to tumble.

New Jersey-based financial consultant Ray Soifer has studied the career choices of Harvard Business School graduates for two decades, and he’s found that when the fraction of MBAs going straight into securities industry jobs tops 30 percent, the stock market plummets.

But investors can breathe a sigh of relief: only 26 percent of the MBA Class of ’04 headed to Wall Street. At least 30 percent of the Business School’s grads took securities industry jobs in 2000, 2001 and 2002—and leading market indices fell all three years.

The figures don’t necessarily reflect poorly on Harvard grads’ managerial decisions, Soifer said. Rather, the securities industry attracts more top-notch MBAs when I-Banking is booming and starting salaries are high, so grads often jump on the tail end of a bull market.

“People working in the stock market are always looking for indicators of one sort or another—whether it’s skirt lengths or the Super Bowl,” said Soifer, who spent decades on Wall Street as an investment banker and research analyst.

In the 1920s, a business professor at the University of Pennsylvania’s Wharton School postulated that markets are bullish when hemlines inch upward. And when a team from the old American Football League beats a National Football League squad in the professional gridiron championship, stocks tend to sour.

“One doesn’t always know why statistical indicators work, which then makes one suspicious about them,” Soifer said. But when the B-School Class of ’65 grad flipped through data from his alma mater, “the numbers just hit me one day.”

“SHEEP” TO THE SLAUGHTER

Several financial publications have reported on Soifer’s findings, and last week, Slate Magazine columnist Daniel Gross penned a story on the data entitled “Why Harvard Is Bad for Wall Street.”

“Dan Gross wrote that as a true Cornellian, I’m sure,” Soifer quipped.

Gross—who in addition to his undergrad degree from Cornell, also holds a master’s in history from Harvard—wrote in an e-mail that he does “not believe that the mere presence of Harvard MBAs in entry-level (or senior-level, for that matter) positions on Wall Street is bad for markets.”

“And no, I didn’t write the headline,” Gross added.

He said that Soifer’s patterns stem from the fact that Harvard grads’ career decisions reflect broader market dynamics. “MBAs are like very well-paid sheep,” Gross said. “They move in herds.”

Soifer predicted that an analysis of other top business schools would produce “comparable but not quite as dramatic results.” He speculated that “students who go to Wharton and [MIT’s] Sloan [School of Management] are more quantitatively-oriented than the ones at Harvard.”