Found a half-way interesting article (Oyer, 2006, Stanford) on the ROI of finance careers and MBAs for launching finance careers. Rather blah article and I DO NOT want to bicker about MBA ROI, but the final line stuck out to me:
"The results also suggest that risk averse MBA students, especially those interested in Wall Street careers, may want to take actions to insure themselves against the random wealth effects imposed by stock returns while they study. These students should short the stock market upon entering school so that their portfolios hedge their expected labor income."
Is anybody out there hedging their career by shorting the S&P or their industry. For example, any FIG bankers shorting a Financials Index in their personal account? This idea may be completely stupid, but what do you Asset Management guys out there think?
I think it makes more sense in terms of thinking about correlation. For example, I work at a value investing shop and much of my deferred compensation is put in value funds not to mention my firm's performance is tied to value investing which impacts my cash as well as deferred comp number. So, I do try to mix up my investing style and get some growthier names in my PA that I could never pitch at work. But, to short an entire industry for an extended period of time seems pretty silly/expensive. That would be the ultimate risk averse pussy move.
"Ultimate risk averse pussy move". Love it! Thanks!
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