Second Thoughts About Wall Street?

On the evening of October 19--the day the stock market took its worst beating ever--an anxious senior called the analysts with whom he had worked the previous summer to find out the word on the Street. Though it was long after the market had closed, the would-be investment banker found that his friends were still at the offices of Bear Stearns & Co.--trying to make sense of Black Monday.

"Right on that day they were kind of uncertain what was going to happen to them," David M. Kanter '88 says, recalling his phone conversation.

The market's 508-point drop shook up the business community and has made the future financiers from the Class of '88 proceed with caution in their job searches. Nonetheless, the storm seems to be over, and its wake was not powerful enough to frighten most seniors away from Wall Street.

"People realize that the economy made it through the crash," says Kanter, who will be working at the investment bank Lazard Freres & Co. "Most people came through it safely."

A spokesman for the Office of Career Services (OCS) says she has not noticed a major change in where seniors want to work. Although statistics are not yet available, Linda Z. Chernick, associate director of the OCS, says, "We had a very slight decrease" in the number of students interested in investment banking. "It wasn't a hugely dramatic trend, one way or the other."

Most of the seniors contacted this week say the troubled market concerned them this winter but played little practical role in their career choices.

The crash "has not affected my decision to pursue investment banking," says Tad W. Guleserian '88, who is still searching for a job on Wall Street.

"I wasn't deterred [from entering investment banking] because I figured they were still leaving positions open," says Mary L. Rakic '88, who this fall will begin working for the investment firm of Paine Webber Inc.

Rakic says she believes the market is now returning to stable ground. The senior says she thinks the crash is "not going to have any more repercussions. For the next 10 years, it's safe."

Many seniors seem to share Rakic's views, as investment banks did not suffer noticeable drops in the number of applications received this year.

"We continue to have more applicants than openings," says a spokesman for Drexel Burnham Lambert, Inc. "After the crash, obviously, there was perhaps less of an interest in Wall Street, [but] we haven't really noticed anything."

While students who were committed to investment banking did not alter their plans, OCS officials and students say the crash may have changed the minds of those who were wavering.

Chernick says she thinks a small group of students who might have been interested in investment banking held back this year.

And Karen A. Levine '88, who will work for a consulting firm, says she thinks people who were undecided about their job choice before the crash may have steered away from investment banking because of the ailing market.

"It's not very much fun to work in an industry that's going through a recession," says Levine, who has been hired by Booz Allen & Hamilton Inc.

Even those seniors who did not shun investment banking say they covered their career bases this year. Many applied for jobs outside the field of investment banking just in case they did not fare well on Wall Street.

After the crash, says Diana E. Edge '88, she heard rumors about banks hiring fewer people. "I guess I was nervous, although you don't really know," says Edge, who will be working at the commercial bank of Bankers' Trust.

One senior, who asked to remain anonymous, says that he explored the field of consulting to enhance his chances of finding employment. "I was trying to play out all my options," he says.

Thanks in part to students who scattered their resumes and those who avoided Wall Street altogether, a number of consulting firms received a record number of applications.

"I've got to imagine the crash had something to do with the extra 500 resumes coming in," says Nancy J. Martin, manager of university relations at Booz Allen.

And Clarence X. Koo, of Oliver, Wyman & Co. says the market's antics provided his consulting firm with a larger applicant pool. "The difference for us has been probably a bit better selection of people," he says. "Our feeling is that we had a very good crop of people this year."

Once seniors started looking at consulting, many of them found the industry attractive, seniors and firm officials say.

This year, most of the applicants who turned down job offers from Booz Allen said they were taking jobs at other consulting firms, rather than investment banks, Martin says. Consulting firms "were probably the employers of choice this year, over investment banks." Two Harvard seniors will be working at Booz Allen after graduation.

While the crash convinced many students to look at other industries, it had relatively little effect on the number of positions available at investment banks.

A number of firms laid off some workers after the crash, but job-seeking seniors were generally not affected by the cutbacks, as only a few firms cancelled their plans to recruit at Harvard.

The main reason undergraduates were barely affected by the market's decline is that the entry-level positions seniors will fill are low-paying, short-term jobs that companies can afford to keep offering, observers say.

"Generally it's a good deal for the investment banks to get very bright and educated young people who are for the most part willing to work long hours," says Samuel L. Hayes, Schiff Professor of Investment Banking at the Business School.

Hayes says of the two-year analyst positions traditionally taken by graduating seniors, "The bottom line is it's a good source of personnel for the investment banks, and it carries with it no obligations beyond the contract period."

Thus, Black Monday brought with it speculation about the future of investment banking and frightened many people, but, in the end, had a larger effect on seniors' perceptions of the job market than it did on the reality.

Pamela D.A. Reeve, manager of the associate program at the Boston Consulting Group, says that the crash's most visible effect on undergraduates was the smaller number of students who attended introductory meetings for jobs in finance.

"The crash's impact on undergraduates has been fairly minimal," Chernick says. But she adds, "I think-there was some nervousness in the fall."