Dan Rasmussen and Nicholas Rice at Verdad have a fascinating piece out called, “The MBA Indicator.”
They studied which industries the graduating MBAs of Wharton have joined over time, and then tracked the stock performance of each sector in search of some correlation.
What they found is that the more freshly-anointed MBAs were joining a sector, the lower the sector’s relative returns tended to be.
This has (at least) two implications worth being aware of:
MBAs, as Verdad says, are trendy and cyclical. So if you’re getting one, be mindful of what everyone else is doing before you accept a post-graduation position. And,
Since smart people chase what tended to work recently, you can be smarter if you look for areas that may be neglected (for no obviously good reason).
Read the piece and think about where you’re working, what the “smart” people are doing, and what counter-trends might be working against them 5 years down the road.