The 34 percent of Harvard Business School’s 2010 graduates who entered the financial services industry may be a long-term indicator of a bear stock market, says banking analyst Raphael Soifer.

Soifer, who graduated from the Business School in 1965, has used the career choices of Harvard MBA students as a market indicator since 2001.

He claims that when the rate of business school students entering the financial services industry falls below ten percent, the market is heading for a bullish or strong period. When it rises above 30 percent, he anticipates a bearish market.

Soifer set those benchmarks based on the 1982 and 2000 rates, which he said were major turnaround years for the market.

When Soifer first issued his indicator in 2001, the rate of students entering the finance sector—which he defines as investment banking, investment management, hedge funds, sales & trading, venture capital, private equity and leveraged buyouts—was about 32 percent.

“It started very informally while I was a student at the Business School. I liked to observe where my fellow students would head after college, and the alumni bulletin used to print the percentage breakdown of who went into what industry,” Soifer said. “Harvard Business School is unique in many respects, in that it really tries to train generalists. A number of other business schools have highly specialized programs that limit students’ choices after graduating, and a Harvard MBA has a wider range of positions to choose from.”

He added, “A change in the rate of Harvard Business School students going into finance is really indicative of a wider market trend.”

Melvin O. Hibberd, co-president of the Business School’s Finance Club, agreed that there may be some correlation between the number of students entering the finance industry and the overall direction of the economy.

“I would say that at the end of the day, they’re the most attractive jobs for students leaving HBS. They offer great compensation, but they also offer great training opportunities,” he said. “They look for people when times are good and stop looking when times are bad. Since bad periods follow good periods in the cyclic market, the data makes some sense.”

Hibberd pointed out that a number of other analogous market indicators exist, such as the number of houses sold every month.

“The only thing that worries me about this news is the interpretation that Harvard MBAs are causing the crisis. That’s not what’s written explicitly, but if you look at the comments at the bottom of the [Yahoo Finance] article, some people may take the data and spin it against Harvard,” he said, adding that this would be a misinterpretation. “Recent grads are not in any position to do anything particularly dangerous to the entire economy.”