Counting Harvard Sheep As a Contrarian Indicator
Soifer Consulting has been tracking an interesting contrarian indicator (which we found via Daily Dose of Optimism) for the past several years: If 10% or less of the graduating Harvard MBA class takes “market-sensitive” job (e.f. investment banking, trading, investment management, VC or private equit), it’s bullish; if 30% or more do, it’s bearish. Back in November, Harvard released the results of its 2005 class and guess what? Exactly 30% chose market-sensitive jobs, up from 26% a year ago and 23% in 2003. The previous two sell signals came in 2000 and 1987. Maybe they’re on to something.
Harvard MBA Indicator Flashes ‘Sell’ [Soifer Consulting]
Payday for Boondock Bankers
New York may center of the finance universe, but those bonus dollars go a lot further if you live in a place like, say, Charlotte, North Carolina. We’ve never been there--and can’t say we have any wish to visit--but Bank of America and Wachovia each have large presences there. And both banks are cutting their bonus checks this week, even though they told executives their “number” last month (gotta milk that float!). Few are expecting New York-levels of pay but “Most people are pretty upbeat,” said one anonymous Wachovia banker. “People are happy and looking forward to another good year,” said Matt Salisbury, co-founder of Edgeview Partners, a Charlotte investment bank.
It’s Bonus Time for Banktown [Charlotte.com]
Harvard Managers Overpaid, Says Yale CIO
David Swensen, the investment brains behind the Yale endowment’s annualized 16% returns over the past year, had a few things to say about the supersized pay packages of his peers over at the Harvard Management Company:
I have long said that the structure of Harvard Management is inherently unstable. You can’t pay managers astronomical amounts of money because it tears at the fabric of [the university].
Swensen has made an average of about a million bucks a year for the past couple of years while David Mittelman, who managed Harvard’s domestic bonds until a few months ago, took home $18 million in 2005 and $35 million in 2004.
Yale CIO Disses Harvard [Institutional Investor]
News Flash: Goldman Employees Can Buy Lots of Things
Someone over at the New York Post must have just learned to use his calculator and is performing some whiz-bang calculations about how far the Goldman bonuses will stretch this year:
Goldman Sachs Group Inc., Wall Street’s most profitable firm, paid employees an average $521,000 each last year, enough to buy 4,000 celebratory bottles of Dom Perignon champagne or seven Porsche 911 Carrera sports cars. Goldman, the No. 2 U.S. securities firm by market value, paid $11.7 billion in compensation to 22,425 employees for the fiscal year that ended in November. Average pay rose 12 percent from the 2004 average and 35 percent from the previous year, according to a Securities and Exchange Commission filing yesterday. Chief Executive Officer Henry Paulson, 59, received $37 million in shares and stock options for 2005.
Old news, baby. In related news, lots of senior Goldman folks are leaving the firm for greener pastures.
Goldman Bonuses Are a Lot of Bubbly [NY Post]
NY Times: Wall Street Jobs Are For Losers
Bankers and prop desk traders are the working stiffs of modern finance, according to this article by NY Times’ staffer Landon Thomas Jr. The magic number these days is $500 million--a target achieved by such hedge fund luminaries as Stephen Schwarzman and Steven Cohen last year:
The lush payday has always been central to Wall Street’s lore. The canon of such deals includes the $500 million that Michael Milken got during his best years as a junk bond executive and the $20 million earned by the takeover lawyer Martin Lipton for two weeks’ work advising Kraft in 1988. But, as hedge funds and private equity funds have moved from finance’s periphery to becoming critical cogs in the Wall Street money-making machine, such levels of pay are becoming the norm rather than the exception.
For $500 Million Payday, Forget Wall Street [Herald Tribune]
